# Official Journal C 65/17 M

| | ISSN 1725-2423 |
| --- | --- |
| Official Journal
  of the European Union | C 65 |
| | |
| English edition | Information and Notices | Volume 4917 March 2006 |

ISSN 1725-2423

Official Journal

of the European Union

C 65

English edition

Information and Notices

Volume 4917 March 2006

---

| Notice No | Contents | page |
| --- | --- | --- |
| | II   Preparatory Acts |
| | European Economic and Social Committee |
| | 422nd plenary session held on 14-15 December 2005 |
| 2006/C 065/1 | Opinion of the European Economic and Social Committee on the State aid action plan — Less and better targeted state aid: a roadmap for state aid reform 2005-2009(COM(2005) 107 final — SEC(2005) 795) | 1 |
| 2006/C 065/2 | Opinion of the European Economic and Social Committee on the Proposal for a Decision of the European Parliament and of the Council concerning the seventh framework programme of the European Community for research, technological development and demonstration activities (2007 to 2013) and the Proposal for a Council Decision concerning the seventh framework programme of the European Atomic Energy Community (Euratom) for nuclear research and training activities (2007 to 2011)(COM(2005) 119 final/2 — 2005/0043 (COD) — 2005/0044 (CNS)) | 9 |
| 2006/C 065/3 | Opinion of the European Economic and Social Committee on the Proposal for a Decision of the European Parliament and of the Council establishing a Competitiveness and Innovation Framework Programme (2007-2013)(COM(2005) 121 final — 2005/0050 (COD)) | 22 |
| 2006/C 065/4 | Opinion of the European Economic and Social Committee on the Proposal for a Regulation of the European Parliament and of the Council regarding access to the Second Generation Schengen Information System (SIS II) by the services in the Member States responsible for issuing vehicle registration certificates(COM(2005) 237 final — 2005/0104 (COD)) | 27 |
| 2006/C 065/5 | Opinion of the European Economic and Social Committee on the Proposal for a Council Directive amending Directive 69/169/EEC as regards the temporary quantitative restriction on beer imports into Finland(COM(2005) 427 final — 2005/0175 (CNS)) | 29 |
| 2006/C 065/6 | Opinion of the European Economic and Social Committee on the Security of modes of transport | 30 |
| 2006/C 065/7 | Opinion of the European Economic and Social Committee on the Proposal for a Council Regulation establishing Community financial measures for the implementation of the Common Fisheries Policy and in the area of the Law of the Sea(COM(2005) 117 final — 2005/0045 (CNS)) | 38 |
| 2006/C 065/8 | Opinion of the European Economic and Social Committee on the Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions — Improving the Community Civil Protection Mechanism(COM(2005) 137 final) | 41 |
| 2006/C 065/9 | Opinion of the European Economic and Social Committee on Joint enterprises in the fisheries sector: current state of play and future prospects | 46 |
| 2006/C 065/0 | Opinion of the European Economic and Social Committee on the Proposal for a Council Regulation determining the Community scale for the classification of carcases of adult bovine animals(COM(2005) 402 final — 2005/0171 CNS) | 50 |
| 2006/C 065/1 | Opinion of the European Economic and Social Committee on The role of technology parks in the industrial transformation of the new Member States | 51 |
| 2006/C 065/2 | Opinion of the European Economic and Social Committee on the Communication from the Commission — Restructuring and employment — Anticipating and accompanying restructuring in order to develop employment: the role of the European Union(COM(2005) 120 final) | 58 |
| 2006/C 065/3 | Opinion of the European Economic and Social Committee on the Proposal for a Council Decision establishing the specific Programme Prevention, Preparedness and Consequence Management of Terrorism, for the Period 2007-2013. General Programme Security and Safeguarding Liberties(COM(2005) 124 final — 2005/0034 (CNS)) | 63 |
| 2006/C 065/4 | Opinion of the European Economic and Social Committee on the Proposal for a Decision of the European Parliament and the Council on the European Year of Equal Opportunities for All (2007) — Towards a Just Society(COM(2005) 225 final — 2005/0107 (COD)) | 70 |
| 2006/C 065/5 | Opinion of the European Economic and Social Committee on How to integrate social aspects into the Economic Partnership Agreement negotiations | 73 |
| 2006/C 065/6 | Opinion of the European Economic and Social Committee on the Communication from the Commission — Consultation document on state aid for innovation(COM(2005) 436 final) | 86 |
| 2006/C 065/7 | Opinion of the European Economic and Social Committee on the Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions — The Commission's contribution to the period of reflection and beyond: Plan D for Democracy, Dialogue and Debate(COM(2005) 494 final) | 92 |
| 2006/C 065/8 | Opinion of the European Economic and Social Committee on The road to the European knowledge-based society — the contribution of organised civil society to the Lisbon Strategy | 94 |
| 2006/C 065/9 | Opinion of the European Economic and Social Committee on the Proposal for a Council Directive amending Directive 77/388/EEC as regards certain measures to simplify the procedure for charging value added tax and to assist in countering tax evasion and avoidance, and repealing certain Decisions granting derogations(COM(2005) 89 final — 2005/0019 (CNS)) | 103 |
| 2006/C 065/0 | Opinion of the European Economic and Social Committee on Renewable energy sources | 105 |
| 2006/C 065/1 | Opinion of the European Economic and Social Committee on the Green Paper: Mortgage Credit in the EU(COM(2005) 327 final) | 113 |
| 2006/C 065/2 | Opinion of the European Economic and Social Committee on the Communication from the Commission to the Council and the European Parliament: The Hague Programme: Ten priorities for the next five years — The Partnership for European renewal in the field of Freedom, Security and Justice(COM(2005) 184 final) | 120 |
| 2006/C 065/3 | Opinion of the European Economic and Social Committee on the | 131 |
| 2006/C 065/4 | Opinion of the European Economic and Social Committee on the Green Paper on Financial Services Policy (2005-2010)(COM(2005) 177 final) | 134 |
| 2006/C 065/5 | Opinion of the European Economic and Social Committee on Hygiene rules and artisanal food processors | 141 |

Notice No

Contents

page

II   Preparatory Acts

European Economic and Social Committee

422nd plenary session held on 14-15 December 2005

2006/C 065/1

Opinion of the European Economic and Social Committee on the State aid action plan — Less and better targeted state aid: a roadmap for state aid reform 2005-2009(COM(2005) 107 final — SEC(2005) 795)

(COM(2005) 107 final — SEC(2005) 795)

1

2006/C 065/2

Opinion of the European Economic and Social Committee on the Proposal for a Decision of the European Parliament and of the Council concerning the seventh framework programme of the European Community for research, technological development and demonstration activities (2007 to 2013) and the Proposal for a Council Decision concerning the seventh framework programme of the European Atomic Energy Community (Euratom) for nuclear research and training activities (2007 to 2011)(COM(2005) 119 final/2 — 2005/0043 (COD) — 2005/0044 (CNS))

(COM(2005) 119 final/2 — 2005/0043 (COD) — 2005/0044 (CNS))

9

2006/C 065/3

Opinion of the European Economic and Social Committee on the Proposal for a Decision of the European Parliament and of the Council establishing a Competitiveness and Innovation Framework Programme (2007-2013)(COM(2005) 121 final — 2005/0050 (COD))

(COM(2005) 121 final — 2005/0050 (COD))

22

2006/C 065/4

Opinion of the European Economic and Social Committee on the Proposal for a Regulation of the European Parliament and of the Council regarding access to the Second Generation Schengen Information System (SIS II) by the services in the Member States responsible for issuing vehicle registration certificates(COM(2005) 237 final — 2005/0104 (COD))

(COM(2005) 237 final — 2005/0104 (COD))

27

2006/C 065/5

Opinion of the European Economic and Social Committee on the Proposal for a Council Directive amending Directive 69/169/EEC as regards the temporary quantitative restriction on beer imports into Finland(COM(2005) 427 final — 2005/0175 (CNS))

(COM(2005) 427 final — 2005/0175 (CNS))

29

2006/C 065/6

Opinion of the European Economic and Social Committee on the Security of modes of transport

30

2006/C 065/7

Opinion of the European Economic and Social Committee on the Proposal for a Council Regulation establishing Community financial measures for the implementation of the Common Fisheries Policy and in the area of the Law of the Sea(COM(2005) 117 final — 2005/0045 (CNS))

(COM(2005) 117 final — 2005/0045 (CNS))

38

2006/C 065/8

Opinion of the European Economic and Social Committee on the Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions — Improving the Community Civil Protection Mechanism(COM(2005) 137 final)

(COM(2005) 137 final)

41

2006/C 065/9

Opinion of the European Economic and Social Committee on Joint enterprises in the fisheries sector: current state of play and future prospects

46

2006/C 065/0

Opinion of the European Economic and Social Committee on the Proposal for a Council Regulation determining the Community scale for the classification of carcases of adult bovine animals(COM(2005) 402 final — 2005/0171 CNS)

(COM(2005) 402 final — 2005/0171 CNS)

50

2006/C 065/1

Opinion of the European Economic and Social Committee on The role of technology parks in the industrial transformation of the new Member States

51

2006/C 065/2

Opinion of the European Economic and Social Committee on the Communication from the Commission — Restructuring and employment — Anticipating and accompanying restructuring in order to develop employment: the role of the European Union(COM(2005) 120 final)

(COM(2005) 120 final)

58

2006/C 065/3

Opinion of the European Economic and Social Committee on the Proposal for a Council Decision establishing the specific Programme Prevention, Preparedness and Consequence Management of Terrorism, for the Period 2007-2013. General Programme Security and Safeguarding Liberties(COM(2005) 124 final — 2005/0034 (CNS))

(COM(2005) 124 final — 2005/0034 (CNS))

63

2006/C 065/4

Opinion of the European Economic and Social Committee on the Proposal for a Decision of the European Parliament and the Council on the European Year of Equal Opportunities for All (2007) — Towards a Just Society(COM(2005) 225 final — 2005/0107 (COD))

(COM(2005) 225 final — 2005/0107 (COD))

70

2006/C 065/5

Opinion of the European Economic and Social Committee on How to integrate social aspects into the Economic Partnership Agreement negotiations

73

2006/C 065/6

Opinion of the European Economic and Social Committee on the Communication from the Commission — Consultation document on state aid for innovation(COM(2005) 436 final)

(COM(2005) 436 final)

86

2006/C 065/7

Opinion of the European Economic and Social Committee on the Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions — The Commission's contribution to the period of reflection and beyond: Plan D for Democracy, Dialogue and Debate(COM(2005) 494 final)

(COM(2005) 494 final)

92

2006/C 065/8

Opinion of the European Economic and Social Committee on The road to the European knowledge-based society — the contribution of organised civil society to the Lisbon Strategy

94

2006/C 065/9

Opinion of the European Economic and Social Committee on the Proposal for a Council Directive amending Directive 77/388/EEC as regards certain measures to simplify the procedure for charging value added tax and to assist in countering tax evasion and avoidance, and repealing certain Decisions granting derogations(COM(2005) 89 final — 2005/0019 (CNS))

(COM(2005) 89 final — 2005/0019 (CNS))

103

2006/C 065/0

Opinion of the European Economic and Social Committee on Renewable energy sources

105

2006/C 065/1

Opinion of the European Economic and Social Committee on the Green Paper: Mortgage Credit in the EU(COM(2005) 327 final)

(COM(2005) 327 final)

113

2006/C 065/2

Opinion of the European Economic and Social Committee on the Communication from the Commission to the Council and the European Parliament: The Hague Programme: Ten priorities for the next five years — The Partnership for European renewal in the field of Freedom, Security and Justice(COM(2005) 184 final)

(COM(2005) 184 final)

120

2006/C 065/3

Opinion of the European Economic and Social Committee on the

131

2006/C 065/4

Opinion of the European Economic and Social Committee on the Green Paper on Financial Services Policy (2005-2010)(COM(2005) 177 final)

(COM(2005) 177 final)

134

2006/C 065/5

Opinion of the European Economic and Social Committee on Hygiene rules and artisanal food processors

141

| EN | |
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EN

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II Preparatory Acts

European Economic and Social Committee

422nd plenary session held on 14-15 December 2005

| 17.3.2006 | EN | Official Journal of the European Union | C 65/1 |
| --- | --- | --- | --- |

17.3.2006

EN

Official Journal of the European Union

C 65/1

---

Opinion of the European Economic and Social Committee on the ‘State aid action plan — Less and better targeted state aid: a roadmap for state aid reform 2005-2009’

(COM(2005) 107 final — SEC(2005) 795)

(2006/C 65/01)

On 8 June 2005 the Commission decided to consult the European Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on the abovementioned proposal.

The Section for the Single Market, Production and Consumption, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 11 November 2005. The rapporteur was Mr Pezzini.

At its 422nd plenary session, held on 14-15 December 2005 (meeting of 14 December), the European Economic and Social Committee adopted the following opinion by 117 votes to two with five abstentions.

1.   Introduction

| 1.1 | The European Economic and Social Committee has consistently stressed the importance of state-aid control as a key factor in:






  — | sound competition policy, not least as a way of increasing convergence between Member States' economies; |
| --- | --- | --- |

1.1

The European Economic and Social Committee has consistently stressed the importance of state-aid control as a key factor in:

—

sound competition policy, not least as a way of increasing convergence between Member States' economies;

| — | boosting innovation and the EU's competitiveness; |
| --- | --- |

—

boosting innovation and the EU's competitiveness;

| — | cohesion and sustainable growth throughout the Community's regions. |
| --- | --- |

—

cohesion and sustainable growth throughout the Community's regions.

| 1.2 | The rules governing state aid are based on the Community's founding texts – the ECSC Treaty and the EEC Treaty. Unlike the ECSC Treaty, which has now expired, the EC Treaty does not lay down an absolute ban on state aid: derogations (1) and some exceptions (2) to the ban are provided for, giving the Commission – and, exceptionally, the Council, too – wide discretionary power to authorise aid as an exception to the general rule. |
| --- | --- |

1.2

The rules governing state aid are based on the Community's founding texts – the ECSC Treaty and the EEC Treaty. Unlike the ECSC Treaty, which has now expired, the EC Treaty does not lay down an absolute ban on state aid: derogations (1) and some exceptions (2) to the ban are provided for, giving the Commission – and, exceptionally, the Council, too – wide discretionary power to authorise aid as an exception to the general rule.

| 1.3 | Moreover, Articles 87, 88 and 89, which govern this complex matter, are included in Section II of Title VI laying down common rules on competition, taxation and approximation of laws, precisely in order to underscore the fact that the issue of state aid should be viewed in terms of the impact that it can have on the competitive market place. |
| --- | --- |

1.3

Moreover, Articles 87, 88 and 89, which govern this complex matter, are included in Section II of Title VI laying down common rules on competition, taxation and approximation of laws, precisely in order to underscore the fact that the issue of state aid should be viewed in terms of the impact that it can have on the competitive market place.

| 1.3.1 | In this connection, the EESC has already stressed that any new state aid action plan should be compatible with the objectives laid down in Article 2 of the EC Treaty in order to ensure, inter alia, proper functioning of the internal market, implementation of non-discriminatory rules, harmonious, balanced, sustainable development of economic activities, sustainable and non-inflationary growth, a high degree of competitiveness and convergence, a better quality of life, economic and social cohesion and solidarity among Member States. |
| --- | --- |

1.3.1

In this connection, the EESC has already stressed that any new state aid action plan should be compatible with the objectives laid down in Article 2 of the EC Treaty in order to ensure, inter alia, proper functioning of the internal market, implementation of non-discriminatory rules, harmonious, balanced, sustainable development of economic activities, sustainable and non-inflationary growth, a high degree of competitiveness and convergence, a better quality of life, economic and social cohesion and solidarity among Member States.

| 1.4 | Indeed, state aid, as the Commission itself states, is: ‘a form of state intervention used to promote a certain economic activity. It implies that certain economic sectors or activities are treated more favourably than others and thus distorts competition because it discriminates between companies that receive assistance and others that do not’ (3). |
| --- | --- |

1.4

Indeed, state aid, as the Commission itself states, is: ‘a form of state intervention used to promote a certain economic activity. It implies that certain economic sectors or activities are treated more favourably than others and thus distorts competition because it discriminates between companies that receive assistance and others that do not’ (3).

| 1.4.1 | According to Article 87(1) of the Treaty, state aid includes not just aid granted by public authorities and financed by public funds but also interventions to reduce costs which are normally part of an undertaking's outgoings. |
| --- | --- |

1.4.1

According to Article 87(1) of the Treaty, state aid includes not just aid granted by public authorities and financed by public funds but also interventions to reduce costs which are normally part of an undertaking's outgoings.

| 1.5 | The March 2005 European Council reiterated the goal of continuing to work towards a reduction in the general level of state aid, while granting derogations for any market failures. This is in line with the recommendations of the 2000 Lisbon Summit and the 2001 Stockholm Summit and meets the need to direct aid towards horizontal objectives of common interest, including cohesion objectives. |
| --- | --- |

1.5

The March 2005 European Council reiterated the goal of continuing to work towards a reduction in the general level of state aid, while granting derogations for any market failures. This is in line with the recommendations of the 2000 Lisbon Summit and the 2001 Stockholm Summit and meets the need to direct aid towards horizontal objectives of common interest, including cohesion objectives.

| 1.5.1 | Furthermore, in its recent Communication on the mid-term review of the Lisbon Strategy, the Commission took up this objective of reducing state aid, redirecting it to address market failures, particularly in sectors with a high growth potential, and stimulating innovation (4). |
| --- | --- |

1.5.1

Furthermore, in its recent Communication on the mid-term review of the Lisbon Strategy, the Commission took up this objective of reducing state aid, redirecting it to address market failures, particularly in sectors with a high growth potential, and stimulating innovation (4).

| 1.6 | The European Parliament, too, has recently expressed its views on state aid (5), stressing that it must be used responsibly, providing value for money, since it:






  — | equals more than 50 % of the EU's annual budget; |
| --- | --- | --- |

1.6

The European Parliament, too, has recently expressed its views on state aid (5), stressing that it must be used responsibly, providing value for money, since it:

—

equals more than 50 % of the EU's annual budget;

| — | has consequences for public finances, for competition and for the ability of private undertakings to invest in a globalised economic environment; |
| --- | --- |

—

has consequences for public finances, for competition and for the ability of private undertakings to invest in a globalised economic environment;

| — | is raised from European taxpayers. |
| --- | --- |

—

is raised from European taxpayers.

| 1.6.1 | Moreover, on 12 May 2005, the EP adopted a resolution on Strengthening European competitiveness – the effects of industrial change on policy and the role of SMEs (6), in which it supported the aim of reducing the global volume of aid to enterprises, but pointed to the usefulness of certain types of aid in offsetting shortcomings in the market, such as aid for research and development, for training and for advisory services. |
| --- | --- |

1.6.1

Moreover, on 12 May 2005, the EP adopted a resolution on Strengthening European competitiveness – the effects of industrial change on policy and the role of SMEs (6), in which it supported the aim of reducing the global volume of aid to enterprises, but pointed to the usefulness of certain types of aid in offsetting shortcomings in the market, such as aid for research and development, for training and for advisory services.

| 1.6.2 | The EP noted the importance of state aid for SMEs in the Member States and called on the Commission to maintain within the Structural Funds all aid instruments for the economic and socio-economic reconversion of regions affected by industrial relocation; it urged better consideration for small and micro-enterprises (7) in these regions and, more generally, in all cohesion policies. |
| --- | --- |

1.6.2

The EP noted the importance of state aid for SMEs in the Member States and called on the Commission to maintain within the Structural Funds all aid instruments for the economic and socio-economic reconversion of regions affected by industrial relocation; it urged better consideration for small and micro-enterprises (7) in these regions and, more generally, in all cohesion policies.

| 1.6.3 | As part of the plan to reform state aid arrangements, the EP proposed that a clear-cut approach be laid down with a view to fostering innovation across all sectors, under the heading of the Lisbon objectives. |
| --- | --- |

1.6.3

As part of the plan to reform state aid arrangements, the EP proposed that a clear-cut approach be laid down with a view to fostering innovation across all sectors, under the heading of the Lisbon objectives.

| 1.7 | For its part, over the years, the Court of Justice has also expressed its views on state aid on many occasions, creating genuine case law laying down consistent, extremely detailed guidelines, most recently with the judgment on services of general interest and the Altmark judgment of 24 July 2003 (8). |
| --- | --- |

1.7

For its part, over the years, the Court of Justice has also expressed its views on state aid on many occasions, creating genuine case law laying down consistent, extremely detailed guidelines, most recently with the judgment on services of general interest and the Altmark judgment of 24 July 2003 (8).

| 1.8 | In its April 2005 Report on the State Aid Scoreboard (9), the Commission paints an encouraging picture of Member States' reactions to the Lisbon Strategy, recording a slight decline in the level of aid in relation to GDP and even more positive responses as regards the redirection of aid in line with the suggestions of the European Councils; nevertheless, there is still a long way to go. |
| --- | --- |

1.8

In its April 2005 Report on the State Aid Scoreboard (9), the Commission paints an encouraging picture of Member States' reactions to the Lisbon Strategy, recording a slight decline in the level of aid in relation to GDP and even more positive responses as regards the redirection of aid in line with the suggestions of the European Councils; nevertheless, there is still a long way to go.

| 1.8.1 | In 2001, the Commission created the state aid register and the state aid scoreboard as a basis for discussion on a strategy for reducing the general level of state aid and redirecting it towards horizontal objectives, and these tools were developed further in 2002. The EESC has already expressed appreciation of the Commission's efforts to achieve greater transparency in the area of state aid, which would seem to be especially important with regard to the Member States which have recently joined the EU. |
| --- | --- |

1.8.1

In 2001, the Commission created the state aid register and the state aid scoreboard as a basis for discussion on a strategy for reducing the general level of state aid and redirecting it towards horizontal objectives, and these tools were developed further in 2002. The EESC has already expressed appreciation of the Commission's efforts to achieve greater transparency in the area of state aid, which would seem to be especially important with regard to the Member States which have recently joined the EU.

| 1.9 | The EESC is pleased to note that, in 2003, annual total state aid had fallen by 3,6 % since 1999 and by almost 30 % since 1996; however, it also notes that the figure of EUR 53 billion (10), over 60 % of which is earmarked for the manufacturing and service industries, continues to be high. It also stresses its concern at the potential competition distortions which could be caused by the state-aid disparities between Member States and between the different regions within Member States. |
| --- | --- |

1.9

The EESC is pleased to note that, in 2003, annual total state aid had fallen by 3,6 % since 1999 and by almost 30 % since 1996; however, it also notes that the figure of EUR 53 billion (10), over 60 % of which is earmarked for the manufacturing and service industries, continues to be high. It also stresses its concern at the potential competition distortions which could be caused by the state-aid disparities between Member States and between the different regions within Member States.

| 1.9.1 | In an earlier opinion (11), the EESC welcomed the ongoing clarification and fine-tuning of the rules by the Commission, with particular regard to the block exemption regulation for employment aid designed to facilitate Member States' job creation initiatives. |
| --- | --- |

1.9.1

In an earlier opinion (11), the EESC welcomed the ongoing clarification and fine-tuning of the rules by the Commission, with particular regard to the block exemption regulation for employment aid designed to facilitate Member States' job creation initiatives.

| 1.9.2 | The EESC fully agrees with the Commission that state aid rules need to be adjusted with the passage of time to take into account political, economic and legal developments. That is why instruments for assessing state aid are reviewed periodically and therefore often have limited duration (12). |
| --- | --- |

1.9.2

The EESC fully agrees with the Commission that state aid rules need to be adjusted with the passage of time to take into account political, economic and legal developments. That is why instruments for assessing state aid are reviewed periodically and therefore often have limited duration (12).

| 1.10 | The EESC welcomes the Commission's proposals for general reform in the field (13), based on an integrated approach which takes proper account of ‘market failures’. |
| --- | --- |

1.10

The EESC welcomes the Commission's proposals for general reform in the field (13), based on an integrated approach which takes proper account of ‘market failures’.

| 1.10.1 | It feels that the adoption of a new framework which gears state aid policy to development needs should be subject to a review comprising streamlining and an exhaustive impact assessment. |
| --- | --- |

1.10.1

It feels that the adoption of a new framework which gears state aid policy to development needs should be subject to a review comprising streamlining and an exhaustive impact assessment.

| 1.10.2 | The review should be based on clear goals, wide-ranging consultation and comprehensive information. In addition to a clear control system, the new framework should provide coherence between policies, concentrated measures and, lastly, greater streamlining, transparency and legal certainty. |
| --- | --- |

1.10.2

The review should be based on clear goals, wide-ranging consultation and comprehensive information. In addition to a clear control system, the new framework should provide coherence between policies, concentrated measures and, lastly, greater streamlining, transparency and legal certainty.

| 1.10.3 | The proposed framework should be in line with:






  — | the integrated approach to competitiveness decided on by the November 2004 European Council with a view to reinvigorating the Lisbon agenda in terms of economic development, employment growth and consolidating enterprise; |
| --- | --- | --- |

1.10.3

The proposed framework should be in line with:

—

the integrated approach to competitiveness decided on by the November 2004 European Council with a view to reinvigorating the Lisbon agenda in terms of economic development, employment growth and consolidating enterprise;

| — | the need to streamline Community state aid policy, which has been rendered increasingly complex by successive additions, which have also increased the administrative burdens for both Member States and beneficiaries; |
| --- | --- |

—

the need to streamline Community state aid policy, which has been rendered increasingly complex by successive additions, which have also increased the administrative burdens for both Member States and beneficiaries;

| — | the need to ensure legal certainty and administrative transparency, with clear, simple, pre-established rules which are easy for businesses and their advisers to understand and use; |
| --- | --- |

—

the need to ensure legal certainty and administrative transparency, with clear, simple, pre-established rules which are easy for businesses and their advisers to understand and use;

| — | the principle that aid should be economically worthwhile; it should be aimed at rectifying market failures, reducing uncertainty and ensuring a sufficient degree of predictability for operators; |
| --- | --- |

—

the principle that aid should be economically worthwhile; it should be aimed at rectifying market failures, reducing uncertainty and ensuring a sufficient degree of predictability for operators;

| — | the mechanisms and procedures for identification and notification of measures incompatible with the EU-25 single market; these must ensure practical ways of actively involving stakeholders, the judiciary, the academic and business worlds and civil society. |
| --- | --- |

—

the mechanisms and procedures for identification and notification of measures incompatible with the EU-25 single market; these must ensure practical ways of actively involving stakeholders, the judiciary, the academic and business worlds and civil society.

| 1.10.4 | Particular consideration must also be given to the following:






  — | the size and location of beneficiaries and the volume of aid granted (cf. ‘De minimis’ regulation); |
| --- | --- | --- |

1.10.4

Particular consideration must also be given to the following:

—

the size and location of beneficiaries and the volume of aid granted (cf. ‘De minimis’ regulation);

| — | the compatibility of the new framework with Community environment policy (new Emission Trading Scheme rules); |
| --- | --- |

—

the compatibility of the new framework with Community environment policy (new Emission Trading Scheme rules);

| — | innovation policy (November 2004 Vademecum and new 2005 Communication) and research and technological development policy (new 2006 framework for R&D aid); |
| --- | --- |

—

innovation policy (November 2004 Vademecum and new 2005 Communication) and research and technological development policy (new 2006 framework for R&D aid);

| — | sectoral industrial policy; |
| --- | --- |

—

sectoral industrial policy;

| — | cohesion policy (revision of the Guidelines on Regional Aid (RAG 2006); |
| --- | --- |

—

cohesion policy (revision of the Guidelines on Regional Aid (RAG 2006);

| — | enterprise policy (‘De minimis’ regulation and revision of the rules on risk capital); |
| --- | --- |

—

enterprise policy (‘De minimis’ regulation and revision of the rules on risk capital);

| — | consumers' views and the benefits for the European public. |
| --- | --- |

—

consumers' views and the benefits for the European public.

| 1.11 | In the EESC's view, however, the most important thing in defining a common state aid framework is to launch a modern policy which will win the unanimous support of all the Member States, since all the EU economies are subject to transition and restructuring processes as a result of globalisation. |
| --- | --- |

1.11

In the EESC's view, however, the most important thing in defining a common state aid framework is to launch a modern policy which will win the unanimous support of all the Member States, since all the EU economies are subject to transition and restructuring processes as a result of globalisation.

| 1.12 | As competitors and end recipients of state aid, undertakings, along with the public sector, are in a good position to assess the effectiveness of the instruments created. They have a practical contribution to make in monitoring solutions suitable for modern European state aid policy, and can make suggestions for drawing up new guidelines. |
| --- | --- |

1.12

As competitors and end recipients of state aid, undertakings, along with the public sector, are in a good position to assess the effectiveness of the instruments created. They have a practical contribution to make in monitoring solutions suitable for modern European state aid policy, and can make suggestions for drawing up new guidelines.

| 1.12.1 | Moreover, undertakings are directly exposed both to the legal uncertainties and lengthy approval times of aid systems and to the serious consequences of recovery of aid declared to be unlawful. They are therefore among those who would benefit most from the dissemination of a uniform understanding of Community legislation and the elimination of difficulties and disparities in interpretation and implementation. |
| --- | --- |

1.12.1

Moreover, undertakings are directly exposed both to the legal uncertainties and lengthy approval times of aid systems and to the serious consequences of recovery of aid declared to be unlawful. They are therefore among those who would benefit most from the dissemination of a uniform understanding of Community legislation and the elimination of difficulties and disparities in interpretation and implementation.

2.   Towards a balanced framework for reforming state aid

| 2.1 | The EESC firmly believes that the Commission's reform proposals could be a valuable melting pot for achieving balanced reconciliation of:






  — | all Member States' development needs – a sustainable, knowledge-based economy with more and better jobs and a high standard of living; |
| --- | --- | --- |

2.1

The EESC firmly believes that the Commission's reform proposals could be a valuable melting pot for achieving balanced reconciliation of:

—

all Member States' development needs – a sustainable, knowledge-based economy with more and better jobs and a high standard of living;

| — | the constraints of globalisation, not least in terms of full respect for WTO rules; |
| --- | --- |

—

the constraints of globalisation, not least in terms of full respect for WTO rules;

| — | equal conditions, in the great single market of the enlarged Europe, for undertakings, consumers, taxpayers and civil society as a whole. |
| --- | --- |

—

equal conditions, in the great single market of the enlarged Europe, for undertakings, consumers, taxpayers and civil society as a whole.

| 2.2 | The EESC fully supports the principle underlying the ‘Less and better-targeted’ state aid reform, which seeks to make undertakings more competitive on domestic and international markets and to create the right conditions to enable the most efficient undertakings to be rewarded. |
| --- | --- |

2.2

The EESC fully supports the principle underlying the ‘Less and better-targeted’ state aid reform, which seeks to make undertakings more competitive on domestic and international markets and to create the right conditions to enable the most efficient undertakings to be rewarded.

| 2.3 | The EESC fully endorses the approach outlined by the Commission aimed at simplifying rules in order to give operators greater certainty and alleviate Member States' administrative burdens. Indeed, the EESC firmly believes that uncertainty regarding what constitutes legitimate state aid and what does not is likely to call into question the legitimacy of the Commission's state aid control process. |
| --- | --- |

2.3

The EESC fully endorses the approach outlined by the Commission aimed at simplifying rules in order to give operators greater certainty and alleviate Member States' administrative burdens. Indeed, the EESC firmly believes that uncertainty regarding what constitutes legitimate state aid and what does not is likely to call into question the legitimacy of the Commission's state aid control process.

| 2.4 | The EESC believes that the proposed reform of Community state aid rules should essentially entail:






  — | greater involvement by the institutions of the various stakeholders, particularly undertakings, in policy-making and policy implementation; |
| --- | --- | --- |

2.4

The EESC believes that the proposed reform of Community state aid rules should essentially entail:

—

greater involvement by the institutions of the various stakeholders, particularly undertakings, in policy-making and policy implementation;

| — | bringing existing rules into line with new challenges in order to support the Lisbon objectives and increase the benefits for the public; |
| --- | --- |

—

bringing existing rules into line with new challenges in order to support the Lisbon objectives and increase the benefits for the public;

| — | the creation of specific instruments to encourage undertakings to expand, providing suitable incentives; |
| --- | --- |

—

the creation of specific instruments to encourage undertakings to expand, providing suitable incentives;

| — | the adoption of new rules for state aid for innovation and R&D; |
| --- | --- |

—

the adoption of new rules for state aid for innovation and R&D;

| — | clearer conditions for the granting of fiscal aid, reviewing the frameworks for aid measures in order to introduce tax advantages, to provide an attractive, simple instrument with limited impact on competition which will ensure a level playing field for disadvantaged areas; |
| --- | --- |

—

clearer conditions for the granting of fiscal aid, reviewing the frameworks for aid measures in order to introduce tax advantages, to provide an attractive, simple instrument with limited impact on competition which will ensure a level playing field for disadvantaged areas;

| — | the introduction of ex-post assessment mechanisms and monitoring of the cost-effectiveness of measures, which examine their viability in terms of the functioning of the internal market; |
| --- | --- |

—

the introduction of ex-post assessment mechanisms and monitoring of the cost-effectiveness of measures, which examine their viability in terms of the functioning of the internal market;

| — | greater international cooperation to coordinate Community policy with the policies of third countries, particularly those whose legislation does not provide for any state aid restrictions. |
| --- | --- |

—

greater international cooperation to coordinate Community policy with the policies of third countries, particularly those whose legislation does not provide for any state aid restrictions.

| 2.5 | State aid policy is an integral part of competition policy and, as such, is among the Community policies, with the greatest bearing on economic trends. The EESC therefore believes that state aid policy should be used more specifically to achieve high-quality development and consistency with the Lisbon objectives so that it can play a driving role in ensuring sound economic and employment development trends. |
| --- | --- |

2.5

State aid policy is an integral part of competition policy and, as such, is among the Community policies, with the greatest bearing on economic trends. The EESC therefore believes that state aid policy should be used more specifically to achieve high-quality development and consistency with the Lisbon objectives so that it can play a driving role in ensuring sound economic and employment development trends.

| 2.6 | Competitiveness is a measure of a market's capacity to create valuable goods and services effectively in a globalised world, raising the standard of living and ensuring a high employment rate. However, it must be admitted that the EU has failed in its attempt to promote the growth of its business and human resources and achieve higher levels of technological research, innovation, training and internationalisation, as called for by the Lisbon Strategy. |
| --- | --- |

2.6

Competitiveness is a measure of a market's capacity to create valuable goods and services effectively in a globalised world, raising the standard of living and ensuring a high employment rate. However, it must be admitted that the EU has failed in its attempt to promote the growth of its business and human resources and achieve higher levels of technological research, innovation, training and internationalisation, as called for by the Lisbon Strategy.

3.   The reform and the Lisbon Strategy (Less and better-targeted state aid policy)

| 3.1 | The EESC supports a new general Community state aid framework based on an aid policy which:






  — | is more targeted and selective; |
| --- | --- | --- |

3.1

The EESC supports a new general Community state aid framework based on an aid policy which:

—

is more targeted and selective;

| — | is consistent and fully integrated with the Lisbon Strategy, with the completion of the single market and with other Community policies; |
| --- | --- |

—

is consistent and fully integrated with the Lisbon Strategy, with the completion of the single market and with other Community policies;

| — | is based on simplification, transparency and legal certainty of procedures and rules; |
| --- | --- |

—

is based on simplification, transparency and legal certainty of procedures and rules;

| — | gives undertakings and workers a more institutional role in the decision-making and implementation processes, and in assessing and monitoring the effectiveness of aid; |
| --- | --- |

—

gives undertakings and workers a more institutional role in the decision-making and implementation processes, and in assessing and monitoring the effectiveness of aid;

| — | is based on responsibility-sharing, by means of national coordination bodies; |
| --- | --- |

—

is based on responsibility-sharing, by means of national coordination bodies;

| — | is linked to the aid policies of international bodies and principal European partners on the global markets; |
| --- | --- |

—

is linked to the aid policies of international bodies and principal European partners on the global markets;

| — | complies with the rules of the single market; |
| --- | --- |

—

complies with the rules of the single market;

| — | ensures that all European Union state aid is compatible. |
| --- | --- |

—

ensures that all European Union state aid is compatible.

| 3.2 | The EESC believes that Community state aid policy has an active role to play in making Europe more attractive to investors and employers, boosting business competitiveness and social cohesion, encouraging research and innovation endeavours, and, lastly, promoting the introduction and dissemination of new skills and the training of human resources. |
| --- | --- |

3.2

The EESC believes that Community state aid policy has an active role to play in making Europe more attractive to investors and employers, boosting business competitiveness and social cohesion, encouraging research and innovation endeavours, and, lastly, promoting the introduction and dissemination of new skills and the training of human resources.

| 3.3 | The EESC feels that a general block exemption regulation should be introduced to extend and simplify the Community exemption framework for training and employment aids, favouring the aid measures which are most transparent and best target specific objectives, to be identified in close consultation with undertakings and the social partners, which, as beneficiaries of the aid systems, are in the best position to assess the effectiveness of the proposed instruments. |
| --- | --- |

3.3

The EESC feels that a general block exemption regulation should be introduced to extend and simplify the Community exemption framework for training and employment aids, favouring the aid measures which are most transparent and best target specific objectives, to be identified in close consultation with undertakings and the social partners, which, as beneficiaries of the aid systems, are in the best position to assess the effectiveness of the proposed instruments.

| 3.4 | As regards the regional aid system, the EESC supports the intention in the new 2007-13 programming framework of boosting development in disadvantaged regions (NUTS II ‘statistical effect’ regions, NUTS II ‘economic development’ regions and NUTS III ‘low population density’ regions) and remote islands and mountain areas, overcoming the aid dependency mindset, reducing maximum aid intensities, preventing the aid differential between less developed regions exceeding 10 %, and combating potential waves of relocation due to disproportionate aid differentials (no higher then 20 % for NUTS level III regions) between border regions. |
| --- | --- |

3.4

As regards the regional aid system, the EESC supports the intention in the new 2007-13 programming framework of boosting development in disadvantaged regions (NUTS II ‘statistical effect’ regions, NUTS II ‘economic development’ regions and NUTS III ‘low population density’ regions) and remote islands and mountain areas, overcoming the aid dependency mindset, reducing maximum aid intensities, preventing the aid differential between less developed regions exceeding 10 %, and combating potential waves of relocation due to disproportionate aid differentials (no higher then 20 % for NUTS level III regions) between border regions.

| 3.4.1 | The EESC supports the Commission's approach of varying regional aid intensities for different types of undertakings, but considers that the danger of slowing down smaller undertakings' expansion should be avoided and a single differential of 20 % set for both small and medium-sized undertakings. The proposed limits for aid for large undertakings' investments in regions covered by the new derogations should take into account the new classification of undertakings laid down in the 2003 Commission Recommendation (14). |
| --- | --- |

3.4.1

The EESC supports the Commission's approach of varying regional aid intensities for different types of undertakings, but considers that the danger of slowing down smaller undertakings' expansion should be avoided and a single differential of 20 % set for both small and medium-sized undertakings. The proposed limits for aid for large undertakings' investments in regions covered by the new derogations should take into account the new classification of undertakings laid down in the 2003 Commission Recommendation (14).

| 3.5 | As regards small-scale aid, the EESC endorses increasing the ceiling for ‘de minimis’ aid, not least with a view to ensuring more targeted, streamlined Community action. |
| --- | --- |

3.5

As regards small-scale aid, the EESC endorses increasing the ceiling for ‘de minimis’ aid, not least with a view to ensuring more targeted, streamlined Community action.

| 3.6 | The EESC believes that the Commission should focus on state aid which has a significant effect on trade rather than wasting its resources analysing large numbers of cases of predominantly local concern, and that it should clarify the meaning and interpretation of the concept of ‘local concern’. |
| --- | --- |

3.6

The EESC believes that the Commission should focus on state aid which has a significant effect on trade rather than wasting its resources analysing large numbers of cases of predominantly local concern, and that it should clarify the meaning and interpretation of the concept of ‘local concern’.

| 3.7 | The EESC believes that state aid control should be proportionate and effective, and that complex notification procedures should be avoided in cases which are of minor importance for Community competition. |
| --- | --- |

3.7

The EESC believes that state aid control should be proportionate and effective, and that complex notification procedures should be avoided in cases which are of minor importance for Community competition.

| 3.8 | The EESC firmly supports the proposal on small-scale state aid submitted by the Commission in February 2004, with a view to giving Member States greater flexibility, simpler procedures and sufficient opportunity to introduce aid measures facilitating the achievement of the Lisbon objectives while preserving adequate scope for Commission control. |
| --- | --- |

3.8

The EESC firmly supports the proposal on small-scale state aid submitted by the Commission in February 2004, with a view to giving Member States greater flexibility, simpler procedures and sufficient opportunity to introduce aid measures facilitating the achievement of the Lisbon objectives while preserving adequate scope for Commission control.

| 3.9 | Where sectoral aid is concerned, coherence between EU sectoral policies and aid regimes in the transport, energy, information and communication sectors needs to be ensured, along the lines recommended by the Commission for block exemptions. The Lisbon Strategy laid down specific objectives for the culture, audiovisual, film and sport sectors, where there is great potential for innovation, growth and job creation. |
| --- | --- |

3.9

Where sectoral aid is concerned, coherence between EU sectoral policies and aid regimes in the transport, energy, information and communication sectors needs to be ensured, along the lines recommended by the Commission for block exemptions. The Lisbon Strategy laid down specific objectives for the culture, audiovisual, film and sport sectors, where there is great potential for innovation, growth and job creation.

| 3.10 | The Community framework for state aid to environmental protection will remain in force until 2007. Here, too, it is important to pursue the Lisbon objectives, facilitating the introduction of the CO2 emissions trading scheme (ETS National Allocation Plans) as part of the Kyoto Protocol objectives. |
| --- | --- |

3.10

The Community framework for state aid to environmental protection will remain in force until 2007. Here, too, it is important to pursue the Lisbon objectives, facilitating the introduction of the CO2 emissions trading scheme (ETS National Allocation Plans) as part of the Kyoto Protocol objectives.

| 3.11 | Aid to innovation (pursuant to the Green Paper (15)): The EESC believes that the existing framework should be extended to types of aid for innovative activities which are not covered by the current guidelines, and that clear, general compatibility criteria should be defined which leave Member States greater scope for intervention without a notification obligation. |
| --- | --- |

3.11

Aid to innovation (pursuant to the Green Paper (15)): The EESC believes that the existing framework should be extended to types of aid for innovative activities which are not covered by the current guidelines, and that clear, general compatibility criteria should be defined which leave Member States greater scope for intervention without a notification obligation.

| 3.11.1 | To bring about improvement in this field, the EESC calls upon the Commission to specify more precisely, with the help of Eurostat, which production and service activities can currently be defined as innovative. Some guidance in this sensitive area would be extremely useful. |
| --- | --- |

3.11.1

To bring about improvement in this field, the EESC calls upon the Commission to specify more precisely, with the help of Eurostat, which production and service activities can currently be defined as innovative. Some guidance in this sensitive area would be extremely useful.

| 3.11.2 | In this connection, the EESC welcomes the issue on 21 September 2005 of the Communication on state aid and innovation, which provides a Community framework for this key sector and identifies both the most obvious market failures and suitable measures for those cases which could be remedied. |
| --- | --- |

3.11.2

In this connection, the EESC welcomes the issue on 21 September 2005 of the Communication on state aid and innovation, which provides a Community framework for this key sector and identifies both the most obvious market failures and suitable measures for those cases which could be remedied.

| 3.12 | Clear pre-established criteria need to be devised for gauging which market failures are likely to impede innovation measures and instruments in the implementation of the Lisbon Strategy. At the same time, however, the Member States and their regions will have to be given sufficient room for manoeuvre to vary interventions so that they are proportionate and effective and can transform pre-competitive research into commercial and market innovation. |
| --- | --- |

3.12

Clear pre-established criteria need to be devised for gauging which market failures are likely to impede innovation measures and instruments in the implementation of the Lisbon Strategy. At the same time, however, the Member States and their regions will have to be given sufficient room for manoeuvre to vary interventions so that they are proportionate and effective and can transform pre-competitive research into commercial and market innovation.

| 3.13 | State aid facilitating SME investment in innovative projects needs to encourage businesses to grow in size as well and to encompass, in particular:






  — | support for regional and transregional innovation networks; |
| --- | --- | --- |

3.13

State aid facilitating SME investment in innovative projects needs to encourage businesses to grow in size as well and to encompass, in particular:

—

support for regional and transregional innovation networks;

| — | promotion of the industrial technology parks and districts policy; |
| --- | --- |

—

promotion of the industrial technology parks and districts policy;

| — | introduction of business angels and service intermediaries such as venture technologists, brokers and patent consultants; |
| --- | --- |

—

introduction of business angels and service intermediaries such as venture technologists, brokers and patent consultants;

| — | establishment of technology transfer centres and venture capital; |
| --- | --- |

—

establishment of technology transfer centres and venture capital;

| — | training and hiring of skilled technical staff. |
| --- | --- |

—

training and hiring of skilled technical staff.

| 3.14 | The EESC believes that the new framework should also take into account all the external factors which affect the innovation process, namely:






  — | the culture of innovation-based enterprise; |
| --- | --- | --- |

3.14

The EESC believes that the new framework should also take into account all the external factors which affect the innovation process, namely:

—

the culture of innovation-based enterprise;

| — | the network of relations and interrelations with other undertakings, organisations and public bodies, which are essential for the creation and dissemination of knowledge and innovation; |
| --- | --- |

—

the network of relations and interrelations with other undertakings, organisations and public bodies, which are essential for the creation and dissemination of knowledge and innovation;

| — | the reference framework of laws and regulations, particularly in the field of intellectual property; |
| --- | --- |

—

the reference framework of laws and regulations, particularly in the field of intellectual property;

| — | access to the capital market, particularly in respect of risk and start-up capital (revision of the Communication on investment capital); |
| --- | --- |

—

access to the capital market, particularly in respect of risk and start-up capital (revision of the Communication on investment capital);

| — | education and training services and relations between the academic and scientific worlds and enterprise; |
| --- | --- |

—

education and training services and relations between the academic and scientific worlds and enterprise;

| — | innovation support structures (such as incubators, district networks, industrial technology parks) and intermediary services. |
| --- | --- |

—

innovation support structures (such as incubators, district networks, industrial technology parks) and intermediary services.

| 3.14.1 | More generally, it believes that, when reviewing the guidelines on horizontal aid such as aid to research, innovation, the environment and human capital:






  — | the intensities currently laid down for horizontal aid should be increased; |
| --- | --- | --- |

3.14.1

More generally, it believes that, when reviewing the guidelines on horizontal aid such as aid to research, innovation, the environment and human capital:

—

the intensities currently laid down for horizontal aid should be increased;

| — | the regional bonuses for interventions in less-developed areas should be maintained; |
| --- | --- |

—

the regional bonuses for interventions in less-developed areas should be maintained;

| — | a ‘cohesion bonus’ for interventions part-financed by the Structural Funds should be introduced for non-eligible areas or area which are no longer eligible under Article 83(c). |
| --- | --- |

—

a ‘cohesion bonus’ for interventions part-financed by the Structural Funds should be introduced for non-eligible areas or area which are no longer eligible under Article 83(c).

| 3.15 | As regards aid to services of general economic interest, it should be stressed that these services are a fundamental element of social and regional cohesion. In accordance with the criteria established by the Altmark judgment (16) and the relevant Commission Decision of 13 July 2005, the concept of a ‘typical undertaking, well run’ therefore needs to be clarified. Legal certainty also needs to be ensured as regards compensation for public service provision, which is a form of state aid compatible with the Treaty. |
| --- | --- |

3.15

As regards aid to services of general economic interest, it should be stressed that these services are a fundamental element of social and regional cohesion. In accordance with the criteria established by the Altmark judgment (16) and the relevant Commission Decision of 13 July 2005, the concept of a ‘typical undertaking, well run’ therefore needs to be clarified. Legal certainty also needs to be ensured as regards compensation for public service provision, which is a form of state aid compatible with the Treaty.

| 3.16 | The EESC believes that the future legislation should take into account the fact that responsibility for defining services of general economic interest lies with national, regional and local institutions with democratic legitimacy in the field (17). |
| --- | --- |

3.16

The EESC believes that the future legislation should take into account the fact that responsibility for defining services of general economic interest lies with national, regional and local institutions with democratic legitimacy in the field (17).

4.   Simplification and transparency of procedures

| 4.1 | The EESC believes that major steps forward can be taken towards a simpler, more transparent Community aid policy, building on the Commission's work to target elements likely to cause substantial distortions of competition. |
| --- | --- |

4.1

The EESC believes that major steps forward can be taken towards a simpler, more transparent Community aid policy, building on the Commission's work to target elements likely to cause substantial distortions of competition.

| 4.2 | Delays in the processing of cases also need to be eliminated, with administrative practices improved and streamlined; Member States need to shoulder their responsibilities too in order to ensure transparency and effectiveness. |
| --- | --- |

4.2

Delays in the processing of cases also need to be eliminated, with administrative practices improved and streamlined; Member States need to shoulder their responsibilities too in order to ensure transparency and effectiveness.

| 4.3 | The EESC also calls strongly for codes of practice to be developed with the full involvement of all stakeholders, particularly undertakings, as beneficiaries of aid measures. |
| --- | --- |

4.3

The EESC also calls strongly for codes of practice to be developed with the full involvement of all stakeholders, particularly undertakings, as beneficiaries of aid measures.

5.   The reform and EU-25

| 5.1 | The situation in the wake of enlargement calls for changes to state aid policy to make all regions of the EU equally attractive as new locations and to investors, and to ensure fair competition between neighbouring regions. |
| --- | --- |

5.1

The situation in the wake of enlargement calls for changes to state aid policy to make all regions of the EU equally attractive as new locations and to investors, and to ensure fair competition between neighbouring regions.

| 5.2 | The 10 new Member States currently grant undertakings much higher amounts of state aid – as a percentage of GDP – than the EU-15 Member States, although the situation looks set to even out gradually. During the period 2000-2003, state aid in the new Member States represented on average 1,42 % of GDP compared to an average of 0,4 % in EU-15. |
| --- | --- |

5.2

The 10 new Member States currently grant undertakings much higher amounts of state aid – as a percentage of GDP – than the EU-15 Member States, although the situation looks set to even out gradually. During the period 2000-2003, state aid in the new Member States represented on average 1,42 % of GDP compared to an average of 0,4 % in EU-15.

| 5.3 | The Lisbon Strategy provided for aid to be used to achieve horizontal objectives. In 2002,73 % of aid was earmarked for this purpose in EU-15 as opposed to 22 % in the new Member States (18). |
| --- | --- |

5.3

The Lisbon Strategy provided for aid to be used to achieve horizontal objectives. In 2002,73 % of aid was earmarked for this purpose in EU-15 as opposed to 22 % in the new Member States (18).

| 5.4 | On the other hand, it should be acknowledged that the new Member States have adapted very well to the market economy, although the enlarged EU still needs to take major steps to reduce the overall level of aid and encourage competitiveness, sustainable and cohesive development and the new European knowledge-based economy. |
| --- | --- |

5.4

On the other hand, it should be acknowledged that the new Member States have adapted very well to the market economy, although the enlarged EU still needs to take major steps to reduce the overall level of aid and encourage competitiveness, sustainable and cohesive development and the new European knowledge-based economy.

6.   Involvement of stakeholders: undertakings and civil society

| 6.1 | The EESC believes that better governance of state-aid practices and procedures is necessary. Direct stakeholders need to be more involved, particularly enterprise and civil society, as they are directly exposed both to the legal uncertainties and lengthy turnaround times for Community approval of aid systems and to the serious effects of the recovery of inadmissible or unlawful aid. |
| --- | --- |

6.1

The EESC believes that better governance of state-aid practices and procedures is necessary. Direct stakeholders need to be more involved, particularly enterprise and civil society, as they are directly exposed both to the legal uncertainties and lengthy turnaround times for Community approval of aid systems and to the serious effects of the recovery of inadmissible or unlawful aid.

| 6.2 | As both beneficiaries of state aid and, at the same time, competitors, businesses are in a prime position to:






  — | assess the effectiveness of the instruments implemented, monitor the solutions adopted and define possible best practices, thanks to the skills and first-hand experience they have acquired; |
| --- | --- | --- |

6.2

As both beneficiaries of state aid and, at the same time, competitors, businesses are in a prime position to:

—

assess the effectiveness of the instruments implemented, monitor the solutions adopted and define possible best practices, thanks to the skills and first-hand experience they have acquired;

| — | facilitate better dissemination of Community legislation, in forms which are clear, transparent and directly accessible to users, whether providers or beneficiaries of aid; |
| --- | --- |

—

facilitate better dissemination of Community legislation, in forms which are clear, transparent and directly accessible to users, whether providers or beneficiaries of aid;

| — | help surmount the difficulties and uncertainties encountered in interpreting and implementing rules, which are in danger of calling into question the legitimacy of state aid control; |
| --- | --- |

—

help surmount the difficulties and uncertainties encountered in interpreting and implementing rules, which are in danger of calling into question the legitimacy of state aid control;

| — | introduce forms of private enforcement, facilitating compliance with and full implementation of European legislation. |
| --- | --- |

—

introduce forms of private enforcement, facilitating compliance with and full implementation of European legislation.

| 6.3 | The EESC therefore believes that:






  — | the institutions should involve enterprise more in decision-making and policy implementation; |
| --- | --- | --- |

6.3

The EESC therefore believes that:

—

the institutions should involve enterprise more in decision-making and policy implementation;

| — | mechanisms for ex-post assessment and monitoring the cost-effectiveness of measures need to be introduced; |
| --- | --- |

—

mechanisms for ex-post assessment and monitoring the cost-effectiveness of measures need to be introduced;

| — | Commission decisions should be made fully accessible on the Internet in one of the Commission's working languages as well as in the language of the Member State concerned; |
| --- | --- |

—

Commission decisions should be made fully accessible on the Internet in one of the Commission's working languages as well as in the language of the Member State concerned;

| — | businesses need to be kept informed about ongoing notification processes so that they can ascertain whether concessions granted at national or local level comply with EU substantive rules and procedures relating to aid, and so that they can work with authorities at different levels to bring about more effective implementation of EU state aid policy; |
| --- | --- |

—

businesses need to be kept informed about ongoing notification processes so that they can ascertain whether concessions granted at national or local level comply with EU substantive rules and procedures relating to aid, and so that they can work with authorities at different levels to bring about more effective implementation of EU state aid policy;

| — | proactive monitoring of the implementation of legislation should be performed, involving enterprise and civil society representatives in economic analysis of market failures and performance shortfalls in particular sectors or industries; |
| --- | --- |

—

proactive monitoring of the implementation of legislation should be performed, involving enterprise and civil society representatives in economic analysis of market failures and performance shortfalls in particular sectors or industries;

| — | systematic, joint ‘market-failure watch’ mechanisms based on clearly-defined, transparent criteria need to be introduced, as well as aid measures which have no significant impact on competition in the internal market and comply with the Lisbon Strategy. |
| --- | --- |

—

systematic, joint ‘market-failure watch’ mechanisms based on clearly-defined, transparent criteria need to be introduced, as well as aid measures which have no significant impact on competition in the internal market and comply with the Lisbon Strategy.

7.   Towards a state aid policy which is an instrument for growth and part of a shared vision for integrated, cohesive economic development in EU 25-27, fostering new jobs and businesses

| 7.1 | The EESC believes that a clear picture needs to be painted of the added value of state aid for the European Union's future, in terms of the objectives of the competitive, sustainable and cohesive development of the Member States decided on at Lisbon and reiterated a number of times at various European summits since 2000. |
| --- | --- |

7.1

The EESC believes that a clear picture needs to be painted of the added value of state aid for the European Union's future, in terms of the objectives of the competitive, sustainable and cohesive development of the Member States decided on at Lisbon and reiterated a number of times at various European summits since 2000.

| 7.1.1 | The key sectors identified by the Lisbon Strategy require substantial, targeted financial input which must be fully reflected in Member States' budgetary and structural policies: a pre-established, coherent, compatible framework is needed to which all policies, including Community competition policy, must refer and conform. |
| --- | --- |

7.1.1

The key sectors identified by the Lisbon Strategy require substantial, targeted financial input which must be fully reflected in Member States' budgetary and structural policies: a pre-established, coherent, compatible framework is needed to which all policies, including Community competition policy, must refer and conform.

| 7.2 | Before a single European market which can compete on equal terms with the other players on the global market can be fully achieved, the EESC believes that substantial modernisation is needed in both the framing and implementation of European economic and, in particular, state aid policy. This is also a pre-requisite for the major infrastructure and major intangible investment necessary for an effective, technologically advanced, competitive market to function properly. |
| --- | --- |

7.2

Before a single European market which can compete on equal terms with the other players on the global market can be fully achieved, the EESC believes that substantial modernisation is needed in both the framing and implementation of European economic and, in particular, state aid policy. This is also a pre-requisite for the major infrastructure and major intangible investment necessary for an effective, technologically advanced, competitive market to function properly.

| 7.3 | The Committee believes that general compatibility criteria need to be defined in order to encourage the Member States and regions to implement support policies with the aim of achieving a competitive economy which complies with free trade rules. |
| --- | --- |

7.3

The Committee believes that general compatibility criteria need to be defined in order to encourage the Member States and regions to implement support policies with the aim of achieving a competitive economy which complies with free trade rules.

| 7.4 | Where the market fails to make European businesses competitive and proves incapable of building up their technological innovation, training and internationalisation capacities, European state aid policy must facilitate rather than hinder policies and schemes to stimulate businesses' growth and increase their ability to attract new investment, expertise and capital to Europe. |
| --- | --- |

7.4

Where the market fails to make European businesses competitive and proves incapable of building up their technological innovation, training and internationalisation capacities, European state aid policy must facilitate rather than hinder policies and schemes to stimulate businesses' growth and increase their ability to attract new investment, expertise and capital to Europe.

8.   Concluding recommendations

| 8.1 | The EESC is in favour of modernisation of European state aid policy based on a new, proactive approach and on a new, general Community framework. In this connection it recommends, in particular:






  — | a policy which can provide adequate responses and remedy or eliminate market failures; |
| --- | --- | --- |

8.1

The EESC is in favour of modernisation of European state aid policy based on a new, proactive approach and on a new, general Community framework. In this connection it recommends, in particular:

—

a policy which can provide adequate responses and remedy or eliminate market failures;

| — | a policy which contributes substantially to the completion of the internal market, without leading to distortion of competition; |
| --- | --- |

—

a policy which contributes substantially to the completion of the internal market, without leading to distortion of competition;

| — | a more coherent, integrated policy which facilitates the achievement of the various strands of the Lisbon Strategy, to make businesses more competitive and innovative on the world stage while also improving the public's quality of life and work; |
| --- | --- |

—

a more coherent, integrated policy which facilitates the achievement of the various strands of the Lisbon Strategy, to make businesses more competitive and innovative on the world stage while also improving the public's quality of life and work;

| — | strengthening the industrial and service fabric by boosting enterprise and bringing industry and the labour market into line with the new industrial policy objectives and the new demands of globalisation; |
| --- | --- |

—

strengthening the industrial and service fabric by boosting enterprise and bringing industry and the labour market into line with the new industrial policy objectives and the new demands of globalisation;

| — | strong support for all forms of product and process innovation (19); |
| --- | --- |

—

strong support for all forms of product and process innovation (19);

| — | a proactive approach to make Europe more attractive to investors and better able to create jobs, to make businesses more competitive, to encourage research and innovation projects and, lastly, to promote the development and dissemination of new skills and the training of human resources; |
| --- | --- |

—

a proactive approach to make Europe more attractive to investors and better able to create jobs, to make businesses more competitive, to encourage research and innovation projects and, lastly, to promote the development and dissemination of new skills and the training of human resources;

| — | greater focus on factors which genuinely distort competition in the internal and international markets, without creating unnecessary, costly red tape in efforts to deal with limited, local incidents which cause no significant distortion; |
| --- | --- |

—

greater focus on factors which genuinely distort competition in the internal and international markets, without creating unnecessary, costly red tape in efforts to deal with limited, local incidents which cause no significant distortion;

| — | an approach based on simpler, transparent, unambiguous procedures and rules together with measures based on fixed, non-discretionary criteria which are compatible with the Lisbon agenda as regards harmonious, cohesive and competitive development at global level; |
| --- | --- |

—

an approach based on simpler, transparent, unambiguous procedures and rules together with measures based on fixed, non-discretionary criteria which are compatible with the Lisbon agenda as regards harmonious, cohesive and competitive development at global level;

| — | greater institutional involvement of enterprises in the decision-making and implementation processes, in assessing and monitoring effectiveness, and in enforcement; |
| --- | --- |

—

greater institutional involvement of enterprises in the decision-making and implementation processes, in assessing and monitoring effectiveness, and in enforcement;

| — | a closer relationship between European regulations and legislation and those of the WTO international bodies and of the main European players on the global markets; |
| --- | --- |

—

a closer relationship between European regulations and legislation and those of the WTO international bodies and of the main European players on the global markets;

| — | a participatory forward-looking exercise open to all political decision-makers and socio-economic players, with the objective of creating a shared vision and establishing in advance how and to what extent intervention is actually compatible with development. |
| --- | --- |

—

a participatory forward-looking exercise open to all political decision-makers and socio-economic players, with the objective of creating a shared vision and establishing in advance how and to what extent intervention is actually compatible with development.

Brussels, 14 December 2005

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  Article 87(2).

1

(2)  Article 87(3).

2

(3)  COM(2005) 147 final of 20.4.2005.

3

(4)  The information society is not always easy to understand. Information society products contain a significant input of intelligence. The capacity to produce increasingly innovative and intelligent goods and services must be stimulated and supported, not least with state aid.

4

(5)  EP Resolution No. P6_TA(2005)0033 of 22.2.2005.

5

(6)  EP Resolution No. A6-0148/2005 of 12.5.2005.

6

(7)  See Recommendation 2003/361/EC (OJ L 124 of 20.5.2003).

7

(8)  Case C-280/00, Altmark Trans and Magdeburg – Nahverkehrsgesellschaft Altmark (2003) ECR I-7747.

8

(9)  See footnote 3.

9

(10)  At EU level.

10

(11)  OJ C 108 of 30.4.2004.

11

(12)  SEC(2005) 795 of 7.6.2005.

12

(13)  COM(2004) 293 final of 20.4.2004.

13

(14)  OJ L 124 of 20.5.2003.

14

(15)  COM(1995) 688

15

(16)  Case C-280/00, Altmark Trans and Magdeburg – Nahverkehrsgesellschaft Altmark 2003 ECR I-7747.

16

(17)  The exemption of public-service compensation (Article 86(2)) should be substantial enough to ensure sufficient flexibility and dynamism and minimum administrative burden.

17

(18)  EU-wide, around 73 % of total aid (less agriculture, fisheries and transport) in 2002 was granted for horizontal objectives including research and development, small and medium-sized enterprises, environment and regional economic development. The remaining 27 % was aid directed at specific sectors (mainly manufacturing, coal and financial services) including aid for rescue and restructuring. The share of aid granted for horizontal objectives increased by 7 percentage points over the period 1998-2000 to 2000-2002. This was largely the result of significant increases in aid for the environment (+7 points) and research and development (+4 points). This positive trend was observed, to varying degrees, in the majority of Member States. Indeed, in several Member States - Belgium, Denmark, Greece, Italy, Netherlands, Austria and Finland – virtually all the aid awarded in 2002 was earmarked for horizontal objectives (COM(2004) 256 final).

18

(19)  As called for in the Green Paper on Innovation (1995).

19

---

| 17.3.2006 | EN | Official Journal of the European Union | C 65/9 |
| --- | --- | --- | --- |

17.3.2006

EN

Official Journal of the European Union

C 65/9

---

Opinion of the European Economic and Social Committee on the ‘Proposal for a Decision of the European Parliament and of the Council concerning the seventh framework programme of the European Community for research, technological development and demonstration activities (2007 to 2013) and the Proposal for a Council Decision concerning the seventh framework programme of the European Atomic Energy Community (Euratom) for nuclear research and training activities (2007 to 2011)’

(COM(2005) 119 final/2 — 2005/0043 (COD) — 2005/0044 (CNS))

(2006/C 65/02)

On 25 April 2005 the Council decided, under Article 95 of the Treaty establishing the European Community, to consult the European Economic and Social Committee on the abovementioned proposal.

The Section for the Single Market, Production and Consumption, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 11 November 2005. The rapporteur was Mr Wolf, the co-rapporteur Mr Pezzini.

At its 422nd plenary session, held on 14 and 15 December 2005 (meeting of 14 December), the European Economic and Social Committee adopted the following opinion by 123 votes, with four abstentions:

Contents

| 1. | Summary and recommendations |
| --- | --- |

1.

| 2. | Introduction |
| --- | --- |

2.

| 3. | Gist of the Commission document |
| --- | --- |

3.

| 4. | General comments |
| --- | --- |

4.

| 5. | Specific comments |
| --- | --- |

5.

| 6. | The seventh Euratom framework programme |
| --- | --- |

6.

1.   Summary and recommendations

| 1.1 | The Lisbon objectives (1) are about Europe's position in global competition, which centres around the race to invest more in research and development; this involves both the traditional industrial nations (e.g. USA, EU and Japan) and the burgeoning new economic powers (e.g. China, India, Brazil, Korea) with their substantially cheaper labour. |
| --- | --- |

1.1

The Lisbon objectives (1) are about Europe's position in global competition, which centres around the race to invest more in research and development; this involves both the traditional industrial nations (e.g. USA, EU and Japan) and the burgeoning new economic powers (e.g. China, India, Brazil, Korea) with their substantially cheaper labour.

| 1.2 | Effective, high-quality research and development that enjoys an adequate level of support is in fact the basic foundation and sine qua non for innovation, competitiveness and prosperity, and thus also for cultural development and the provision of social services; investments in research and development have a high gain factor and boost economic strength accordingly. This is also in line with the 3 % objective laid down in Barcelona (2) in 2002, though the global race makes this a ‘moving target’. |
| --- | --- |

1.2

Effective, high-quality research and development that enjoys an adequate level of support is in fact the basic foundation and sine qua non for innovation, competitiveness and prosperity, and thus also for cultural development and the provision of social services; investments in research and development have a high gain factor and boost economic strength accordingly. This is also in line with the 3 % objective laid down in Barcelona (2) in 2002, though the global race makes this a ‘moving target’.

| 1.3 | Community-funded research and development activities create considerable European added value. They open up potentials that plainly go beyond the capacities of individual Member States and have already facilitated European developments of global importance. They have a decisive and stimulating leverage and integration effect on the necessary and more extensive national research programmes of the Member States, which also leads to a pooling of resources. They bring together Europe's research elites, European industry and European decision-makers. They are a catalyst of European integration, cohesion and identity-building. They are the core element of the European Research Area. |
| --- | --- |

1.3

Community-funded research and development activities create considerable European added value. They open up potentials that plainly go beyond the capacities of individual Member States and have already facilitated European developments of global importance. They have a decisive and stimulating leverage and integration effect on the necessary and more extensive national research programmes of the Member States, which also leads to a pooling of resources. They bring together Europe's research elites, European industry and European decision-makers. They are a catalyst of European integration, cohesion and identity-building. They are the core element of the European Research Area.

| 1.4 | The Commission's proposal to increase expenditure and to devote just under 8 % of the total Community budget to these objectives is a welcome and absolutely necessary first step in the right direction. It is a minimum amount that must be increased still further in the longer term so as not to gamble away – but rather to maintain and strengthen – Europe's position as the cradle of modern science and technology. Without such action, it will not be possible, even in the longer term, to meet the Lisbon objectives. |
| --- | --- |

1.4

The Commission's proposal to increase expenditure and to devote just under 8 % of the total Community budget to these objectives is a welcome and absolutely necessary first step in the right direction. It is a minimum amount that must be increased still further in the longer term so as not to gamble away – but rather to maintain and strengthen – Europe's position as the cradle of modern science and technology. Without such action, it will not be possible, even in the longer term, to meet the Lisbon objectives.

| 1.5 | On scientific and technological performance hinge not just economic competitiveness and the ‘pull’ that that exerts on investors, scientists and engineers (‘brain-drain’), but also cultural and political standing and influence. The EU must remain a key, sought-after partner in cooperation and must not lose its importance on the world stage as part of the global network. |
| --- | --- |

1.5

On scientific and technological performance hinge not just economic competitiveness and the ‘pull’ that that exerts on investors, scientists and engineers (‘brain-drain’), but also cultural and political standing and influence. The EU must remain a key, sought-after partner in cooperation and must not lose its importance on the world stage as part of the global network.

| 1.6 | The Committee therefore calls on the European Parliament, the European Council and, in particular, Member State heads of state or government to make the urgently needed R&D investments proposed by the Commission available in full and to ensure that these do not become a pawn in – or fall victim to – the negotiations on the EU's future overall budget. This decision will be a crucial touchstone for the capacity of European policy to set the right course for the future. |
| --- | --- |

1.6

The Committee therefore calls on the European Parliament, the European Council and, in particular, Member State heads of state or government to make the urgently needed R&D investments proposed by the Commission available in full and to ensure that these do not become a pawn in – or fall victim to – the negotiations on the EU's future overall budget. This decision will be a crucial touchstone for the capacity of European policy to set the right course for the future.

| 1.7 | The Committee also calls on the heads of state or government and on European industry, including through their national research programmes and industrial research measures, to help ensure that the 3 % target is reached as soon as possible. |
| --- | --- |

1.7

The Committee also calls on the heads of state or government and on European industry, including through their national research programmes and industrial research measures, to help ensure that the 3 % target is reached as soon as possible.

| 1.8 | The Committee welcomes the fundamental direction of the two framework programmes proposed by the Commission (FP7 and Euratom FP7), not only for their thematic content and structure, but also, for the most part, for the balance they strike between the objectives and components of the individual programmes. |
| --- | --- |

1.8

The Committee welcomes the fundamental direction of the two framework programmes proposed by the Commission (FP7 and Euratom FP7), not only for their thematic content and structure, but also, for the most part, for the balance they strike between the objectives and components of the individual programmes.

| 1.9 | The Committee is pleased at the inclusion of the energy, security and space sub-programmes. One of the key priority issues is how to secure the adequate and sustainable supply of reasonably priced energy within the EU, which means finding the right balance between sustainability, environmental protection and competitiveness. The answer lies in sufficient research and development. Security too is a major issue, as the recent heinous terrorist attacks have made only too plain. |
| --- | --- |

1.9

The Committee is pleased at the inclusion of the energy, security and space sub-programmes. One of the key priority issues is how to secure the adequate and sustainable supply of reasonably priced energy within the EU, which means finding the right balance between sustainability, environmental protection and competitiveness. The answer lies in sufficient research and development. Security too is a major issue, as the recent heinous terrorist attacks have made only too plain.

| 1.10 | Many of the issues that need to be resolved cut across different remits and a number of different sub-programmes – including the humanities and economic sciences. In such cases, the Committee recommends that steps be taken to ensure overall coordination and the necessary link-ups. That might well have an impact on the current budgetary allocation for the individual sub-programmes. The same is true of the share of the budget earmarked for economic research, which may be too low. |
| --- | --- |

1.10

Many of the issues that need to be resolved cut across different remits and a number of different sub-programmes – including the humanities and economic sciences. In such cases, the Committee recommends that steps be taken to ensure overall coordination and the necessary link-ups. That might well have an impact on the current budgetary allocation for the individual sub-programmes. The same is true of the share of the budget earmarked for economic research, which may be too low.

| 1.11 | The Committee welcomes the Commission's intention to simplify administrative procedures and reduce the effort these involve, thus boosting the efficiency of the European research programmes. As they stand, the application and approval procedures involve too much work and are too expensive, causing difficulties for scientific and industrial users. The European research programme must be a worthwhile venture for those taking part in it, including in terms of the risk involved in making the application. This also applies in particular to smaller players, such as SMEs or smaller research groups from universities and research centres. |
| --- | --- |

1.11

The Committee welcomes the Commission's intention to simplify administrative procedures and reduce the effort these involve, thus boosting the efficiency of the European research programmes. As they stand, the application and approval procedures involve too much work and are too expensive, causing difficulties for scientific and industrial users. The European research programme must be a worthwhile venture for those taking part in it, including in terms of the risk involved in making the application. This also applies in particular to smaller players, such as SMEs or smaller research groups from universities and research centres.

| 1.12 | A key consideration here is to ensure a sufficient degree of continuity in the application and support arrangements, and in the cooperative structures and organisational parameters (instruments). New instruments such as the joint technology initiatives should be introduced with great care, and, initially, for a trial period only. |
| --- | --- |

1.12

A key consideration here is to ensure a sufficient degree of continuity in the application and support arrangements, and in the cooperative structures and organisational parameters (instruments). New instruments such as the joint technology initiatives should be introduced with great care, and, initially, for a trial period only.

| 1.13 | Given the key role of small and medium-sized enterprises for the Lisbon process, the Committee welcomes the Commission's plan to involve SMEs even more closely in research, development and innovation. Accordingly, it recommends increasing the budget earmarked for this area even further where necessary, if the appropriations provided for in the competitiveness and innovation framework programme (2007-2013), which is not discussed here and which has a key support and intermediary role to play, should prove inadequate. |
| --- | --- |

1.13

Given the key role of small and medium-sized enterprises for the Lisbon process, the Committee welcomes the Commission's plan to involve SMEs even more closely in research, development and innovation. Accordingly, it recommends increasing the budget earmarked for this area even further where necessary, if the appropriations provided for in the competitiveness and innovation framework programme (2007-2013), which is not discussed here and which has a key support and intermediary role to play, should prove inadequate.

| 1.14 | To win, SMEs set up specifically to develop and market innovative high-tech products above all need enough start capital and venture capital to be able to bridge the first five to ten years of operations successfully. |
| --- | --- |

1.14

To win, SMEs set up specifically to develop and market innovative high-tech products above all need enough start capital and venture capital to be able to bridge the first five to ten years of operations successfully.

| 1.15 | The Committee supports the role of the Joint Research Centre (JRC) and the key range of responsibilities it has in many fields, including the study of future scientific, technological, economic and social trends, and their importance for policy consultations. |
| --- | --- |

1.15

The Committee supports the role of the Joint Research Centre (JRC) and the key range of responsibilities it has in many fields, including the study of future scientific, technological, economic and social trends, and their importance for policy consultations.

| 1.16 | Further, more in-depth comments and recommendations are set out in the more detailed sections 2, 4 and 5 of the opinion below. |
| --- | --- |

1.16

Further, more in-depth comments and recommendations are set out in the more detailed sections 2, 4 and 5 of the opinion below.

2.   Introduction

| 2.1 | Europe's economic, social and cultural future. Europe's future development and position on the world stage will be determined above all by the competition that exists on the global market, with its changing industrial and economic structures, labour market situation and raw material parameters. In this context, growth, success and economic strength – and the resultant capacity to provide social services and secure cultural development – are critically contingent on available knowledge and thus on investment in research and technological development. Investments in research and development have a high gain factor and boost economic strength accordingly. |
| --- | --- |

2.1

Europe's economic, social and cultural future. Europe's future development and position on the world stage will be determined above all by the competition that exists on the global market, with its changing industrial and economic structures, labour market situation and raw material parameters. In this context, growth, success and economic strength – and the resultant capacity to provide social services and secure cultural development – are critically contingent on available knowledge and thus on investment in research and technological development. Investments in research and development have a high gain factor and boost economic strength accordingly.

| 2.2 | Global competition. On the one hand, Europe is competing with the now-traditional industrial nations such as the USA, Japan and Russia, with, in all R&D sectors, US investments (3) in particular considerably outstripping those of the EU, thus steadily widening that country's existing lead. On the other hand, Europe is also competing with rapidly expanding economies such as China, India, Brazil and Korea. |
| --- | --- |

2.2

Global competition. On the one hand, Europe is competing with the now-traditional industrial nations such as the USA, Japan and Russia, with, in all R&D sectors, US investments (3) in particular considerably outstripping those of the EU, thus steadily widening that country's existing lead. On the other hand, Europe is also competing with rapidly expanding economies such as China, India, Brazil and Korea.

| 2.3 | The global research race. These last-named countries not only have much cheaper labour than the EU, but they are now also showing a rapid rise in scientific and technical standards and are investing strongly in education, research and development. For the EU, therefore, it is becoming increasingly difficult to safeguard what are, in comparison, its much higher wages and social and environmental standards by widening its scientific and technological lead and delivering superior products and processes as a result. Europe must thus do its utmost to ensure it does not lose this global race for increasing R&D investments that is so crucial for its future. |
| --- | --- |

2.3

The global research race. These last-named countries not only have much cheaper labour than the EU, but they are now also showing a rapid rise in scientific and technical standards and are investing strongly in education, research and development. For the EU, therefore, it is becoming increasingly difficult to safeguard what are, in comparison, its much higher wages and social and environmental standards by widening its scientific and technological lead and delivering superior products and processes as a result. Europe must thus do its utmost to ensure it does not lose this global race for increasing R&D investments that is so crucial for its future.

| 2.4 | Overall standing and attraction – international cooperation. On scientific and technological performance hinge not just economic competitiveness and the ‘pull’ that that exerts on investors, scientists and engineers (brain-drain), but also cultural and political prestige and influence. The EU must remain a key, sought-after partner in cooperation and must not lose its importance on the world stage as part of the global network. |
| --- | --- |

2.4

Overall standing and attraction – international cooperation. On scientific and technological performance hinge not just economic competitiveness and the ‘pull’ that that exerts on investors, scientists and engineers (brain-drain), but also cultural and political prestige and influence. The EU must remain a key, sought-after partner in cooperation and must not lose its importance on the world stage as part of the global network.

| 2.5 | The Lisbon strategy. The March 2000 Lisbon European Council therefore resolved to make the European Union the most competitive and dynamic knowledge-based economy in the world (4). Since then, implementation of the Lisbon strategy, and the creation of a strong European Research Area, which forms an integral part of the strategy, is acknowledged as the centrepiece of EU policy. The spring 2002 European Council in Barcelona added quantitative objectives for the support of research activities, with total research expenditure in the EU set to rise to 3 % of GDP by 2010, with two-thirds of funding coming from the private sector (the 3 % objective). The Committee would point out, however, that, in the light of the global investment race, this objective is a ‘moving target’. Those who fail to reach it in time fall even further behind. |
| --- | --- |

2.5

The Lisbon strategy. The March 2000 Lisbon European Council therefore resolved to make the European Union the most competitive and dynamic knowledge-based economy in the world (4). Since then, implementation of the Lisbon strategy, and the creation of a strong European Research Area, which forms an integral part of the strategy, is acknowledged as the centrepiece of EU policy. The spring 2002 European Council in Barcelona added quantitative objectives for the support of research activities, with total research expenditure in the EU set to rise to 3 % of GDP by 2010, with two-thirds of funding coming from the private sector (the 3 % objective). The Committee would point out, however, that, in the light of the global investment race, this objective is a ‘moving target’. Those who fail to reach it in time fall even further behind.

| 2.6 | Need for a strong Community framework programme. Community-funded research and development activities not only complement the Member States' research programmes, but also have considerable European added value. They open up potentials that plainly go beyond the capacities of individual Member States and have already facilitated European developments of global importance (5). They have a decisive and stimulating leverage and integration effect on the necessary and more extensive national research programmes of the Member States. They reflect the international nature of science, research and production and the international labour market that that requires. |
| --- | --- |

2.6

Need for a strong Community framework programme. Community-funded research and development activities not only complement the Member States' research programmes, but also have considerable European added value. They open up potentials that plainly go beyond the capacities of individual Member States and have already facilitated European developments of global importance (5). They have a decisive and stimulating leverage and integration effect on the necessary and more extensive national research programmes of the Member States. They reflect the international nature of science, research and production and the international labour market that that requires.

| 2.7 | A catalyst for European integration and cohesion. Community-funded research and development also brings together Europe's research elites, European industry and European decision-makers. It is a key catalyst of European integration, cohesion and identity-building. |
| --- | --- |

2.7

A catalyst for European integration and cohesion. Community-funded research and development also brings together Europe's research elites, European industry and European decision-makers. It is a key catalyst of European integration, cohesion and identity-building.

| 2.8 | The Commission's proposals. The Commission document sets out proposals for Community actions relating to programme funding and content which are urgently needed to support research and development activity, thus underpinning the objectives of the Lisbon strategy. Although they have been expanded, they still make up only a relatively small part – now just under 8 % – of the proposed overall EU budget for 2007 to 2013. |
| --- | --- |

2.8

The Commission's proposals. The Commission document sets out proposals for Community actions relating to programme funding and content which are urgently needed to support research and development activity, thus underpinning the objectives of the Lisbon strategy. Although they have been expanded, they still make up only a relatively small part – now just under 8 % – of the proposed overall EU budget for 2007 to 2013.

| 2.9 | The Commission's proposals are also linked to the proposal to establish a competitiveness and innovation framework programme (2007-2013), which is not discussed here. In particular, this programme could also act an intermediary between the framework programme submitted here and the innovation needed by many SMEs. |
| --- | --- |

2.9

The Commission's proposals are also linked to the proposal to establish a competitiveness and innovation framework programme (2007-2013), which is not discussed here. In particular, this programme could also act an intermediary between the framework programme submitted here and the innovation needed by many SMEs.

| 2.10 | Setting priorities as a test of commitment. Adoption of the proposed measures and sufficiently high priority treatment by the Parliament, Council and particularly – with regard to the financial perspectives – the Member States, is therefore a crucial test of the EU's commitment and the extent to which its policies are credible and able to deliver results. (See also points 4.2 to 4.6). |
| --- | --- |

2.10

Setting priorities as a test of commitment. Adoption of the proposed measures and sufficiently high priority treatment by the Parliament, Council and particularly – with regard to the financial perspectives – the Member States, is therefore a crucial test of the EU's commitment and the extent to which its policies are credible and able to deliver results. (See also points 4.2 to 4.6).

3.   Gist of the Commission document

| 3.1 | The seventh framework programme of the European Community for research, technological development and demonstration activities (2007 to 2013), referred to hereafter as the FP7, differs from its predecessor in the following respects:






  — | It encompasses the EU-25 from the very start. |
| --- | --- | --- |

3.1

The seventh framework programme of the European Community for research, technological development and demonstration activities (2007 to 2013), referred to hereafter as the FP7, differs from its predecessor in the following respects:

—

It encompasses the EU-25 from the very start.

| — | The programming period has been extended by two years. |
| --- | --- |

—

The programming period has been extended by two years.

| — | The programme envisages a substantial increase in the total budget and annual budgets. |
| --- | --- |

—

The programme envisages a substantial increase in the total budget and annual budgets.

| — | It provides a clear and readily understandable breakdown of the proposed programmes and sub-programmes. |
| --- | --- |

—

It provides a clear and readily understandable breakdown of the proposed programmes and sub-programmes.

| — | Research in the fields of energy, security and space are included as explicit new sub-programmes. |
| --- | --- |

—

Research in the fields of energy, security and space are included as explicit new sub-programmes.

| 3.2 | By contrast, the seventh framework programme of the European Atomic Energy Community (Euratom) for nuclear research and training activities (2007 to 2011), referred to hereafter as the Euratom FP7, is of the same duration as before, although obviously it too covers the EU-25. |
| --- | --- |

3.2

By contrast, the seventh framework programme of the European Atomic Energy Community (Euratom) for nuclear research and training activities (2007 to 2011), referred to hereafter as the Euratom FP7, is of the same duration as before, although obviously it too covers the EU-25.

| 3.3 | The FP7 Framework Programme will be organised in four specific programmes, corresponding to the four major objectives of European research policy:






  — | Cooperation

  With about 61 % of the total budget, this programme accounts for the lion's share of FP7. It is intended to support research activities carried out in transnational cooperation, including cooperation between the EU and third countries. |
| --- | --- | --- |

3.3

The FP7 Framework Programme will be organised in four specific programmes, corresponding to the four major objectives of European research policy:

—

Cooperation

With about 61 % of the total budget, this programme accounts for the lion's share of FP7. It is intended to support research activities carried out in transnational cooperation, including cooperation between the EU and third countries.

| — | Ideas

  An autonomous European Research Council will be created to support ‘frontier research’ projects competing at the European level. This may include all scientific and technological fields, including the humanities. |
| --- | --- |

—

Ideas

An autonomous European Research Council will be created to support ‘frontier research’ projects competing at the European level. This may include all scientific and technological fields, including the humanities.

| — | People

  Support for training and career development of researchers, referred to as ‘Marie Curie’ actions, will be reinforced and expanded, with stronger links to national systems. |
| --- | --- |

—

People

Support for training and career development of researchers, referred to as ‘Marie Curie’ actions, will be reinforced and expanded, with stronger links to national systems.

| — | Capacities

  This programme is intended to support various aspects of European research and innovation capacities: developing new research infrastructures and building on existing infrastructures; research for the benefit of SMEs; regional research-driven clusters; unlocking the full research potential in the EU's ‘convergence’ regions; ‘science in society’ issues; ‘horizontal’ activities of international cooperation. |
| --- | --- |

—

Capacities

This programme is intended to support various aspects of European research and innovation capacities: developing new research infrastructures and building on existing infrastructures; research for the benefit of SMEs; regional research-driven clusters; unlocking the full research potential in the EU's ‘convergence’ regions; ‘science in society’ issues; ‘horizontal’ activities of international cooperation.

| — | Joint Research Centre

  In addition, there will be a specific programme for the non-nuclear actions of the Joint Research Centre. |
| --- | --- |

—

Joint Research Centre

In addition, there will be a specific programme for the non-nuclear actions of the Joint Research Centre.

| 3.4 | The proposed total of Community financial participation in FP7 is EUR 72,726 million. That amount is to be distributed, in percentage terms, among the activities and actions referred to in paragraphs 2 to 6 of Article 2, as follows:






  Cooperation | 61,1% |
| --- | --- | --- |
| Ideas | 16,3% |
| People | 9,8% |
| Capacities | 10,3% |
| Non-nuclear actions of the Joint Research Centre | 2,5% |

3.4

The proposed total of Community financial participation in FP7 is EUR 72,726 million. That amount is to be distributed, in percentage terms, among the activities and actions referred to in paragraphs 2 to 6 of Article 2, as follows:

Cooperation

61,1%

Ideas

16,3%

People

9,8%

Capacities

10,3%

Non-nuclear actions of the Joint Research Centre

2,5%

| 3.5 | The cooperation programme has a proposed overall budget of EUR 44,432 million and is organised into thematic sub-programmes on the basis of priorities. Steps are to be taken to ensure consistency among the sub-programmes, and joint, cross-thematic approaches. The programme covers the following nine research subjects, which are to be approached within the EU in transnational cooperation. The proposed percentage budget allocation is also shown.












  — | Health |
| --- | --- | --- |

3.5

The cooperation programme has a proposed overall budget of EUR 44,432 million and is organised into thematic sub-programmes on the basis of priorities. Steps are to be taken to ensure consistency among the sub-programmes, and joint, cross-thematic approaches. The programme covers the following nine research subjects, which are to be approached within the EU in transnational cooperation. The proposed percentage budget allocation is also shown.

—

Health

18,7%

| — | Food, Agriculture and Biotechnology |
| --- | --- |

—

Food, Agriculture and Biotechnology

5,5%

| — | Information and Communication Technologies |
| --- | --- |

—

Information and Communication Technologies

28,5%

| — | Nanosciences, Nanotechnologies, Materials and new Production Technologies |
| --- | --- |

—

Nanosciences, Nanotechnologies, Materials and new Production Technologies

10,9%

| — | Energy |
| --- | --- |

—

Energy

6,6%

| — | Environment (including Climate Change) |
| --- | --- |

—

Environment (including Climate Change)

5,7%

| — | Transport (including Aeronautics) |
| --- | --- |

—

Transport (including Aeronautics)

13,3%

| — | Socio-economic Sciences and the Humanities |
| --- | --- |

—

Socio-economic Sciences and the Humanities

1,8%

| — | Security and Space |
| --- | --- |

—

Security and Space

8,9%

| 3.6 | Euratom FP7 is organised in two specific programmes. |
| --- | --- |

3.6

Euratom FP7 is organised in two specific programmes.

| 3.6.1 | One covers two areas:






  — | Fusion energy research: to develop the technology for a safe, sustainable, environmentally responsible and economically viable energy source. |
| --- | --- | --- |

3.6.1

One covers two areas:

—

Fusion energy research: to develop the technology for a safe, sustainable, environmentally responsible and economically viable energy source.

| — | Nuclear fission and radiation protection: to promote the safe use and exploitation of nuclear fission and other uses of radiation in industry and medicine. |
| --- | --- |

—

Nuclear fission and radiation protection: to promote the safe use and exploitation of nuclear fission and other uses of radiation in industry and medicine.

| 3.6.2 | The other programme covers the activities of the Joint Research Centre in the field of nuclear energy. |
| --- | --- |

3.6.2

The other programme covers the activities of the Joint Research Centre in the field of nuclear energy.

| 3.6.3 | A total of EUR 3,092 million is to be earmarked for the implementation of Euratom FP7 for the period from 2007 to 2011. That amount is distributed in percentage terms as follows:












  (a) | Fusion energy research |
| --- | --- | --- |

3.6.3

A total of EUR 3,092 million is to be earmarked for the implementation of Euratom FP7 for the period from 2007 to 2011. That amount is distributed in percentage terms as follows:

(a)

Fusion energy research

69,8%

| (b) | Nuclear Fission and Radiation Protection |
| --- | --- |

(b)

Nuclear Fission and Radiation Protection

12,8%

| (c) | Nuclear Activities of the Joint Research Centre |
| --- | --- |

(c)

Nuclear Activities of the Joint Research Centre

17,4%

| 3.7 | The Commission document also contains a detailed analysis and explanation of the proposed support instruments and underlying principles. These were already outlined in a previous Communication from the Commission (6), which the Committee has evaluated in depth (7). |
| --- | --- |

3.7

The Commission document also contains a detailed analysis and explanation of the proposed support instruments and underlying principles. These were already outlined in a previous Communication from the Commission (6), which the Committee has evaluated in depth (7).

4.   General comments

| 4.1 | The Commission proposal is a very substantial document, which outlines an extensive research and development programme with its many details, aspects and links to other areas. In view of this, this opinion cannot analyse or comment on all the components and procedures of the programme. Detailed comments are therefore reserved for aspects to which the Committee attaches particular importance. The Committee would draw attention to its earlier recommendations (8) on relevant specific issues, and notes that these still apply to FP7. The Committee will make more detailed statements in its upcoming opinions on the Commission communications on the specific programmes (9) and access rules (10). |
| --- | --- |

4.1

The Commission proposal is a very substantial document, which outlines an extensive research and development programme with its many details, aspects and links to other areas. In view of this, this opinion cannot analyse or comment on all the components and procedures of the programme. Detailed comments are therefore reserved for aspects to which the Committee attaches particular importance. The Committee would draw attention to its earlier recommendations (8) on relevant specific issues, and notes that these still apply to FP7. The Committee will make more detailed statements in its upcoming opinions on the Commission communications on the specific programmes (9) and access rules (10).

| 4.2 | The Committee considers both proposed budgets as minimum amounts that must be increased still further in the longer term so as not to gamble away – but rather to maintain and strengthen – Europe's position as the cradle of modern science and technology. The Committee sees this as a welcome and absolutely necessary first step in bringing the Community at least closer towards to the 3 % objective
   (11) set by European heads of state or government at the Barcelona summit. |
| --- | --- |

4.2

The Committee considers both proposed budgets as minimum amounts that must be increased still further in the longer term so as not to gamble away – but rather to maintain and strengthen – Europe's position as the cradle of modern science and technology. The Committee sees this as a welcome and absolutely necessary first step in bringing the Community at least closer towards to the 3 % objective
   (11) set by European heads of state or government at the Barcelona summit.

| 4.3 | Without adequate financial backing, FP7 and Euratom FP7 will not be able to contribute to the Lisbon strategy; there is even a risk that Europe will fall further behind in the global race. R&D are the starting point and engine of innovation for competitive products and technologies. They can trigger a snowball effect that will then impact on economic momentum and jobs. |
| --- | --- |

4.3

Without adequate financial backing, FP7 and Euratom FP7 will not be able to contribute to the Lisbon strategy; there is even a risk that Europe will fall further behind in the global race. R&D are the starting point and engine of innovation for competitive products and technologies. They can trigger a snowball effect that will then impact on economic momentum and jobs.

| 4.4 | Furthermore, the Commission proposal is a clear signal to Member States to follow this example and do everything possible, including in their national research budgets, to attain the 3 % objective. |
| --- | --- |

4.4

Furthermore, the Commission proposal is a clear signal to Member States to follow this example and do everything possible, including in their national research budgets, to attain the 3 % objective.

| 4.5 | Consequently, the Committee views the total funding decided on for the two budgets as a crucial test of European policies, of their credibility and ability to deliver results. It is this funding which will reveal the extent to which Europe has set itself the right priorities and is on the right course to prevent the EU falling behind in the global race and to deliver the promises of the Lisbon objectives. |
| --- | --- |

4.5

Consequently, the Committee views the total funding decided on for the two budgets as a crucial test of European policies, of their credibility and ability to deliver results. It is this funding which will reveal the extent to which Europe has set itself the right priorities and is on the right course to prevent the EU falling behind in the global race and to deliver the promises of the Lisbon objectives.

| 4.6 | Appeal. The Committee thus calls on the European Parliament, the European Council and, in particular, the Member State heads of state or government to ensure that the urgently needed R&D investments proposed by the Commission are actually made available and do not become a pawn in – or fall victim to – the negotiations on the future overall EU budget. Major difficulties would otherwise ensue, the Lisbon strategy objectives would not be met, and the standing and credibility of European policy would be dented. |
| --- | --- |

4.6

Appeal. The Committee thus calls on the European Parliament, the European Council and, in particular, the Member State heads of state or government to ensure that the urgently needed R&D investments proposed by the Commission are actually made available and do not become a pawn in – or fall victim to – the negotiations on the future overall EU budget. Major difficulties would otherwise ensue, the Lisbon strategy objectives would not be met, and the standing and credibility of European policy would be dented.

| 4.7 | The Committee also calls on the Member State heads of state or government and on European industry, including through their more extensive national research programmes and industrial research measures, to make a major effort to ensure that the 3 % target is reached as soon as possible. |
| --- | --- |

4.7

The Committee also calls on the Member State heads of state or government and on European industry, including through their more extensive national research programmes and industrial research measures, to make a major effort to ensure that the 3 % target is reached as soon as possible.

| 4.8 | The Committee welcomes the fundamental direction of the two framework programmes proposed by the Commission (FP7 and Euratom FP7), not only for their thematic content and structure, but also, for the most part, for the balance they strike between the objectives and components of the individual programmes. |
| --- | --- |

4.8

The Committee welcomes the fundamental direction of the two framework programmes proposed by the Commission (FP7 and Euratom FP7), not only for their thematic content and structure, but also, for the most part, for the balance they strike between the objectives and components of the individual programmes.

| 4.9 | The Committee notes with approval that the Commission's proposal has taken on board or attached particular importance to many of its recommendations. In the case of the research themes of the specific cooperation programme, these recommendations relate to its opinions on subjects such as nanotechnology
   (12), biotechnology
   (13)
  health research
   (14), information technology
   (15), energy research
   (16) (including fusion energy research (17)), space
   (18) and security research
   (19). The Committee would reiterate at this point that it considers all these issues to be very important and thus strongly advocates that they be dealt with appropriately. Any gaps or other specific points still identified by the Committee will be addressed at a later stage. |
| --- | --- |

4.9

The Committee notes with approval that the Commission's proposal has taken on board or attached particular importance to many of its recommendations. In the case of the research themes of the specific cooperation programme, these recommendations relate to its opinions on subjects such as nanotechnology
   (12), biotechnology
   (13)
  health research
   (14), information technology
   (15), energy research
   (16) (including fusion energy research (17)), space
   (18) and security research
   (19). The Committee would reiterate at this point that it considers all these issues to be very important and thus strongly advocates that they be dealt with appropriately. Any gaps or other specific points still identified by the Committee will be addressed at a later stage.

| 4.10 | It is true that in the case of space and security research, the Committee had made a reasoned case for such research to be managed and supported outside FP7. However, it realises that there are also arguments in favour of incorporating this area into FP7; for example, management would be more straightforward, and there would be better synergy and coherence with other sub-programmes. Therefore, it would now advocate initially incorporating these sub-programmes into FP7 on a trial basis and, depending on the results, making the necessary changes after the mid-term review, or in FP8. |
| --- | --- |

4.10

It is true that in the case of space and security research, the Committee had made a reasoned case for such research to be managed and supported outside FP7. However, it realises that there are also arguments in favour of incorporating this area into FP7; for example, management would be more straightforward, and there would be better synergy and coherence with other sub-programmes. Therefore, it would now advocate initially incorporating these sub-programmes into FP7 on a trial basis and, depending on the results, making the necessary changes after the mid-term review, or in FP8.

| 4.10.1 | Space-based applications at the service of the European society, which falls under the space sub-programme, will, as a typical cross-cutting theme (see section 5), be coordinated with the themes of security, the environment and information technology. |
| --- | --- |

4.10.1

Space-based applications at the service of the European society, which falls under the space sub-programme, will, as a typical cross-cutting theme (see section 5), be coordinated with the themes of security, the environment and information technology.

| 4.10.2 | Security research themes, which are, sadly, of particular concern at the moment, such as protection against terrorism and crime, security of infrastructures and utilities, border security, and security and society are cross-cutting issues that should be complemented by research in the humanities and sociology on themes such as conflict and peace and culture, in order to learn more about the background to conflicts and ways of avoiding or preventing them. Particular attention should be paid to combating terrorism and the control of menacing weapons of mass destruction (see also point 6.4.3 below). |
| --- | --- |

4.10.2

Security research themes, which are, sadly, of particular concern at the moment, such as protection against terrorism and crime, security of infrastructures and utilities, border security, and security and society are cross-cutting issues that should be complemented by research in the humanities and sociology on themes such as conflict and peace and culture, in order to learn more about the background to conflicts and ways of avoiding or preventing them. Particular attention should be paid to combating terrorism and the control of menacing weapons of mass destruction (see also point 6.4.3 below).

| 4.11 | With regard to the ideas programme, the Committee is also pleased to note that its recommendations (20) have been taken up. These dealt largely with the autonomous management of this programme by the European Research Council, which is to be made up of outstanding scientists of international renown. The Committee would reiterate its recommendation to involve high-calibre industrial research scientists in this venture as well. The Committee therefore feels it is all the more imperative that the Parliament and the Council should approve this new type of research support, which should be organised on similar lines to the UK Medical Research Council or the German Research Foundation (Deutsche Forschungsgemeinschaft), for example. |
| --- | --- |

4.11

With regard to the ideas programme, the Committee is also pleased to note that its recommendations (20) have been taken up. These dealt largely with the autonomous management of this programme by the European Research Council, which is to be made up of outstanding scientists of international renown. The Committee would reiterate its recommendation to involve high-calibre industrial research scientists in this venture as well. The Committee therefore feels it is all the more imperative that the Parliament and the Council should approve this new type of research support, which should be organised on similar lines to the UK Medical Research Council or the German Research Foundation (Deutsche Forschungsgemeinschaft), for example.

| 4.11.1 | This programme, which seeks to promote excellence in all areas of science and technology, will offer European added value and contribute to the EU's competitiveness in the global context. The Committee would point out in particular that (21)
  basic research which is free, independent and unhampered, even though subject to certain limits, is the only kind of research which can deliver the key ingredient for future prosperity – new knowledge. Industry also acknowledges the value of basic research and the need to support it (22). |
| --- | --- |

4.11.1

This programme, which seeks to promote excellence in all areas of science and technology, will offer European added value and contribute to the EU's competitiveness in the global context. The Committee would point out in particular that (21)
  basic research which is free, independent and unhampered, even though subject to certain limits, is the only kind of research which can deliver the key ingredient for future prosperity – new knowledge. Industry also acknowledges the value of basic research and the need to support it (22).

| 4.11.2 | At the same time, this ties in with repeated recommendations by the Committee to give due emphasis to all three essential sides of the innovation triangle – basic research, applied research and development (product and process development), in order to create the best possible conditions for full success, while helping to promote multidisciplinarity, as advocated by the Commission. The Committee would again point out that the dividing lines between the terms basic research, applied research and development have always been fluid and arbitrary, and their importance should not, therefore, be artificially inflated by administrative measures. |
| --- | --- |

4.11.2

At the same time, this ties in with repeated recommendations by the Committee to give due emphasis to all three essential sides of the innovation triangle – basic research, applied research and development (product and process development), in order to create the best possible conditions for full success, while helping to promote multidisciplinarity, as advocated by the Commission. The Committee would again point out that the dividing lines between the terms basic research, applied research and development have always been fluid and arbitrary, and their importance should not, therefore, be artificially inflated by administrative measures.

| 4.12 | The Committee also welcomes the proposal to beef up actions under the people heading and the associated ‘Marie Curie’ programmes. This programme has so far also proven to be an extremely successful and important means of training and supporting European researchers, and of making the European Research Area more attractive for researchers from all over the world. The Committee reiterates that, as well as creating new knowledge, researchers are also the main agents in the transfer of such knowledge between countries and continents, and also between research establishments and industry, i.e. between research and application. |
| --- | --- |

4.12

The Committee also welcomes the proposal to beef up actions under the people heading and the associated ‘Marie Curie’ programmes. This programme has so far also proven to be an extremely successful and important means of training and supporting European researchers, and of making the European Research Area more attractive for researchers from all over the world. The Committee reiterates that, as well as creating new knowledge, researchers are also the main agents in the transfer of such knowledge between countries and continents, and also between research establishments and industry, i.e. between research and application.

| 4.12.1 | The objectives of life-long training and career development and pathways and partnerships between industry and universities are particularly interesting aspects of the programme. Whereas the first objective applies to training for young researchers and subsequent professional development (including the professional development of experienced researchers – see also the next point), the second concerns the important task of launching and supporting longer-term cooperation programmes between organisations from academia and industry, in particular SMEs, thus underpinning the innovation triangle outlined above. It is therefore particularly important to promote mobility between the public and private sectors. This should also include mobility in relation to, and partnerships with, for instance, the farming sector or political institutions. |
| --- | --- |

4.12.1

The objectives of life-long training and career development and pathways and partnerships between industry and universities are particularly interesting aspects of the programme. Whereas the first objective applies to training for young researchers and subsequent professional development (including the professional development of experienced researchers – see also the next point), the second concerns the important task of launching and supporting longer-term cooperation programmes between organisations from academia and industry, in particular SMEs, thus underpinning the innovation triangle outlined above. It is therefore particularly important to promote mobility between the public and private sectors. This should also include mobility in relation to, and partnerships with, for instance, the farming sector or political institutions.

| 4.12.2 | The Committee is also touching here on the key role of universities as research and training bodies. To be able to meet their remit, however, it is essential that universities have the material and tools they need, as well as an appropriate staff budget and organisational structure (see also point 4.15.4). There are major shortcomings on this front – not least in comparison with top universities, for instance in the USA. The Committee is therefore pleased that the Commission is working on a separate communication on this issue, on which the Committee itself will also issue an opinion. At this stage, the Committee would just make clear one key point in relation to FP7: namely that the support instruments must be in keeping with the usual scale of projects conducted by university research groups. |
| --- | --- |

4.12.2

The Committee is also touching here on the key role of universities as research and training bodies. To be able to meet their remit, however, it is essential that universities have the material and tools they need, as well as an appropriate staff budget and organisational structure (see also point 4.15.4). There are major shortcomings on this front – not least in comparison with top universities, for instance in the USA. The Committee is therefore pleased that the Commission is working on a separate communication on this issue, on which the Committee itself will also issue an opinion. At this stage, the Committee would just make clear one key point in relation to FP7: namely that the support instruments must be in keeping with the usual scale of projects conducted by university research groups.

| 4.13 | In addition, the Committee endorses the Commission's efforts to establish a coherent professional profile for European researchers, to develop a stable career structure, and to adapt internal market rules accordingly. The Committee has pointed out in the past (23) that human capital is the most sensitive and valuable resource for research and development and that it supports the Commission's efforts to maintain and develop human resources. The Committee agrees with the Commission that improvements are needed both in relation to researchers' contracts and to the adaptation/portability of all aspects of social security and retirement provision, which are so important for all types of mobility. |
| --- | --- |

4.13

In addition, the Committee endorses the Commission's efforts to establish a coherent professional profile for European researchers, to develop a stable career structure, and to adapt internal market rules accordingly. The Committee has pointed out in the past (23) that human capital is the most sensitive and valuable resource for research and development and that it supports the Commission's efforts to maintain and develop human resources. The Committee agrees with the Commission that improvements are needed both in relation to researchers' contracts and to the adaptation/portability of all aspects of social security and retirement provision, which are so important for all types of mobility.

| 4.13.1 | Capable young scientists will take their research out of Europe or turn to other activities unless we succeed in offering them an attractive and predictable career path (known in the USA as a tenure track). Mobility among scientists is needed and wanted not only within the EU, but also between the EU and many other countries. This must not, however, lead to a net loss of the most gifted among them (brain-drain). One particular aspect of this, in view of the importance of family cohesion, is the option of ‘dual-career-couples’. |
| --- | --- |

4.13.1

Capable young scientists will take their research out of Europe or turn to other activities unless we succeed in offering them an attractive and predictable career path (known in the USA as a tenure track). Mobility among scientists is needed and wanted not only within the EU, but also between the EU and many other countries. This must not, however, lead to a net loss of the most gifted among them (brain-drain). One particular aspect of this, in view of the importance of family cohesion, is the option of ‘dual-career-couples’.

| 4.13.2 | The Committee would refer in that regard to the Commission's recommendation of 11 March 2005 concerning the European Charter for Researchers
   (24) and a code of conduct for the recruitment of researchers designed to promote the objectives set out above. The Committee very much endorses the intentions expressed therein and many of the individual proposals. It therefore regrets that in certain respects the proposed rules go too far and thus make it difficult for the provisions – and the fundamentally warranted concern that underpins them – to secure acceptance among the scientific community. In some cases, the wording and recommendations are even misleading, or at the very least unclear or ambiguous (25). This can, among other things, make simplification more difficult (see next point) or result in unsound decisions being taken. The Committee therefore recommends that these key provisions be revised as appropriate when the opportunity arises. |
| --- | --- |

4.13.2

The Committee would refer in that regard to the Commission's recommendation of 11 March 2005 concerning the European Charter for Researchers
   (24) and a code of conduct for the recruitment of researchers designed to promote the objectives set out above. The Committee very much endorses the intentions expressed therein and many of the individual proposals. It therefore regrets that in certain respects the proposed rules go too far and thus make it difficult for the provisions – and the fundamentally warranted concern that underpins them – to secure acceptance among the scientific community. In some cases, the wording and recommendations are even misleading, or at the very least unclear or ambiguous (25). This can, among other things, make simplification more difficult (see next point) or result in unsound decisions being taken. The Committee therefore recommends that these key provisions be revised as appropriate when the opportunity arises.

| 4.14 | In this context, the Committee endorses the Commission's declared intention, under the heading of simplification, of streamlining numerous actions and rules for application and decision-making procedures, thereby making them markedly easier for applicants to deal with. Ultimately, the considerable investment of time and money involved in application and approval procedures is one of the main obstacles for scientific and industrial users. This applies in particular to SMEs with their considerable potential for innovation, and to smaller, university-based research groups. More user-friendly procedures would considerably enhance the efficiency of European support for research, besides helping to improve perceptions of ‘Brussels’ among the European public, which, unfortunately, are largely clouded by images of ‘red tape’ and ‘overregulation’. The Committee reiterates its earlier recommendations to this effect and its endorsement of the Marimon Report (26). The European research programme must be a worthwhile venture for those taking part in it, including in terms of the effort and risk involved in making the application. |
| --- | --- |

4.14

In this context, the Committee endorses the Commission's declared intention, under the heading of simplification, of streamlining numerous actions and rules for application and decision-making procedures, thereby making them markedly easier for applicants to deal with. Ultimately, the considerable investment of time and money involved in application and approval procedures is one of the main obstacles for scientific and industrial users. This applies in particular to SMEs with their considerable potential for innovation, and to smaller, university-based research groups. More user-friendly procedures would considerably enhance the efficiency of European support for research, besides helping to improve perceptions of ‘Brussels’ among the European public, which, unfortunately, are largely clouded by images of ‘red tape’ and ‘overregulation’. The Committee reiterates its earlier recommendations to this effect and its endorsement of the Marimon Report (26). The European research programme must be a worthwhile venture for those taking part in it, including in terms of the effort and risk involved in making the application.

| 4.14.1 | The Committee is aware that this issue touches on the balance between the requirement for transparency, the rules of the European Court of Auditors and the need for all decision-makers to have sufficient room for manoeuvre. This can and must lead to stakeholders from the Commission or its authorised agencies acting more on their own initiative (although the problem of their personal liability will have to be considered), which in turn will place very exacting demands on their specialist knowledge. The Committee therefore reiterates its recommendation that specific experts with many years' experience are needed here. The Committee would refer to its earlier recommendations on this point (27). |
| --- | --- |

4.14.1

The Committee is aware that this issue touches on the balance between the requirement for transparency, the rules of the European Court of Auditors and the need for all decision-makers to have sufficient room for manoeuvre. This can and must lead to stakeholders from the Commission or its authorised agencies acting more on their own initiative (although the problem of their personal liability will have to be considered), which in turn will place very exacting demands on their specialist knowledge. The Committee therefore reiterates its recommendation that specific experts with many years' experience are needed here. The Committee would refer to its earlier recommendations on this point (27).

| 4.14.2 | A particularly important facet of securing innovation and ‘going the extra mile’ is the willingness to accept uncertainty and the risk of failure. No attempt to break new scientific and technological ground, no quest to discover the unknown can be planned or organised in such a way that success is guaranteed. Indeed, the reverse is true. Nothing new can be discovered if everything is known in advance. ‘Failure’ must not therefore be seen as such, but rather a useful finding in the trial-and-error process. Opportunity and risk are two sides of the same coin. |
| --- | --- |

4.14.2

A particularly important facet of securing innovation and ‘going the extra mile’ is the willingness to accept uncertainty and the risk of failure. No attempt to break new scientific and technological ground, no quest to discover the unknown can be planned or organised in such a way that success is guaranteed. Indeed, the reverse is true. Nothing new can be discovered if everything is known in advance. ‘Failure’ must not therefore be seen as such, but rather a useful finding in the trial-and-error process. Opportunity and risk are two sides of the same coin.

| 4.14.3 | It is advisable to set up external agencies only if a clear improvement in administrative procedures can be achieved by doing so and if there is a clear and proven cost advantage to be gained. Any additional or external administrative costs must not, under any circumstances, eat into the budget available for actual research. |
| --- | --- |

4.14.3

It is advisable to set up external agencies only if a clear improvement in administrative procedures can be achieved by doing so and if there is a clear and proven cost advantage to be gained. Any additional or external administrative costs must not, under any circumstances, eat into the budget available for actual research.

| 4.15 | The Committee also particularly welcomes the important sub-programmes included under the capacities programme. These cover the fields of research infrastructures; research for the benefit of SMEs; regions of knowledge; research potential; science in society; and activities of international cooperation. |
| --- | --- |

4.15

The Committee also particularly welcomes the important sub-programmes included under the capacities programme. These cover the fields of research infrastructures; research for the benefit of SMEs; regions of knowledge; research potential; science in society; and activities of international cooperation.

| 4.15.1 | The important objective of involving small and medium-sized enterprises (SMEs) more closely in research and innovation process and creating suitable conditions and tools for this to happen is of particular interest. |
| --- | --- |

4.15.1

The important objective of involving small and medium-sized enterprises (SMEs) more closely in research and innovation process and creating suitable conditions and tools for this to happen is of particular interest.

| 4.15.2 | Support from the innovation programme may prove to be another useful means of supporting SMEs
   (28), but, here too, procedures must be kept practicable and in due proportion to the resources of SMEs. Depending on the success of this innovation programme, the Committee feels it would be worth considering a further increase in the share of explicit SME support from its current level of 15 %, not least given the requirements of the new Member States. The Committee would reiterate its earlier statements on this issue, namely that, to win, SMEs set up specifically to develop and market innovative high-tech products above all need enough start capital and venture capital to be able to bridge the first five to ten years of operations successfully. Economic research and economic policy can make key contributions here. |
| --- | --- |

4.15.2

Support from the innovation programme may prove to be another useful means of supporting SMEs
   (28), but, here too, procedures must be kept practicable and in due proportion to the resources of SMEs. Depending on the success of this innovation programme, the Committee feels it would be worth considering a further increase in the share of explicit SME support from its current level of 15 %, not least given the requirements of the new Member States. The Committee would reiterate its earlier statements on this issue, namely that, to win, SMEs set up specifically to develop and market innovative high-tech products above all need enough start capital and venture capital to be able to bridge the first five to ten years of operations successfully. Economic research and economic policy can make key contributions here.

| 4.15.3 | Equally important are the objectives of optimising and developing research infrastructures, of developing regional research-driven clusters, and of promoting and unlocking research potential in the EU's convergence and outermost regions. Developing research infrastructures and establishing new infrastructures will promote and stimulate the emergence of regional research-driven clusters. Here too, there is above all a need for adequate venture capital – a crucial factor in success. |
| --- | --- |

4.15.3

Equally important are the objectives of optimising and developing research infrastructures, of developing regional research-driven clusters, and of promoting and unlocking research potential in the EU's convergence and outermost regions. Developing research infrastructures and establishing new infrastructures will promote and stimulate the emergence of regional research-driven clusters. Here too, there is above all a need for adequate venture capital – a crucial factor in success.

| 4.15.4 | The Committee would above all stress the importance of adequate infrastructure measures to get the universities up to speed (see point 4.12.2 above). In this context, the Committee notes that, in a number of places in the EU, successful clusters of high-tech firms have grown up around certain universities and/or research centres, sparking growth and innovation in the neighbouring economic area as well (poles of economic growth). See also point 4.16.2. |
| --- | --- |

4.15.4

The Committee would above all stress the importance of adequate infrastructure measures to get the universities up to speed (see point 4.12.2 above). In this context, the Committee notes that, in a number of places in the EU, successful clusters of high-tech firms have grown up around certain universities and/or research centres, sparking growth and innovation in the neighbouring economic area as well (poles of economic growth). See also point 4.16.2.

| 4.15.5 | There is more on the role of European supercomputer centres as an additional and very important infrastructure measure at a later stage in this opinion (see point 5.8 below). |
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4.15.5

There is more on the role of European supercomputer centres as an additional and very important infrastructure measure at a later stage in this opinion (see point 5.8 below).

| 4.15.6 | The Committee also recommends that, subject to its inclusion under the ‘Ideas’ programme as well, the issue of science in society – currently one of the activities under the ‘Capacities’ heading – should be switched (29) to the priority sub-programme‘Socio-economic sciences and the humanities’ which is part of the ‘Cooperation’ programme. In this way, more effective use might be made of the potential synergies between these themes, and the necessary links could also be established. This would also make it clearer that the total budget of these overlapping issues is 3 % of the thematic, priority programmes. |
| --- | --- |

4.15.6

The Committee also recommends that, subject to its inclusion under the ‘Ideas’ programme as well, the issue of science in society – currently one of the activities under the ‘Capacities’ heading – should be switched (29) to the priority sub-programme‘Socio-economic sciences and the humanities’ which is part of the ‘Cooperation’ programme. In this way, more effective use might be made of the potential synergies between these themes, and the necessary links could also be established. This would also make it clearer that the total budget of these overlapping issues is 3 % of the thematic, priority programmes.

| 4.15.7 | Sound and effective international cooperation in research and training is a key element of global partnership and reflects with the very nature of scientific R&D. International cooperation activities (30), which come under the capacities sub-programme, focus on the key issue of working together (see also point 4.13.1) with applicant countries, countries neighbouring the EU, developing countries and emerging economies. The Committee is pleased that cooperation with economically and technically advanced countries such as the USA or Japan, which is, at the least, equally important, is made possible under the ‘Cooperation’ or ‘People’ sub-programmes, and that, in individual cases, such cooperation has even been placed on an institutional footing through bilateral agreements. The Committee recognises that this cooperation must grow out of actual need in the fields concerned, but it would nonetheless recommend raising the profile of these important facts and giving them greater emphasis. |
| --- | --- |

4.15.7

Sound and effective international cooperation in research and training is a key element of global partnership and reflects with the very nature of scientific R&D. International cooperation activities (30), which come under the capacities sub-programme, focus on the key issue of working together (see also point 4.13.1) with applicant countries, countries neighbouring the EU, developing countries and emerging economies. The Committee is pleased that cooperation with economically and technically advanced countries such as the USA or Japan, which is, at the least, equally important, is made possible under the ‘Cooperation’ or ‘People’ sub-programmes, and that, in individual cases, such cooperation has even been placed on an institutional footing through bilateral agreements. The Committee recognises that this cooperation must grow out of actual need in the fields concerned, but it would nonetheless recommend raising the profile of these important facts and giving them greater emphasis.

| 4.16 | Continuity and tools to promote research (forms of support). With regard to both aspects, the Committee strongly reaffirms its recommendations put forward in a previous opinion. In view of the urgent need for greater continuity, the Committee reiterates its point that the retention of instruments which have proved their worth is an important means of achieving this objective, and that there should be scope for flexibility in applicants' choices of instruments. At the same time, however, the assessment procedure must not sanction the choice of a particular instrument (not favoured by the Commission), nor may it give priority to particular instruments. The Committee also sees the extended duration of FP7 as a contribution to greater continuity, provided, however, that it is adequately funded. |
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4.16

Continuity and tools to promote research (forms of support). With regard to both aspects, the Committee strongly reaffirms its recommendations put forward in a previous opinion. In view of the urgent need for greater continuity, the Committee reiterates its point that the retention of instruments which have proved their worth is an important means of achieving this objective, and that there should be scope for flexibility in applicants' choices of instruments. At the same time, however, the assessment procedure must not sanction the choice of a particular instrument (not favoured by the Commission), nor may it give priority to particular instruments. The Committee also sees the extended duration of FP7 as a contribution to greater continuity, provided, however, that it is adequately funded.

| 4.16.1 | Some of the instruments have been re-named or are entirely new. At this point the Committee would reiterate its general recommendations to the effect that, firstly, the Commission should, in the interests of continuity, proceed with great caution in introducing new instruments, or even renaming existing ones, and secondly, during the necessary trials of new instruments, it should make it clear that such instruments may still be in the testing phase. |
| --- | --- |

4.16.1

Some of the instruments have been re-named or are entirely new. At this point the Committee would reiterate its general recommendations to the effect that, firstly, the Commission should, in the interests of continuity, proceed with great caution in introducing new instruments, or even renaming existing ones, and secondly, during the necessary trials of new instruments, it should make it clear that such instruments may still be in the testing phase.

| 4.16.2 | In addition to the technology platforms mentioned earlier, the joint technology initiatives are also a new instrument of this kind designed to promote the establishment of longer-term public-private partnerships. There are high hopes for these initiatives within industry and not least among SMEs, although the Committee notes that the Commission has yet to produce any clearer proposals on this issue, including how the initiatives differ from technology platforms. Such initiatives could, among other things, also lead to the establishment of cooperative networks between big companies and SMEs, and also with universities and research centres, and, in broad terms, to more private-sector R&D investment (see also point 4.15.4). It is important, therefore, not only to work out clearer conditions and operating arrangements for joint technology initiatives of this kind, but also, after an appropriate period, to check whether the expectations placed in the initiatives have been fulfilled. |
| --- | --- |

4.16.2

In addition to the technology platforms mentioned earlier, the joint technology initiatives are also a new instrument of this kind designed to promote the establishment of longer-term public-private partnerships. There are high hopes for these initiatives within industry and not least among SMEs, although the Committee notes that the Commission has yet to produce any clearer proposals on this issue, including how the initiatives differ from technology platforms. Such initiatives could, among other things, also lead to the establishment of cooperative networks between big companies and SMEs, and also with universities and research centres, and, in broad terms, to more private-sector R&D investment (see also point 4.15.4). It is important, therefore, not only to work out clearer conditions and operating arrangements for joint technology initiatives of this kind, but also, after an appropriate period, to check whether the expectations placed in the initiatives have been fulfilled.

| 4.16.3 | When introducing new instruments, the Commission should take care to avoid any recurrence of the mistakes that were made during the launch of the ‘networks of excellence’ (FP6). In that instance, an ineffective information policy led to confusion and differing interpretations among all stakeholders, and even within the Commission itself. The Committee trusts that it will have an opportunity to go into this subject in a subsequent opinion. It welcomes the Commission's proposal to apply Articles 169 and 171 of the EU Treaty to the funding schemes. |
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4.16.3

When introducing new instruments, the Commission should take care to avoid any recurrence of the mistakes that were made during the launch of the ‘networks of excellence’ (FP6). In that instance, an ineffective information policy led to confusion and differing interpretations among all stakeholders, and even within the Commission itself. The Committee trusts that it will have an opportunity to go into this subject in a subsequent opinion. It welcomes the Commission's proposal to apply Articles 169 and 171 of the EU Treaty to the funding schemes.

5.   Specific comments

| 5.1 | Most of the specific comments relate to the thematic sub-programmes of the cooperation programme which form the core of the framework programme. At this point, the Committee would like to reaffirm its support for the Commission's proposals as a whole, and to recommend their implementation. |
| --- | --- |

5.1

Most of the specific comments relate to the thematic sub-programmes of the cooperation programme which form the core of the framework programme. At this point, the Committee would like to reaffirm its support for the Commission's proposals as a whole, and to recommend their implementation.

| 5.2 | The Committee would first of all consider the key aspect of multidisciplinary, cross-cutting themes, which, by their very nature, require overall coordination or direction, and thus frequently also encompass the socio-economic sciences and humanities sub-programme (see also point 5.8). Care should therefore be taken to ensure that, in spite of the precise structure of the individual programmes – unavoidable for administrative and other reasons – the overall connection between many of the issues to be tackled is recognised, dealt with and turned to good account. The Committee therefore recommends that steps be taken to ensure overall coordination and the necessary link-ups. |
| --- | --- |

5.2

The Committee would first of all consider the key aspect of multidisciplinary, cross-cutting themes, which, by their very nature, require overall coordination or direction, and thus frequently also encompass the socio-economic sciences and humanities sub-programme (see also point 5.8). Care should therefore be taken to ensure that, in spite of the precise structure of the individual programmes – unavoidable for administrative and other reasons – the overall connection between many of the issues to be tackled is recognised, dealt with and turned to good account. The Committee therefore recommends that steps be taken to ensure overall coordination and the necessary link-ups.

| 5.2.1 | This also includes the theme of security research and combating terrorism, discussed in section 4 above. |
| --- | --- |

5.2.1

This also includes the theme of security research and combating terrorism, discussed in section 4 above.

| 5.2.2 | Demographics is another case in point (31). Research required in this field ranges from identifying demographic facts, causes and trends, to the worryingly low birth rate in many Member States and the impact of still-rising average life expectancy. On this last point, the focus is on the requisite geriatric/medical research and care techniques (32). The social and economic issues involved in the whole complex question are a particularly important consideration here. |
| --- | --- |

5.2.2

Demographics is another case in point (31). Research required in this field ranges from identifying demographic facts, causes and trends, to the worryingly low birth rate in many Member States and the impact of still-rising average life expectancy. On this last point, the focus is on the requisite geriatric/medical research and care techniques (32). The social and economic issues involved in the whole complex question are a particularly important consideration here.

| 5.2.3 | Health too is also a cross-cutting issue (see point 5.9), as it is affected by lifestyle. working conditions, environment, diet, vaccinations, and other factors such as addictions. |
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5.2.3

Health too is also a cross-cutting issue (see point 5.9), as it is affected by lifestyle. working conditions, environment, diet, vaccinations, and other factors such as addictions.

| 5.3 | Some of the sub-programmes, however, are also, by their very nature, particularly cross-cutting, in that, besides having a direct impact on European industrial performance, they also benefit other sub-programmes, due to thematic links between them. (In this regard, again see point 5.2.) |
| --- | --- |

5.3

Some of the sub-programmes, however, are also, by their very nature, particularly cross-cutting, in that, besides having a direct impact on European industrial performance, they also benefit other sub-programmes, due to thematic links between them. (In this regard, again see point 5.2.)

| 5.4 | This is particularly true of the information and communication technologies (ICT), biotechnology, and nanosciences, nanotechnologies, materials and new production technologies sub-programmes. The energy, environment, and transport sub-programmes are also closely interconnected. In view of this, any assessment of the balance between the individual sub-programmes can at best be only qualitative; this reservation should be borne in mind in connection with the following remarks. |
| --- | --- |

5.4

This is particularly true of the information and communication technologies (ICT), biotechnology, and nanosciences, nanotechnologies, materials and new production technologies sub-programmes. The energy, environment, and transport sub-programmes are also closely interconnected. In view of this, any assessment of the balance between the individual sub-programmes can at best be only qualitative; this reservation should be borne in mind in connection with the following remarks.

| 5.5 | Information and communication technologies (ICT) are indeed of crucial relevance to all aspects of industry, business, the services sector, science and technology, including security and defence. They are a critical element in global competition. Compared to Japan and the USA in particular, Europe has considerable ground to make up, not least in view of the need for supercomputers in many important fields, such as climate, security and materials research and the synthesis of new medicines. This concerns both the establishment of European supercomputer centres – which could be more appropriately covered by the capacities or infrastructure programmes – and independent European development of the requisite hardware and software. |
| --- | --- |

5.5

Information and communication technologies (ICT) are indeed of crucial relevance to all aspects of industry, business, the services sector, science and technology, including security and defence. They are a critical element in global competition. Compared to Japan and the USA in particular, Europe has considerable ground to make up, not least in view of the need for supercomputers in many important fields, such as climate, security and materials research and the synthesis of new medicines. This concerns both the establishment of European supercomputer centres – which could be more appropriately covered by the capacities or infrastructure programmes – and independent European development of the requisite hardware and software.

| 5.5.1 | However, it is striking that, as under FP6, by far the largest share of the budget has again been allocated to the ICT sub-programme. Given the importance of other themes, particularly energy or, for instance, health which also have economic implications, it may be asked whether the possibility of a certain shift in emphasis should not be kept open, in the interests of a consistent approach to the sub-programmes. The answer to this question partly depends on the degree to which the ICT programme contributes to other programmes, e.g. security research or space exploration. |
| --- | --- |

5.5.1

However, it is striking that, as under FP6, by far the largest share of the budget has again been allocated to the ICT sub-programme. Given the importance of other themes, particularly energy or, for instance, health which also have economic implications, it may be asked whether the possibility of a certain shift in emphasis should not be kept open, in the interests of a consistent approach to the sub-programmes. The answer to this question partly depends on the degree to which the ICT programme contributes to other programmes, e.g. security research or space exploration.

| 5.5.2 | With this specific example in mind, the Committee recommends that in general, FP7 should be implemented in such a way as to allow sufficient flexibility in allocating funds between individual sub-programmes or to benefit from the intended coherence, e.g. by means of sub-programmes jointly issuing calls for tenders. The Committee's remarks on ICT also apply to the transport and space sub-programmes (e.g. aeronautics). |
| --- | --- |

5.5.2

With this specific example in mind, the Committee recommends that in general, FP7 should be implemented in such a way as to allow sufficient flexibility in allocating funds between individual sub-programmes or to benefit from the intended coherence, e.g. by means of sub-programmes jointly issuing calls for tenders. The Committee's remarks on ICT also apply to the transport and space sub-programmes (e.g. aeronautics).

| 5.5.3 | Once again, the Committee expresses its satisfaction at the start of construction of the Galileo project which is a prime example of the application of the subsidiarity principle. Besides being of great value in terms of innovation, the technological solutions employed here and especially their application are, in the Committee's view, what makes this project truly multi-disciplinary and cross-functional. |
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5.5.3

Once again, the Committee expresses its satisfaction at the start of construction of the Galileo project which is a prime example of the application of the subsidiarity principle. Besides being of great value in terms of innovation, the technological solutions employed here and especially their application are, in the Committee's view, what makes this project truly multi-disciplinary and cross-functional.

| 5.6 | The Committee reiterates its strong satisfaction at the incorporation of the important energy sub-programme into FP7, in line with a recommendation that it has put forward on several occasions. However, even though energy research is also a very high priority for Euratom FP7, the Committee does feel that even greater emphasis should be placed on this vital and highly topical subject. Energy is the ‘staple food’ of a competitive economy, yet not only is the EU currently dependent on energy imports to an extremely worrying degree, but global resources are also set to run short in the medium term. R&D is the key to solving the energy problem. |
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5.6

The Committee reiterates its strong satisfaction at the incorporation of the important energy sub-programme into FP7, in line with a recommendation that it has put forward on several occasions. However, even though energy research is also a very high priority for Euratom FP7, the Committee does feel that even greater emphasis should be placed on this vital and highly topical subject. Energy is the ‘staple food’ of a competitive economy, yet not only is the EU currently dependent on energy imports to an extremely worrying degree, but global resources are also set to run short in the medium term. R&D is the key to solving the energy problem.

| 5.6.1 | The Committee is thus pleased that the development of renewable energy sources has been given such clear emphasis. They play a crucial role in the whole energy/environment equation (global warming). Here the Committee would refer to its numerous opinions (33) which cover the whole range of needs for research into renewables, from geothermal energy, biomass, solar and wind energy to storage technology. Support from FP7 will give renewable energy sources a substantial additional boost, complementing various support measures for commercial launches (e.g. legislation on the sale of electricity to the grid), which are intended to promote the development of commercially viable products. The Committee would also recommend that more detailed studies be conducted into the energy balance of renewable systems as doubts have recently been raised about, for instance, the positive energy efficiency of certain biofuels (34). |
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5.6.1

The Committee is thus pleased that the development of renewable energy sources has been given such clear emphasis. They play a crucial role in the whole energy/environment equation (global warming). Here the Committee would refer to its numerous opinions (33) which cover the whole range of needs for research into renewables, from geothermal energy, biomass, solar and wind energy to storage technology. Support from FP7 will give renewable energy sources a substantial additional boost, complementing various support measures for commercial launches (e.g. legislation on the sale of electricity to the grid), which are intended to promote the development of commercially viable products. The Committee would also recommend that more detailed studies be conducted into the energy balance of renewable systems as doubts have recently been raised about, for instance, the positive energy efficiency of certain biofuels (34).

| 5.6.2 | However, the Committee would emphasise that the conventional fossil fuels, coal, crude oil and natural gas
   (35), will remain the backbone of European and global energy supplies for several decades to come. In view of this, any research and development activities which contribute to more efficient extraction, transportation and use of such fuels, and thus directly or indirectly to reducing greenhouse gas emissions, are of great economic and environmental significance. Admittedly, the energy sub-programme refers to cutting CO2
  (including CO2 separation and storage) and energy efficiency, but it is still important to ensure that the relevant measures are adequately funded. In addition, interconnections with the materials and transport sub-programmes offer potential synergies. The Committee also welcomes the related coal and steel research programme (36). |
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5.6.2

However, the Committee would emphasise that the conventional fossil fuels, coal, crude oil and natural gas
   (35), will remain the backbone of European and global energy supplies for several decades to come. In view of this, any research and development activities which contribute to more efficient extraction, transportation and use of such fuels, and thus directly or indirectly to reducing greenhouse gas emissions, are of great economic and environmental significance. Admittedly, the energy sub-programme refers to cutting CO2
  (including CO2 separation and storage) and energy efficiency, but it is still important to ensure that the relevant measures are adequately funded. In addition, interconnections with the materials and transport sub-programmes offer potential synergies. The Committee also welcomes the related coal and steel research programme (36).

| 5.6.3 | The Committee therefore recommends that research and development measures give due emphasis not only to renewables but also to energy production technologies using fossil fuels. This is all the more important in view of the fact that over the next two decades many of the existing fossil-fuelled power stations will have to be replaced, and extra new ones (several hundred throughout the EU!) will be needed. It is of vital economic and environmental importance that these stations should use state-of-the-art technology. The high oil price also raises the question as to when coal-based fuel generation technologies will be able to offer an economically competitive alternative. |
| --- | --- |

5.6.3

The Committee therefore recommends that research and development measures give due emphasis not only to renewables but also to energy production technologies using fossil fuels. This is all the more important in view of the fact that over the next two decades many of the existing fossil-fuelled power stations will have to be replaced, and extra new ones (several hundred throughout the EU!) will be needed. It is of vital economic and environmental importance that these stations should use state-of-the-art technology. The high oil price also raises the question as to when coal-based fuel generation technologies will be able to offer an economically competitive alternative.

| 5.6.4 | For further details, the Committee's would refer to its earlier and current opinions on energy research and the energy issue (37). |
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5.6.4

For further details, the Committee's would refer to its earlier and current opinions on energy research and the energy issue (37).

| 5.7 | Ultimately, one of the most effective means of combating climate change and other undesirable environmental impacts is to improve energy production technologies (38). |
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5.7

Ultimately, one of the most effective means of combating climate change and other undesirable environmental impacts is to improve energy production technologies (38).

| 5.7.1 | The link between the themes of the two sub-programmes should therefore be used to enhance both. While research in the environment sub-programme (including climate change) is designed largely to provide the diagnosis, the main purpose of the energy sub-programme is to provide the therapy. |
| --- | --- |

5.7.1

The link between the themes of the two sub-programmes should therefore be used to enhance both. While research in the environment sub-programme (including climate change) is designed largely to provide the diagnosis, the main purpose of the energy sub-programme is to provide the therapy.

| 5.7.2 | Even within the environment sub-programme, however, the key links and synergies between analysis/diagnosis (e.g. seabed geology) and potential therapies (e.g. seabed protection) should be identified and turned to good account. |
| --- | --- |

5.7.2

Even within the environment sub-programme, however, the key links and synergies between analysis/diagnosis (e.g. seabed geology) and potential therapies (e.g. seabed protection) should be identified and turned to good account.

| 5.8 | The socio-economic sciences and the humanities sub-programme, expanded, as recommended in point 4.15.5, to incorporate the science in society programme, should also be seen as a cross-cutting theme. The Committee also reiterates its previous recommendation that there should be a closer link between natural sciences and the humanities (including social sciences), not only between individuals working in these two areas, but between their methods and criteria too (39). Social scientists and researchers in the humanities should also be involved in examining the key issues connected with security research. |
| --- | --- |

5.8

The socio-economic sciences and the humanities sub-programme, expanded, as recommended in point 4.15.5, to incorporate the science in society programme, should also be seen as a cross-cutting theme. The Committee also reiterates its previous recommendation that there should be a closer link between natural sciences and the humanities (including social sciences), not only between individuals working in these two areas, but between their methods and criteria too (39). Social scientists and researchers in the humanities should also be involved in examining the key issues connected with security research.

| 5.8.1 | In this connection, the Committee also welcomes the emphasis placed on economic analyses to develop best practices for the single market and the Lisbon strategy in the face of global competition and other effects of globalisation. The Committee would also stress the urgent need for analyses of and political discussion (see also the Joint Research Centre programme, point 5.10.1) about the causes of unemployment, the strengths and weaknesses of various economic systems and the causes, implications and possible turning points of demographic trends. Last but not least, the Committee would underscore the need to look in greater depth at the causal link between research, innovation and prosperity. |
| --- | --- |

5.8.1

In this connection, the Committee also welcomes the emphasis placed on economic analyses to develop best practices for the single market and the Lisbon strategy in the face of global competition and other effects of globalisation. The Committee would also stress the urgent need for analyses of and political discussion (see also the Joint Research Centre programme, point 5.10.1) about the causes of unemployment, the strengths and weaknesses of various economic systems and the causes, implications and possible turning points of demographic trends. Last but not least, the Committee would underscore the need to look in greater depth at the causal link between research, innovation and prosperity.

| 5.8.2 | It is not only the legal sciences that are involved here, but ultimately also the scientific foundations of all EU policies, be they social, legislative, economic (monetary and financial, fiscal, innovation-based, etc.) or security-related. Particularly important, however, are the political, economic and legal issues raised by the further internal development of the EU, including the single market, cohesion, integration and governance. |
| --- | --- |

5.8.2

It is not only the legal sciences that are involved here, but ultimately also the scientific foundations of all EU policies, be they social, legislative, economic (monetary and financial, fiscal, innovation-based, etc.) or security-related. Particularly important, however, are the political, economic and legal issues raised by the further internal development of the EU, including the single market, cohesion, integration and governance.

| 5.8.3 | The Committee would also emphasise the particularly topical issue of the political and cultural identity of the EU and its borders. It is important here to explore the common features of European culture, not only in terms of art, science, architecture, technology and fashion, but also in relation to the history of ideas, the law, value systems, and the way countries are run. The modern idea of the state was born in Europe (and first realised in the USA). This, however, also implies more in-depth consideration of the concept of culture, its facets and obscurities, its hierarchies of values and the misunderstandings to which it may give rise. |
| --- | --- |

5.8.3

The Committee would also emphasise the particularly topical issue of the political and cultural identity of the EU and its borders. It is important here to explore the common features of European culture, not only in terms of art, science, architecture, technology and fashion, but also in relation to the history of ideas, the law, value systems, and the way countries are run. The modern idea of the state was born in Europe (and first realised in the USA). This, however, also implies more in-depth consideration of the concept of culture, its facets and obscurities, its hierarchies of values and the misunderstandings to which it may give rise.

| 5.8.4 | Given the diverse range of important issues involved, the budget earmarked for the socio-economic sciences and the humanities sub-programme may, despite the proposed input from the science in society budget, be low. To decide, conclusively, whether that is the case, consideration must also be given to areas of the other sub-programmes – such as energy – that include aspects of the humanities. |
| --- | --- |

5.8.4

Given the diverse range of important issues involved, the budget earmarked for the socio-economic sciences and the humanities sub-programme may, despite the proposed input from the science in society budget, be low. To decide, conclusively, whether that is the case, consideration must also be given to areas of the other sub-programmes – such as energy – that include aspects of the humanities.

| 5.8.5 | Last but not least, the Committee would emphasise all ethical issues, which reflect the interplay of knowledge, research and application, and the balance between risks and opportunities. One key issue, also with regard to the Lisbon strategy, relates to the connections and conflicts between ideological/dogmatic positions, the willingness to take risks, and progress. |
| --- | --- |

5.8.5

Last but not least, the Committee would emphasise all ethical issues, which reflect the interplay of knowledge, research and application, and the balance between risks and opportunities. One key issue, also with regard to the Lisbon strategy, relates to the connections and conflicts between ideological/dogmatic positions, the willingness to take risks, and progress.

| 5.8.6 | This brings us back to the question of science in society, a topic on which the Committee has already drawn up a very substantial opinion (40). In line with the position adopted in this earlier opinion, the Committee also endorses the range of themes proposed by the Commission, which reflect a concern to bring scientific research and knowledge closer to the public, to enhance mutual understanding and to encourage young people in particular to consider a scientific career. A forum is needed to engage citizens and consumers with science and research and in which they can bring their opinions to bear. |
| --- | --- |

5.8.6

This brings us back to the question of science in society, a topic on which the Committee has already drawn up a very substantial opinion (40). In line with the position adopted in this earlier opinion, the Committee also endorses the range of themes proposed by the Commission, which reflect a concern to bring scientific research and knowledge closer to the public, to enhance mutual understanding and to encourage young people in particular to consider a scientific career. A forum is needed to engage citizens and consumers with science and research and in which they can bring their opinions to bear.

| 5.8.6.1 | The Committee feels that measures which enable direct contacts or even hands-on involvement are especially important: good technology museums, special laboratories, work shadowing, etc. However, renewed emphasis in higher educational curricula on effective and dynamic science teaching is what is needed most of all. The particular aim is also to promote interest in and understanding of science and technology. Adequate knowledge is the sine qua non of sound judgement. |
| --- | --- |

5.8.6.1

The Committee feels that measures which enable direct contacts or even hands-on involvement are especially important: good technology museums, special laboratories, work shadowing, etc. However, renewed emphasis in higher educational curricula on effective and dynamic science teaching is what is needed most of all. The particular aim is also to promote interest in and understanding of science and technology. Adequate knowledge is the sine qua non of sound judgement.

| 5.8.6.2 | Scientific knowledge is also an essential part of training the mind and instilling a clear world view. |
| --- | --- |

5.8.6.2

Scientific knowledge is also an essential part of training the mind and instilling a clear world view.

| 5.8.6.3 | However, it is equally important for researchers themselves to contribute their views and become more closely involved in discussions and decision-making processes concerning this programme. |
| --- | --- |

5.8.6.3

However, it is equally important for researchers themselves to contribute their views and become more closely involved in discussions and decision-making processes concerning this programme.

| 5.9 | One particularly important sub-programme relates to health, a very broad issue that the Committee has already addressed on a number of occasions. This sub-programme covers all R&D work in the fields of diagnostics, therapeutics and the relief and prevention of disease. |
| --- | --- |

5.9

One particularly important sub-programme relates to health, a very broad issue that the Committee has already addressed on a number of occasions. This sub-programme covers all R&D work in the fields of diagnostics, therapeutics and the relief and prevention of disease.

| 5.9.1 | Priority should thereby first of all be given to the treatment or prevention of diseases which have – or would have if spread in an uncontrolled epidemic – a particularly high mortality and morbidity rate among children, adults and older people. |
| --- | --- |

5.9.1

Priority should thereby first of all be given to the treatment or prevention of diseases which have – or would have if spread in an uncontrolled epidemic – a particularly high mortality and morbidity rate among children, adults and older people.

| 5.9.2 | The steady increase in average life expectancy is the result not only of successful medical progress but also of the ever-better, ever-healthier food supply. A corollary of that, however, is also the increased incidence of lifestyle-related illnesses (caused, for instance, by obesity (41) or smoking) and of job- and age-related illnesses and ailments. The importance of this latter issue has been highlighted many times above (42). It is an issue that not only touches on medical and human aspects, but, in terms of fitness for work and care costs, also has an economic dimension. The same is also true for the entire issue of how the health system is organised and financed, and the application of medical advances. Research into disabilities is a similar case in point. Research of this kind seeks to raise the quality of life of people with disabilities and possibly to get them into work. |
| --- | --- |

5.9.2

The steady increase in average life expectancy is the result not only of successful medical progress but also of the ever-better, ever-healthier food supply. A corollary of that, however, is also the increased incidence of lifestyle-related illnesses (caused, for instance, by obesity (41) or smoking) and of job- and age-related illnesses and ailments. The importance of this latter issue has been highlighted many times above (42). It is an issue that not only touches on medical and human aspects, but, in terms of fitness for work and care costs, also has an economic dimension. The same is also true for the entire issue of how the health system is organised and financed, and the application of medical advances. Research into disabilities is a similar case in point. Research of this kind seeks to raise the quality of life of people with disabilities and possibly to get them into work.

| 5.9.3 | However, disability issues and health issues are not one and the same; disabilities should therefore be recognised across all relevant sectors of the programme. |
| --- | --- |

5.9.3

However, disability issues and health issues are not one and the same; disabilities should therefore be recognised across all relevant sectors of the programme.

| 5.9.4 | The Committee would also highlight the international dimension of health. This involves working together with countries strongly committed to successful research, and also covers health-related development aid. This makes cooperation with the World Heath Organisation (WHO) particularly important. |
| --- | --- |

5.9.4

The Committee would also highlight the international dimension of health. This involves working together with countries strongly committed to successful research, and also covers health-related development aid. This makes cooperation with the World Heath Organisation (WHO) particularly important.

| 5.9.5 | The global dispersal of new pathogens is another international issue in which cooperation with the WHO is also very important. |
| --- | --- |

5.9.5

The global dispersal of new pathogens is another international issue in which cooperation with the WHO is also very important.

| 5.9.6 | Moreover, international cooperation provides an opportunity to conduct in-depth clinical studies not only of the population at large, but also in relation to specific age groups: children, adults and older people. |
| --- | --- |

5.9.6

Moreover, international cooperation provides an opportunity to conduct in-depth clinical studies not only of the population at large, but also in relation to specific age groups: children, adults and older people.

| 5.9.7 | The substantial health-related R&D work that has been done, including in the private sector (the pharmaceuticals industry and appliance manufacturers) is a good example of the application of Article 169 in partnerships between the private sector and research funded by the public sector (including the Member States). |
| --- | --- |

5.9.7

The substantial health-related R&D work that has been done, including in the private sector (the pharmaceuticals industry and appliance manufacturers) is a good example of the application of Article 169 in partnerships between the private sector and research funded by the public sector (including the Member States).

| 5.10 | Joint Research Centre (non-nuclear actions) |
| --- | --- |

5.10

Joint Research Centre (non-nuclear actions)

| 5.10.1 | The Joint Research Centre (JRC) provides scientific and technical support for EU policymaking in areas such as sustainable development; climate change; food; energy; transport; chemicals; alternative methods to animal testing; research policy; information technologies; reference methods and materials; biotechnology risks, hazards and socio-economic impacts; as well as in the field of econometric modelling and analysis techniques. A further task is to develop scientific and technological reference data in various fields of environmental and food monitoring. This also provides valuable input into the framing of Community legislation. |
| --- | --- |

5.10.1

The Joint Research Centre (JRC) provides scientific and technical support for EU policymaking in areas such as sustainable development; climate change; food; energy; transport; chemicals; alternative methods to animal testing; research policy; information technologies; reference methods and materials; biotechnology risks, hazards and socio-economic impacts; as well as in the field of econometric modelling and analysis techniques. A further task is to develop scientific and technological reference data in various fields of environmental and food monitoring. This also provides valuable input into the framing of Community legislation.

| 5.10.2 | The Committee also feels that the Community has an additional task in helping coordinate national metrological and standardisation institutions while, at the same time, taking part in their programmes. With the single market and European integration as a whole in mind, consideration should be given to establishing a European Bureau of Standards, with the involvement of the appropriate national institutions, relevant industries and the JRC. The diversity that has existed to date would provide an opportunity to adopt ‘parallel’ practices, to compare different approaches, and to forge ahead with new developments within a dependably resourced, properly coordinated environment. |
| --- | --- |

5.10.2

The Committee also feels that the Community has an additional task in helping coordinate national metrological and standardisation institutions while, at the same time, taking part in their programmes. With the single market and European integration as a whole in mind, consideration should be given to establishing a European Bureau of Standards, with the involvement of the appropriate national institutions, relevant industries and the JRC. The diversity that has existed to date would provide an opportunity to adopt ‘parallel’ practices, to compare different approaches, and to forge ahead with new developments within a dependably resourced, properly coordinated environment.

| 5.10.3 | The Committee is pleased to note that JRC activities are integrated into the international scientific community. However, it also considers such integration to be particularly important in the field of socio-economic sciences and the humanities mentioned in point 5.8. |
| --- | --- |

5.10.3

The Committee is pleased to note that JRC activities are integrated into the international scientific community. However, it also considers such integration to be particularly important in the field of socio-economic sciences and the humanities mentioned in point 5.8.

6.   The seventh Euratom framework programme (Euratom FP7)

| 6.1 | Controlled fusion. The Committee reiterates the view expressed in its recent opinion (43) on fusion energy that, in the long term, the peaceful use of fusion energy has the potential to play a very important part in resolving energy supply problems in a sustainable, environmentally sound and competitive way. Like nuclear fission, fusion does not generate any greenhouse gases, but it also has other important advantages. |
| --- | --- |

6.1

Controlled fusion. The Committee reiterates the view expressed in its recent opinion (43) on fusion energy that, in the long term, the peaceful use of fusion energy has the potential to play a very important part in resolving energy supply problems in a sustainable, environmentally sound and competitive way. Like nuclear fission, fusion does not generate any greenhouse gases, but it also has other important advantages.

| 6.1.1 | The Committee congratulates the Commission and other stakeholders on the success of negotiations, recommended by the Committee, as a result of which the major international ITER project has been brought to Europe. ITER
   (44) represents a decisive step towards a future demonstration reactor, DEMO. However, this also entails a contractual obligation to finance ITER and the preparatory and accompanying programmes this requires, as well as the preparatory programmes for DEMO. |
| --- | --- |

6.1.1

The Committee congratulates the Commission and other stakeholders on the success of negotiations, recommended by the Committee, as a result of which the major international ITER project has been brought to Europe. ITER
   (44) represents a decisive step towards a future demonstration reactor, DEMO. However, this also entails a contractual obligation to finance ITER and the preparatory and accompanying programmes this requires, as well as the preparatory programmes for DEMO.

| 6.1.2 | With this in mind, the Committee calls on the Member States to make a substantial contribution of their own to the European fusion programme and provide appropriate backing for the laboratories associated with the programme. The Committee acknowledges that the fusion programme has reached a stage at which implementation requires a substantial and increased investment, which it feels is necessary and warranted in view of the potential of this energy source and the seriousness of the energy problem. |
| --- | --- |

6.1.2

With this in mind, the Committee calls on the Member States to make a substantial contribution of their own to the European fusion programme and provide appropriate backing for the laboratories associated with the programme. The Committee acknowledges that the fusion programme has reached a stage at which implementation requires a substantial and increased investment, which it feels is necessary and warranted in view of the potential of this energy source and the seriousness of the energy problem.

| 6.1.3 | For further details, the Committee would refer to its recent opinion on this issue (45) in which it highlights the DEMO preparatory work (development of materials and blankets, the idea behind the system, etc.) and studies on improved confinement concepts. |
| --- | --- |

6.1.3

For further details, the Committee would refer to its recent opinion on this issue (45) in which it highlights the DEMO preparatory work (development of materials and blankets, the idea behind the system, etc.) and studies on improved confinement concepts.

| 6.2 | Nuclear fission and radiation protection. Nuclear energy is the most important source of carbon-free base-load electricity presently available. However, there are still concerns about operating risks and safe storage of spent nuclear fuel. The Committee would refer to its opinions on nuclear energy (46) (nuclear fission) and on the nuclear package (47). In the latter opinion, it expressed its support for ‘the Commission's intention to vigorously promote research relating to safety of nuclear installations and disposal of radioactive waste in the future and to coordinate such research across the Community’. It endorses the measures proposed by the Commission, which are consistent with this intention. |
| --- | --- |

6.2

Nuclear fission and radiation protection. Nuclear energy is the most important source of carbon-free base-load electricity presently available. However, there are still concerns about operating risks and safe storage of spent nuclear fuel. The Committee would refer to its opinions on nuclear energy (46) (nuclear fission) and on the nuclear package (47). In the latter opinion, it expressed its support for ‘the Commission's intention to vigorously promote research relating to safety of nuclear installations and disposal of radioactive waste in the future and to coordinate such research across the Community’. It endorses the measures proposed by the Commission, which are consistent with this intention.

| 6.2.1 | Reactor systems. This involves research to underpin the continued safe operation of existing reactor systems (including fuel cycle facilities), and to assess the potential and safety aspects of future reactor systems. |
| --- | --- |

6.2.1

Reactor systems. This involves research to underpin the continued safe operation of existing reactor systems (including fuel cycle facilities), and to assess the potential and safety aspects of future reactor systems.

| 6.2.1.1 | The Committee sets great store by actions in the latter area, which should lead to the development of innovative reactor systems. The history of technology shows that the greatest potential for progress lies in new-generation systems and innovation building on existing systems and concepts. In view of the importance of nuclear power for energy policy, measures should be taken to unlock existing potential in terms of enhanced safety, reduced radioactive (especially long-life) waste, making resources go further, and tapping additional resources. |
| --- | --- |

6.2.1.1

The Committee sets great store by actions in the latter area, which should lead to the development of innovative reactor systems. The history of technology shows that the greatest potential for progress lies in new-generation systems and innovation building on existing systems and concepts. In view of the importance of nuclear power for energy policy, measures should be taken to unlock existing potential in terms of enhanced safety, reduced radioactive (especially long-life) waste, making resources go further, and tapping additional resources.

| 6.2.2 | Radiation protection. The objective here is to consolidate the scientific basis for protection of the general public from ionising radiation arising from radioactivity or other sources in medicine, research and industry (including the production of nuclear energy). One particularly important issue that could be investigated is the effects of very low doses of radiation, a subject that is difficult to access statistically and which still arouses controversy as a result. |
| --- | --- |

6.2.2

Radiation protection. The objective here is to consolidate the scientific basis for protection of the general public from ionising radiation arising from radioactivity or other sources in medicine, research and industry (including the production of nuclear energy). One particularly important issue that could be investigated is the effects of very low doses of radiation, a subject that is difficult to access statistically and which still arouses controversy as a result.

| 6.2.3 | There have also been particularly important developments in the technical monitoring and supervision of all non-proliferation measures for nuclear weapons material and technology. |
| --- | --- |

6.2.3

There have also been particularly important developments in the technical monitoring and supervision of all non-proliferation measures for nuclear weapons material and technology.

| 6.3 | For the development of the nuclear fusion power station and the safe operation and ongoing development of nuclear fission reactors, it is a matter of some urgency to educate a new generation of highly skilled experts and train them using appropriate test facilities. That can only succeed if nuclear technology in Europe is again given higher priority, thereby stimulating the interest of the upcoming generation of scientists. Here too, it is essential, as in the past, to forge close links between research and training. |
| --- | --- |

6.3

For the development of the nuclear fusion power station and the safe operation and ongoing development of nuclear fission reactors, it is a matter of some urgency to educate a new generation of highly skilled experts and train them using appropriate test facilities. That can only succeed if nuclear technology in Europe is again given higher priority, thereby stimulating the interest of the upcoming generation of scientists. Here too, it is essential, as in the past, to forge close links between research and training.

| 6.3.1 | For further details, the Committee would refer to its recent opinions on this subject (48). |
| --- | --- |

6.3.1

For further details, the Committee would refer to its recent opinions on this subject (48).

6.4   Joint Research Centre – Euratom Programme

| 6.4.1 | The Committee is pleased to note that the Joint Research Centre supports policymaking in the nuclear field, including the implementation and monitoring of existing policies and responding to new demands. |
| --- | --- |

6.4.1

The Committee is pleased to note that the Joint Research Centre supports policymaking in the nuclear field, including the implementation and monitoring of existing policies and responding to new demands.

| 6.4.2 | The Committee feels that it is right to focus ‘nuclear’ JRC activities on the key issues of waste management, nuclear safety and security, as these are the specific subjects of public concern that need reliable solutions. The Committee trusts that activities in this field will also be networked and coordinated with those of the Member States. |
| --- | --- |

6.4.2

The Committee feels that it is right to focus ‘nuclear’ JRC activities on the key issues of waste management, nuclear safety and security, as these are the specific subjects of public concern that need reliable solutions. The Committee trusts that activities in this field will also be networked and coordinated with those of the Member States.

| 6.4.3 | The Committee also feels it is an important task to (further) develop procedures to secure even more effective monitoring of the non-proliferation of nuclear weapons material and technologies (see also point 4.10.2). |
| --- | --- |

6.4.3

The Committee also feels it is an important task to (further) develop procedures to secure even more effective monitoring of the non-proliferation of nuclear weapons material and technologies (see also point 4.10.2).

Brussels, 14 December 2005

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  This also applies to the objectives of the revamped Lisbon strategy (European Council of 23 March 2005).

1

(2)  Total EU spending on research and development to rise to 3 % of GDP by 2010, with the private sector contributing two-thirds. See also OJ C 95 of 23.4.2003.

2

(3)  R&D spending by the US Department of Defence (DoD) – which covers not only military research – represents a particularly important share of these investments.

3

(4)  This objective was explicitly confirmed and detailed in the decisions taken by the March 2005 European Council in Brussels to revitalise the Lisbon strategy.

4

(5)  Examples of successful European cooperation: Ariane, Airbus, CERN, ESO, Galileo; JET/ITER.

5

(6)  Science and technology, the key to Europe's future – Guidelines for future European Union policy to support research, COM(2004) 353 final.

6

Science and technology, the key to Europe's future – Guidelines for future European Union policy to support research

(7)  OJ C 157, 28.6.2005.

7

(8)  See footnotes 14 to 21 below.

8

(9)  COM(2005) 440 to 445 final.

9

(10)  Expected shortly.

10

(11)  OJ C 95, 23.4.2003.

11

(12)  OJ C 157 of 28.6.2005.

12

(13)  OJ C 234, 30.9.2003; OJ C 61, 14.3.2003; OJ C 94, 18.4.2002.

13

(14)  OJ C 74, 23.3.2005; OJ C 133, 6.6.2003.

14

(15)  OJ C 302, 7.12.2004.

15

(16)  OJ C 241, 7.10.2002.

16

(17)  OJ C 302, 7.12.2004.

17

(18)  OJ C 220, 16.9.2003; OJ C 112, 30.4.2004.

18

(19)  OJ C 157, 28.6.2005.

19

(20)  OJ C 110, 30.4.2004.

20

(21)  Quotation from the speech of the then German Chancellor, Gerhard Schröder. inaugurating Einstein Year in 2005. He went on to point out that ‘basic research also needs security, freedom from the pressure to deliver direct applications of its findings and the compulsion to constantly demonstrate its usefulness ...’.

21

basic research also needs security, freedom from the pressure to deliver direct applications of its findings and the compulsion to constantly demonstrate its usefulness ...

(22)  cf. The Economic Returns to Basic Research and the Benefits of University-Industry Relationships. A literature review and update of findings. Report for the UK Office of Science and Technology by SPRU - Science and Technology Policy Research., Alister Scott, Grové Steyn, Aldo Geuna, Stefano Brusoni, Ed Steinmueller, 2002.

22

The Economic Returns to Basic Research and the Benefits of University-Industry Relationships. A literature review and update of findings. Report for the UK Office of Science and Technology

(23)  See also OJ C 110, 30.4.2004.

23

(24)  OJ L 75, 22.3.2005, p. 67.

24

(25)  This applies, for instance to a failure to appreciate (a) the fact that the main purpose of research is to generate new knowledge, while the issue of what serves humanity or what is relevant to society is not an appropriate criterion in individual cases (see also OJ C 221, 7.8.2001, points 4 and 6 – point 6.7.1 for instance – and footnote 14, or (b) the key importance of duplication, not only to safeguard new knowledge but to ensure that such knowledge is circulated, built on and expanded (see also OJ C 221, 7.8.2001, points 4.7.5 and 4.7.6). Good research cannot be forced by over-narrow rules, but needs freedom in which to develop.

25

The most effective way to forge ahead to break new ground and achieve good results is to appoint the most successful and particularly experienced researchers to executive positions, to secure the services of and promote the best scientists, and to make sure adequate provision is made for proper equipment and research resources (critical mass). See also OJ C 204, 18.7.2000 and OJ C 110, 30.4.2004. Researchers' skills cannot be quantified or assessed in an objective way. Any judgement is bound to be subject to the discretion of their experienced peers.

(26)  Report of an Expert Panel chaired by Prof. Marimon, 21 June 2004, Sixth Framework Programme.

26

(27)  OJ C 204, 18.7.2000 (CES 595/2000, point 9.8.4).

27

(28)  (COM(2005) 121 final – 2005/0050 (COD))

28

(29)  This recommendation concerns only the primarily sociological research on the subject ‘Science in Society’. On the other hand, that share of the budget earmarked for activities (exhibitions, museums, conferences) designed to spread scientific knowledge (‘Communicating science’), i.e. its findings and methodology, should remain in the specific programme ‘Capacities’.

29

(30)  See also the European Commission's magazine RTDinfo, special INCO issue, July 2005.

30

(31)  CESE 818/2005 fin.

31

(32)  OJ C 74, 23.3.2005.

32

(33)  E.g. OJ C 241 of 7.10.2002; JO C 221 of 8.9.2005 and JO C 286 of 17.11.2005.

33

(34)  David Pimentel and Ted. W. Patzek, Natural Resources Research Vol. 14, No 1, 2005.

34

(35)  JO C 120 of 20.5.2005.

35

(36)  OJ C 294 of 25.11.2005.

36

(37)  OJ C 241 of 7.10.2002, JO C 133 of 6.6.2003, JO C 108 of 30.4.2004, JO C 110 of 30.4.2004, JO C 302 of 7.12.2004, JO C 286 of 17.11.2005, JO C 120 of 20.5.2005.

37

(38)  See also: Deutsche Physikalische Gesellschaft, Sept. 2005 ‘Klimaschutz und Energieversorgung in Deutschland 1990-2020’.

38

(39)  This very complex issue was to some extent examined in OJ C 221, 7.8.2001, points 3.9 and section 6.

39

(40)  OJ C 221, 7.8.2001.

40

(41)  JO C 24 of 31.1.2006.

41

(42)  See footnotes to point 5.2.2.

42

(43)  OJ C 302, 7.12.2004.

43

(44)  ITER will produce 500 MW of fusion power. It is the step between today's studies of plasma physics like JET and tomorrow's electricity-producing fusion power plant DEMO. It is an international project involving China, the European Union and Switzerland, Japan, Korea, Russia and the USA. It is to be constructed at Cadarache, France.

44

(45)  See footnote 44.

45

(46)  OJ C 110, 30.4.2004.

46

(47)  OJ C 133, 6.6.2003.

47

(48)  See previous footnotes.

48

---

| 17.3.2006 | EN | Official Journal of the European Union | C 65/22 |
| --- | --- | --- | --- |

17.3.2006

EN

Official Journal of the European Union

C 65/22

---

Opinion of the European Economic and Social Committee on the ‘Proposal for a Decision of the European Parliament and of the Council establishing a Competitiveness and Innovation Framework Programme (2007-2013)’

(COM(2005) 121 final — 2005/0050 (COD))

(2006/C 65/03)

On 25 April 2005 the Council decided to consult the European Economic and Social Committee, under Articles 156, 157(3) and 175(1) of the Treaty establishing the European Community, on the abovementioned proposal.

The Section for the Single Market, Production and Consumption, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 20 October 2005. The rapporteur was Mr Welschke, the co-rapporteur Ms Fusco.

At its 422nd plenary session, held on 14 and 15 December 2005 (meeting of 14 December 2005), the European Economic and Social Committee adopted the following opinion by 125 votes to two with one abstention.

1.   Preliminary remarks

| 1.1 | Many growth, employment and innovation indicators suggest that the European Union has been falling behind in global competition over the past few years and is continuing to do so. Bringing down unemployment, creating new jobs and promoting the economic growth required for that purpose on a sustainable basis is becoming the EU's biggest economic and social challenge. |
| --- | --- |

1.1

Many growth, employment and innovation indicators suggest that the European Union has been falling behind in global competition over the past few years and is continuing to do so. Bringing down unemployment, creating new jobs and promoting the economic growth required for that purpose on a sustainable basis is becoming the EU's biggest economic and social challenge.

| 1.2 | Businesses have a vital role to play in meeting these challenges. 98 % of businesses in Europe are small and medium-sized enterprises (SMEs). They provide 55 % of private-sector jobs. In terms of production processes, products and services SMEs have considerable innovative potential. |
| --- | --- |

1.2

Businesses have a vital role to play in meeting these challenges. 98 % of businesses in Europe are small and medium-sized enterprises (SMEs). They provide 55 % of private-sector jobs. In terms of production processes, products and services SMEs have considerable innovative potential.

| 1.3 | Many businesses take advantage of the benefits of the European single market. Often, however, because of remaining restrictions, limited staff and financial capacity and lack of information, they are unable to make full use of the single market's potential. That can be remedied by the consistent implementation of the Lisbon strategy, completion of the single market and further market opening, better regulation, and support programmes that generate European added value. |
| --- | --- |

1.3

Many businesses take advantage of the benefits of the European single market. Often, however, because of remaining restrictions, limited staff and financial capacity and lack of information, they are unable to make full use of the single market's potential. That can be remedied by the consistent implementation of the Lisbon strategy, completion of the single market and further market opening, better regulation, and support programmes that generate European added value.

| 1.4 | Modern administrations and efficient public services can also do much to promote competitiveness and innovation in Europe. Cross-border twinning between authorities at all levels can improve the administrative cooperation that is becoming increasingly necessary, facilitate exchanges of experience and exploit examples of best practice for the benefit of all. |
| --- | --- |

1.4

Modern administrations and efficient public services can also do much to promote competitiveness and innovation in Europe. Cross-border twinning between authorities at all levels can improve the administrative cooperation that is becoming increasingly necessary, facilitate exchanges of experience and exploit examples of best practice for the benefit of all.

2.   Summary of the Commission document

| 2.1 | The Competitiveness and Innovation Framework Programme (CIP), which is set to run from 2007 to 2013, is intended to help implement the refocused Lisbon strategy and the Community strategy for sustainable development. |
| --- | --- |

2.1

The Competitiveness and Innovation Framework Programme (CIP), which is set to run from 2007 to 2013, is intended to help implement the refocused Lisbon strategy and the Community strategy for sustainable development.

| 2.2 | The CIP marks the continuation of a range of existing Community support programmes in various policy areas and presents them as a package with a coherent legal basis. The Commission is proposing a ‘financial reference amount’ of EUR 4. 212,6 million. |
| --- | --- |

2.2

The CIP marks the continuation of a range of existing Community support programmes in various policy areas and presents them as a package with a coherent legal basis. The Commission is proposing a ‘financial reference amount’ of EUR 4. 212,6 million.

| 2.3 | The CIP is open to all EU Member States, EU candidate countries, countries of the European Economic Area (EEA) and countries of the western Balkans. Other non-EU countries may also take part if this is provided for in bilateral agreements. |
| --- | --- |

2.3

The CIP is open to all EU Member States, EU candidate countries, countries of the European Economic Area (EEA) and countries of the western Balkans. Other non-EU countries may also take part if this is provided for in bilateral agreements.

| 2.4 | The CIP is designed to foster competitiveness of enterprises, and particularly SMEs; to promote innovation and make it market-viable; to accelerate the development of the information society; and to promote energy efficiency and the use of new and renewable energy sources. |
| --- | --- |

2.4

The CIP is designed to foster competitiveness of enterprises, and particularly SMEs; to promote innovation and make it market-viable; to accelerate the development of the information society; and to promote energy efficiency and the use of new and renewable energy sources.

| 2.5 | Underpinned by Articles 156, 157(3) and 175(1) of the Treaty establishing the European Community, the proposal seeks to establish a significant and coherent legal basis for specific Community support programmes and relevant parts of other Community programmes in fields critical to boosting European productivity, innovation and sustainable growth, while at the same time addressing complementary environmental concerns. The CIP is made up of three specific sub-programmes. |
| --- | --- |

2.5

Underpinned by Articles 156, 157(3) and 175(1) of the Treaty establishing the European Community, the proposal seeks to establish a significant and coherent legal basis for specific Community support programmes and relevant parts of other Community programmes in fields critical to boosting European productivity, innovation and sustainable growth, while at the same time addressing complementary environmental concerns. The CIP is made up of three specific sub-programmes.

| 2.6 | The purpose of the Entrepreneurship and Innovation programme is to create a framework for entrepreneurship, innovation and competitiveness. It targets businesses in all economic sectors, whether hi-tech or traditional. The aim is to improve access to finance for SME start-ups and growth. Other key elements include cooperation between businesses, the fostering of innovation and the promotion of environmental technologies. The budgetary allocation for this programme is EUR 2,631 million. |
| --- | --- |

2.6

The purpose of the Entrepreneurship and Innovation programme is to create a framework for entrepreneurship, innovation and competitiveness. It targets businesses in all economic sectors, whether hi-tech or traditional. The aim is to improve access to finance for SME start-ups and growth. Other key elements include cooperation between businesses, the fostering of innovation and the promotion of environmental technologies. The budgetary allocation for this programme is EUR 2,631 million.

| 2.7 | The ICT policy support programme is designed to promote the adoption of information and communication technologies in businesses, administrations and public-sector services. The proposed measures flesh out and support the new EU initiative i2010, which in the years ahead is set to provide the framework for the establishment of a single European information area and the strengthening of the internal market in information products and services. The budgetary allocation for this programme is EUR 801.6 million. |
| --- | --- |

2.7

The ICT policy support programme is designed to promote the adoption of information and communication technologies in businesses, administrations and public-sector services. The proposed measures flesh out and support the new EU initiative i2010, which in the years ahead is set to provide the framework for the establishment of a single European information area and the strengthening of the internal market in information products and services. The budgetary allocation for this programme is EUR 801.6 million.

| 2.8 | The Intelligent Energy — Europe programme seeks to support sustainable development as it relates to energy; to improve security of supply and energy efficiency; to reduce dependence on energy imports; and to increase renewable energy's share of gross inland consumption to 12 %. Priorities include projects to promote and disseminate sustainable energy technologies; improved administrative structures and closer networking; and action to raise overall awareness of the need for sustainable energy use. The Intelligent Energy Executive Agency set up by the Commission is to remain in place. The budgetary allocation for this programme is EUR 780 million. |
| --- | --- |

2.8

The Intelligent Energy — Europe programme seeks to support sustainable development as it relates to energy; to improve security of supply and energy efficiency; to reduce dependence on energy imports; and to increase renewable energy's share of gross inland consumption to 12 %. Priorities include projects to promote and disseminate sustainable energy technologies; improved administrative structures and closer networking; and action to raise overall awareness of the need for sustainable energy use. The Intelligent Energy Executive Agency set up by the Commission is to remain in place. The budgetary allocation for this programme is EUR 780 million.

| 2.9 | The CIP will operate on the basis of annual work programmes. The Commission intends to ensure implementation of these programmes. Management committees are to provide back-up for the measures at Member State level and ensure the coherence of national activities. |
| --- | --- |

2.9

The CIP will operate on the basis of annual work programmes. The Commission intends to ensure implementation of these programmes. Management committees are to provide back-up for the measures at Member State level and ensure the coherence of national activities.

3.   General comments

| 3.1 | The CIP proposal is wide-ranging and covers a broad spectrum of policies and programmes. The comments here relate only to those aspects which the Committee considers to be of particular importance or where it would like to see additional considerations borne in mind. |
| --- | --- |

3.1

The CIP proposal is wide-ranging and covers a broad spectrum of policies and programmes. The comments here relate only to those aspects which the Committee considers to be of particular importance or where it would like to see additional considerations borne in mind.

| 3.2 | The Committee welcomes the CIP as an important step towards establishing synergies to promote business competitiveness and innovation and to foster sustainable development. The proposed measures and tools can play a key part in strengthening social cohesion, promoting sustainable economic development and achieving the Lisbon strategy's growth and employment objectives. This is why the Commission also highlights the CIP as an important element of Community policy in its proposed action plan to revitalise the Lisbon strategy at Community level (COM(2005) 330). |
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3.2

The Committee welcomes the CIP as an important step towards establishing synergies to promote business competitiveness and innovation and to foster sustainable development. The proposed measures and tools can play a key part in strengthening social cohesion, promoting sustainable economic development and achieving the Lisbon strategy's growth and employment objectives. This is why the Commission also highlights the CIP as an important element of Community policy in its proposed action plan to revitalise the Lisbon strategy at Community level (COM(2005) 330).

| 3.3 | The 2004 Kok report refers to the key factors determining the competitiveness of the European economy. The report rightly recommended that measures be taken to develop the knowledge society further, complete the single market, improve the business climate, modernise the labour market (not least through strategies for lifelong leaning and active ageing) and promote environmental sustainability. The Committee feels that the onus is on the Member States in particular to do everything they can to boost businesses competitiveness by establishing the requisite conditions, and considers the EU support programmes an important and effective adjunct in this connection. In addition to the CIP, the framework research programme, the lifelong learning strategy and the Structural Funds are of particular importance. |
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3.3

The 2004 Kok report refers to the key factors determining the competitiveness of the European economy. The report rightly recommended that measures be taken to develop the knowledge society further, complete the single market, improve the business climate, modernise the labour market (not least through strategies for lifelong leaning and active ageing) and promote environmental sustainability. The Committee feels that the onus is on the Member States in particular to do everything they can to boost businesses competitiveness by establishing the requisite conditions, and considers the EU support programmes an important and effective adjunct in this connection. In addition to the CIP, the framework research programme, the lifelong learning strategy and the Structural Funds are of particular importance.

| 3.4 | Businesses boost their innovative capacity not only by exploiting technological progress. Innovation is also furthered by making the entrepreneurial spirit a more established fixture in each country's society and culture and expanding managerial knowledge, as well as by responsible business management and the pursuit of cross-border activities. When setting goals for the CIP, it would be a mistake to interpret innovation too narrowly, thereby squandering opportunities for more growth, employment and social cohesion. Businesses are key players in the process of innovation, and the social partners should be involved appropriately in implementing that process. |
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3.4

Businesses boost their innovative capacity not only by exploiting technological progress. Innovation is also furthered by making the entrepreneurial spirit a more established fixture in each country's society and culture and expanding managerial knowledge, as well as by responsible business management and the pursuit of cross-border activities. When setting goals for the CIP, it would be a mistake to interpret innovation too narrowly, thereby squandering opportunities for more growth, employment and social cohesion. Businesses are key players in the process of innovation, and the social partners should be involved appropriately in implementing that process.

| 3.5 | Innovation is born in people's minds. A high level of education and training is essential if there is to be a sustained increase in innovative capacity in the European Union. It is a duty equally incumbent on employers, workers, governments, universities, schools and all other stakeholders to raise the innovative potential of our societies still further. Cross-border projects are a good way to build on national efforts to promote the knowledge society. The Committee is pleased that the EU is targeting education and training, not least through Community schemes such as Socrates (education in general), Tempus (university studies) and Leonardo da Vinci (vocational training). The integrated action programme for education, training and lifelong learning, which is set to run from 2007 to 2013, can also play a key part in boosting businesses' innovative capacity and making the CIP a success. |
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3.5

Innovation is born in people's minds. A high level of education and training is essential if there is to be a sustained increase in innovative capacity in the European Union. It is a duty equally incumbent on employers, workers, governments, universities, schools and all other stakeholders to raise the innovative potential of our societies still further. Cross-border projects are a good way to build on national efforts to promote the knowledge society. The Committee is pleased that the EU is targeting education and training, not least through Community schemes such as Socrates (education in general), Tempus (university studies) and Leonardo da Vinci (vocational training). The integrated action programme for education, training and lifelong learning, which is set to run from 2007 to 2013, can also play a key part in boosting businesses' innovative capacity and making the CIP a success.

| 3.6 | The Committee welcomes the Commission's intention to boost businesses' innovative capacity and competitiveness through better regulation and a systematic review of existing legislation to check for disproportionate burdens. It is particularly important that any new rules be subject to an effective impact assessment. When conducting this impact assessment, the Commission should work closely with the Competitiveness Council and the European Parliament. |
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3.6

The Committee welcomes the Commission's intention to boost businesses' innovative capacity and competitiveness through better regulation and a systematic review of existing legislation to check for disproportionate burdens. It is particularly important that any new rules be subject to an effective impact assessment. When conducting this impact assessment, the Commission should work closely with the Competitiveness Council and the European Parliament.

| 3.7 | The Committee shares the Commission's view that horizontal and coordinating EU measures can generate major added value. It will be particularly important to provide businesses with information that is as practical as possible and to give them easy access to CIP actions and tools. |
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3.7

The Committee shares the Commission's view that horizontal and coordinating EU measures can generate major added value. It will be particularly important to provide businesses with information that is as practical as possible and to give them easy access to CIP actions and tools.

| 3.8 | The Committee backs the Commission's aim of using the CIP to promote traditional and not only hi-tech sectors. Such traditional sectors in particular have the potential to play an even greater role in boosting employment and strengthening social cohesion if they are given the opportunity to become more competitive and innovative. There is also considerable innovative potential in the services and logistics sectors. |
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3.8

The Committee backs the Commission's aim of using the CIP to promote traditional and not only hi-tech sectors. Such traditional sectors in particular have the potential to play an even greater role in boosting employment and strengthening social cohesion if they are given the opportunity to become more competitive and innovative. There is also considerable innovative potential in the services and logistics sectors.

| 3.9 | The Committee would ask the Commission not to be too restrictive in identifying the framework programme's target groups, so as to secure maximum added value across as many different regions and sectors as possible. Cooperatives, consortia, mutuals, innovative start-ups and microenterprises can also help boost competitiveness and innovative capacity within the EU. Cooperatives, for instance, make it possible to utilise size-related advantages which have a favourable impact on market access (including participation in larger invitations to tender), market position, the development of management potential, further training and research capacity. A key condition for access to CIP projects should be the extent to which the target groups develop feasible ideas that help boost competitiveness and innovation and warrant support. Foundations, associations and chambers of industry and commerce play a key role as intermediaries with regard to the framework programme. |
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3.9

The Committee would ask the Commission not to be too restrictive in identifying the framework programme's target groups, so as to secure maximum added value across as many different regions and sectors as possible. Cooperatives, consortia, mutuals, innovative start-ups and microenterprises can also help boost competitiveness and innovative capacity within the EU. Cooperatives, for instance, make it possible to utilise size-related advantages which have a favourable impact on market access (including participation in larger invitations to tender), market position, the development of management potential, further training and research capacity. A key condition for access to CIP projects should be the extent to which the target groups develop feasible ideas that help boost competitiveness and innovation and warrant support. Foundations, associations and chambers of industry and commerce play a key role as intermediaries with regard to the framework programme.

| 3.10 | Given the budgetary constraints in the Member States and at European level, CIP funding is limited. The Committee expects the programme to be given adequate funding under the next financial perspective, on which a decision is still pending. At the same time, it is essential to focus available funding as efficiently as possible on the target groups and in a way that is best suited to achieving the desired outcome. The Commission should examine the extent to which funding currently earmarked for managing the programme can be used for projects. |
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3.10

Given the budgetary constraints in the Member States and at European level, CIP funding is limited. The Committee expects the programme to be given adequate funding under the next financial perspective, on which a decision is still pending. At the same time, it is essential to focus available funding as efficiently as possible on the target groups and in a way that is best suited to achieving the desired outcome. The Commission should examine the extent to which funding currently earmarked for managing the programme can be used for projects.

| 3.11 | The Committee welcomes the Commission's intention to evaluate the experience it has gained with the existing programmes, to correct any shortcomings and, when implementing the CIP, to draw on examples of best practice. Benchmarking and monitoring that is readily understandable to all stakeholders will help make the CIP a success. Any findings that could help make the CIP as effective as possible should be incorporated into the annual planning of work at an early stage. The Commission and the players involved in implementing the programmes should take a critical look at the mid-term review to see if any changes need to be made, with due regard to the experiences of businesses and the other target groups. However, the certainty with which all project stakeholders must be able to plan ahead should not be undermined at any time. |
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3.11

The Committee welcomes the Commission's intention to evaluate the experience it has gained with the existing programmes, to correct any shortcomings and, when implementing the CIP, to draw on examples of best practice. Benchmarking and monitoring that is readily understandable to all stakeholders will help make the CIP a success. Any findings that could help make the CIP as effective as possible should be incorporated into the annual planning of work at an early stage. The Commission and the players involved in implementing the programmes should take a critical look at the mid-term review to see if any changes need to be made, with due regard to the experiences of businesses and the other target groups. However, the certainty with which all project stakeholders must be able to plan ahead should not be undermined at any time.

| 3.12 | The Committee feels it of the utmost importance that Member States take on board the concept of ‘additionality’. Member States are urged to maintain their national support at the planned levels irrespective of financial contributions from the EU. As the Committee see it, Member States are committed the agreed objective of devoting 3 % of GDP to research and development. CIP implementation must not result in any slackening of Member States' efforts to achieve this objective. |
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3.12

The Committee feels it of the utmost importance that Member States take on board the concept of ‘additionality’. Member States are urged to maintain their national support at the planned levels irrespective of financial contributions from the EU. As the Committee see it, Member States are committed the agreed objective of devoting 3 % of GDP to research and development. CIP implementation must not result in any slackening of Member States' efforts to achieve this objective.

| 3.13 | The Commission is right to point to the need for close links between the CIP's tools and measures and other EU programmes and initiatives. Links with the 7th Framework Research Programme, the lifelong learning strategy and structural policy programmes are of particular importance. The Commission should take steps to ensure that all the directorates-general involved pursue coherent objectives. Transparency must be guaranteed for the activities and decisions of all the stakeholder bodies. Horizontal synergies and vertical synergies between the EU and the Member States and between business, science and the public authorities will only be fully attainable if the substantive and organisational priorities of these programmes are well coordinated. |
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3.13

The Commission is right to point to the need for close links between the CIP's tools and measures and other EU programmes and initiatives. Links with the 7th Framework Research Programme, the lifelong learning strategy and structural policy programmes are of particular importance. The Commission should take steps to ensure that all the directorates-general involved pursue coherent objectives. Transparency must be guaranteed for the activities and decisions of all the stakeholder bodies. Horizontal synergies and vertical synergies between the EU and the Member States and between business, science and the public authorities will only be fully attainable if the substantive and organisational priorities of these programmes are well coordinated.

4.   Specific comments

| 4.1 | When implementing the CIP, the target groups must have ready access to the proposed programmes. This was not always fully guaranteed in the past. Funding must be allocated efficiently and on the basis of practical need, with as few bureaucratic hurdles as possible (inter alia as regards reporting and documentation). |
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4.1

When implementing the CIP, the target groups must have ready access to the proposed programmes. This was not always fully guaranteed in the past. Funding must be allocated efficiently and on the basis of practical need, with as few bureaucratic hurdles as possible (inter alia as regards reporting and documentation).

| 4.2 | The Commission should administer the CIP in an efficient and user-friendly way by adopting a coherent approach. All players involved in implementing the CIP rely both on long-term certainty to plan ahead and on transparency. It would be helpful to use an external agency to handle the administrative side of the programmes if administrative procedures could be considerably simplified and costs cut as a result. |
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4.2

The Commission should administer the CIP in an efficient and user-friendly way by adopting a coherent approach. All players involved in implementing the CIP rely both on long-term certainty to plan ahead and on transparency. It would be helpful to use an external agency to handle the administrative side of the programmes if administrative procedures could be considerably simplified and costs cut as a result.

| 4.3 | The Commission's SME observatory should play an even more active back-up role with regard to the CIP's implementation. This could further improve the exchange of knowledge and experience between the Member States, between businesses, and between industry, science and the public authorities. The SME observatory reports should be examined with a view to their practicability and relevance to the target groups. It would be helpful to define the observatory's remit in such a way that the input from all target groups (as defined in point 3.9) is clearly brought to bear. |
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4.3

The Commission's SME observatory should play an even more active back-up role with regard to the CIP's implementation. This could further improve the exchange of knowledge and experience between the Member States, between businesses, and between industry, science and the public authorities. The SME observatory reports should be examined with a view to their practicability and relevance to the target groups. It would be helpful to define the observatory's remit in such a way that the input from all target groups (as defined in point 3.9) is clearly brought to bear.

4.4   The Entrepreneurship and Innovation programme

| 4.4.1 | For SMEs and innovative micro-enterprises, access to capital remains very limited — despite the fact that this problem has been well known for many years. Action is needed on this front without delay. The financial instruments proposed under this programme are of crucial importance for the success of European enterprise policy. The Committee trusts that they will be able to do much to move things forward and generate leverage. |
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4.4.1

For SMEs and innovative micro-enterprises, access to capital remains very limited — despite the fact that this problem has been well known for many years. Action is needed on this front without delay. The financial instruments proposed under this programme are of crucial importance for the success of European enterprise policy. The Committee trusts that they will be able to do much to move things forward and generate leverage.

| 4.4.2 | The Committee advocates allocating resources to appropriate financial intermediaries in order to reduce financing costs (including staffing and administrative costs) and to lower financing risks. The High Growth and Innovative SME Facility (GIF), the SME Guarantee Facility (SMEG) and the Capacity Building Scheme (CBS) are designed to help make it easier for businesses to finance loans and access risk capital. Providing loans to innovation-driven SMEs and micro-enterprises, especially in their start-up and growth phase, will boost their growth and employment potential. Small and micro loans should also be made available for appropriate projects. |
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4.4.2

The Committee advocates allocating resources to appropriate financial intermediaries in order to reduce financing costs (including staffing and administrative costs) and to lower financing risks. The High Growth and Innovative SME Facility (GIF), the SME Guarantee Facility (SMEG) and the Capacity Building Scheme (CBS) are designed to help make it easier for businesses to finance loans and access risk capital. Providing loans to innovation-driven SMEs and micro-enterprises, especially in their start-up and growth phase, will boost their growth and employment potential. Small and micro loans should also be made available for appropriate projects.

| 4.4.3 | The Committee thinks that building up and expanding cross-border activities should also be considered as an integral part of European policy and a key SME strategy to boost competitiveness and innovation. All the actions and tools provided for in the programme should serve this objective. On this front, the Commission should provide businesses with active support through ‘cooperation exchanges’, practical information and other appropriate measures. |
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4.4.3

The Committee thinks that building up and expanding cross-border activities should also be considered as an integral part of European policy and a key SME strategy to boost competitiveness and innovation. All the actions and tools provided for in the programme should serve this objective. On this front, the Commission should provide businesses with active support through ‘cooperation exchanges’, practical information and other appropriate measures.

| 4.4.4 | The complexity of European aid arrangements and the legal framework involved makes it essential to provide businesses and other target groups with tailor-made information and advice. The best means of achieving that is through a European-wide network of information channels working successfully together. In this way, it is possible to heighten awareness still further among the public and among businesses of the added value of European programmes and projects. This also ties in, among other things, with the new EU communication strategy. |
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4.4.4

The complexity of European aid arrangements and the legal framework involved makes it essential to provide businesses and other target groups with tailor-made information and advice. The best means of achieving that is through a European-wide network of information channels working successfully together. In this way, it is possible to heighten awareness still further among the public and among businesses of the added value of European programmes and projects. This also ties in, among other things, with the new EU communication strategy.

| 4.4.5 | The Committee is keen that the planned invitation to tender for network partners to provide support services for businesses and innovation should be subject to transparent rules and be open to all regional and sectoral organisations, which, by virtue of their structure and the services they offer, can respond directly to business concerns. The Commission is advised to give individual consideration to the credentials of existing Euro Info Centres (EIC), the Innovation Relay Centres (IRC) and the Business Innovation Centres (BIC). |
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4.4.5

The Committee is keen that the planned invitation to tender for network partners to provide support services for businesses and innovation should be subject to transparent rules and be open to all regional and sectoral organisations, which, by virtue of their structure and the services they offer, can respond directly to business concerns. The Commission is advised to give individual consideration to the credentials of existing Euro Info Centres (EIC), the Innovation Relay Centres (IRC) and the Business Innovation Centres (BIC).

4.5   The ICT policy support programme

| 4.5.1 | The Committee welcomes the line taken by this programme. This sector is a driving force behind the increased productivity that is necessary in all economic fields. The proposed measures may be expected to generate considerable European added value. |
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4.5.1

The Committee welcomes the line taken by this programme. This sector is a driving force behind the increased productivity that is necessary in all economic fields. The proposed measures may be expected to generate considerable European added value.

| 4.5.2 | Promoting the European information society will help foster sustainable economic development, boost European social integration and improve people's quality of life. When implementing this programme, it is particularly important to ensure that all companies have access, including those in traditional sectors. |
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4.5.2

Promoting the European information society will help foster sustainable economic development, boost European social integration and improve people's quality of life. When implementing this programme, it is particularly important to ensure that all companies have access, including those in traditional sectors.

| 4.5.3 | Targeted projects, consolidated measures and the establishment and expansion of cross-border networks and clusters can boost technology transfer and the application of innovative, market-based ICT solutions. The Committee is pleased that joint technical specifications and action plans are to be drawn up to facilitate public procurement in this sector. |
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4.5.3

Targeted projects, consolidated measures and the establishment and expansion of cross-border networks and clusters can boost technology transfer and the application of innovative, market-based ICT solutions. The Committee is pleased that joint technical specifications and action plans are to be drawn up to facilitate public procurement in this sector.

| 4.5.4 | In terms of structure and planning, the ICT policy support programme should be coordinated very closely with the initiative i2010 — A European Information Society for growth and employment (COM (2005) 229). The Committee is working on a separate opinion on the i2010 initiative. |
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4.5.4

In terms of structure and planning, the ICT policy support programme should be coordinated very closely with the initiative i2010 — A European Information Society for growth and employment (COM (2005) 229). The Committee is working on a separate opinion on the i2010 initiative.

4.6   The Intelligent Energy — Europe programme

| 4.6.1 | The Committee welcomes the scope of the proposed programme. Energy efficiency, the promotion of renewables and the diversification of energy supply are vital for sustainable economic development and environmental protection in Europe. The programme should help harness the energy sector's full innovative potential, not least in the fields of systems engineering and energy conversion. |
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4.6.1

The Committee welcomes the scope of the proposed programme. Energy efficiency, the promotion of renewables and the diversification of energy supply are vital for sustainable economic development and environmental protection in Europe. The programme should help harness the energy sector's full innovative potential, not least in the fields of systems engineering and energy conversion.

| 4.6.2 | Market-oriented technologies and competitive products will be crucial in determining whether the programme is able to achieve its objectives. The Committee is therefore pleased at the support to be given to projects that make it easier to convert innovation into marketable products. However, such activities can only be useful early on in the innovation process. Basically, the only way to develop the best technologies and competitive products or services is through l competition. |
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4.6.2

Market-oriented technologies and competitive products will be crucial in determining whether the programme is able to achieve its objectives. The Committee is therefore pleased at the support to be given to projects that make it easier to convert innovation into marketable products. However, such activities can only be useful early on in the innovation process. Basically, the only way to develop the best technologies and competitive products or services is through l competition.

| 4.6.3 | The Committee welcomes the Commission's plan to promote the sustainable use of energy resources and to disseminate information to that end. These activities should be aimed not only at specialist groups but also at the wider public. The ongoing Sustainable energy for Europe campaign has an important contribution to make in this regard. It is designed to spread examples of best practice and further raise public awareness of the need to use energy efficiently and protect the environment. The Committee trusts that this campaign and the Intelligent Energy-Europe programme usefully complement each other. |
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4.6.3

The Committee welcomes the Commission's plan to promote the sustainable use of energy resources and to disseminate information to that end. These activities should be aimed not only at specialist groups but also at the wider public. The ongoing Sustainable energy for Europe campaign has an important contribution to make in this regard. It is designed to spread examples of best practice and further raise public awareness of the need to use energy efficiently and protect the environment. The Committee trusts that this campaign and the Intelligent Energy-Europe programme usefully complement each other.

5.   Final recommendations

| 5.1 | The Committee would encourage the Commission to set out the aims and structure of the CIP even more clearly. A good example is the list of planned implementing measures in CIP Article 6. The individual programmes and tools could be presented in a similarly systematic fashion, thereby making the CIP more readily understandable for the target groups. Civil society organisations should also be involved in this process. |
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5.1

The Committee would encourage the Commission to set out the aims and structure of the CIP even more clearly. A good example is the list of planned implementing measures in CIP Article 6. The individual programmes and tools could be presented in a similarly systematic fashion, thereby making the CIP more readily understandable for the target groups. Civil society organisations should also be involved in this process.

| 5.2 | The Committee expects that consolidating a range of programmes and individual measures will produce added value. That will only succeed through optimum coordination, consistency between the individual measures taken, and coordination with other relevant EU schemes. The onus here is on the Commission and the managing authorities in particular. |
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5.2

The Committee expects that consolidating a range of programmes and individual measures will produce added value. That will only succeed through optimum coordination, consistency between the individual measures taken, and coordination with other relevant EU schemes. The onus here is on the Commission and the managing authorities in particular.

| 5.3 | The Committee is pleased that the CIP is based on the EU's key economic, social, environmental and energy policy objectives. In implementing the CIP, it will be important to structure the annual work programmes in a practical way that is of clear relevance to the target groups, not least innovative businesses. That can only be achieved through the appropriate involvement of the target groups even at the planning stage. |
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5.3

The Committee is pleased that the CIP is based on the EU's key economic, social, environmental and energy policy objectives. In implementing the CIP, it will be important to structure the annual work programmes in a practical way that is of clear relevance to the target groups, not least innovative businesses. That can only be achieved through the appropriate involvement of the target groups even at the planning stage.

| 5.4 | For the purposes of improved implementation and policy continuity, the Committee calls on the Commission to clarify the links between the CIP and other related existing and future initiatives, notably the 2000 European Charter for Small Enterprises, the 2003 Entrepreneurship in Europe Action Plan and the Communication that has been announced on SME policy for the years ahead. This would be of great value to business representatives and policy makers at national, regional and local level. |
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5.4

For the purposes of improved implementation and policy continuity, the Committee calls on the Commission to clarify the links between the CIP and other related existing and future initiatives, notably the 2000 European Charter for Small Enterprises, the 2003 Entrepreneurship in Europe Action Plan and the Communication that has been announced on SME policy for the years ahead. This would be of great value to business representatives and policy makers at national, regional and local level.

| 5.5 | The Committee will be closely monitoring CIP implementation. It reserves the right to submit fresh recommendations in the light of experience gained or as part of the mid-term review. |
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5.5

The Committee will be closely monitoring CIP implementation. It reserves the right to submit fresh recommendations in the light of experience gained or as part of the mid-term review.

Brussels, 14 December 2005.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

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| 17.3.2006 | EN | Official Journal of the European Union | C 65/27 |
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17.3.2006

EN

Official Journal of the European Union

C 65/27

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Opinion of the European Economic and Social Committee on the ‘Proposal for a Regulation of the European Parliament and of the Council regarding access to the Second Generation Schengen Information System (SIS II) by the services in the Member States responsible for issuing vehicle registration certificates’

(COM(2005) 237 final — 2005/0104 (COD))

(2006/C 65/04)

On 16 September 2005 the Council decided to consult the European Economic and Social Committee, under Article 95 of the Treaty establishing the European Community, on the abovementioned proposal.

The Section for the Single Market, Production and Consumption, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 20 October 2005. The rapporteur was Mr Ranocchiari.

At its 422nd plenary session, held on 14 and 15 December 2005 (meeting of 14 December), the European Economic and Social Committee adopted the following opinion nem. con. with 123 votes in favour and two abstentions.

1.   Introduction

| 1.1 | The Schengen Convention, which is designed to permit the free movement of people and goods, was signed in 1990 and became operational in 1995. The Schengen Convention stipulates which authorities have access to the Schengen Information System (SIS) and the purposes for which such data may be used. This first text of the Convention did not allow vehicle registration authorities to access the SIS. |
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1.1

The Schengen Convention, which is designed to permit the free movement of people and goods, was signed in 1990 and became operational in 1995. The Schengen Convention stipulates which authorities have access to the Schengen Information System (SIS) and the purposes for which such data may be used. This first text of the Convention did not allow vehicle registration authorities to access the SIS.

| 1.2 | On 21 August 2003, the Commission submitted a Proposal for a Regulation amending the Convention implementing the Schengen Agreement as regards access to the Schengen Information System (SIS) by the services in the Member States responsible for issuing registration certificates for vehicles (1). The aim was to allow access to SIS data on stolen vehicles and trailers, stolen blank official documents and issued identity papers (passports, identity cards, driving licences) for the purposes of checking whether vehicles presented for a second registration have been stolen, misappropriated or lost and also whether persons applying for a registration certificate are using stolen identity or vehicle registration documents to this end. |
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1.2

On 21 August 2003, the Commission submitted a Proposal for a Regulation amending the Convention implementing the Schengen Agreement as regards access to the Schengen Information System (SIS) by the services in the Member States responsible for issuing registration certificates for vehicles (1). The aim was to allow access to SIS data on stolen vehicles and trailers, stolen blank official documents and issued identity papers (passports, identity cards, driving licences) for the purposes of checking whether vehicles presented for a second registration have been stolen, misappropriated or lost and also whether persons applying for a registration certificate are using stolen identity or vehicle registration documents to this end.

| 1.3 | The European Economic and Social Committee issued its opinion on the proposal on 25 February 2004 (2). The EESC agreed with the Commission that access to the SIS should be broadened to include national authorities responsible for issuing and checking vehicle registration certificates. The EESC was also pleased that the proposal, taking into account the fact that various Member States have private services responsible for vehicle registration, suggested that these private services might obtain the information necessary to carry out their work properly, indirectly through one of the public authorities with access to the SIS, provided that data protection was guaranteed. |
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1.3

The European Economic and Social Committee issued its opinion on the proposal on 25 February 2004 (2). The EESC agreed with the Commission that access to the SIS should be broadened to include national authorities responsible for issuing and checking vehicle registration certificates. The EESC was also pleased that the proposal, taking into account the fact that various Member States have private services responsible for vehicle registration, suggested that these private services might obtain the information necessary to carry out their work properly, indirectly through one of the public authorities with access to the SIS, provided that data protection was guaranteed.

| 1.4 | Subsequently, and after enlargement, it became clear that the development of a second generation of SIS (i.e. SIS II) was essential so that the new Member States could connect to the system and the Schengen area could be extended to the territory of these Member States. |
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1.4

Subsequently, and after enlargement, it became clear that the development of a second generation of SIS (i.e. SIS II) was essential so that the new Member States could connect to the system and the Schengen area could be extended to the territory of these Member States.

| 1.5 | Given that the SIS II needs an appropriate legal framework and the different policy areas involved, the European Commission had to table three proposals: the first one relates to the free movement of persons, the second to police and judicial cooperation in criminal matters while the third one complements the other two proposals and aims at providing vehicle registration authorities with access to the SIS II. |
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1.5

Given that the SIS II needs an appropriate legal framework and the different policy areas involved, the European Commission had to table three proposals: the first one relates to the free movement of persons, the second to police and judicial cooperation in criminal matters while the third one complements the other two proposals and aims at providing vehicle registration authorities with access to the SIS II.

| 1.6 | The EESC is now being consulted on this third proposal, which represents a necessary follow- up to the previous, above-mentioned Regulation (3), which was recently adopted by the Council on 6 July 2005. |
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1.6

The EESC is now being consulted on this third proposal, which represents a necessary follow- up to the previous, above-mentioned Regulation (3), which was recently adopted by the Council on 6 July 2005.

2.   General comments

| 2.1 | The Commission's new proposal is intended to ensure consistency with the new legal instruments for the establishment, operation and use of the second generation of the Schengen Information System (SIS II). The Commission states that the main objective of the current proposal is the same as that tabled in August 2003, i.e. to reinforce cooperation between Member States, based on an effective exchange of information to combat fraud and illegal trade in stolen vehicles. The Commission further notes that the purpose is to guarantee that the services responsible for issuing registration certificates for vehicles shall have access to the same SIS data under the new legal framework for SIS II as they have had since June 2005, when the 2003 proposed Regulation entered into force. |
| --- | --- |

2.1

The Commission's new proposal is intended to ensure consistency with the new legal instruments for the establishment, operation and use of the second generation of the Schengen Information System (SIS II). The Commission states that the main objective of the current proposal is the same as that tabled in August 2003, i.e. to reinforce cooperation between Member States, based on an effective exchange of information to combat fraud and illegal trade in stolen vehicles. The Commission further notes that the purpose is to guarantee that the services responsible for issuing registration certificates for vehicles shall have access to the same SIS data under the new legal framework for SIS II as they have had since June 2005, when the 2003 proposed Regulation entered into force.

| 2.2 | The issue is still important since some 1,3 million vehicles are currently stolen each year in the European Union and approximately 500.000 vehicles disappear for good (4). Vehicle crimes are also related to other crimes such as trafficking, smuggling and terrorism (car bombing). |
| --- | --- |

2.2

The issue is still important since some 1,3 million vehicles are currently stolen each year in the European Union and approximately 500.000 vehicles disappear for good (4). Vehicle crimes are also related to other crimes such as trafficking, smuggling and terrorism (car bombing).

| 2.3 | The EESC reiterates its agreement with the Commission that access to the SIS II should be broadened to include national authorities responsible for issuing and checking the above-mentioned documents (see point 1.2). In addition, private services responsible for vehicle registration should obtain information indirectly through one of the public authorities with access to the SIS II, provided that data protection is guaranteed. It is especially important to secure mechanisms for restricting access to other information in the system, which is reserved for the authorities specified in Article 101 of the Schengen Convention. |
| --- | --- |

2.3

The EESC reiterates its agreement with the Commission that access to the SIS II should be broadened to include national authorities responsible for issuing and checking the above-mentioned documents (see point 1.2). In addition, private services responsible for vehicle registration should obtain information indirectly through one of the public authorities with access to the SIS II, provided that data protection is guaranteed. It is especially important to secure mechanisms for restricting access to other information in the system, which is reserved for the authorities specified in Article 101 of the Schengen Convention.

| 2.4 | The general comments and other comments that the EESC set out in the opinion of 25 February 2004 should still be considered. Some comments can be restated. For instance, the EESC thinks that the proposal would enhance security and speed up justice procedures. It will also act as an incentive to the Member States to allow more free movement of vehicles within the Union. However, it is important that the proposal be compatible with Member States' domestic rules and regulations. It is also important to give access to Member States which are not signatories to the Schengen Convention and to increase cooperation with Interpol and Europol in order to combat traffic in stolen or misappropriated vehicles outside countries which have access to the SIS II. The EESC also points out the importance of compiling, processing and publishing statistical data on this type of crime in order to enhance the approach to tackling it. |
| --- | --- |

2.4

The general comments and other comments that the EESC set out in the opinion of 25 February 2004 should still be considered. Some comments can be restated. For instance, the EESC thinks that the proposal would enhance security and speed up justice procedures. It will also act as an incentive to the Member States to allow more free movement of vehicles within the Union. However, it is important that the proposal be compatible with Member States' domestic rules and regulations. It is also important to give access to Member States which are not signatories to the Schengen Convention and to increase cooperation with Interpol and Europol in order to combat traffic in stolen or misappropriated vehicles outside countries which have access to the SIS II. The EESC also points out the importance of compiling, processing and publishing statistical data on this type of crime in order to enhance the approach to tackling it.

3.   Special comments

| 3.1 | The Commission proposal is well in line with the Council Decision of 22 December 2004 on tackling vehicle crime with cross-border implications (2004/919/EC) (5). The Decision states that ‘cooperation between law enforcement authorities and vehicle registration authorities is of particular importance, as is the provision of information to the relevant parties’. Article 7 of the Decision states that the national vehicle registration authorities shall be informed by the law enforcement authorities whether a vehicle, that is in the process of being registered, is known as having been stolen and that access to databases to that end shall take place with due respect to provisions of Community law. The EESC is pleased that the thoughts set out in the Council Decision are now incorporated in the Commission proposal. |
| --- | --- |

3.1

The Commission proposal is well in line with the Council Decision of 22 December 2004 on tackling vehicle crime with cross-border implications (2004/919/EC) (5). The Decision states that ‘cooperation between law enforcement authorities and vehicle registration authorities is of particular importance, as is the provision of information to the relevant parties’. Article 7 of the Decision states that the national vehicle registration authorities shall be informed by the law enforcement authorities whether a vehicle, that is in the process of being registered, is known as having been stolen and that access to databases to that end shall take place with due respect to provisions of Community law. The EESC is pleased that the thoughts set out in the Council Decision are now incorporated in the Commission proposal.

| 3.2 | Although the Commission proposal only concerns access by the registration authorities to certain information within the SIS II, the EESC would underline the need for greater cooperation in order to combat vehicle crimes. As stated in Article 4 of the Council Decision ‘the Member States shall take necessary steps to organise periodic consultations, as appropriate, among national competent authorities, in accordance with national law and may involve representatives of the private sectors (such as holders of private registers of missing vehicles, insurers and the car trade) in such consultations with a view to coordination of information and mutual alignment of activities in this area’. The EESC thinks that the Commission must take such ideas into consideration in future work to combat vehicle crimes. |
| --- | --- |

3.2

Although the Commission proposal only concerns access by the registration authorities to certain information within the SIS II, the EESC would underline the need for greater cooperation in order to combat vehicle crimes. As stated in Article 4 of the Council Decision ‘the Member States shall take necessary steps to organise periodic consultations, as appropriate, among national competent authorities, in accordance with national law and may involve representatives of the private sectors (such as holders of private registers of missing vehicles, insurers and the car trade) in such consultations with a view to coordination of information and mutual alignment of activities in this area’. The EESC thinks that the Commission must take such ideas into consideration in future work to combat vehicle crimes.

| 3.3 | As an example of these ideas, the EESC would mention Interpol's earlier project Stop Register Stolen Cars (StoreSto Car, later called Vehicle Identification, Research and Analysis, VIRA 17). The aim of this project was to bring together all information on cars in one database, information provided by the vehicle identification number (VIN) if the car was reported stolen, registered, exported or imported, manufactured or scrapped. Such a database forms a basis for cooperation between law enforcement authorities, registration authorities, custom authorities, car manufactures and insurance business. |
| --- | --- |

3.3

As an example of these ideas, the EESC would mention Interpol's earlier project Stop Register Stolen Cars (StoreSto Car, later called Vehicle Identification, Research and Analysis, VIRA 17). The aim of this project was to bring together all information on cars in one database, information provided by the vehicle identification number (VIN) if the car was reported stolen, registered, exported or imported, manufactured or scrapped. Such a database forms a basis for cooperation between law enforcement authorities, registration authorities, custom authorities, car manufactures and insurance business.

| 3.4 | As regards the present proposal, the EESC also wishes to point out that there are generally few possibilities to examine a vehicle physically in order to establish its identity and find out whether it has been reported stolen. In many countries the registration of a vehicle is combined with an inspection. Thus when a vehicle is being registered an opportunity arises to check whether it has been stolen. It is therefore important to provide the registration authorities with this means of detecting stolen, misappropriated or lost vehicles. |
| --- | --- |

3.4

As regards the present proposal, the EESC also wishes to point out that there are generally few possibilities to examine a vehicle physically in order to establish its identity and find out whether it has been reported stolen. In many countries the registration of a vehicle is combined with an inspection. Thus when a vehicle is being registered an opportunity arises to check whether it has been stolen. It is therefore important to provide the registration authorities with this means of detecting stolen, misappropriated or lost vehicles.

| 3.5 | As was noted in point 3.2 above, there is a need for greater cooperation in order to combat vehicle crimes. Another opportunity to examine a vehicle physically arises when the vehicle is exported or imported. The EESC recommends that the customs authorities should check in the same SIS II data as the registration authorities, both when a vehicle is imported or exported. |
| --- | --- |

3.5

As was noted in point 3.2 above, there is a need for greater cooperation in order to combat vehicle crimes. Another opportunity to examine a vehicle physically arises when the vehicle is exported or imported. The EESC recommends that the customs authorities should check in the same SIS II data as the registration authorities, both when a vehicle is imported or exported.

| 3.6 | When checking a vehicle to determine whether it has been reported stolen or not, it must also be possible to establish the identity of the vehicle. The identity of a vehicle is often established by its vehicle identification number (VIN). It is not unusual that a stolen vehicle's identity has been falsified or cloned. The EESC points out that it is important in the future to increase the possibilities of identifying a vehicle. Proposals such as electronic vehicle identification (EVI) or better spare parts marking must be closely examined and evaluated. |
| --- | --- |

3.6

When checking a vehicle to determine whether it has been reported stolen or not, it must also be possible to establish the identity of the vehicle. The identity of a vehicle is often established by its vehicle identification number (VIN). It is not unusual that a stolen vehicle's identity has been falsified or cloned. The EESC points out that it is important in the future to increase the possibilities of identifying a vehicle. Proposals such as electronic vehicle identification (EVI) or better spare parts marking must be closely examined and evaluated.

| 3.7 | Finally, the EESC suggests a further step to be done in the nearest future in order to extend the scope of this regulation. As a matter of fact the present Commission proposal, aiming at checking whether vehicles have been stolen, misappropriated or lost should be combined with the possibility to repatriate vehicles. This possibility varies considerably between the Member States and depends on the countries' different bona fide provisions. In some countries it is possible to obtain ownership of a stolen vehicle when the vehicle has been received in good faith, while in others it is not. In addition, the possibilities of repatriating vehicles which have been found to be stolen must be explored and evaluated in the future. |
| --- | --- |

3.7

Finally, the EESC suggests a further step to be done in the nearest future in order to extend the scope of this regulation. As a matter of fact the present Commission proposal, aiming at checking whether vehicles have been stolen, misappropriated or lost should be combined with the possibility to repatriate vehicles. This possibility varies considerably between the Member States and depends on the countries' different bona fide provisions. In some countries it is possible to obtain ownership of a stolen vehicle when the vehicle has been received in good faith, while in others it is not. In addition, the possibilities of repatriating vehicles which have been found to be stolen must be explored and evaluated in the future.

Brussels, 14 December 2005.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  COM(2003) 510 final – 2003/0198 (COD).

1

(2)  OJ C 110 of 30.4.2004.

2

(3)  See footnote 1.

3

(4)  Source: Statistics from Europol, The Hague, 27 June 2005.

4

(5)  OJ L 389 of 30.12.2004.

5

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| 17.3.2006 | EN | Official Journal of the European Union | C 65/29 |
| --- | --- | --- | --- |

17.3.2006

EN

Official Journal of the European Union

C 65/29

---

Opinion of the European Economic and Social Committee on the ‘Proposal for a Council Directive amending Directive 69/169/EEC as regards the temporary quantitative restriction on beer imports into Finland’

(COM(2005) 427 final — 2005/0175 (CNS))

(2006/C 65/05)

On 30 September 2005 the Council decided to consult the European Economic and Social Committee, under Article 93 of the Treaty establishing the European Community, on the abovementioned proposal.

The Section for the Single Market, Production and Consumption, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 11 November 2005. The rapporteur was Mr Byrne.

At its 422nd plenary session, held on 14 and 15 December 2005 (meeting of 14 December 2005), the European Economic and Social Committee adopted the following opinion by 115 votes to 3 with 14 abstentions.

1.   Summary

| 1.1 | Finland has requested an extension of the existing restriction on beer imports by travellers from countries other than Member States beyond 1 January 2006. This request is aimed at addressing fiscal, economic, social health and public order problems. |
| --- | --- |

1.1

Finland has requested an extension of the existing restriction on beer imports by travellers from countries other than Member States beyond 1 January 2006. This request is aimed at addressing fiscal, economic, social health and public order problems.

| 1.2 | The proposed amendment authorises Finland to extend the restriction until 31 December 2006. The maximum limit of six litres will however be increased to sixteen which is the actual limit currently being applied by Finland. |
| --- | --- |

1.2

The proposed amendment authorises Finland to extend the restriction until 31 December 2006. The maximum limit of six litres will however be increased to sixteen which is the actual limit currently being applied by Finland.

| 1.3 | The EESC supports the amendment. |
| --- | --- |

1.3

The EESC supports the amendment.

2.   Background

| 2.1 | In 2000 Finland was granted a derogation until 31 December 2005 to limit personal imports of beer by individuals from countries other than Member States to a maximum of six litres. In particular, Finland has a border with Russia where alcohol is much cheaper so that if the normal monetary limits applied individuals could import c. 200 litres of beer. |
| --- | --- |

2.1

In 2000 Finland was granted a derogation until 31 December 2005 to limit personal imports of beer by individuals from countries other than Member States to a maximum of six litres. In particular, Finland has a border with Russia where alcohol is much cheaper so that if the normal monetary limits applied individuals could import c. 200 litres of beer.

| 2.2 | Because of the large price difference the impact of unrestricted imports on Finnish retailers, government tax revenue and social and health problems would be severe. |
| --- | --- |

2.2

Because of the large price difference the impact of unrestricted imports on Finnish retailers, government tax revenue and social and health problems would be severe.

| 2.3 | Finland has however already made significant tax reductions in 2004 and has also applied a higher maximum of sixteen litres rather than six. Thus Finland has therefore been seeking to move towards a long-term solution. |
| --- | --- |

2.3

Finland has however already made significant tax reductions in 2004 and has also applied a higher maximum of sixteen litres rather than six. Thus Finland has therefore been seeking to move towards a long-term solution.

3.   General comments

| 3.1 | The Committee notes the steps already taken by Finland to address the problem and believes therefore that it is appropriate to grant a further extension of the derogation until 31 December 2006. |
| --- | --- |

3.1

The Committee notes the steps already taken by Finland to address the problem and believes therefore that it is appropriate to grant a further extension of the derogation until 31 December 2006.

Brussels, 14 December 2005.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

| 17.3.2006 | EN | Official Journal of the European Union | C 65/30 |
| --- | --- | --- | --- |

17.3.2006

EN

Official Journal of the European Union

C 65/30

---

Opinion of the European Economic and Social Committee on the ‘Security of modes of transport’

(2006/C 65/06)

By letter of 2 June 2005, the Commission asked the European Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, to draw up an opinion on the Security of modes of transport.

The Section for Transport, Energy, Infrastructure and the Information Society, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 24 November 2005. The rapporteur was Mr Simons.

At its 422nd plenary session, held on 14 and 15 December 2005 (meeting of 14 December 2005), the European Economic and Social Committee adopted the following opinion with 124 votes in favour and four abstentions.

1.   Introduction

| 1.1 | Interest in the subject of security has increased enormously since the terrorist attacks of 11 September 2001 (New York), November 2003 (Istanbul), 11 March 2004 (Madrid), 7 July 2005 (London) and other attacks elsewhere. Preventive and operational measures have been taken everywhere to protect people, means of transport and goods as much and as effectively as possible. Security has become a hot policy-making issue. |
| --- | --- |

1.1

Interest in the subject of security has increased enormously since the terrorist attacks of 11 September 2001 (New York), November 2003 (Istanbul), 11 March 2004 (Madrid), 7 July 2005 (London) and other attacks elsewhere. Preventive and operational measures have been taken everywhere to protect people, means of transport and goods as much and as effectively as possible. Security has become a hot policy-making issue.

| 1.2 | In this context, the term ‘security’ is understood to mean measures to prevent both terrorist attacks and ordinary crime, and especially theft. |
| --- | --- |

1.2

In this context, the term ‘security’ is understood to mean measures to prevent both terrorist attacks and ordinary crime, and especially theft.

| 1.3 | The Committee has been playing its part. Several opinions have been adopted, including the exploratory opinion of 24 October 2002 (1) (rapporteur: Ms Bredima-Savopoulou), which was particularly valuable as it dealt comprehensively with security in shipping and civil aviation. |
| --- | --- |

1.3

The Committee has been playing its part. Several opinions have been adopted, including the exploratory opinion of 24 October 2002 (1) (rapporteur: Ms Bredima-Savopoulou), which was particularly valuable as it dealt comprehensively with security in shipping and civil aviation.

| 1.4 | On 23 December 2003 the European Commission published a Consultation Paper on Freight Transport Security, in which it sought the views of interested parties with regard to the subject of security. Furthermore, in a Communication to the Council (2), the Commission proposed a framework programme in the field of security, and on 12 August 2005 a work programme on combating terrorism was published in the Official Journal (3). A number of points from these publications have been of value in drawing up this exploratory opinion. |
| --- | --- |

1.4

On 23 December 2003 the European Commission published a Consultation Paper on Freight Transport Security, in which it sought the views of interested parties with regard to the subject of security. Furthermore, in a Communication to the Council (2), the Commission proposed a framework programme in the field of security, and on 12 August 2005 a work programme on combating terrorism was published in the Official Journal (3). A number of points from these publications have been of value in drawing up this exploratory opinion.

| 1.5 | This exploratory opinion seeks above all to bring clarity to the role and responsibility of the various actors, both nationally and internationally, in the security field relating to:






  — | passengers (and staff employed in the transport chain); |
| --- | --- | --- |

1.5

This exploratory opinion seeks above all to bring clarity to the role and responsibility of the various actors, both nationally and internationally, in the security field relating to:

—

passengers (and staff employed in the transport chain);

| — | modes of transport, goods and infrastructure, with the ultimate aim of improving the security of persons, goods, means of transport and infrastructure. |
| --- | --- |

—

modes of transport, goods and infrastructure, with the ultimate aim of improving the security of persons, goods, means of transport and infrastructure.

| 1.6 | This opinion is focussed solely on the security of modes of transport and not on transport safety. A complicating factor is that there is no linguistic distinction in several European Union countries between the two concepts. |
| --- | --- |

1.6

This opinion is focussed solely on the security of modes of transport and not on transport safety. A complicating factor is that there is no linguistic distinction in several European Union countries between the two concepts.

| 1.7 | With regard to the security of the infrastructure used by the inland modes of transport, a distinction is to be made between the TEN corridors, including nodes and the national infrastructure, although it is not always immediately clear where subsidiarity in the inland modes of transport begins and where it ends.
  It must be realised, as far as security measures in the inland modes of transport are concerned, that there is a considerable degree of interdependence between all modes of transport in the logistics chain, and not only inland modes. This requires a great deal of coordination when adopting security measures. An intermodal approach to security is in any case also necessary to prevent distortion of competition between the different modes, although we should realise that security costs can differ sharply from one mode of transport to another.
  Issues arising in connection with increased security measures will also be looked at in detail. These include questions such as:






  — | what is the impact of security measures on employees? |
| --- | --- | --- |

1.7

With regard to the security of the infrastructure used by the inland modes of transport, a distinction is to be made between the TEN corridors, including nodes and the national infrastructure, although it is not always immediately clear where subsidiarity in the inland modes of transport begins and where it ends.

It must be realised, as far as security measures in the inland modes of transport are concerned, that there is a considerable degree of interdependence between all modes of transport in the logistics chain, and not only inland modes. This requires a great deal of coordination when adopting security measures. An intermodal approach to security is in any case also necessary to prevent distortion of competition between the different modes, although we should realise that security costs can differ sharply from one mode of transport to another.

Issues arising in connection with increased security measures will also be looked at in detail. These include questions such as:

—

what is the impact of security measures on employees?

| — | should ‘crisis management’ be included in management training courses? |
| --- | --- |

—

should ‘crisis management’ be included in management training courses?

| — | who should meet the cost of security? |
| --- | --- |

—

who should meet the cost of security?

| — | what is the role of the insurance companies? |
| --- | --- |

—

what is the role of the insurance companies?

In view of the wide-ranging nature of this subject, it is advisable to bring some order to bear and to indicate how this exploratory opinion has been structured. In chapter 2, the General section, the broader issues of security are dealt with. It covers subjects such as the division of responsibilities and competences respectively of the European Union, the national governments, the modes of transport themselves, the passengers and management of the companies. In addition, the legislative aspect is discussed in this chapter. Chapter 3, the section which deals with specific issues, begins with an outline of initiatives taken at different levels to improve security. Closer attention is then paid to the security of modes of transport themselves. Chapter 4 examines the cost of security and the question of who should meet this cost. The role of the insurance companies is also discussed in this context. Chapter 5 presents a summary and draws the final conclusions.

2.   General

2.1   Security: General

| 2.1.1 | Ensuring the security of persons and goods in all modes of transport is now high on the agenda of politicians, policy makers and the business community. The term security means measures against both terrorism and ordinary crime. Nevertheless, it is hard to avoid the conclusion that no adequate coordinated approach yet exists. And this is indeed urgently needed because in a chain the weakest link determines the strength of the whole. |
| --- | --- |

2.1.1

Ensuring the security of persons and goods in all modes of transport is now high on the agenda of politicians, policy makers and the business community. The term security means measures against both terrorism and ordinary crime. Nevertheless, it is hard to avoid the conclusion that no adequate coordinated approach yet exists. And this is indeed urgently needed because in a chain the weakest link determines the strength of the whole.

| 2.1.2 | The complexity of the subject matter makes it difficult to define easily and unambiguously. The issue of subsidiarity is fully relevant to the security of modes of transport. It concerns both the demarcation of competences between the European Union and the national governments as regards the measures to be taken and their financing. But it also concerns the responsibilities and competences of the modes of transport themselves: those of passengers, employees and management. |
| --- | --- |

2.1.2

The complexity of the subject matter makes it difficult to define easily and unambiguously. The issue of subsidiarity is fully relevant to the security of modes of transport. It concerns both the demarcation of competences between the European Union and the national governments as regards the measures to be taken and their financing. But it also concerns the responsibilities and competences of the modes of transport themselves: those of passengers, employees and management.

2.2   Security in maritime and air transport

| 2.2.1 | Since 11 September 2001, there has been some improvement in the security of air and maritime transport. The European Council introduced measures partly on the basis of the EESC report of 24 October 2002 which covered in particular security proposals in the aviation and maritime transport sectors. Most noteworthy are the following: EU Regulation 2320/2002 on civil aviation security, EU Regulation EC 725/2004 on enhancing ship and port facility security and draft Directive COM(2004) 76 on enhancing port security. All these measures make provision for EU inspections. These involve quality checks in these sectors. These rules for shipping were also laid down in a Directive adopted on 10 May 2005. |
| --- | --- |

2.2.1

Since 11 September 2001, there has been some improvement in the security of air and maritime transport. The European Council introduced measures partly on the basis of the EESC report of 24 October 2002 which covered in particular security proposals in the aviation and maritime transport sectors. Most noteworthy are the following: EU Regulation 2320/2002 on civil aviation security, EU Regulation EC 725/2004 on enhancing ship and port facility security and draft Directive COM(2004) 76 on enhancing port security. All these measures make provision for EU inspections. These involve quality checks in these sectors. These rules for shipping were also laid down in a Directive adopted on 10 May 2005.

2.3   Security in inland modes of transport

| 2.3.1 | The situation in the EU differs considerably from country to country with regard to inland modes of transport. In major cities such as Madrid and London, but also in Paris, security measures have been taken on public transport partly because of the terrorist attacks. Other cities and countries have not yet reached this stage, but even there the recent attacks have created an awareness of the importance of security measures (4). |
| --- | --- |

2.3.1

The situation in the EU differs considerably from country to country with regard to inland modes of transport. In major cities such as Madrid and London, but also in Paris, security measures have been taken on public transport partly because of the terrorist attacks. Other cities and countries have not yet reached this stage, but even there the recent attacks have created an awareness of the importance of security measures (4).

| 2.3.2 | The question which arises in the first instance is who is authorised to adopt security measures which cover more than one inland mode of transport? Is it the responsibility of the European Union or of the national governments? And, if the latter is the case, what is the role of the EU in this? |
| --- | --- |

2.3.2

The question which arises in the first instance is who is authorised to adopt security measures which cover more than one inland mode of transport? Is it the responsibility of the European Union or of the national governments? And, if the latter is the case, what is the role of the EU in this?

| 2.3.3 | The Committee takes the view that ‘security’ is the shared responsibility of the Member States and the European Union, but that the Member States themselves are responsible for ensuring that security measures are taken by the various inland modes of transport. For this they need to create a framework of minimum standards for the inland modes of transport i.e. this should not be left to their own discretion. The national governments should set up a specialist body to coordinate the measures to be adopted by the inland modes of transport and local authorities. The authority would also ensure implementation. |
| --- | --- |

2.3.3

The Committee takes the view that ‘security’ is the shared responsibility of the Member States and the European Union, but that the Member States themselves are responsible for ensuring that security measures are taken by the various inland modes of transport. For this they need to create a framework of minimum standards for the inland modes of transport i.e. this should not be left to their own discretion. The national governments should set up a specialist body to coordinate the measures to be adopted by the inland modes of transport and local authorities. The authority would also ensure implementation.

| 2.3.4 | In the Committee's opinion, the role of the European Union is above all to coordinate measures at international level. At the same time, the Union should urge the Member States to adopt a unified approach. Intensive cooperation between the national governments and the European Union is necessary in view of the cross-border nature of the transport of persons and goods and the need to coordinate national security measures. |
| --- | --- |

2.3.4

In the Committee's opinion, the role of the European Union is above all to coordinate measures at international level. At the same time, the Union should urge the Member States to adopt a unified approach. Intensive cooperation between the national governments and the European Union is necessary in view of the cross-border nature of the transport of persons and goods and the need to coordinate national security measures.

| 2.3.5 | The national governments should realise that a great deal of work remains to be done concerning the inland modes of transport. A sense of urgency must be created. The national governments should urge the modes to consider and adopt security measures. A first step in this direction would be for minimum security standards to be set at a European level for the inland modes of transport. The individual modes of transport need to realise that without security measures they are extremely vulnerable. |
| --- | --- |

2.3.5

The national governments should realise that a great deal of work remains to be done concerning the inland modes of transport. A sense of urgency must be created. The national governments should urge the modes to consider and adopt security measures. A first step in this direction would be for minimum security standards to be set at a European level for the inland modes of transport. The individual modes of transport need to realise that without security measures they are extremely vulnerable.

| 2.3.6 | Furthermore, it must be realised that cooperation is necessary. For example, there must be coordination of measures between train, underground and bus companies. Information campaigns targeted at passengers and employees on how to act in the event of emergency should be coordinated. |
| --- | --- |

2.3.6

Furthermore, it must be realised that cooperation is necessary. For example, there must be coordination of measures between train, underground and bus companies. Information campaigns targeted at passengers and employees on how to act in the event of emergency should be coordinated.

| 2.3.7 | With regard to goods transport, close attention will have to be paid to vulnerable intersections such as terminals and marshalling yards. Cooperation will be needed between national and local government, the individual transport branches and the managers of transfer installations and terminals. |
| --- | --- |

2.3.7

With regard to goods transport, close attention will have to be paid to vulnerable intersections such as terminals and marshalling yards. Cooperation will be needed between national and local government, the individual transport branches and the managers of transfer installations and terminals.

2.4   The role of the various actors

| 2.4.1 | The safeguarding of the physical infrastructure is, in the Committee's view, a matter for national, regional or local government. |
| --- | --- |

2.4.1

The safeguarding of the physical infrastructure is, in the Committee's view, a matter for national, regional or local government.

| 2.4.2 | The specialist body mentioned in point 2.3.3 should act as the coordinating body. This would prevent fragmentation at national level as well as promote the policy internationally and would facilitate coordination at EU level. |
| --- | --- |

2.4.2

The specialist body mentioned in point 2.3.3 should act as the coordinating body. This would prevent fragmentation at national level as well as promote the policy internationally and would facilitate coordination at EU level.

| 2.4.3 | The Committee has noted with satisfaction that, in addition to the EU's coordinating role, a sum of EUR 3,5 million has been made available at Community level, under the 6th Framework Programme, for security measures in the passenger and goods transport sectors as well as in the energy sector. |
| --- | --- |

2.4.3

The Committee has noted with satisfaction that, in addition to the EU's coordinating role, a sum of EUR 3,5 million has been made available at Community level, under the 6th Framework Programme, for security measures in the passenger and goods transport sectors as well as in the energy sector.

| 2.4.4 | Since modes of transport are an abstract concept which can only operate with the support of the people who use the mode (passengers, customers) as well as those who work there (employees), action specifically targeted at these groups is indispensable. This should be expressed above all in a continuous publicity campaign aimed at passengers and customers. The attitude of transport users should be transformed from one of passivity to a more alert and conscious one. The employees of a mode of transport are of crucial importance for the development and application of security measures. In order to fulfil their role properly, the Committee considers it to be of great importance that the employees are offered special training geared to their role in security. |
| --- | --- |

2.4.4

Since modes of transport are an abstract concept which can only operate with the support of the people who use the mode (passengers, customers) as well as those who work there (employees), action specifically targeted at these groups is indispensable. This should be expressed above all in a continuous publicity campaign aimed at passengers and customers. The attitude of transport users should be transformed from one of passivity to a more alert and conscious one. The employees of a mode of transport are of crucial importance for the development and application of security measures. In order to fulfil their role properly, the Committee considers it to be of great importance that the employees are offered special training geared to their role in security.

| 2.4.5 | The role of management is to integrate security concepts into the company ethos and culture. Furthermore, management must give employees an opportunity to undertake special training in this field. Management training should include crisis management. |
| --- | --- |

2.4.5

The role of management is to integrate security concepts into the company ethos and culture. Furthermore, management must give employees an opportunity to undertake special training in this field. Management training should include crisis management.

2.5   Way in which security must be implemented

| 2.5.1 | The question arises of the extent to which security measures in inland modes of transport should be laid down in a more informal way, such as in the form of a certificate or quality mark, or alternatively in a more mandatory way, for example by legislation. In the Committee's judgement, the subject is far too important to tackle in an informal manner. |
| --- | --- |

2.5.1

The question arises of the extent to which security measures in inland modes of transport should be laid down in a more informal way, such as in the form of a certificate or quality mark, or alternatively in a more mandatory way, for example by legislation. In the Committee's judgement, the subject is far too important to tackle in an informal manner.

| 2.5.2 | The Committee considers that in any event national minimum standards for security measures should be laid down, with a recommendation to go further than the minimum. It should also be made compulsory to exchange information about security measures adopted or planned. At international level, countries should be obliged to harmonise measures and to forward information to the international coordinating bodies. |
| --- | --- |

2.5.2

The Committee considers that in any event national minimum standards for security measures should be laid down, with a recommendation to go further than the minimum. It should also be made compulsory to exchange information about security measures adopted or planned. At international level, countries should be obliged to harmonise measures and to forward information to the international coordinating bodies.

3.   Specific comments

| 3.1 | Before looking at any security measures that have been or ought to be taken in the individual inland modes of transport, it is first advisable to have an overview of measures which have been taken at an international level by the coordinating organisations. |
| --- | --- |

3.1

Before looking at any security measures that have been or ought to be taken in the individual inland modes of transport, it is first advisable to have an overview of measures which have been taken at an international level by the coordinating organisations.

| 3.1.1 | International Maritime Organisation (IMO)
  The IMO is mentioned here because a number of measures have already been taken in maritime transport which could serve as a model for the inland modes of transport.






  a. | The International Maritime Organisation (IMO) has adopted the International Ship and Port Facility Security (ISPS) Code. This Code puts into practice a framework for cooperation between central government, local government, shipping companies and port authorities with the aim of pinpointing security risks and taking measures. It concerns security requirements for ships and port facilities. The Code entered into force on 1 July 2004. |
| --- | --- | --- |

3.1.1

International Maritime Organisation (IMO)

The IMO is mentioned here because a number of measures have already been taken in maritime transport which could serve as a model for the inland modes of transport.

a.

The International Maritime Organisation (IMO) has adopted the International Ship and Port Facility Security (ISPS) Code. This Code puts into practice a framework for cooperation between central government, local government, shipping companies and port authorities with the aim of pinpointing security risks and taking measures. It concerns security requirements for ships and port facilities. The Code entered into force on 1 July 2004.

| b. | Amendments made to the Safety of Life at Sea Convention (SOLAS). The amendments to this Convention also led to changes to the mandatory International Maritime Dangerous Goods (IMDG) Code. The IMDG code makes detailed recommendations for the packing, labelling and storage of dangerous substances. |
| --- | --- |

b.

Amendments made to the Safety of Life at Sea Convention (SOLAS). The amendments to this Convention also led to changes to the mandatory International Maritime Dangerous Goods (IMDG) Code. The IMDG code makes detailed recommendations for the packing, labelling and storage of dangerous substances.

The amendments came into force on 1 January 2004.

| 3.1.2 | International Civil Aviation Organisation (ICAO)
  Since 1971 binding international agreements have been made in the civil aviation sector in order to combat crime and terrorism. As a result of a number of aircraft hijackings at the end of the 1960s, the ICAO decided to draw up a basic agreement regulating civil aviation. Thus it was laid down in Annex 17 to the Chicago Convention that all passengers on civil commercial flights should be systematically screened. This measure has been in force since 1972 and it is difficult to imagine now that things were once otherwise. Following the attack on the Twin Towers in 2001 Annex 17 was radically overhauled. New specifications were made mandatory, for instance with regard to the reinforcement and locking of cockpit doors as well as air freight transport. In addition, training and quality requirements for security checks were tightened. |
| --- | --- |

3.1.2

International Civil Aviation Organisation (ICAO)

Since 1971 binding international agreements have been made in the civil aviation sector in order to combat crime and terrorism. As a result of a number of aircraft hijackings at the end of the 1960s, the ICAO decided to draw up a basic agreement regulating civil aviation. Thus it was laid down in Annex 17 to the Chicago Convention that all passengers on civil commercial flights should be systematically screened. This measure has been in force since 1972 and it is difficult to imagine now that things were once otherwise. Following the attack on the Twin Towers in 2001 Annex 17 was radically overhauled. New specifications were made mandatory, for instance with regard to the reinforcement and locking of cockpit doors as well as air freight transport. In addition, training and quality requirements for security checks were tightened.

| 3.1.3 | European Civil Aviation Conference (ECAC)
  At European level too a policy on air transport security was developed within the framework of the European Civil Aviation Conference (ECAC). This was, of course, based on international standards such as those laid down by the ICAO. This resulted in a European security handbook, Document 30, which contains security regulations which, although regarded as authoritative, are unfortunately not binding because of the ECAC's statute. That is why on 14 September 2001, three days after 9/11, the European Council decided that the EU should take on responsibility for aviation security. This decision resulted in Regulation 2320/2002, establishing common rules in the field of civil aviation security. The Regulation entered into force on 19 January 2003. At the same Council of Ministers of 14 September it was also decided that the Commission would be empowered to carry out direct quality checks in the Member States. |
| --- | --- |

3.1.3

European Civil Aviation Conference (ECAC)

At European level too a policy on air transport security was developed within the framework of the European Civil Aviation Conference (ECAC). This was, of course, based on international standards such as those laid down by the ICAO. This resulted in a European security handbook, Document 30, which contains security regulations which, although regarded as authoritative, are unfortunately not binding because of the ECAC's statute. That is why on 14 September 2001, three days after 9/11, the European Council decided that the EU should take on responsibility for aviation security. This decision resulted in Regulation 2320/2002, establishing common rules in the field of civil aviation security. The Regulation entered into force on 19 January 2003. At the same Council of Ministers of 14 September it was also decided that the Commission would be empowered to carry out direct quality checks in the Member States.

| 3.1.4 | International Labour Organisation (ILO)
  This concerns the revision of the Seafarers' Identity Documents Convention. The purpose of the revised Convention is to improve the security of seafarers' identification so that passengers and crew are better protected and the safety of ships increased. At the same time seafarers' freedom of movement is not restricted, so that they may freely go ashore. The revised Convention is focused in particular on guidelines for the composition and issue of identity documents for seafarers. The ILO and the Convention are mentioned here as a model for inland modes of transport. |
| --- | --- |

3.1.4

International Labour Organisation (ILO)

This concerns the revision of the Seafarers' Identity Documents Convention. The purpose of the revised Convention is to improve the security of seafarers' identification so that passengers and crew are better protected and the safety of ships increased. At the same time seafarers' freedom of movement is not restricted, so that they may freely go ashore. The revised Convention is focused in particular on guidelines for the composition and issue of identity documents for seafarers. The ILO and the Convention are mentioned here as a model for inland modes of transport.

| 3.1.5 | World Customs Organisation (WCO)






  a. | Revised WCO Kyoto Convention
  In June 1999 the WCO Council adopted revisions to the WCO Convention of 1974, known as the Kyoto Convention. It is concerned with the simplification and harmonisation of customs procedures. An important aspect of the revised Convention is the increased attention paid to transparency and predictability in the chain. Important aspects of the revised Convention include:






  — | the use of pre-arrival information to enable prior selections to be made |
| --- | --- | --- | --- |

3.1.5

World Customs Organisation (WCO)

a.

Revised WCO Kyoto Convention

In June 1999 the WCO Council adopted revisions to the WCO Convention of 1974, known as the Kyoto Convention. It is concerned with the simplification and harmonisation of customs procedures. An important aspect of the revised Convention is the increased attention paid to transparency and predictability in the chain. Important aspects of the revised Convention include:

—

the use of pre-arrival information to enable prior selections to be made

| — | risk management techniques |
| --- | --- |

—

risk management techniques

| — | maximum use of automated systems |
| --- | --- |

—

maximum use of automated systems

| — | interventions coordinated with other bodies |
| --- | --- |

—

interventions coordinated with other bodies

| — | continuous monitoring and availability of information regarding customs requirements, laws, and |
| --- | --- |

—

continuous monitoring and availability of information regarding customs requirements, laws, and

| — | Directives. |
| --- | --- |

—

Directives.

| b. | WCO Customs Data Model
  This model contains a standardised international set of data which meets the demands which governments place on international transport. It means a step forward in the direction of harmonised customs information that is useable for security purposes. The model has been designed to work in a fully automated environment. |
| --- | --- |

b.

WCO Customs Data Model

This model contains a standardised international set of data which meets the demands which governments place on international transport. It means a step forward in the direction of harmonised customs information that is useable for security purposes. The model has been designed to work in a fully automated environment.

| c. | The WCO Unique Consignment Reference
  The advantage is that every consignment is provided with a unique number so that identification of the consignment and the compiling of information on the consignment is simplified. |
| --- | --- |

c.

The WCO Unique Consignment Reference

The advantage is that every consignment is provided with a unique number so that identification of the consignment and the compiling of information on the consignment is simplified.

| d. | The Advanced Cargo Information guidelines are, in accordance with the revised Kyoto Convention, aimed at gathering security-related information and provides guidelines for rapid compilation of data by Customs authorities. |
| --- | --- |

d.

The Advanced Cargo Information guidelines are, in accordance with the revised Kyoto Convention, aimed at gathering security-related information and provides guidelines for rapid compilation of data by Customs authorities.

| e. | The Customs Convention on Containers contains technical specifications for containers used in international transport with a customs seal and also procedures for the type approval of such containers. At present the Convention, which dates from 1972, is being revised in the light of the increased attention paid to security. |
| --- | --- |

e.

The Customs Convention on Containers contains technical specifications for containers used in international transport with a customs seal and also procedures for the type approval of such containers. At present the Convention, which dates from 1972, is being revised in the light of the increased attention paid to security.

This information on the World Customs Organisation could be of benefit to the inland modes of transport. The important thing is to focus on aspects of relevance to the inland modes.

| 3.1.6 | International Standards Organisation (ISO)
  In 2003 this organisation adopted guidelines with specifications for the mechanical sealing of freight containers.
  In addition, the organisation has developed a standard for the use of radio-frequency identification tags fitted in freight containers; it has also developed a joint communication protocol for digital sealing. |
| --- | --- |

3.1.6

International Standards Organisation (ISO)

In 2003 this organisation adopted guidelines with specifications for the mechanical sealing of freight containers.

In addition, the organisation has developed a standard for the use of radio-frequency identification tags fitted in freight containers; it has also developed a joint communication protocol for digital sealing.

| 3.1.7 | The European Union (EU)






  a. | The EU has been particularly active in the field of security of maritime transport, ports and air transport. Several examples were given in point 2.3.
  In the field of intermodal transport, the European Commission published in December 2003 the consultation paper on Freight Transport Security which noted the possible threats and the measures that could be taken to protect the transport chain.
  The Commission indicated in this document that for all measures proposed, a risk profile should be drawn up for each mode individually, and for the whole transport chain.
  The measures proposed in the consultation paper are:






  — | the securing of infrastructure of European interest by the Member States by a number of detailed measures (a security plan to be updated annually, risk assessment, the designation of a contact point and the appointment of persons responsible for securing infrastructure, and the designation of a public audit body); |
| --- | --- | --- | --- |

3.1.7

The European Union (EU)

a.

The EU has been particularly active in the field of security of maritime transport, ports and air transport. Several examples were given in point 2.3.

In the field of intermodal transport, the European Commission published in December 2003 the consultation paper on Freight Transport Security which noted the possible threats and the measures that could be taken to protect the transport chain.

The Commission indicated in this document that for all measures proposed, a risk profile should be drawn up for each mode individually, and for the whole transport chain.

The measures proposed in the consultation paper are:

—

the securing of infrastructure of European interest by the Member States by a number of detailed measures (a security plan to be updated annually, risk assessment, the designation of a contact point and the appointment of persons responsible for securing infrastructure, and the designation of a public audit body);

| — | the development of security standards for service providers (at Community level the development of minimum standards of security for international service providers, the introduction of the regulated agent and known shipper concepts in the inland transport chain; |
| --- | --- |

—

the development of security standards for service providers (at Community level the development of minimum standards of security for international service providers, the introduction of the regulated agent and known shipper concepts in the inland transport chain;

| — | the use of the advanced information concept in electronic form; depending on a risk analysis, this could be made compulsory for certain routes or shipments; |
| --- | --- |

—

the use of the advanced information concept in electronic form; depending on a risk analysis, this could be made compulsory for certain routes or shipments;

| — | the use of special seals and locks for high-risk and, from the security point of view, vulnerable shipments; |
| --- | --- |

—

the use of special seals and locks for high-risk and, from the security point of view, vulnerable shipments;

| — | ensuring that Member States do not adopt different standards which hinder the efficient functioning of the market. The Commission proposes a number of measures in this regard in its document. |
| --- | --- |

—

ensuring that Member States do not adopt different standards which hinder the efficient functioning of the market. The Commission proposes a number of measures in this regard in its document.

| b. | The Communication from the Commission of 24 July 2003 and the Proposal for a Regulation of the same date, in which the Commission proposed to amend the Community Customs Code. This Proposal aimed to adapt the role of the customs authorities at the EU's external borders to make them able to deal with the increased security standards for the import and export of goods. |
| --- | --- |

b.

The Communication from the Commission of 24 July 2003 and the Proposal for a Regulation of the same date, in which the Commission proposed to amend the Community Customs Code. This Proposal aimed to adapt the role of the customs authorities at the EU's external borders to make them able to deal with the increased security standards for the import and export of goods.

| 3.1.8 | The UN Economic Commission for Europe (UNECE)
  The Working Party on Customs Questions affecting Transport (WP30) and the Administrative Committee of TIR (Transports Internationaux Routiers) reached an agreement in February 2003 to gradually computerise TIR procedures, which are at present still paper-based. With a TIR carnet, goods can be transported to countries outside the EU with minimum delay at borders, as the carnet is an internationally recognised customs document.
  This concerns the security of goods transported by road. The Committee recommends a study of the extent to which measures of this kind are applicable to other modes. |
| --- | --- |

3.1.8

The UN Economic Commission for Europe (UNECE)

The Working Party on Customs Questions affecting Transport (WP30) and the Administrative Committee of TIR (Transports Internationaux Routiers) reached an agreement in February 2003 to gradually computerise TIR procedures, which are at present still paper-based. With a TIR carnet, goods can be transported to countries outside the EU with minimum delay at borders, as the carnet is an internationally recognised customs document.

This concerns the security of goods transported by road. The Committee recommends a study of the extent to which measures of this kind are applicable to other modes.

| 3.1.9 | Measures taken by the USA
  It goes without saying that, after the attacks of 11 September 2001, the United States took the lead in enacting security measures. Thus, a Bioterrorism Act came into force in 2002. This requires certain information relating to the import of food products to be submitted prior to arrival in the United States. In addition, food producers and storage facilities must be registered with the Federal Food and Drug Administration (FDA) and they have to appoint a local representative in the USA. |
| --- | --- |

3.1.9

Measures taken by the USA

It goes without saying that, after the attacks of 11 September 2001, the United States took the lead in enacting security measures. Thus, a Bioterrorism Act came into force in 2002. This requires certain information relating to the import of food products to be submitted prior to arrival in the United States. In addition, food producers and storage facilities must be registered with the Federal Food and Drug Administration (FDA) and they have to appoint a local representative in the USA.

| 3.1.10 | In order to maintain the readability of this exploratory opinion, a number of measures are noted here without going into further details.
  When taking measures in Europe, it is of course recommended that the experience acquired in the USA be studied and taken into account. The following should be mentioned here:






  a. | the Container Security Initiative (CSI), |
| --- | --- | --- |

3.1.10

In order to maintain the readability of this exploratory opinion, a number of measures are noted here without going into further details.

When taking measures in Europe, it is of course recommended that the experience acquired in the USA be studied and taken into account. The following should be mentioned here:

a.

the Container Security Initiative (CSI),

| b. | the Customs-Trade Partnership against Terrorism (C-TPAT), |
| --- | --- |

b.

the Customs-Trade Partnership against Terrorism (C-TPAT),

| c. | the 24 Hour Advance Manifest, |
| --- | --- |

c.

the 24 Hour Advance Manifest,

| d. | the Bio-Terrorism Act. |
| --- | --- |

d.

the Bio-Terrorism Act.

| 3.2 | Initiatives taken by the industry either alone or in conjunction with government






  a. | The Business Anti-Smuggling Coalition Programme, |
| --- | --- | --- |

3.2

a.

The Business Anti-Smuggling Coalition Programme,

| b. | The Memorandum of Understanding on Electronic Business, |
| --- | --- |

b.

The Memorandum of Understanding on Electronic Business,

| c. | Resolution of the International Road Transport Union (IRU) on security in road transport, |
| --- | --- |

c.

Resolution of the International Road Transport Union (IRU) on security in road transport,

| d. | The Road Transport Security Guidelines drawn up by the IRU, |
| --- | --- |

d.

The Road Transport Security Guidelines drawn up by the IRU,

| e. | The IRU Standard Security Plan currently being developed, |
| --- | --- |

e.

The IRU Standard Security Plan currently being developed,

| f. | The Operation Safe Commerce (OSC) programme, |
| --- | --- |

f.

The Operation Safe Commerce (OSC) programme,

| g. | The Smart and Secure Tradelanes initiative. |
| --- | --- |

g.

The Smart and Secure Tradelanes initiative.

| 3.3 | The majority of initiatives noted in the above paragraphs are concerned with security measures for the transport of goods in general and for container transport in particular. In the Committee's opinion, a number of these measures could also be applicable to passenger transport. |
| --- | --- |

3.3

The majority of initiatives noted in the above paragraphs are concerned with security measures for the transport of goods in general and for container transport in particular. In the Committee's opinion, a number of these measures could also be applicable to passenger transport.

| 3.4 | The security measures in the individual transport sectors are rather diverse. As already noted, maritime transport/ports and air transport are the modes which are furthest advanced in the implementation of measures. This was excellently illustrated in the Committee's Opinion of 24 October 2002 (5) (rapporteur: Ms Bredima-Savopoulou). These modes of transport will not therefore be further examined separately in this exploratory opinion. |
| --- | --- |

3.4

The security measures in the individual transport sectors are rather diverse. As already noted, maritime transport/ports and air transport are the modes which are furthest advanced in the implementation of measures. This was excellently illustrated in the Committee's Opinion of 24 October 2002 (5) (rapporteur: Ms Bredima-Savopoulou). These modes of transport will not therefore be further examined separately in this exploratory opinion.

| 3.5 | One point meriting attention is the position of vulnerable inland terminals and transfer points. Pipelines can in this context also be mentioned as a separate mode of transport. The owners of the terminal operations indeed devote a great deal of energy to securing their sites. However, the Committee has the impression that it is not sufficiently understood that it is precisely the transfer points that are vulnerable and that cooperation is much needed with the modes that use the transfer facilities. |
| --- | --- |

3.5

One point meriting attention is the position of vulnerable inland terminals and transfer points. Pipelines can in this context also be mentioned as a separate mode of transport. The owners of the terminal operations indeed devote a great deal of energy to securing their sites. However, the Committee has the impression that it is not sufficiently understood that it is precisely the transfer points that are vulnerable and that cooperation is much needed with the modes that use the transfer facilities.

| 3.6 | In the Committee's view, there is also an insufficient sense of urgency concerning the dangers connected with the transport and transfer via pipelines. The Committee points out that this awareness needs to be fostered as a matter of urgency and that the competent authorities should adopt security measures for both staff and infrastructure. |
| --- | --- |

3.6

In the Committee's view, there is also an insufficient sense of urgency concerning the dangers connected with the transport and transfer via pipelines. The Committee points out that this awareness needs to be fostered as a matter of urgency and that the competent authorities should adopt security measures for both staff and infrastructure.

| 3.7 | Traditionally, the railways have always attached high importance to the safety of employees, passengers and equipment alike. It is to be hoped that this will also apply to security. Extra attention will have to be devoted to sensitive locations such as stations and marshalling yards. The International Union of Railways (UIC) should come up with some recommendations for the necessary international coordination.
  The national railway companies should produce information material in order to inform passengers and staff what to do in the event of an emergency. This ought to become a standard part of staff training. |
| --- | --- |

3.7

Traditionally, the railways have always attached high importance to the safety of employees, passengers and equipment alike. It is to be hoped that this will also apply to security. Extra attention will have to be devoted to sensitive locations such as stations and marshalling yards. The International Union of Railways (UIC) should come up with some recommendations for the necessary international coordination.

The national railway companies should produce information material in order to inform passengers and staff what to do in the event of an emergency. This ought to become a standard part of staff training.

| 3.8 | The inland waterways sector makes use of ports to load and to unload. The ISPS (International Ship & Port Facility Security) Code thus also applies to inland waterway transport. In the Committee's view, a strict application of the Code would not lead to disruption of the logistics chain. It is the responsibility of the ports, shipping companies and inspection services to ensure that the ISPS Code is complied with. The Committee believes that security should form an integral part of the training of inland waterway workers. |
| --- | --- |

3.8

The inland waterways sector makes use of ports to load and to unload. The ISPS (International Ship & Port Facility Security) Code thus also applies to inland waterway transport. In the Committee's view, a strict application of the Code would not lead to disruption of the logistics chain. It is the responsibility of the ports, shipping companies and inspection services to ensure that the ISPS Code is complied with. The Committee believes that security should form an integral part of the training of inland waterway workers.

| 3.9 | Following the terrorist attacks in Madrid and London there is a general awareness of the vulnerability of public transport. Measures have been taken in the form of surveillance and checks in order to drastically increase the security level and thus the sense of security of passengers and staff. |
| --- | --- |

3.9

Following the terrorist attacks in Madrid and London there is a general awareness of the vulnerability of public transport. Measures have been taken in the form of surveillance and checks in order to drastically increase the security level and thus the sense of security of passengers and staff.

| 3.10 | The road transport and haulage sector is extremely vulnerable in view of the great number of coach and road haulage companies: we are dealing with several hundred thousand companies which are extremely mobile. This sector has been plagued by crime for many years. Theft of vehicles, loaded or unloaded, is an every day occurrence, frequently with psychological consequences for the drivers. The IRU (International Road Transport Union) is doing all it can to persuade governments and market players to adopt security measures. One example is the call to increase the number of secure parking areas. In view of the high-risk nature of the sector the International Road Transport Union has, as indicated in point 3.2, drawn up Security Guidelines. These contain a number of recommendations for managers, drivers and consignors. In addition, a framework has been drawn up for voluntary cooperation with the customs authorities. |
| --- | --- |

3.10

The road transport and haulage sector is extremely vulnerable in view of the great number of coach and road haulage companies: we are dealing with several hundred thousand companies which are extremely mobile. This sector has been plagued by crime for many years. Theft of vehicles, loaded or unloaded, is an every day occurrence, frequently with psychological consequences for the drivers. The IRU (International Road Transport Union) is doing all it can to persuade governments and market players to adopt security measures. One example is the call to increase the number of secure parking areas. In view of the high-risk nature of the sector the International Road Transport Union has, as indicated in point 3.2, drawn up Security Guidelines. These contain a number of recommendations for managers, drivers and consignors. In addition, a framework has been drawn up for voluntary cooperation with the customs authorities.

| 3.11 | The basic principles underlying these Security Guidelines mentioned in point 3.10 are:






  — | Security measures should not be so strict as to make normal business impossible. |
| --- | --- | --- |

3.11

The basic principles underlying these Security Guidelines mentioned in point 3.10 are:

—

Security measures should not be so strict as to make normal business impossible.

| — | Newly introduced security measures should be proportionate to their purpose, the costs involved and the consequences for traffic. |
| --- | --- |

—

Newly introduced security measures should be proportionate to their purpose, the costs involved and the consequences for traffic.

| — | Unilateral measures by states are not acceptable. |
| --- | --- |

—

Unilateral measures by states are not acceptable.

| — | Security measures must be readily understood and reasonable. |
| --- | --- |

—

Security measures must be readily understood and reasonable.

| — | In view of the international nature of transport, the measures to be taken should be applied uniformly, proportionately and without discrimination, and little or no disruption to the efficient business flows. |
| --- | --- |

—

In view of the international nature of transport, the measures to be taken should be applied uniformly, proportionately and without discrimination, and little or no disruption to the efficient business flows.

Generally speaking, before taking measures, it is essential that the target group be aware of the need for security measures. No measures should be taken as long as the target group is not fully informed. The Committee therefore urges that this information be distributed in good time.

| 3.12 | As far as own-account transport is concerned, the Committee recommends that, irrespective of the mode of transport to be used, the person responsible within the company should adopt appropriate security measures for staff, means of transport and infrastructure. |
| --- | --- |

3.12

As far as own-account transport is concerned, the Committee recommends that, irrespective of the mode of transport to be used, the person responsible within the company should adopt appropriate security measures for staff, means of transport and infrastructure.

| 3.13 | The Committee finds that there is an increasing awareness on the part of governments and the inland modes of transport that security measures must be incorporated into daily working practices. However, consistency is still a long way off. Of the individual modes of transport, a great deal has been done in particular in maritime and air transport because of their global nature. The public transport sector has become more alert, but in the goods transport sector initiatives have for the most part remained limited to measures within the branch itself. Measures that involve the whole logistics chain have not yet been taken, whilst vulnerability lies precisely at the interchanges between one mode and another. The Committee advises governments to set up a coordinating body at national level to cover the whole chain. |
| --- | --- |

3.13

The Committee finds that there is an increasing awareness on the part of governments and the inland modes of transport that security measures must be incorporated into daily working practices. However, consistency is still a long way off. Of the individual modes of transport, a great deal has been done in particular in maritime and air transport because of their global nature. The public transport sector has become more alert, but in the goods transport sector initiatives have for the most part remained limited to measures within the branch itself. Measures that involve the whole logistics chain have not yet been taken, whilst vulnerability lies precisely at the interchanges between one mode and another. The Committee advises governments to set up a coordinating body at national level to cover the whole chain.

4.   The cost of security measures

| 4.1 | It is obvious to everyone that, under the impact of increased crime and terrorism, measures must be taken to protect passengers, staff, means of transport and cargoes. It is less clear, however, who should meet the cost of the security measures. And clearly the cost of security is high. Thus, it is estimated that the security cost of transporting one container overseas is between 30 and 40 US dollars. |
| --- | --- |

4.1

It is obvious to everyone that, under the impact of increased crime and terrorism, measures must be taken to protect passengers, staff, means of transport and cargoes. It is less clear, however, who should meet the cost of the security measures. And clearly the cost of security is high. Thus, it is estimated that the security cost of transporting one container overseas is between 30 and 40 US dollars.

| 4.2 | In order to gain a clear understanding of who should be responsible for costs, it is necessary to consider what types of cost we are talking about. Costs can be categorised as follows:






  a. | costs incurred in drawing up and monitoring implementation of the rules; |
| --- | --- | --- |

4.2

In order to gain a clear understanding of who should be responsible for costs, it is necessary to consider what types of cost we are talking about. Costs can be categorised as follows:

a.

costs incurred in drawing up and monitoring implementation of the rules;

| b. | cost of analysing the degree of threat and helping non-EU countries to bring their security standards up to EU levels; |
| --- | --- |

b.

cost of analysing the degree of threat and helping non-EU countries to bring their security standards up to EU levels;

| c. | cost of investing in selection and training of security staff and purchase of security equipment; |
| --- | --- |

c.

cost of investing in selection and training of security staff and purchase of security equipment;

| d. | running costs, such as cost of security staff, maintenance of security equipment, security information, insurance and public order measures to ensure compliance with the law. |
| --- | --- |

d.

running costs, such as cost of security staff, maintenance of security equipment, security information, insurance and public order measures to ensure compliance with the law.

In addition, there is the cost of measures preceding or following an exceptional event such as a terrorist attack. A separate solution will have to be found for the allocation of these costs. In the Committee's view, the government should meet these costs in the first instance.

| 4.3 | Regarding the question as to who or which body should be considered primarily responsible for the cost, it seems logical in the case of the first two categories to opt for the national or local and regional authorities, whilst for categories c and d the private sector could be involved to a greater extent. |
| --- | --- |

4.3

Regarding the question as to who or which body should be considered primarily responsible for the cost, it seems logical in the case of the first two categories to opt for the national or local and regional authorities, whilst for categories c and d the private sector could be involved to a greater extent.

| 4.4 | From the economic point of view, the cost should ultimately be met by the activity from which the costs arise, so that it is incorporated into the price (a public transport ticket or tariff for goods transport). After all, the prices of goods and services should as far as possible cover the marginal social costs, including the security costs. The measures to be taken could, however, sometimes be of such great public interest that the costs involved should be met by the whole community. |
| --- | --- |

4.4

From the economic point of view, the cost should ultimately be met by the activity from which the costs arise, so that it is incorporated into the price (a public transport ticket or tariff for goods transport). After all, the prices of goods and services should as far as possible cover the marginal social costs, including the security costs. The measures to be taken could, however, sometimes be of such great public interest that the costs involved should be met by the whole community.

| 4.5 | If this distinction is taken into consideration, it means that ultimately the cost of security is borne by the consumer, who pays for them in the form of a higher price for the end product. However, in the case of government financing security measures which are in the public interest, the cost will be met by the taxpayer. |
| --- | --- |

4.5

If this distinction is taken into consideration, it means that ultimately the cost of security is borne by the consumer, who pays for them in the form of a higher price for the end product. However, in the case of government financing security measures which are in the public interest, the cost will be met by the taxpayer.

| 4.6 | The role of the insurance companies is, in the Committee's view, a secondary one. For providing that policies do not exclude terrorist acts, any payments will always be passed on to the insured in the form of higher premiums. There is an obvious causal connection between the degree of security and the level of premium to be paid. As security measures are enhanced, the premium should fall correspondingly. |
| --- | --- |

4.6

The role of the insurance companies is, in the Committee's view, a secondary one. For providing that policies do not exclude terrorist acts, any payments will always be passed on to the insured in the form of higher premiums. There is an obvious causal connection between the degree of security and the level of premium to be paid. As security measures are enhanced, the premium should fall correspondingly.

| 4.7 | The role of the European Union can, from the point of view of its duties and competences, only be a coordinating and supervisory one. Financial resources can, at the most, be made available for publicity campaigns and information. Thus, for example, EUR 3,5 million has been set aside for security in the 6th Framework Programme. |
| --- | --- |

4.7

The role of the European Union can, from the point of view of its duties and competences, only be a coordinating and supervisory one. Financial resources can, at the most, be made available for publicity campaigns and information. Thus, for example, EUR 3,5 million has been set aside for security in the 6th Framework Programme.

5.   Summary and recommendations

| 5.1 | The Committee notes that, as a result of the terrorist attacks of recent years, there has been an enormous increase at all levels in the attention paid to security. |
| --- | --- |

5.1

The Committee notes that, as a result of the terrorist attacks of recent years, there has been an enormous increase at all levels in the attention paid to security.

| 5.2 | The required agreements, laid down under international rules, have been reached in the maritime and air transport sectors in particular. Implementation is via EU inspections. |
| --- | --- |

5.2

The required agreements, laid down under international rules, have been reached in the maritime and air transport sectors in particular. Implementation is via EU inspections.

| 5.3 | In the inland modes of transport, the Committee considers that the necessary work remains to be done, partly because of the high degree of interdependence between the modes and the vulnerable intermodal storage and transfer points. A coordinated approach is urgently needed, because the weakest link determines the strength of the whole chain. |
| --- | --- |

5.3

In the inland modes of transport, the Committee considers that the necessary work remains to be done, partly because of the high degree of interdependence between the modes and the vulnerable intermodal storage and transfer points. A coordinated approach is urgently needed, because the weakest link determines the strength of the whole chain.

| 5.4 | The Committee points out that no distinction is made in several European Union languages between the terms ‘security’ and ‘safety’. It notes that this leads to confusion and recommends that unambiguous terminology be used. |
| --- | --- |

5.4

The Committee points out that no distinction is made in several European Union languages between the terms ‘security’ and ‘safety’. It notes that this leads to confusion and recommends that unambiguous terminology be used.

| 5.5 | In the Committee's judgement, the responsibility for adopting security measures lies with the Member States. They should create a framework of minimum standards for the modes of transport. To coordinate the measures to be taken, the governments should set up a special body to ensure implementation. |
| --- | --- |

5.5

In the Committee's judgement, the responsibility for adopting security measures lies with the Member States. They should create a framework of minimum standards for the modes of transport. To coordinate the measures to be taken, the governments should set up a special body to ensure implementation.

| 5.6 | In the Committee's view, the role of the European Union lies in coordinating measures at Community and international level, while that of national and local government lies more in actually taking measures, monitoring implementation, providing information and promoting awareness of terrorism and crime at all levels. The national and local governments should also promote cooperation between the modes of transport and, in the Committee's view, the protection of physical infrastructure should be part of their responsibilities. |
| --- | --- |

5.6

In the Committee's view, the role of the European Union lies in coordinating measures at Community and international level, while that of national and local government lies more in actually taking measures, monitoring implementation, providing information and promoting awareness of terrorism and crime at all levels. The national and local governments should also promote cooperation between the modes of transport and, in the Committee's view, the protection of physical infrastructure should be part of their responsibilities.

| 5.7 | The users of the modes of transport play a vital role in security. Passengers and customers must be encouraged by publicity campaigns to be more active and alert; employees in the inland mode of transport should receive special training geared to their role in the security of the mode. In the Committee's opinion, the role of company management lies in making security concepts an integral part of the company ethos and culture, allowing employees to undertake training courses in this field and ensuring that management training includes crisis management. |
| --- | --- |

5.7

The users of the modes of transport play a vital role in security. Passengers and customers must be encouraged by publicity campaigns to be more active and alert; employees in the inland mode of transport should receive special training geared to their role in the security of the mode. In the Committee's opinion, the role of company management lies in making security concepts an integral part of the company ethos and culture, allowing employees to undertake training courses in this field and ensuring that management training includes crisis management.

| 5.8 | The Committee finds that the position in the various inland modes of transport remains diverse. There is an increasing awareness on the part of governments and modes of transport that security measures should be incorporated into daily working practices. Consistency is still a long way off, however. The situation in the public transport sector in this respect is better than in the goods sector. Initiatives in the latter sector are still chiefly limited to the sector itself. The Committee therefore advises governments to establish one coordinating organisation to cover the whole chain. |
| --- | --- |

5.8

The Committee finds that the position in the various inland modes of transport remains diverse. There is an increasing awareness on the part of governments and modes of transport that security measures should be incorporated into daily working practices. Consistency is still a long way off, however. The situation in the public transport sector in this respect is better than in the goods sector. Initiatives in the latter sector are still chiefly limited to the sector itself. The Committee therefore advises governments to establish one coordinating organisation to cover the whole chain.

| 5.9 | In the case of own-account transport, the Committee believes that, irrespective of the mode used, the person responsible within the company should adopt the necessary security measures for employees, means of transport and infrastructure. |
| --- | --- |

5.9

In the case of own-account transport, the Committee believes that, irrespective of the mode used, the person responsible within the company should adopt the necessary security measures for employees, means of transport and infrastructure.

| 5.10 | In the Committee's opinion, the cost of security should be reflected in the price of the end product, so that the consumer pays for it directly or, if the measures are taken by government, ultimately the public through taxes. |
| --- | --- |

5.10

In the Committee's opinion, the cost of security should be reflected in the price of the end product, so that the consumer pays for it directly or, if the measures are taken by government, ultimately the public through taxes.

| 5.11 | In the view of the Committee, the role of the insurance companies is a secondary one. Any payments will ultimately be passed on to the insured in the form of higher premiums. As security measures reach a higher level, the premiums to be paid should fall. The level of the premiums will have to be closely monitored to ensure that they reflect market risks. |
| --- | --- |

5.11

In the view of the Committee, the role of the insurance companies is a secondary one. Any payments will ultimately be passed on to the insured in the form of higher premiums. As security measures reach a higher level, the premiums to be paid should fall. The level of the premiums will have to be closely monitored to ensure that they reflect market risks.

| 5.12 | The financing role of the European Union will focus mainly on research, information and awareness-raising campaigns. |
| --- | --- |

5.12

The financing role of the European Union will focus mainly on research, information and awareness-raising campaigns.

Brussels, 14 December 2005

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  OJ C 61, 14.3.2003, p. 174.

1

(2)  COM(2005) 124 final, 6.4.2005.

2

(3)  OJ C 198, 12.8.2005, p. 1.

3

(4)  For a wide-ranging discussion of the security of public transport systems in the major cities, see the outlook opinion of the Committee of the Regions on the Safety of all modes of transport, including the the issue of financing (rapporteur: Mr Robert Neill, Member of the London Assembly (CdR 209/2005)).

4

Safety of all modes of transport, including the the issue of financing

(5)  OJ C 61, 14.3.2003, p. 174.

5

---

| 17.3.2006 | EN | Official Journal of the European Union | C 65/38 |
| --- | --- | --- | --- |

17.3.2006

EN

Official Journal of the European Union

C 65/38

---

Opinion of the European Economic and Social Committee on the ‘Proposal for a Council Regulation establishing Community financial measures for the implementation of the Common Fisheries Policy and in the area of the Law of the Sea’

(COM(2005) 117 final — 2005/0045 (CNS))

(2006/C 65/07)

On 19 May 2005, the Council decided to consult the European Economic and Social Committee, under Article 37 of the Treaty establishing the European Community, on the abovementioned proposal.

The Section for Agriculture, Rural Development and the Environment, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 9 November 2005. The rapporteur was Mr Sarró Iparraguirre.

At its 422nd plenary session, held on 14 and 15 December 2005 (meeting of 14 December 2005), the European Economic and Social Committee adopted the following opinion nem. con. with 122 votes in favour and four abstentions.

1.   Introduction

| 1.1 | The European Commission has called on the EESC to issue an opinion on the proposed Council Regulation establishing the framework for financial measures necessary for the implementation of the Common Fisheries Policy (CFP) with funding of EUR 2,583 million, which comes in addition to the proposal for a Council Regulation on the European Fisheries Fund (1) (EFF), with a budget of EUR 4,963 million. |
| --- | --- |

1.1

The European Commission has called on the EESC to issue an opinion on the proposed Council Regulation establishing the framework for financial measures necessary for the implementation of the Common Fisheries Policy (CFP) with funding of EUR 2,583 million, which comes in addition to the proposal for a Council Regulation on the European Fisheries Fund (1) (EFF), with a budget of EUR 4,963 million.

| 1.2 | One of the aims of the CFP is to make financial intervention more effective. The proposal for a Regulation aims to help improve the conditions for implementing financial interventions in particular areas by setting specific objectives for each of them. |
| --- | --- |

1.2

One of the aims of the CFP is to make financial intervention more effective. The proposal for a Regulation aims to help improve the conditions for implementing financial interventions in particular areas by setting specific objectives for each of them.

| 1.3 | The Committee wishes to express its deep concern over the lack of any decision regarding the approval of the budget for 2007-2013. It believes that the European Union is facing a very serious situation, which will require great political effort if it is to be resolved. The financing of the CFP cannot be undertaken if the budgets for this Regulation and the EFF Regulation are not maintained. The Committee urges the Council to adopt political decisions that do not affect CFP financing, but that ensure sustainable exploitation of living aquatic resources in a manner that provides sustainable economic, environmental and social conditions. The EESC also regrets that, to date, the Council has not adopted any decision regarding the proposal for a Regulation on the European Fisheries Fund. |
| --- | --- |

1.3

The Committee wishes to express its deep concern over the lack of any decision regarding the approval of the budget for 2007-2013. It believes that the European Union is facing a very serious situation, which will require great political effort if it is to be resolved. The financing of the CFP cannot be undertaken if the budgets for this Regulation and the EFF Regulation are not maintained. The Committee urges the Council to adopt political decisions that do not affect CFP financing, but that ensure sustainable exploitation of living aquatic resources in a manner that provides sustainable economic, environmental and social conditions. The EESC also regrets that, to date, the Council has not adopted any decision regarding the proposal for a Regulation on the European Fisheries Fund.

| 1.4 | The proposed Regulation sets out four areas of action in which Community financial measures will be applied:






  — | control and enforcement of the CFP rules; |
| --- | --- | --- |

1.4

The proposed Regulation sets out four areas of action in which Community financial measures will be applied:

—

control and enforcement of the CFP rules;

| — | conservation measures, data collection and improvement of scientific advice concerning the sustainable management of fisheries resources within the scope of the CFP; |
| --- | --- |

—

conservation measures, data collection and improvement of scientific advice concerning the sustainable management of fisheries resources within the scope of the CFP;

| — | governance of the CFP; |
| --- | --- |

—

governance of the CFP;

| — | international relations in the area of the CFP and the Law of the Sea. |
| --- | --- |

—

international relations in the area of the CFP and the Law of the Sea.

| 1.5 | The Committee considers that this proposal for a Regulation is necessary and approves of the areas of application that it covers. |
| --- | --- |

1.5

The Committee considers that this proposal for a Regulation is necessary and approves of the areas of application that it covers.

2.   Community financial measures in each of the four areas of application

2.1   Control and enforcement of the CFP rules

| 2.1.1 | The financial measures that will be applied to control and enforcement of the CFP will serve to improve the control of fishing activities undertaken by Member States, and evaluation and control activities carried out by the Commission services. The following expenditure by Member States shall be eligible for financing measures: spending on new control technologies, training programmes, pilot inspection and observer schemes, audits and information seminars. |
| --- | --- |

2.1.1

The financial measures that will be applied to control and enforcement of the CFP will serve to improve the control of fishing activities undertaken by Member States, and evaluation and control activities carried out by the Commission services. The following expenditure by Member States shall be eligible for financing measures: spending on new control technologies, training programmes, pilot inspection and observer schemes, audits and information seminars.

| 2.1.2 | Financing will be provided for Commission expenditure relating to administrative arrangements with the Joint Research Centre, spending on inspections by the Commission, and expenditure generated by the Community Fisheries Control Agency. |
| --- | --- |

2.1.2

Financing will be provided for Commission expenditure relating to administrative arrangements with the Joint Research Centre, spending on inspections by the Commission, and expenditure generated by the Community Fisheries Control Agency.

| 2.1.3 | The Committee agrees with the proposed control and enforcement measures. |
| --- | --- |

2.1.3

The Committee agrees with the proposed control and enforcement measures.

2.2   Conservation measures, data collection and improvement of scientific advice concerning the sustainable management of fisheries resources within the scope of the CFP

| 2.2.1 | The proposal for a Regulation's second area of application covers financial aid to Member States with a view to drawing up multi-annual aggregated and science based datasets incorporating biological, technical, environmental and economic information, with the objective of assessing the state of the resources, the level of fishing, the impact fisheries have on resources and the marine eco-system, and the performance of the fishing industry, within and outside Community waters. |
| --- | --- |

2.2.1

The proposal for a Regulation's second area of application covers financial aid to Member States with a view to drawing up multi-annual aggregated and science based datasets incorporating biological, technical, environmental and economic information, with the objective of assessing the state of the resources, the level of fishing, the impact fisheries have on resources and the marine eco-system, and the performance of the fishing industry, within and outside Community waters.

| 2.2.2 | To obtain this information, Member States will collect basic data, while additional data will be gathered by the Commission. |
| --- | --- |

2.2.2

To obtain this information, Member States will collect basic data, while additional data will be gathered by the Commission.

| 2.2.3 | Bearing in mind that fisheries management depends on the availability of data concerning the biological state of fish stocks and the impact of fishing fleet activity, the EESC approves the proposed financial measures in the areas of basic data collection by Member States. It also supports the financing of additional data collection, by the Commission, as such data make it possible to optimise and standardise the collection of basic data from Member States. Nonetheless, the Committee believes that, in order to improve fisheries management, financing should also be provided, via the Member States, for expenditure incurred by the EU fishing sector in order to conduct the required studies to assess the environmental effects of fishing activities and the socio-economic situation in the sector. |
| --- | --- |

2.2.3

Bearing in mind that fisheries management depends on the availability of data concerning the biological state of fish stocks and the impact of fishing fleet activity, the EESC approves the proposed financial measures in the areas of basic data collection by Member States. It also supports the financing of additional data collection, by the Commission, as such data make it possible to optimise and standardise the collection of basic data from Member States. Nonetheless, the Committee believes that, in order to improve fisheries management, financing should also be provided, via the Member States, for expenditure incurred by the EU fishing sector in order to conduct the required studies to assess the environmental effects of fishing activities and the socio-economic situation in the sector.

| 2.2.4 | The reform of the CFP has resulted in new demands for scientific advice, in particular concerning the adoption of an ecosystem approach and the management of mixed fisheries. The Committee therefore believes that the expenses eligible for Community financial measures in the field of scientific advice are appropriate. |
| --- | --- |

2.2.4

The reform of the CFP has resulted in new demands for scientific advice, in particular concerning the adoption of an ecosystem approach and the management of mixed fisheries. The Committee therefore believes that the expenses eligible for Community financial measures in the field of scientific advice are appropriate.

| 2.2.5 | However, in line with its opinion on the European Fisheries Fund (2), the Committee reiterates that financial aid should also cover scientific advice to the fishing sector. Economic effort in this field is essential if the CFP rules are to be complied with properly. |
| --- | --- |

2.2.5

However, in line with its opinion on the European Fisheries Fund (2), the Committee reiterates that financial aid should also cover scientific advice to the fishing sector. Economic effort in this field is essential if the CFP rules are to be complied with properly.

2.3   Governance of the CFP

| 2.3.1 | In this third area of application, the financial measures are geared towards involving stakeholders in all the phases of the CFP, and keeping them informed of the objectives of the CFP and related measures. This financial aid will be channelled via the EU Advisory Committee on Fisheries and Aquaculture and the Regional Advisory Councils, and through information and training seminars organised by the European Commission. |
| --- | --- |

2.3.1

In this third area of application, the financial measures are geared towards involving stakeholders in all the phases of the CFP, and keeping them informed of the objectives of the CFP and related measures. This financial aid will be channelled via the EU Advisory Committee on Fisheries and Aquaculture and the Regional Advisory Councils, and through information and training seminars organised by the European Commission.

| 2.3.2 | The Committee supports these measures and believes that, with regard to the Regional Advisory Councils, as suggested in point 5.3 of the Legislative Financial Statement appended to the proposal for a Resolution, the Commission should consider the possibility of extending the financing period for the operating costs of these Regional Advisory Councils. |
| --- | --- |

2.3.2

The Committee supports these measures and believes that, with regard to the Regional Advisory Councils, as suggested in point 5.3 of the Legislative Financial Statement appended to the proposal for a Resolution, the Commission should consider the possibility of extending the financing period for the operating costs of these Regional Advisory Councils.

2.4   International relations in the area of the CFP and the Law of the Sea

| 2.4.1 | In the area of international relations, the financial measures will cover expenditure arising from the fisheries agreements (including fisheries partnership agreements), and from the European Community's involvement in international organisations. The EESC believes that, within the specific objectives pertaining to international relations, it is essential to contribute to the conservation and sustainable use of fisheries resources in third-country and international waters, and to maintain employment in fishing-dependent regions. |
| --- | --- |

2.4.1

In the area of international relations, the financial measures will cover expenditure arising from the fisheries agreements (including fisheries partnership agreements), and from the European Community's involvement in international organisations. The EESC believes that, within the specific objectives pertaining to international relations, it is essential to contribute to the conservation and sustainable use of fisheries resources in third-country and international waters, and to maintain employment in fishing-dependent regions.

| 2.4.2 | The Committee deems it essential for all Community policies that the European Union participate in all international organisations relating to fisheries or the law of the sea, given that the future of international fisheries resources depends on the responsible management of international organisations. It therefore approves the Community financial measures set down in the area of international relations. |
| --- | --- |

2.4.2

The Committee deems it essential for all Community policies that the European Union participate in all international organisations relating to fisheries or the law of the sea, given that the future of international fisheries resources depends on the responsible management of international organisations. It therefore approves the Community financial measures set down in the area of international relations.

| 2.4.3 | The EESC believes that the financial measures in this area should also cover the attendance of fisheries sector representatives at meetings of international organisations, at the request of the Member States or the Commission. |
| --- | --- |

2.4.3

The EESC believes that the financial measures in this area should also cover the attendance of fisheries sector representatives at meetings of international organisations, at the request of the Member States or the Commission.

2.5   Technical assistance

| 2.5.1 | The Committee supports the Community financial measures for expenditure arising from the preparation, follow-up, monitoring, audit and evaluation required in order to meet the objectives of this Regulation. |
| --- | --- |

2.5.1

The Committee supports the Community financial measures for expenditure arising from the preparation, follow-up, monitoring, audit and evaluation required in order to meet the objectives of this Regulation.

3.   Rates of co-financing, financing procedures, allocation of funds and assessment and control

| 3.1 | The Regulation establishes the rates of co-financing with Member States for the financial measures applicable to expenditure in each of the areas of application. The EESC has no objection to the proposed rates. |
| --- | --- |

3.1

The Regulation establishes the rates of co-financing with Member States for the financial measures applicable to expenditure in each of the areas of application. The EESC has no objection to the proposed rates.

| 3.2 | The Regulation prohibits the accumulation of Community support, stipulating that actions financed under this Regulation shall not receive assistance from other Community financial instruments. The Committee believes that the financial instruments for other Community policies, such as development, research, external trade and the environment, should also contribute to the actions in the field of international relations set out in this Regulation. In the Communication from the Commission on an Integrated framework for fisheries partnership agreements with third countries, the European Commission clearly indicates that the objective of the European Union is to contribute to sustainable fisheries via the CFP and the objectives of other European policies such as development, research, trade and the environment. |
| --- | --- |

3.2

The Regulation prohibits the accumulation of Community support, stipulating that actions financed under this Regulation shall not receive assistance from other Community financial instruments. The Committee believes that the financial instruments for other Community policies, such as development, research, external trade and the environment, should also contribute to the actions in the field of international relations set out in this Regulation. In the Communication from the Commission on an Integrated framework for fisheries partnership agreements with third countries, the European Commission clearly indicates that the objective of the European Union is to contribute to sustainable fisheries via the CFP and the objectives of other European policies such as development, research, trade and the environment.

| 3.3 | Lastly, the Regulation sets out the financing procedures in each area of application. It describes how and when Member States should apply to the Commission for Community financial measures, and details the Commission's decision on these applications, setting the total amount, the rate of the financial contribution to the Member state, and any conditions applicable to this contribution. The Regulation also provides for the protection of Community financial interests by means of preventive measures against fraud, corruption and other illegal activities, along with inspections, controls and audits on the financial aid granted; the Committee therefore considers that the financing and control system set down in the Regulation is adequate. |
| --- | --- |

3.3

Lastly, the Regulation sets out the financing procedures in each area of application. It describes how and when Member States should apply to the Commission for Community financial measures, and details the Commission's decision on these applications, setting the total amount, the rate of the financial contribution to the Member state, and any conditions applicable to this contribution. The Regulation also provides for the protection of Community financial interests by means of preventive measures against fraud, corruption and other illegal activities, along with inspections, controls and audits on the financial aid granted; the Committee therefore considers that the financing and control system set down in the Regulation is adequate.

4.   Conclusions

| 4.1 | The EESC approves the proposal for a Council Regulation establishing Community financial measures for the implementation of the Common Fisheries Policy and in the area of the Law of the Sea, and calls on the Commission to take the following observations into account: |
| --- | --- |

4.1

The EESC approves the proposal for a Council Regulation establishing Community financial measures for the implementation of the Common Fisheries Policy and in the area of the Law of the Sea, and calls on the Commission to take the following observations into account:

| 4.2 | The Committee believes that there is a need for the present proposal for a Regulation establishing the framework for financial interventions for the implementation of the CFP and the Law of the Sea, in addition to the proposal for a Council Regulation on the European Fisheries Fund. |
| --- | --- |

4.2

The Committee believes that there is a need for the present proposal for a Regulation establishing the framework for financial interventions for the implementation of the CFP and the Law of the Sea, in addition to the proposal for a Council Regulation on the European Fisheries Fund.

| 4.3 | The Committee deeply regrets that, at the time of writing, no decision has been taken to adopt the budgets for 2007-2013, which is the period of application for the financial measures covered in this opinion, and that the Council has not adopted a decision on the proposal for a Regulation on the European Fisheries Fund. |
| --- | --- |

4.3

The Committee deeply regrets that, at the time of writing, no decision has been taken to adopt the budgets for 2007-2013, which is the period of application for the financial measures covered in this opinion, and that the Council has not adopted a decision on the proposal for a Regulation on the European Fisheries Fund.

| 4.4 | The EESC calls on the Commission to ensure that any variation in the budget, in the context of the financial perspectives, does not have a proportional effect on the CFP budget, as it would otherwise be impossible to achieve the objectives defined for the reform of the CFP. |
| --- | --- |

4.4

The EESC calls on the Commission to ensure that any variation in the budget, in the context of the financial perspectives, does not have a proportional effect on the CFP budget, as it would otherwise be impossible to achieve the objectives defined for the reform of the CFP.

| 4.5 | The proposed areas of application are a necessity and are sufficient, since the Regulation provides Member States and the Commission with the means for more efficient financial implementation of the CFP. |
| --- | --- |

4.5

The proposed areas of application are a necessity and are sufficient, since the Regulation provides Member States and the Commission with the means for more efficient financial implementation of the CFP.

| 4.6 | Of the areas of application specified by the Regulation, the EESC would like to draw the Commission's attention to the particular importance of improving scientific advice. The sustainable development of fisheries resources and, consequently, the success of the CFP depends on detailed, truthful, current scientific knowledge about the status of different fish species. An immense effort is being made by EU, Member States' and fishing authorities, along with the fisheries sector, making it essential for the European Union to have the best scientific advice on its own resources and those of international waters. |
| --- | --- |

4.6

Of the areas of application specified by the Regulation, the EESC would like to draw the Commission's attention to the particular importance of improving scientific advice. The sustainable development of fisheries resources and, consequently, the success of the CFP depends on detailed, truthful, current scientific knowledge about the status of different fish species. An immense effort is being made by EU, Member States' and fishing authorities, along with the fisheries sector, making it essential for the European Union to have the best scientific advice on its own resources and those of international waters.

| 4.7 | To this end, in order to improve scientific advice, the Committee believes that financing should also be provided, via the Member States, for expenditure incurred by the EU fishing sector in order to conduct studies to assess the environmental effects of fishing activities and the socio-economic situation in the sector.. It therefore believes that the financial aid should also cover scientific advice to the fisheries sector. |
| --- | --- |

4.7

To this end, in order to improve scientific advice, the Committee believes that financing should also be provided, via the Member States, for expenditure incurred by the EU fishing sector in order to conduct studies to assess the environmental effects of fishing activities and the socio-economic situation in the sector.. It therefore believes that the financial aid should also cover scientific advice to the fisheries sector.

| 4.8 | The Committee agrees with the proposed financial measures in the area of CFP governance, which will help to involve stakeholders in all the phases of the CFP and to keep them informed of the progress made towards its objectives. |
| --- | --- |

4.8

The Committee agrees with the proposed financial measures in the area of CFP governance, which will help to involve stakeholders in all the phases of the CFP and to keep them informed of the progress made towards its objectives.

| 4.9 | The EESC believes that the financing period for the operating costs of the Regional Advisory Councils (RACs) should be extended. |
| --- | --- |

4.9

The EESC believes that the financing period for the operating costs of the Regional Advisory Councils (RACs) should be extended.

| 4.10 | The Committee considers that it is particularly important for the European Union to participate in the international organisations relating to fisheries or the law of the sea, and therefore approves the financial assistance proposed for these areas and for fisheries agreements, including fisheries cooperation agreements with third countries, as these are essential in order to help conserve and sustainably exploit fisheries resources in third-country and international waters, and to maintain employment in fishing-dependent regions. |
| --- | --- |

4.10

The Committee considers that it is particularly important for the European Union to participate in the international organisations relating to fisheries or the law of the sea, and therefore approves the financial assistance proposed for these areas and for fisheries agreements, including fisheries cooperation agreements with third countries, as these are essential in order to help conserve and sustainably exploit fisheries resources in third-country and international waters, and to maintain employment in fishing-dependent regions.

| 4.11 | The EESC believes that the financial measures in the area of international relations should also cover the attendance of fisheries sector representatives at meetings of international organisations, at the request of the Member States or the Commission. |
| --- | --- |

4.11

The EESC believes that the financial measures in the area of international relations should also cover the attendance of fisheries sector representatives at meetings of international organisations, at the request of the Member States or the Commission.

| 4.12 | Lastly, the Committee considers that the financial instruments for other Community policies, such as development, research, external trade and the environment, should also contribute to the initiatives in the field of international relations for the CFP. |
| --- | --- |

4.12

Lastly, the Committee considers that the financial instruments for other Community policies, such as development, research, external trade and the environment, should also contribute to the initiatives in the field of international relations for the CFP.

Brussels, 14 December 2005.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

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(1)  OJ C 267 of 27.10.2005.

1

(2)  Idem 1, point 3.5.3.6.

2

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| 17.3.2006 | EN | Official Journal of the European Union | C 65/41 |
| --- | --- | --- | --- |

17.3.2006

EN

Official Journal of the European Union

C 65/41

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Opinion of the European Economic and Social Committee on the ‘Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions — Improving the Community Civil Protection Mechanism’

(COM(2005) 137 final)

(2006/C 65/08)

On 3 June 2005, the European Commission decided to consult the European Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on the abovementioned proposal.

The Section for Agriculture, Rural Development and the Environment, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 9 November 2005. The rapporteur was Ms Sánchez Miguel.

At its 422nd plenary session, held on 14 and 15 December 2005 (meeting of 14 December 2005), the European Economic and Social Committee adopted the following opinion by 133 votes to one.

1.   Introduction

| 1.1 | Disasters are occurring with increasing frequency within the borders of the EU and throughout the world; some are caused by natural phenomena such as floods, earthquakes, fires, droughts, hurricanes etc., while others are due to terrorist acts which spread terror among innocent people. Human action could be said to be the cause of any of these, to some extent, although the degrees of intentionality cannot be compared. The EU has pledged to implement preventive action in response to climate change, not just through the commitments made in the Kyoto Protocol, but also through a number of provisions relating to measures for preserving land, water and air. This undertaking is geared towards prevention; it could help to maintain and regenerate our land, seas and atmosphere, and to encourage action to be taken on a worldwide scale. Meanwhile, the response to terrorist activity (1) has resulted in many police and justice-related coordination instruments, which have made it possible to improve cooperation relations between Member States. |
| --- | --- |

1.1

Disasters are occurring with increasing frequency within the borders of the EU and throughout the world; some are caused by natural phenomena such as floods, earthquakes, fires, droughts, hurricanes etc., while others are due to terrorist acts which spread terror among innocent people. Human action could be said to be the cause of any of these, to some extent, although the degrees of intentionality cannot be compared. The EU has pledged to implement preventive action in response to climate change, not just through the commitments made in the Kyoto Protocol, but also through a number of provisions relating to measures for preserving land, water and air. This undertaking is geared towards prevention; it could help to maintain and regenerate our land, seas and atmosphere, and to encourage action to be taken on a worldwide scale. Meanwhile, the response to terrorist activity (1) has resulted in many police and justice-related coordination instruments, which have made it possible to improve cooperation relations between Member States.

| 1.2 | Nevertheless, the EU has had to set up a Community system for providing assistance in the event of a disaster of any type occurring within its borders. This system is the Community Civil Protection Mechanism, which supports and facilitates the mobilisation of vital civil protection assistance for the immediate needs of disaster-stricken areas, even those outside the Community. The aim of the Communication is to improve the Civil Protection Mechanism, which was set up in 2001 (2), and to enhance the Civil Protection Action Programme (3) with a Proposal for a Regulation by the Council establishing a rapid response and preparedness instrument for disasters (4). |
| --- | --- |

1.2

Nevertheless, the EU has had to set up a Community system for providing assistance in the event of a disaster of any type occurring within its borders. This system is the Community Civil Protection Mechanism, which supports and facilitates the mobilisation of vital civil protection assistance for the immediate needs of disaster-stricken areas, even those outside the Community. The aim of the Communication is to improve the Civil Protection Mechanism, which was set up in 2001 (2), and to enhance the Civil Protection Action Programme (3) with a Proposal for a Regulation by the Council establishing a rapid response and preparedness instrument for disasters (4).

| 1.3 | Here, it would be useful to define the term ‘civil protection’, which is often confused with the concept of humanitarian aid. In this sense, the Commission makes a clear distinction between the two terms, although they share the same purpose: ‘to save lives and alleviate the effects of a disaster during the first days’. The Commission sets out the differences between the two concepts: firstly, civil protection assistance can address the environmental consequences of disasters, not just those affecting the population; secondly, it is provided through resources and teams from Member States rather than humanitarian bodies and NGOs; thirdly, it can be delivered both inside and outside the EU, although the procedures for action in non-EU countries are different (5). |
| --- | --- |

1.3

Here, it would be useful to define the term ‘civil protection’, which is often confused with the concept of humanitarian aid. In this sense, the Commission makes a clear distinction between the two terms, although they share the same purpose: ‘to save lives and alleviate the effects of a disaster during the first days’. The Commission sets out the differences between the two concepts: firstly, civil protection assistance can address the environmental consequences of disasters, not just those affecting the population; secondly, it is provided through resources and teams from Member States rather than humanitarian bodies and NGOs; thirdly, it can be delivered both inside and outside the EU, although the procedures for action in non-EU countries are different (5).

| 1.4 | The specific role of the Mechanism is to act within the EU, and always at the request of the Member State in which the disaster occurred. However, it is worth noting that the Mechanism also operates on an international scale in coordination with other international organisations such as the UN Office for the Coordination of Humanitarian Affairs (OCHA), with which it has established various operational procedures, and also working with the Red Cross and NGOs which operate on the ground. |
| --- | --- |

1.4

The specific role of the Mechanism is to act within the EU, and always at the request of the Member State in which the disaster occurred. However, it is worth noting that the Mechanism also operates on an international scale in coordination with other international organisations such as the UN Office for the Coordination of Humanitarian Affairs (OCHA), with which it has established various operational procedures, and also working with the Red Cross and NGOs which operate on the ground.

| 1.5 | The EU's stance towards the disasters that have occurred (and which, sadly, seem to have no end) led the General Affairs and External Relations Council, at its extraordinary meeting of 7 January 2005, to propose the improvement of the Community Mechanism and the development of a rapid response capability. A few days later, on 13 January, the European Parliament issued a Resolution on the recent tsunami disaster in the Indian Ocean, calling for human, material and training measures to be set up and made available in the event of a disaster. |
| --- | --- |

1.5

The EU's stance towards the disasters that have occurred (and which, sadly, seem to have no end) led the General Affairs and External Relations Council, at its extraordinary meeting of 7 January 2005, to propose the improvement of the Community Mechanism and the development of a rapid response capability. A few days later, on 13 January, the European Parliament issued a Resolution on the recent tsunami disaster in the Indian Ocean, calling for human, material and training measures to be set up and made available in the event of a disaster.

| 1.6 | The framework that currently regulates action in the field of civil protection consists of the two instruments mentioned previously: the Community Civil Protection Mechanism and the Civil Protection Action Programme. The Communication focuses on the former, particularly the Monitoring and Information Centre (MIC) which is based at the European Commission and operates around the clock. It has a database on the civil protection services in each Member State, incorporating data from the military database. |
| --- | --- |

1.6

The framework that currently regulates action in the field of civil protection consists of the two instruments mentioned previously: the Community Civil Protection Mechanism and the Civil Protection Action Programme. The Communication focuses on the former, particularly the Monitoring and Information Centre (MIC) which is based at the European Commission and operates around the clock. It has a database on the civil protection services in each Member State, incorporating data from the military database.

2.   Gist of the Commission proposal

| 2.1 | Improving the Community Civil Protection Mechanism: The latest reports have highlighted the need to improve the Civil Protection Mechanism, and the need for greater coordination between Member States and with the other bodies involved. The Communication proposes four areas for improving the system: |
| --- | --- |

2.1

Improving the Community Civil Protection Mechanism: The latest reports have highlighted the need to improve the Civil Protection Mechanism, and the need for greater coordination between Member States and with the other bodies involved. The Communication proposes four areas for improving the system:

| 2.1.1 | Reinforcing preparedness by training teams and carrying out preparatory exercises. To achieve this, firstly, current capability must be assessed; secondly, a plan must be drawn up setting out a series of rapidly deployable modules; lastly, training courses and joint exercises must be carried out to enhance interoperability and develop a common intervention culture. |
| --- | --- |

2.1.1

Reinforcing preparedness by training teams and carrying out preparatory exercises. To achieve this, firstly, current capability must be assessed; secondly, a plan must be drawn up setting out a series of rapidly deployable modules; lastly, training courses and joint exercises must be carried out to enhance interoperability and develop a common intervention culture.

| 2.1.2 | Analysis and assessment of needs by means of a warning system using the resources of the MIC and collating all information enabling it to act in cooperation with other bodies, particularly the UN. Improving the assessment of needs at the site of a disaster makes it possible to determine needs in each case, so that the intervention can be more effective. It is proposed that the staff of the MIC be increased, and its assessment methods and standards revised. |
| --- | --- |

2.1.2

Analysis and assessment of needs by means of a warning system using the resources of the MIC and collating all information enabling it to act in cooperation with other bodies, particularly the UN. Improving the assessment of needs at the site of a disaster makes it possible to determine needs in each case, so that the intervention can be more effective. It is proposed that the staff of the MIC be increased, and its assessment methods and standards revised.

| 2.1.3 | Enhanced coordination is one of the most extensive improvements. This involves more effectively coordinating Member States' contributions in order to achieve coordinated European assistance, as well as greater complementarity and coordination with the UN and other bodies involved in humanitarian aid, and with military counterparts. This coordination should strengthen the operational planning capacity on site, including the various Commission departments. |
| --- | --- |

2.1.3

Enhanced coordination is one of the most extensive improvements. This involves more effectively coordinating Member States' contributions in order to achieve coordinated European assistance, as well as greater complementarity and coordination with the UN and other bodies involved in humanitarian aid, and with military counterparts. This coordination should strengthen the operational planning capacity on site, including the various Commission departments.

| 2.1.4 | Improved assistance to citizens As the tsunami disaster showed, the protection of European citizens is achieved through cooperation between civil protection and the consular authorities of the countries involved. Cooperation must be strengthened between the countries affected by a disaster and Member States. |
| --- | --- |

2.1.4

Improved assistance to citizens As the tsunami disaster showed, the protection of European citizens is achieved through cooperation between civil protection and the consular authorities of the countries involved. Cooperation must be strengthened between the countries affected by a disaster and Member States.

| 2.2 | The improvement measures proposed by the Commission should be accompanied by an increase in the resources available for civil protection. The Council has therefore called for proposals in order to develop current resources. The EU Action Plan of 31 January 2005 highlighted the most important areas for action. |
| --- | --- |

2.2

The improvement measures proposed by the Commission should be accompanied by an increase in the resources available for civil protection. The Council has therefore called for proposals in order to develop current resources. The EU Action Plan of 31 January 2005 highlighted the most important areas for action.

| 2.2.1 | Firstly, it proposes pooling civil protection resources so that when national resources and capabilities are not sufficient to meet needs, steps can be taken at European level in order to improve the efficiency of action taken. |
| --- | --- |

2.2.1

Firstly, it proposes pooling civil protection resources so that when national resources and capabilities are not sufficient to meet needs, steps can be taken at European level in order to improve the efficiency of action taken.

| 2.2.2 | Strengthening the analytical capacity of the MIC can pave the way for a more pro-active approach, particularly when it comes to informing non-EU countries. It is therefore necessary for there to be a fluid relationship that enables available resources to be deployed flexibly, at the request of the affected country. |
| --- | --- |

2.2.2

Strengthening the analytical capacity of the MIC can pave the way for a more pro-active approach, particularly when it comes to informing non-EU countries. It is therefore necessary for there to be a fluid relationship that enables available resources to be deployed flexibly, at the request of the affected country.

| 2.2.3 | Standby modules fulfil an important role when it comes to intervening in large-scale disasters or when requested by other Member States or non-EU countries. It is therefore important to implement the system proposed in the Communication, so that each country can rely on key modules that are on permanent standby for interventions within or outside the EU. |
| --- | --- |

2.2.3

Standby modules fulfil an important role when it comes to intervening in large-scale disasters or when requested by other Member States or non-EU countries. It is therefore important to implement the system proposed in the Communication, so that each country can rely on key modules that are on permanent standby for interventions within or outside the EU.

| 2.2.4 | Reinforcing the logistical basis and sufficient resources to enable the MIC to act swiftly and efficiently. The costs of hiring equipment for interventions will benefit from some European funds (6), although when it comes to interventions outside the EU, synergies with the UN need to be explored. |
| --- | --- |

2.2.4

Reinforcing the logistical basis and sufficient resources to enable the MIC to act swiftly and efficiently. The costs of hiring equipment for interventions will benefit from some European funds (6), although when it comes to interventions outside the EU, synergies with the UN need to be explored.

| 2.2.5 | Lastly, international coordination is one of the key factors for a rapid response to disasters. The Community Mechanism has access to capabilities which, when coordinated with those of other bodies, result in a better response. United Nations bodies and humanitarian aid organisations should both be taken into consideration. |
| --- | --- |

2.2.5

Lastly, international coordination is one of the key factors for a rapid response to disasters. The Community Mechanism has access to capabilities which, when coordinated with those of other bodies, result in a better response. United Nations bodies and humanitarian aid organisations should both be taken into consideration.

3.   General comments

| 3.1 | The EESC welcomes the proposal to improve the Community Civil Protection Mechanism, given the need to strengthen and enhance all available resources so that action can be taken in the event of a disaster within or outside the EU. Experience acquired over the years has shown that many operational aspects of Community civil protection could be improved; the Committee therefore believes that certain preliminary observations should be made in order to optimise the efficiency of the measures proposed to improve the Community Mechanism. |
| --- | --- |

3.1

The EESC welcomes the proposal to improve the Community Civil Protection Mechanism, given the need to strengthen and enhance all available resources so that action can be taken in the event of a disaster within or outside the EU. Experience acquired over the years has shown that many operational aspects of Community civil protection could be improved; the Committee therefore believes that certain preliminary observations should be made in order to optimise the efficiency of the measures proposed to improve the Community Mechanism.

| 3.2 | Firstly, the EU's response capability must be enhanced, based on the national civil protection systems, in various areas: |
| --- | --- |

3.2

Firstly, the EU's response capability must be enhanced, based on the national civil protection systems, in various areas:

3.2.1   Regional communication and information systems

| 3.2.1.1 | The CECIS (7) system should be enhanced, moving to a satellite-based system with video, voice and data capability, which is secure and linked up via the MIC (8) to specific knowledge centres providing data, experts and models (e.g. foreseeable consequences) that will be useful in the circumstances of specific emergencies. Some basic examples include the European Space Agency and the Joint Research Centre for current maps of non-EU countries and damage assessment, or maps updated after a disaster (e.g. earthquakes or floods) which could disable an infrastructure network for routing aid. The network would be based on contact points for each Member State, which could help respond to the emergency. |
| --- | --- |

3.2.1.1

The CECIS (7) system should be enhanced, moving to a satellite-based system with video, voice and data capability, which is secure and linked up via the MIC (8) to specific knowledge centres providing data, experts and models (e.g. foreseeable consequences) that will be useful in the circumstances of specific emergencies. Some basic examples include the European Space Agency and the Joint Research Centre for current maps of non-EU countries and damage assessment, or maps updated after a disaster (e.g. earthquakes or floods) which could disable an infrastructure network for routing aid. The network would be based on contact points for each Member State, which could help respond to the emergency.

| 3.2.1.2 | The information flow between the EU's assistance units and the MIC should be constant, secure and tamper-proof:






  — | communications with disaster-stricken areas are usually highly deficient, due to the destruction and/or saturation of infrastructure (conventional and mobile networks); |
| --- | --- | --- |

3.2.1.2

The information flow between the EU's assistance units and the MIC should be constant, secure and tamper-proof:

—

communications with disaster-stricken areas are usually highly deficient, due to the destruction and/or saturation of infrastructure (conventional and mobile networks);

| — | nevertheless, we cannot dismiss the possibility of governments controlling the information issued about a disaster located within their borders, in the same way that the movements of assistance units are controlled. |
| --- | --- |

—

nevertheless, we cannot dismiss the possibility of governments controlling the information issued about a disaster located within their borders, in the same way that the movements of assistance units are controlled.

| 3.2.1.3 | The most obvious response would be to use satellite communications. Indeed, experience has shown this method to be:






  — | fairly safe from environmental destruction (all that is required is a case and the ability to generate electricity for transmission); |
| --- | --- | --- |

3.2.1.3

The most obvious response would be to use satellite communications. Indeed, experience has shown this method to be:

—

fairly safe from environmental destruction (all that is required is a case and the ability to generate electricity for transmission);

| — | safe when subject to information monitoring and surveillance by third parties. |
| --- | --- |

—

safe when subject to information monitoring and surveillance by third parties.

| 3.2.1.4 | However, this method also has a limited data transmission capacity and, in some cases, can become saturated due to other requirements or users (e.g. the media). It is therefore necessary to ensure that there are dedicated — i.e. permanent — satellite wavelengths, enabling satisfactory communication between the affected area(s) and the MIC, and between the different intervention areas. |
| --- | --- |

3.2.1.4

However, this method also has a limited data transmission capacity and, in some cases, can become saturated due to other requirements or users (e.g. the media). It is therefore necessary to ensure that there are dedicated — i.e. permanent — satellite wavelengths, enabling satisfactory communication between the affected area(s) and the MIC, and between the different intervention areas.

| 3.2.1.5 | As regards coverage, it might seem that a specific geographical area would suffice (EU and neighbouring areas); however, in reality, coverage should be worldwide. The case of the recent tsunami clearly showed the former solution to be unsatisfactory, as coverage was not only required for communication with the MIC, but also for communication between areas of operation as distant from each other as the Maldives, Sri Lanka, Thailand and Indonesia. |
| --- | --- |

3.2.1.5

As regards coverage, it might seem that a specific geographical area would suffice (EU and neighbouring areas); however, in reality, coverage should be worldwide. The case of the recent tsunami clearly showed the former solution to be unsatisfactory, as coverage was not only required for communication with the MIC, but also for communication between areas of operation as distant from each other as the Maldives, Sri Lanka, Thailand and Indonesia.

| 3.2.1.6 | In order to ensure that communication is effective, the EU must therefore a have a satellite transmission system that is dedicated (i.e. exclusive), secure (tamper-proof), reliable and global in scale. This system must be able to support videoconferencing, data- (fax, mail and high-definition images) and voice-based communications. |
| --- | --- |

3.2.1.6

In order to ensure that communication is effective, the EU must therefore a have a satellite transmission system that is dedicated (i.e. exclusive), secure (tamper-proof), reliable and global in scale. This system must be able to support videoconferencing, data- (fax, mail and high-definition images) and voice-based communications.

| 3.2.1.7 | The Joint Research Centre, the European Space Agency and the Commission (DG Information Society) have sufficient capability to meet the needs expressed by the Management Committee for the Action Programme and the Mechanism, which is accountable to the Directorate-General responsible for civil protection (DG Environment). |
| --- | --- |

3.2.1.7

The Joint Research Centre, the European Space Agency and the Commission (DG Information Society) have sufficient capability to meet the needs expressed by the Management Committee for the Action Programme and the Mechanism, which is accountable to the Directorate-General responsible for civil protection (DG Environment).

3.2.2   Requirement for minimum intervention resources

| 3.2.2.1 | Interventions by assistance teams:






  — | intervention teams are equipped by Member States with resources enabling them to act with sufficient independence, and with suitable systems for communication in the field; |
| --- | --- | --- |

3.2.2.1

Interventions by assistance teams:

—

intervention teams are equipped by Member States with resources enabling them to act with sufficient independence, and with suitable systems for communication in the field;

| — | these teams are coordinated by an EU coordinator whose duties include coordinating the different teams sent by Member States, liaising with the authorities of the affected country, liaising with the UN Office for the Coordination of Humanitarian Affairs, etc.; |
| --- | --- |

—

these teams are coordinated by an EU coordinator whose duties include coordinating the different teams sent by Member States, liaising with the authorities of the affected country, liaising with the UN Office for the Coordination of Humanitarian Affairs, etc.;

| — | to date, the coordinator has not been supplied with resources by the EU; but only has certain communication equipment; the EU should obtain suitable resources and equipment in order to facilitate the duties of the coordinator and his support team, from communication equipment to tents, in order to coordinate with other teams and authorities in the affected country, and to ensure that the coordinator's work is carried out efficiently in often difficult conditions; |
| --- | --- |

—

to date, the coordinator has not been supplied with resources by the EU; but only has certain communication equipment; the EU should obtain suitable resources and equipment in order to facilitate the duties of the coordinator and his support team, from communication equipment to tents, in order to coordinate with other teams and authorities in the affected country, and to ensure that the coordinator's work is carried out efficiently in often difficult conditions;

| — | furthermore, these resources and equipment, which should be clearly marked with EU symbols, should serve as a clear indication of the EU's presence and commitment to the stricken population. Within the EU, this sends a message of inter-regional solidarity, while outside the EU, it emphasises the EU's position in the international arena. |
| --- | --- |

—

furthermore, these resources and equipment, which should be clearly marked with EU symbols, should serve as a clear indication of the EU's presence and commitment to the stricken population. Within the EU, this sends a message of inter-regional solidarity, while outside the EU, it emphasises the EU's position in the international arena.

| 3.2.2.2 | Support to Member States in the event of an emergency:






  — | in certain cases, Member States cannot provide the requisite support, either because those in possession of the necessary resources and equipment require them for some foreseeable or declared emergency, or because the resources would only be used in exceptional cases which do means they are not worth acquiring; |
| --- | --- | --- |

3.2.2.2

Support to Member States in the event of an emergency:

—

in certain cases, Member States cannot provide the requisite support, either because those in possession of the necessary resources and equipment require them for some foreseeable or declared emergency, or because the resources would only be used in exceptional cases which do means they are not worth acquiring;

| — | forest fires are one typical example of the former scenario, as states equipped with air facilities are in the same situation at the same time. A dangerous situation in one's own country usually makes it difficult to send resources to another country; solidarity between the Mediterranean countries of the EU is very strong, and resources are occasionally sent from one area to another in particularly serious cases; |
| --- | --- |

—

forest fires are one typical example of the former scenario, as states equipped with air facilities are in the same situation at the same time. A dangerous situation in one's own country usually makes it difficult to send resources to another country; solidarity between the Mediterranean countries of the EU is very strong, and resources are occasionally sent from one area to another in particularly serious cases;

| — | severe floods requiring high-volume pumps are an example of the latter scenario: these types of pumps do not usually feature among the equipment of intervention teams in most EU countries; |
| --- | --- |

—

severe floods requiring high-volume pumps are an example of the latter scenario: these types of pumps do not usually feature among the equipment of intervention teams in most EU countries;

| — | in another type of situation, resulting from the new types of terrorism, resources and equipment could be requested to respond to situations which, although exceptional, are still potentially serious; |
| --- | --- |

—

in another type of situation, resulting from the new types of terrorism, resources and equipment could be requested to respond to situations which, although exceptional, are still potentially serious;

| — | in light of the above, the EU should be able to obtain resources and equipment, either owned or contracted out, enabling it to back up the response capabilities of Member States. |
| --- | --- |

—

in light of the above, the EU should be able to obtain resources and equipment, either owned or contracted out, enabling it to back up the response capabilities of Member States.

3.2.3   Centralisation of operational bases

| 3.2.3.1 | The Mechanism's current structures are based on EU-wide provision of various intervention teams, assessment resources and equipment. While this is an improvement on the vacuum that had existed before, it is still not fully satisfactory. |
| --- | --- |

3.2.3.1

The Mechanism's current structures are based on EU-wide provision of various intervention teams, assessment resources and equipment. While this is an improvement on the vacuum that had existed before, it is still not fully satisfactory.

| 3.2.3.2 | Due to the geographical expansion of the EU and the variety of risks facing the area, it might be worth considering setting up regional support structures as part of the Mechanism; these would have various teams and resources already in place which would therefore be more quickly deployable and better suited to the specific nature of regional risks within the EU. |
| --- | --- |

3.2.3.2

Due to the geographical expansion of the EU and the variety of risks facing the area, it might be worth considering setting up regional support structures as part of the Mechanism; these would have various teams and resources already in place which would therefore be more quickly deployable and better suited to the specific nature of regional risks within the EU.

| 3.2.3.3 | These resources could be seasonal (e.g. aircraft to fight forest fires) or permanent. |
| --- | --- |

3.2.3.3

These resources could be seasonal (e.g. aircraft to fight forest fires) or permanent.

| 3.2.3.4 | Another potential improvement would involve sharing out the task of gathering resources among neighbouring countries; the resources could then be made available to all the countries in that region. In this way, the EU could promote the acquisition of resources shared between countries of medium size or facing a common risk (floods in a particular basin, earthquakes, etc.). |
| --- | --- |

3.2.3.4

Another potential improvement would involve sharing out the task of gathering resources among neighbouring countries; the resources could then be made available to all the countries in that region. In this way, the EU could promote the acquisition of resources shared between countries of medium size or facing a common risk (floods in a particular basin, earthquakes, etc.).

3.2.4   Provision of a centralised technical body on 24-hour standby

| 3.2.4.1 | Although the MIC is a 24-hour system, it currently lacks sufficient human and technical resources, like those available to emergency centres in most Member States. The Commission should pledge to change this. |
| --- | --- |

3.2.4.1

Although the MIC is a 24-hour system, it currently lacks sufficient human and technical resources, like those available to emergency centres in most Member States. The Commission should pledge to change this.

| 3.2.4.2 | However, the Commission's current approach is restricted to obtaining resources determined in accordance with the emergency. It is worth considering whether this approach is as ambitious as the situation requires. |
| --- | --- |

3.2.4.2

However, the Commission's current approach is restricted to obtaining resources determined in accordance with the emergency. It is worth considering whether this approach is as ambitious as the situation requires.

| 3.2.4.3 | There is no questioning the fact that the MIC, by definition, is not a decision or emergency coordination centre. However, when helping to make decisions or implement assistance, improvisation must be avoided, and there must be a set procedure for action which varies according to the circumstances of the emergency. Action in response to a flood will differ from that taken in response to a landslide, earthquake or volcanic eruption. Resources are also different. |
| --- | --- |

3.2.4.3

There is no questioning the fact that the MIC, by definition, is not a decision or emergency coordination centre. However, when helping to make decisions or implement assistance, improvisation must be avoided, and there must be a set procedure for action which varies according to the circumstances of the emergency. Action in response to a flood will differ from that taken in response to a landslide, earthquake or volcanic eruption. Resources are also different.

| 3.2.4.4 | Therefore, in addition to having access to reliable data in the event of an emergency, the MIC must have predefined assistance plans, so that the Commission can plan contact with specialised bodies within and outside the EU. These plans should be defined according to the type of emergency, severity, country, etc. and should seek to provide effective and rapid responses. Naturally, the modules that can be mobilised in each country should be included. |
| --- | --- |

3.2.4.4

Therefore, in addition to having access to reliable data in the event of an emergency, the MIC must have predefined assistance plans, so that the Commission can plan contact with specialised bodies within and outside the EU. These plans should be defined according to the type of emergency, severity, country, etc. and should seek to provide effective and rapid responses. Naturally, the modules that can be mobilised in each country should be included.

| 3.2.4.5 | The question is whether the MIC, in addition to its role as monitoring centre, could also coordinate national bodies, specialised humanitarian aid organisations and, in particular, the volunteers that come forward to help after any disaster. Coordination is a necessary task that should be carried out by those organisations that have the information and specific resources at their disposal. |
| --- | --- |

3.2.4.5

The question is whether the MIC, in addition to its role as monitoring centre, could also coordinate national bodies, specialised humanitarian aid organisations and, in particular, the volunteers that come forward to help after any disaster. Coordination is a necessary task that should be carried out by those organisations that have the information and specific resources at their disposal.

3.2.5   Training of intervention teams

| 3.2.5.1 | Unquestionably, the intervention teams preselected by the Member States know how to act in an emergency. The current training programme is achieving good results in terms of joint action capabilities. The number of courses should be increased, and attempts should be made to run them in languages other than English, since, for example, action could be taken in countries with cultural links to other languages such as French or Spanish. |
| --- | --- |

3.2.5.1

Unquestionably, the intervention teams preselected by the Member States know how to act in an emergency. The current training programme is achieving good results in terms of joint action capabilities. The number of courses should be increased, and attempts should be made to run them in languages other than English, since, for example, action could be taken in countries with cultural links to other languages such as French or Spanish.

| 3.2.5.2 | The intervention teams should be made aware of the advance assistance plans, once defined, and these should therefore be included in the training schemes. |
| --- | --- |

3.2.5.2

The intervention teams should be made aware of the advance assistance plans, once defined, and these should therefore be included in the training schemes.

| 3.2.5.3 | It would also be worth considering the use of new distance learning techniques for these courses. |
| --- | --- |

3.2.5.3

It would also be worth considering the use of new distance learning techniques for these courses.

4.   Specific comments on the Commission's proposal

| 4.1 | While there is no doubt that this is a positive proposal, there is room for improvement, given that the Mechanism is essentially for use within the EU, and is therefore currently an instrument (if not the instrument) for EU inter-regional solidarity. |
| --- | --- |

4.1

While there is no doubt that this is a positive proposal, there is room for improvement, given that the Mechanism is essentially for use within the EU, and is therefore currently an instrument (if not the instrument) for EU inter-regional solidarity.

| 4.2 | Consequently, the EU should spare no effort to provide the swiftest and most effective response to emergencies in all their forms. This calls for predefined procedures or assistance plans which should be tested by means of drills, and updated on the basis of experience gained from these drills or from actual interventions. |
| --- | --- |

4.2

Consequently, the EU should spare no effort to provide the swiftest and most effective response to emergencies in all their forms. This calls for predefined procedures or assistance plans which should be tested by means of drills, and updated on the basis of experience gained from these drills or from actual interventions.

| 4.3 | The plans must include communications, up-to-date maps and suitable resources to achieve satisfactory coordination. These resources should be owned by the EU. European intervention plans must set an international standard which will boost the image and influence of the EU on an international scale. |
| --- | --- |

4.3

The plans must include communications, up-to-date maps and suitable resources to achieve satisfactory coordination. These resources should be owned by the EU. European intervention plans must set an international standard which will boost the image and influence of the EU on an international scale.

| 4.4 | Furthermore, EU assessment teams and coordinators must be able to have their say about the recovery of the affected area and potential subsequent action plans. |
| --- | --- |

4.4

Furthermore, EU assessment teams and coordinators must be able to have their say about the recovery of the affected area and potential subsequent action plans.

| 4.5 | The EESC believes that all the activities carried out by the Community Mechanism should receive sufficient funding to ensure the availability of both technical staff and resources, in order to improve European interventions and visibility, particularly for disasters occurring outside the EU. In particular, transport is needed to permit rapid action to minimise the consequences of disasters. |
| --- | --- |

4.5

The EESC believes that all the activities carried out by the Community Mechanism should receive sufficient funding to ensure the availability of both technical staff and resources, in order to improve European interventions and visibility, particularly for disasters occurring outside the EU. In particular, transport is needed to permit rapid action to minimise the consequences of disasters.

| 4.6 | In the event of intervention in non-EU countries, interventions by the Mechanism must be considered an integral part of EU foreign policy, and must be given the importance that they deserve, as a sign of the EU's solidarity with countries experiencing tragic events. |
| --- | --- |

4.6

In the event of intervention in non-EU countries, interventions by the Mechanism must be considered an integral part of EU foreign policy, and must be given the importance that they deserve, as a sign of the EU's solidarity with countries experiencing tragic events.

5.   Conclusions

| 5.1 | The EESC endorses the content of the Communication on Improving the Community Civil Protection Mechanism. However, it believes that certain specific aspects could be improved, and points out that certain of its observations result from an assessment by the representatives of organised civil society at this Committee. |
| --- | --- |

5.1

The EESC endorses the content of the Communication on Improving the Community Civil Protection Mechanism. However, it believes that certain specific aspects could be improved, and points out that certain of its observations result from an assessment by the representatives of organised civil society at this Committee.

| 5.2 | As a starting point, and given the need for mandatory compliance with the proposed measures, a suitable legal framework is required. The EESC considers that the Regulation (9) is the right instrument to play a mandatory, harmonising role in all EU Member States. |
| --- | --- |

5.2

As a starting point, and given the need for mandatory compliance with the proposed measures, a suitable legal framework is required. The EESC considers that the Regulation (9) is the right instrument to play a mandatory, harmonising role in all EU Member States.

| 5.3 | Another aspect that merits attention is the funding earmarked for the Mechanism, which should be sufficient to cover more staff and the purchase of resources. Furthermore, although the Communication does not specify the financial aid granted to Member States, the new proposal for the Solidarity Fund (10) should cover and take account of all natural disasters, including drought. |
| --- | --- |

5.3

Another aspect that merits attention is the funding earmarked for the Mechanism, which should be sufficient to cover more staff and the purchase of resources. Furthermore, although the Communication does not specify the financial aid granted to Member States, the new proposal for the Solidarity Fund (10) should cover and take account of all natural disasters, including drought.

| 5.4 | As regards the improvements to the Mechanism proposed by the EESC and mentioned in this Opinion, the following merit particular attention:






  — | creation of a satellite communication system; |
| --- | --- | --- |

5.4

As regards the improvements to the Mechanism proposed by the EESC and mentioned in this Opinion, the following merit particular attention:

—

creation of a satellite communication system;

| — | provision of assistance teams specific to the Mechanism; |
| --- | --- |

—

provision of assistance teams specific to the Mechanism;

| — | identification of persons and teams from the EU, particularly for work outside the EU; |
| --- | --- |

—

identification of persons and teams from the EU, particularly for work outside the EU;

| — | regionalisation of operational bases and coordination between them; |
| --- | --- |

—

regionalisation of operational bases and coordination between them;

| — | technical training for teams, with consideration given to languages. |
| --- | --- |

—

technical training for teams, with consideration given to languages.

| 5.5 | The EESC, as representative of civil society, wishes to make public its support for those volunteers who work unpaid and often full-time in the field of disaster relief. This is not only a form of practical solidarity but an essential contribution to dealing actively with the damage to persons and property occurring in areas affected by disasters. |
| --- | --- |

5.5

The EESC, as representative of civil society, wishes to make public its support for those volunteers who work unpaid and often full-time in the field of disaster relief. This is not only a form of practical solidarity but an essential contribution to dealing actively with the damage to persons and property occurring in areas affected by disasters.

Brussels, 14 December 2005.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  The following instruments have been presented by the Commission: Communication establishing a framework programme on ‘Security and Safeguarding Liberties’ for the period 2007-2013 (COM(2005) 124 final (6.4.2005)); Council Decision establishing the specific Programme ‘Prevention, Preparedness and Consequence Management of Terrorism’, for the Period 2007-2013; Council decision – General Programme ‘Security and Safeguarding Liberties’ (SEC(2005) 436).

1

(2)  Council Decision 2001/792/EC, Euratom.

2

(3)  Council Decision, 1999/847/EC, 9 December.

3

(4)  COM(2005)113 final / 2005/0052 (CNS) of 6.4.2005.

4

(5)  Council Decision 2001/792/EC, Article 6. 6.

5

(6)  Proposal for a Council Regulation, 6.4.2005.

6

(7)  The communication system for the mechanism.

7

(8)  The monitoring centre for the mechanism.

8

(9)  For example, there has been a Proposal for a Regulation establishing a rapid response and preparedness instrument for disasters. COM(2005) 113 final of 6.4.2005.

9

(10)  COM(2005) 108 final adopted on 6.5.2005.

10

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| 17.3.2006 | EN | Official Journal of the European Union | C 65/46 |
| --- | --- | --- | --- |

17.3.2006

EN

Official Journal of the European Union

C 65/46

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Opinion of the ‘European Economic and Social Committee on Joint enterprises in the fisheries sector: current state of play and future prospects’

(2006/C 65/09)

On 14 July 2005, the European Economic and Social Committee decided to draw up an opinion, under Rule 29(2) of its Rules of Procedure, on Joint enterprises in the fisheries sector: current state of play and future prospects.

The Section for Agriculture, Rural Development and the Environment, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 9 November 2005. The rapporteur was Mr Sarró Iparraguirre.

At its 422nd plenary session, held on 14 and 15 December 2005 (meeting of 14 December), the European Economic and Social Committee adopted the following opinion nem. con. with 122 votes in favour and ten abstentions.

1.   Introduction

| 1.1 | The Common Fisheries Policy (CFP) first envisaged using joint enterprises as a structural policy instrument in Regulation 3944/90, defining them as ‘a company incorporated under private law comprising one or more Community shipowners and one or more partners from a third country with which the Community maintains relations, associated under a joint enterprise agreement set up for the purpose of exploiting and, where appropriate, using the fishery resources of waters falling within the sovereignty and/or jurisdiction of such third country, primary consideration being given to the supply of the Community market’ (1). During the 1990s, the CFP evolved significantly, and the term ‘Blue Europe’ became widely used. This has become topical once again, in a context of broader debate on the establishment of a Common Maritime Policy. |
| --- | --- |

1.1

The Common Fisheries Policy (CFP) first envisaged using joint enterprises as a structural policy instrument in Regulation 3944/90, defining them as ‘a company incorporated under private law comprising one or more Community shipowners and one or more partners from a third country with which the Community maintains relations, associated under a joint enterprise agreement set up for the purpose of exploiting and, where appropriate, using the fishery resources of waters falling within the sovereignty and/or jurisdiction of such third country, primary consideration being given to the supply of the Community market’ (1). During the 1990s, the CFP evolved significantly, and the term ‘Blue Europe’ became widely used. This has become topical once again, in a context of broader debate on the establishment of a Common Maritime Policy.

| 1.2 | As the CFP evolved, the abovementioned concept of joint enterprises was not reviewed: they were defined exclusively as an alternative fisheries structural policy instrument to the scrapping or final export of vessels, as illustrated by the relevant articles in the Regulations mentioned in point 2.1.2. of this opinion. Therefore, the applicable legislation focused only on financial control. |
| --- | --- |

1.2

As the CFP evolved, the abovementioned concept of joint enterprises was not reviewed: they were defined exclusively as an alternative fisheries structural policy instrument to the scrapping or final export of vessels, as illustrated by the relevant articles in the Regulations mentioned in point 2.1.2. of this opinion. Therefore, the applicable legislation focused only on financial control.

| 1.3 | However, joint enterprises are more than just a structural policy instrument: they are a means to achieve a series of objectives that are clearly set out in the various EU texts and rules, from market supply to cooperation policy, employment and regional development policies, promotion of responsible fishing, EU intervention in the various regional fishery organisations (RFOs) and, more generally, the presence of capital and skilled workers from Member States in sustainable investment projects in various countries and markets. |
| --- | --- |

1.3

However, joint enterprises are more than just a structural policy instrument: they are a means to achieve a series of objectives that are clearly set out in the various EU texts and rules, from market supply to cooperation policy, employment and regional development policies, promotion of responsible fishing, EU intervention in the various regional fishery organisations (RFOs) and, more generally, the presence of capital and skilled workers from Member States in sustainable investment projects in various countries and markets.

| 1.4 | Clearly, with the reform of the CFP, the idea of joint enterprises as a structural policy instrument has become a thing of the past. However, it is also clear that, currently, this reform has resulted in the quasi-total absence of legislation specific to joint enterprises within the context of the EU's own, political powers. |
| --- | --- |

1.4

Clearly, with the reform of the CFP, the idea of joint enterprises as a structural policy instrument has become a thing of the past. However, it is also clear that, currently, this reform has resulted in the quasi-total absence of legislation specific to joint enterprises within the context of the EU's own, political powers.

| 1.5 | Moreover, in the opinions requested of it by the Commission, the Committee has always stressed the need to bring joint enterprises in the fisheries sector into line with the new Common Fisheries Policy: this was emphasised in the EESC's opinion on the proposal for a Council Regulation on the implementation of the CFP reform (2), and reiterated in its opinion on the European Fisheries Fund (3) with regard to the proposal for a Council Regulation on the Fund (4). The Commissioner for Fisheries was publicly informed of this need during his visit to the EESC's NAT Section on 16 June 2005, and he agreed to take the issue into consideration. |
| --- | --- |

1.5

Moreover, in the opinions requested of it by the Commission, the Committee has always stressed the need to bring joint enterprises in the fisheries sector into line with the new Common Fisheries Policy: this was emphasised in the EESC's opinion on the proposal for a Council Regulation on the implementation of the CFP reform (2), and reiterated in its opinion on the European Fisheries Fund (3) with regard to the proposal for a Council Regulation on the Fund (4). The Commissioner for Fisheries was publicly informed of this need during his visit to the EESC's NAT Section on 16 June 2005, and he agreed to take the issue into consideration.

| 1.6 | This opinion aims to further develop the position of the European Economic and Social Committee, putting forward arguments in favour of a new approach to the role of joint enterprises and, therefore, the rules governing them, based on official documents and the facts contained in them. |
| --- | --- |

1.6

This opinion aims to further develop the position of the European Economic and Social Committee, putting forward arguments in favour of a new approach to the role of joint enterprises and, therefore, the rules governing them, based on official documents and the facts contained in them.

| 1.7 | It is likely that, if the proposed new approach is adopted, efforts will need to be made to ensure that these enterprises are fully accepted, as they constitute a unique feature of international trade and provide the EU with a specific line of action in international relations. |
| --- | --- |

1.7

It is likely that, if the proposed new approach is adopted, efforts will need to be made to ensure that these enterprises are fully accepted, as they constitute a unique feature of international trade and provide the EU with a specific line of action in international relations.

2.   General comments

2.1   Establishment of joint enterprises in EU law

| 2.1.1 | Joint enterprises were incorporated into Community Law under Council Regulation (EEC) No 3944/90 of 20 December 1990 amending Regulation (EEC) No 4028/86, as a means to reduce the fishing capacity of the Community fleet and supply the Community market, taking account of the scarcity of resources in Community waters and the ban preventing access to the exclusive economic zones of third countries. The approach was fourfold, aiming to eliminate over-capacity, guarantee supply, partially maintain employment and realise political and trade agreements with third countries (5). In order to implement these measures, Commission Regulation No 1956/1991 was adopted (6). |
| --- | --- |

2.1.1

Joint enterprises were incorporated into Community Law under Council Regulation (EEC) No 3944/90 of 20 December 1990 amending Regulation (EEC) No 4028/86, as a means to reduce the fishing capacity of the Community fleet and supply the Community market, taking account of the scarcity of resources in Community waters and the ban preventing access to the exclusive economic zones of third countries. The approach was fourfold, aiming to eliminate over-capacity, guarantee supply, partially maintain employment and realise political and trade agreements with third countries (5). In order to implement these measures, Commission Regulation No 1956/1991 was adopted (6).

| 2.1.2 | With the adoption of Council Regulations (EEC) 2080/93 (7) and 3699/93 (8), the financing of joint enterprises was integrated into the Financial Instrument for Fisheries Guidance (FIFG). In accordance with the subsidiarity principle, Member States were responsible for selecting, managing and monitoring projects, as well as paying subsidies. These were initially equal to those payable for scrapping or export, and eventually came to represent 80 % of the premium available for scrapping the vessel. A Community shipowner could therefore legitimately consider that the difference in subsidy between the scrapping premium and the premium for export to joint enterprises is due to the maintenance of a favourable relationship between the EU and the new joint enterprise receiving the vessel(s) from the shipowner. These principles were maintained by Council Regulation 2468/98 of 3 November 1998 (9) repealing Regulation 3699/93, and Council Regulation 2792/1999 of 17 December 1999 (10), although it is worth noting that the latter simplified the concept of the joint enterprise, defining it as ‘a commercial enterprise with one or more partners who are nationals of the third country in which the vessel is registered’ (11). |
| --- | --- |

2.1.2

With the adoption of Council Regulations (EEC) 2080/93 (7) and 3699/93 (8), the financing of joint enterprises was integrated into the Financial Instrument for Fisheries Guidance (FIFG). In accordance with the subsidiarity principle, Member States were responsible for selecting, managing and monitoring projects, as well as paying subsidies. These were initially equal to those payable for scrapping or export, and eventually came to represent 80 % of the premium available for scrapping the vessel. A Community shipowner could therefore legitimately consider that the difference in subsidy between the scrapping premium and the premium for export to joint enterprises is due to the maintenance of a favourable relationship between the EU and the new joint enterprise receiving the vessel(s) from the shipowner. These principles were maintained by Council Regulation 2468/98 of 3 November 1998 (9) repealing Regulation 3699/93, and Council Regulation 2792/1999 of 17 December 1999 (10), although it is worth noting that the latter simplified the concept of the joint enterprise, defining it as ‘a commercial enterprise with one or more partners who are nationals of the third country in which the vessel is registered’ (11).

2.2   Background

| 2.2.1 | The Green Paper on the future of the Common Fisheries Policy (12) acknowledged the excess capacity of the Community fleet, along with the globalisation of the fisheries sector and the legitimate aspiration of many developing countries to expand their own fishing industries. These three points, paired with the high capital injection that fisheries investments require (fleets, ports, refrigeration, plants, etc.), also acknowledged by the Green Paper, should have led to a specific discussion on the importance of joint enterprises in the fisheries sector, with a broader scope than that reflected in the official documents (13) at the time. |
| --- | --- |

2.2.1

The Green Paper on the future of the Common Fisheries Policy (12) acknowledged the excess capacity of the Community fleet, along with the globalisation of the fisheries sector and the legitimate aspiration of many developing countries to expand their own fishing industries. These three points, paired with the high capital injection that fisheries investments require (fleets, ports, refrigeration, plants, etc.), also acknowledged by the Green Paper, should have led to a specific discussion on the importance of joint enterprises in the fisheries sector, with a broader scope than that reflected in the official documents (13) at the time.

| 2.2.1.1 | Joint enterprises are a means for the EU to participate and invest in the development of the fishing sector in developing countries, leading to the formation or growth of a fully-fledged economic sector. Supplying these enterprises with fishing vessels is not only beneficial to fishing activity per se, but also boosts other sectors such as ports, services (repairs, engineering, provisioning, consignment, transhipment, loading and unloading, crew services, travel, etc.), effective maintaining of the refrigeration chain (required by EU food safety rules, through investment in costly refrigeration equipment), compliance with health regulations in the food sector and, lastly, the establishment of processing industries. |
| --- | --- |

2.2.1.1

Joint enterprises are a means for the EU to participate and invest in the development of the fishing sector in developing countries, leading to the formation or growth of a fully-fledged economic sector. Supplying these enterprises with fishing vessels is not only beneficial to fishing activity per se, but also boosts other sectors such as ports, services (repairs, engineering, provisioning, consignment, transhipment, loading and unloading, crew services, travel, etc.), effective maintaining of the refrigeration chain (required by EU food safety rules, through investment in costly refrigeration equipment), compliance with health regulations in the food sector and, lastly, the establishment of processing industries.

| 2.2.1.1.1 | As well as maintaining high-quality European jobs among the senior and middle-ranking crew of many vessels, joint enterprises make it possible to create many jobs on the vessels and in the service companies that grow up around them. Such employment could provide local fishermen with decent (as regards working conditions and income) job opportunities, their only other option being a traditional job in a small-scale and often inefficient fishing sector, which can be damaging for local resources due to the scarcity or lack of systems for monitoring, conservation, marketing, etc. |
| --- | --- |

2.2.1.1.1

As well as maintaining high-quality European jobs among the senior and middle-ranking crew of many vessels, joint enterprises make it possible to create many jobs on the vessels and in the service companies that grow up around them. Such employment could provide local fishermen with decent (as regards working conditions and income) job opportunities, their only other option being a traditional job in a small-scale and often inefficient fishing sector, which can be damaging for local resources due to the scarcity or lack of systems for monitoring, conservation, marketing, etc.

| 2.2.1.2 | The creation of local wealth and the export of catches (whether locally processed or not) make it possible, in turn, to create international value chains in which the benefits are more fairly distributed; the gross domestic product and per capita income generated by the sector in the beneficiary country can be increased exponentially, gradually creating an industrialised fishing sector where there used only to be a coastal fishing sector with inadequate health standards and an unsound commercial base. |
| --- | --- |

2.2.1.2

The creation of local wealth and the export of catches (whether locally processed or not) make it possible, in turn, to create international value chains in which the benefits are more fairly distributed; the gross domestic product and per capita income generated by the sector in the beneficiary country can be increased exponentially, gradually creating an industrialised fishing sector where there used only to be a coastal fishing sector with inadequate health standards and an unsound commercial base.

| 2.2.1.3 | Joint enterprises have been required to prioritise the supply of European markets: this guarantees the existence and maintenance of investments in the fishing sector made by shipowners and industrial partners, Member States and the EU itself (through subsidies), and makes it possible to supply a Community market that is in deficit, as fish consumption is increasing as a result of recommendations by scientific and public bodies encouraging Europeans to eat a healthy and varied diet. Furthermore, this supply must strictly obey EU food laws. |
| --- | --- |

2.2.1.3

Joint enterprises have been required to prioritise the supply of European markets: this guarantees the existence and maintenance of investments in the fishing sector made by shipowners and industrial partners, Member States and the EU itself (through subsidies), and makes it possible to supply a Community market that is in deficit, as fish consumption is increasing as a result of recommendations by scientific and public bodies encouraging Europeans to eat a healthy and varied diet. Furthermore, this supply must strictly obey EU food laws.

| 2.2.1.4 | The activity of joint enterprises in fishing-dependent areas of the EU enables employment levels to be maintained in the sector, by keeping companies' central, technical and commercial offices operational in Europe; the supporting industry also generates jobs, both directly, when large vessels return to their home port in Europe for their four-yearly repairs, and indirectly, as chains of know-how are created with the local service industries mentioned above. |
| --- | --- |

2.2.1.4

The activity of joint enterprises in fishing-dependent areas of the EU enables employment levels to be maintained in the sector, by keeping companies' central, technical and commercial offices operational in Europe; the supporting industry also generates jobs, both directly, when large vessels return to their home port in Europe for their four-yearly repairs, and indirectly, as chains of know-how are created with the local service industries mentioned above.

| 2.2.1.5 | Joint enterprises enable the EU to obtain effective data for monitoring and tracking catches in third-country and international waters, by maintaining legal ties with fishing enterprises in their areas of origin. This enables the EU to exercise effective leadership within the competent Regional Fisheries Organisations created or governed under the auspices of the Food and Agriculture Organisation (FAO), the competent UN body in the field (14). This is because, for the purpose of financial control by the Commission, the Member States and the Court of Auditors, joint enterprises must submit half-yearly data on their catches to the Member States. |
| --- | --- |

2.2.1.5

Joint enterprises enable the EU to obtain effective data for monitoring and tracking catches in third-country and international waters, by maintaining legal ties with fishing enterprises in their areas of origin. This enables the EU to exercise effective leadership within the competent Regional Fisheries Organisations created or governed under the auspices of the Food and Agriculture Organisation (FAO), the competent UN body in the field (14). This is because, for the purpose of financial control by the Commission, the Member States and the Court of Auditors, joint enterprises must submit half-yearly data on their catches to the Member States.

| 2.2.1.6 | Joint enterprises also allow EU fishing interests to be maintained in international waters and fishing grounds, with standards guaranteed by EU regulatory requirements for responsible fishing, conservation and management of resources, safety on board vessels, monitoring, food chain safety, etc. This would prevent or minimise the harmful effects of foreign fishing fleets which do not promote the development of the third country's fisheries or industry, do not guarantee the standards governing fishing catches for the EU market, and do not enable resources to be monitored responsibly. |
| --- | --- |

2.2.1.6

Joint enterprises also allow EU fishing interests to be maintained in international waters and fishing grounds, with standards guaranteed by EU regulatory requirements for responsible fishing, conservation and management of resources, safety on board vessels, monitoring, food chain safety, etc. This would prevent or minimise the harmful effects of foreign fishing fleets which do not promote the development of the third country's fisheries or industry, do not guarantee the standards governing fishing catches for the EU market, and do not enable resources to be monitored responsibly.

| 2.2.1.7 | Lastly, joint enterprises enable the EU to make an effective, lasting contribution to the development of local fishing industries in countries with which fisheries agreements have been reached and where there are joint enterprises or national companies controlled by European shipowners. The fishing industry has generated profits both in third countries and in the EU overall, by enabling the continuous supply of marine products. |
| --- | --- |

2.2.1.7

Lastly, joint enterprises enable the EU to make an effective, lasting contribution to the development of local fishing industries in countries with which fisheries agreements have been reached and where there are joint enterprises or national companies controlled by European shipowners. The fishing industry has generated profits both in third countries and in the EU overall, by enabling the continuous supply of marine products.

| 2.2.2 | None of the above points was mentioned — not even indirectly — in point 3.9 of the abovementioned Green Paper on the International dimension of the CFP (15) or in point 5.8 on External relations (16). Joint enterprises in the fisheries sector are not mentioned at all as a valid means of implementing the principles of the fisheries policy proposed by the Green Paper, despite having been endorsed until 2002 by the extensive Community rules in the field, as amply illustrated in this opinion. |
| --- | --- |

2.2.2

None of the above points was mentioned — not even indirectly — in point 3.9 of the abovementioned Green Paper on the International dimension of the CFP (15) or in point 5.8 on External relations (16). Joint enterprises in the fisheries sector are not mentioned at all as a valid means of implementing the principles of the fisheries policy proposed by the Green Paper, despite having been endorsed until 2002 by the extensive Community rules in the field, as amply illustrated in this opinion.

| 2.2.3 | The quasi-total disappearance of joint enterprises from the new CFP is illustrated by the fact that the last report requested by the Commission and containing exhaustive data on the issue dates back to 2001 and does not specify vessels assigned to joint enterprises (17). Prior to this, there had been another specific report, the Study on joint enterprises in the context of structural aids in the fisheries sector, dated 16 June 2000. These studies indicate that there are currently 300 joint enterprises accounting for over 600 vessels in all. These enterprises have remained outside the framework of Community fisheries rules, in a legal vacuum. They simply become foreign companies in which EU partners are involved, with a commitment to prioritise EU supply and to transmit information regularly; their only protection is that provided by bilateral treaties for the mutual protection of investments between the source Member State and the beneficiary third country. |
| --- | --- |

2.2.3

The quasi-total disappearance of joint enterprises from the new CFP is illustrated by the fact that the last report requested by the Commission and containing exhaustive data on the issue dates back to 2001 and does not specify vessels assigned to joint enterprises (17). Prior to this, there had been another specific report, the Study on joint enterprises in the context of structural aids in the fisheries sector, dated 16 June 2000. These studies indicate that there are currently 300 joint enterprises accounting for over 600 vessels in all. These enterprises have remained outside the framework of Community fisheries rules, in a legal vacuum. They simply become foreign companies in which EU partners are involved, with a commitment to prioritise EU supply and to transmit information regularly; their only protection is that provided by bilateral treaties for the mutual protection of investments between the source Member State and the beneficiary third country.

2.3   Current state of play

| 2.3.1 | During the work which led to the definitive draft of the abovementioned Green Paper, two regulations were approved: Council Regulation (EC) No 1263/1999 of 21 June 1999 on the Financial Instrument for Fisheries Guidance (18) and Council Regulation (EC) No 2792/1999 of 17 December 1999 laying down the detailed rules and arrangements regarding Community structural assistance in the fisheries sector (19). These Regulations maintained the validity, within the FIFG, of joint enterprises in the fisheries sector until the end of their term, i.e. 31 December 2006. |
| --- | --- |

2.3.1

During the work which led to the definitive draft of the abovementioned Green Paper, two regulations were approved: Council Regulation (EC) No 1263/1999 of 21 June 1999 on the Financial Instrument for Fisheries Guidance (18) and Council Regulation (EC) No 2792/1999 of 17 December 1999 laying down the detailed rules and arrangements regarding Community structural assistance in the fisheries sector (19). These Regulations maintained the validity, within the FIFG, of joint enterprises in the fisheries sector until the end of their term, i.e. 31 December 2006.

| 2.3.2 | However, since 31 December 2004, joint enterprises have been practically eliminated from the EU's fisheries structural policy, by dint of Council Regulation (EC) No 2369/2002 of 20 December 2002 amending Regulation (EC) No 2792/1999 laying down the detailed rules and arrangements regarding Community structural assistance in the fisheries sector (20). Joint enterprises continue to fall under EU law inasmuch as they must fulfil the rules that are applicable when they are established, but they lack a specific medium- and long-term regulatory framework. |
| --- | --- |

2.3.2

However, since 31 December 2004, joint enterprises have been practically eliminated from the EU's fisheries structural policy, by dint of Council Regulation (EC) No 2369/2002 of 20 December 2002 amending Regulation (EC) No 2792/1999 laying down the detailed rules and arrangements regarding Community structural assistance in the fisheries sector (20). Joint enterprises continue to fall under EU law inasmuch as they must fulfil the rules that are applicable when they are established, but they lack a specific medium- and long-term regulatory framework.

| 2.3.3 | The justification for removing aid to joint enterprises in the fisheries sector and doing away with almost all legislative references to them is found in recital 5 of the abovementioned regulation, whereby the FIFG is required to concentrate on reducing capacity by scrapping vessels. The reduction of fishing capacity is only one of the many Community policy objectives for which joint enterprises have proved useful and could continue to be so, as explained below. |
| --- | --- |

2.3.3

The justification for removing aid to joint enterprises in the fisheries sector and doing away with almost all legislative references to them is found in recital 5 of the abovementioned regulation, whereby the FIFG is required to concentrate on reducing capacity by scrapping vessels. The reduction of fishing capacity is only one of the many Community policy objectives for which joint enterprises have proved useful and could continue to be so, as explained below.

3.   Specific comments

| 3.1 | Need to maintain a specific policy for joint enterprises in the fisheries sector in the context of the CFP |
| --- | --- |

3.1

Need to maintain a specific policy for joint enterprises in the fisheries sector in the context of the CFP

| 3.1.1 | Although they have been removed from current legislation, joint enterprises in the fisheries sector play an economic role that is particularly appropriate in a globalised economy, allowing for savings to be made on costs (which are usually lower in the destination country than the Member State), and promoting technology transfer, the creation and distribution of added value, access to resources and market supply. |
| --- | --- |

3.1.1

Although they have been removed from current legislation, joint enterprises in the fisheries sector play an economic role that is particularly appropriate in a globalised economy, allowing for savings to be made on costs (which are usually lower in the destination country than the Member State), and promoting technology transfer, the creation and distribution of added value, access to resources and market supply.

| 3.1.2 | Furthermore, joint enterprises make it possible to partially maintain sea- and land-based employment in fishing-dependent areas of the EU; they also help generate new, more skilled jobs in the third countries in which they operate, including the training and up-skilling of workers in the destination country. |
| --- | --- |

3.1.2

Furthermore, joint enterprises make it possible to partially maintain sea- and land-based employment in fishing-dependent areas of the EU; they also help generate new, more skilled jobs in the third countries in which they operate, including the training and up-skilling of workers in the destination country.

| 3.1.3 | Joint enterprises were incorporated into Community law within the fisheries structural policy in 1990 (i.e. fifteen years ago), and have proven to be a useful instrument throughout this period. The unnecessary removal of these enterprises from the new CFP sponsored by the Commission and from the legislation in force since 1 January 2005, will lead to the loss of Community support for a valid instrument of economic cooperation between the EU and third — often developing — countries, and could constitute a breach of the principle of trust that should govern relations between European operators and the EU institutions. |
| --- | --- |

3.1.3

Joint enterprises were incorporated into Community law within the fisheries structural policy in 1990 (i.e. fifteen years ago), and have proven to be a useful instrument throughout this period. The unnecessary removal of these enterprises from the new CFP sponsored by the Commission and from the legislation in force since 1 January 2005, will lead to the loss of Community support for a valid instrument of economic cooperation between the EU and third — often developing — countries, and could constitute a breach of the principle of trust that should govern relations between European operators and the EU institutions.

| 3.1.4 | Joint enterprises could and should be considered as a specific aspect of multilateral or bilateral cooperation treaties with third countries; concrete rules should be laid down that take their particular features into consideration, from the point of view of both fishing per se and the promotion and protection of European external investments, customs, labour, tax, etc. |
| --- | --- |

3.1.4

Joint enterprises could and should be considered as a specific aspect of multilateral or bilateral cooperation treaties with third countries; concrete rules should be laid down that take their particular features into consideration, from the point of view of both fishing per se and the promotion and protection of European external investments, customs, labour, tax, etc.

| 3.1.5 | Although joint enterprises could, under the current legislation, fall within the scope of ‘partnership agreements’, no significant practical results have hitherto been observed. There is therefore a need for a regulation that coordinates the disparate responsibilities within the Commission (Directorates-General for Development, Cooperation and Fisheries), and clarifies how employers and other stakeholders should act within the framework of such agreements or other instruments, so that these practical results can be achieved. |
| --- | --- |

3.1.5

Although joint enterprises could, under the current legislation, fall within the scope of ‘partnership agreements’, no significant practical results have hitherto been observed. There is therefore a need for a regulation that coordinates the disparate responsibilities within the Commission (Directorates-General for Development, Cooperation and Fisheries), and clarifies how employers and other stakeholders should act within the framework of such agreements or other instruments, so that these practical results can be achieved.

4.   Conclusion

| 4.1 | The Committee recommends that, as part of the work underway to revise the Common Fisheries Policy and in line with the Council's conclusions of 19 July 2004 (21), joint enterprises, which are no longer a tool for the structural regulation of fleet capacities and an alternative to scrapping vessels, should be defined as a means to supply markets and take integrated sectoral action, which is available to the EU in the framework of its own powers and under its global and regional agreements and bilateral treaties, so as to implement EU fisheries policies properly, in line with the principles of the FAO and the WTO, taking due care to ensure that there is no increase in fishing capacity that could lead to overfishing. |
| --- | --- |

4.1

The Committee recommends that, as part of the work underway to revise the Common Fisheries Policy and in line with the Council's conclusions of 19 July 2004 (21), joint enterprises, which are no longer a tool for the structural regulation of fleet capacities and an alternative to scrapping vessels, should be defined as a means to supply markets and take integrated sectoral action, which is available to the EU in the framework of its own powers and under its global and regional agreements and bilateral treaties, so as to implement EU fisheries policies properly, in line with the principles of the FAO and the WTO, taking due care to ensure that there is no increase in fishing capacity that could lead to overfishing.

| 4.2 | The Committee believes that: |
| --- | --- |

4.2

The Committee believes that:

| 4.2.1 | The Commission should carry out a detailed, up-to-date assessment of the current situation and potential of joint enterprises in the fisheries sector, and should disclose its conclusions to the other EU institutions and the sectors concerned. |
| --- | --- |

4.2.1

The Commission should carry out a detailed, up-to-date assessment of the current situation and potential of joint enterprises in the fisheries sector, and should disclose its conclusions to the other EU institutions and the sectors concerned.

| 4.2.2 | Current Community law should include rules and mechanisms that will give legal security to joint enterprises within a specific stable, long-term framework for action, in the context of bilateral or multilateral agreements with non-EU countries, taking into account the particular nature of the activity and its benefits in terms of management of fisheries resources, market supply, job creation in fishing-dependent areas, creation of added value, cooperation and international trade. |
| --- | --- |

4.2.2

Current Community law should include rules and mechanisms that will give legal security to joint enterprises within a specific stable, long-term framework for action, in the context of bilateral or multilateral agreements with non-EU countries, taking into account the particular nature of the activity and its benefits in terms of management of fisheries resources, market supply, job creation in fishing-dependent areas, creation of added value, cooperation and international trade.

Brussels, 14 December 2005.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  Article 21(a) of Regulation 3944/90.

1

(2)  OJ C 85 of 8.4.2003.

2

(3)  OJ C 267 of 27.10.2005 (points 3.5.1.1.2.1. and 5.5(2)).

3

(4)  COM(2004) 497 final -2004/0169 (CNS).

4

(5)  Study on joint enterprises in the context of structural aids in the fisheries sector, COFREPECHE 16.6.2000 (http://europa.eu.int/comm/fisheries/doc_et_publ/liste_publi/bilansm.pdf).

5

(6)  Commission Regulation (EEC) No 1956/91 of 21 June 1991 laying down detailed rules for the application of Council Regulation (EEC) No 4028/86 as regards measures to encourage the creation of joint enterprises –
  Official Journal L 181 of 8.7.1991, pp 1- 28.

6

Official Journal L 181 of 8.7.1991, pp 1- 28.

(7)  OJ L 193, 31.07.93, p. 1.

7

(8)  OJ L 346, 31.12.93, p. 1.

8

(9)  OJ L 312, 20.11.98, p. 19.

9

(10)  OJ L 337, 30.12.99, p. 10.

10

(11)  Council Regulation 2792/1999 of 17 December 1999, Article.8.1(2).

11

(12)  COM(2001) 135 final of 20.03.2001.

12

(13)  See Communication from the Commission on an integrated framework for fisheries partnership agreements with third countries, COM(2002) 637 final, 23.12.2002, page 7 and footnote no 15.

13

(14)  http://www.fao.org/fi/default.asp

14

(15)  p. 19.

15

(16)  pp. 38-42.

16

(17)  ‘European Distant Water Fishing Fleet’ some principles and some data, April 2001, available in French and English on the website of the Commission's Directorate-General for Fisheries.

17

(18)  OJ L 161 of 26.06.99, p. 1.

18

(19)  OJ L 337 of 30.12.99, p. 10.

19

(20)  OJ L 258, 31.12.02, p. 49.

20

(21)  See document 11234/2/04 Rev 2 (Presse 221) available at http://www.consilium.eu.int./

21

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| 17.3.2006 | EN | Official Journal of the European Union | C 65/50 |
| --- | --- | --- | --- |

17.3.2006

EN

Official Journal of the European Union

C 65/50

---

Opinion of the European Economic and Social Committee on the ‘Proposal for a Council Regulation determining the Community scale for the classification of carcases of adult bovine animals’

(COM(2005) 402 final — 2005/0171 CNS)

(2006/C 65/10)

On 7 October 2005 the Council decided to consult the European Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on the abovementioned proposal.

The Section for Agriculture, Rural Development and the Environment, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 9 November 2005. The rapporteur was Frank Allen.

At its 422nd plenary session, held on 14 and 15 December 2005 (meeting of 14 December), the European Economic and Social Committee adopted the following opinion by 127 votes with 5 abstentions.

1.   Introduction

| 1.1 | The purpose of this proposal is to undertake a codification of Council Regulation (EEC) No 1208/81 of 28 April 1981 determining the Community scale for the classification of carcases of adult bovine animals (1). The new Regulation will supersede the various acts incorporated in it (2); this proposal fully preserves the content of the acts being codified and hence does no more than bringing them together with only such formal amendments as are required by the codification exercise itself. |
| --- | --- |

1.1

The purpose of this proposal is to undertake a codification of Council Regulation (EEC) No 1208/81 of 28 April 1981 determining the Community scale for the classification of carcases of adult bovine animals (1). The new Regulation will supersede the various acts incorporated in it (2); this proposal fully preserves the content of the acts being codified and hence does no more than bringing them together with only such formal amendments as are required by the codification exercise itself.

2.   General comments

| 2.1 | The Committee regards it as very useful to have all the texts integrated into one Regulation. In the context of a People's Europe, the Committee, like the Commission, attaches great importance to simplifying and clarifying Community law so as to make it clearer and more accessible to ordinary citizens, thus giving them new opportunities and the chance to make use of the specific rights it gives them. |
| --- | --- |

2.1

The Committee regards it as very useful to have all the texts integrated into one Regulation. In the context of a People's Europe, the Committee, like the Commission, attaches great importance to simplifying and clarifying Community law so as to make it clearer and more accessible to ordinary citizens, thus giving them new opportunities and the chance to make use of the specific rights it gives them.

| 2.2 | It has been ensured that this compilation of provisions contains no changes of substance and serves only the purpose of presenting Community law in a clear and transparent way. The Committee expresses its total support for this objective and, in the light of these guarantees, welcomes the proposal. |
| --- | --- |

2.2

It has been ensured that this compilation of provisions contains no changes of substance and serves only the purpose of presenting Community law in a clear and transparent way. The Committee expresses its total support for this objective and, in the light of these guarantees, welcomes the proposal.

Brussels, 14 December 2005.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  Carried out pursuant to the Communication from the Commission to the European Parliament and the Council – Codification of the Acquis communautaire, COM(2001) 645 final.

1

(2)  See Annex III to this proposal.

2

---

| 17.3.2006 | EN | Official Journal of the European Union | C 65/51 |
| --- | --- | --- | --- |

17.3.2006

EN

Official Journal of the European Union

C 65/51

---

Opinion of the European Economic and Social Committee on ‘The role of technology parks in the industrial transformation of the new Member States’

(2006/C 65/11)

On 10 February 2005, the European Economic and Social Committee decided to draw up an opinion, under Rule 29(2) of its Rules of Procedure, on: The role of technology parks in the industrial transformation of the new Member States.

The Consultative Commission on Industrial Change, which was responsible for the Committee's work on the subject, adopted its opinion on 23 November 2005. The rapporteur was Mr Tóth and the co-rapporteur was Mr Kubíček.

At its 422nd plenary session of 14 and 15 December 2005 (meeting of 14 December), the European Economic and Social Committee adopted the following opinion by 127 votes to none with six abstentions:

1.   Introduction

| 1.1 | At its March 2005 session, the Council of the European Union relaunched the Lisbon strategy by refocusing on growth and jobs. |
| --- | --- |

1.1

At its March 2005 session, the Council of the European Union relaunched the Lisbon strategy by refocusing on growth and jobs.

| 1.2 | In conjunction with the integrated guidelines, the Council, in its June 2005 Recommendation 10667/05, set out proposals for the Broad Economic Policy Guidelines (BEPGs) for the 2005-2008 period. |
| --- | --- |

1.2

In conjunction with the integrated guidelines, the Council, in its June 2005 Recommendation 10667/05, set out proposals for the Broad Economic Policy Guidelines (BEPGs) for the 2005-2008 period.

| 1.3 | The eighth of these guidelines calls for facilitation of all forms of innovation in the Member States. The EESC would point out that industrial parks, which are the subject of the present opinion, meet all the Council's criteria for instruments to facilitate innovation, and that parks can be considered as ‘innovation poles’, which fall under the second category of instruments in the Council list; as they fulfil the requirement to bring together universities, other research institutions and enterprises in all Member States, they integrate regional and local levels, and thus help to bridge the technology gap between regions. |
| --- | --- |

1.3

The eighth of these guidelines calls for facilitation of all forms of innovation in the Member States. The EESC would point out that industrial parks, which are the subject of the present opinion, meet all the Council's criteria for instruments to facilitate innovation, and that parks can be considered as ‘innovation poles’, which fall under the second category of instruments in the Council list; as they fulfil the requirement to bring together universities, other research institutions and enterprises in all Member States, they integrate regional and local levels, and thus help to bridge the technology gap between regions.

| 1.4 | The EESC would also point out that industrial parks already make a significant contribution to achieving the objectives of Guideline 10 given that their constituent elements form part of the ‘industrial fabric’ which the Council deems necessary for Europe, and that their exceptional competitiveness serves to strengthen the EU's industrial base. |
| --- | --- |

1.4

The EESC would also point out that industrial parks already make a significant contribution to achieving the objectives of Guideline 10 given that their constituent elements form part of the ‘industrial fabric’ which the Council deems necessary for Europe, and that their exceptional competitiveness serves to strengthen the EU's industrial base.

| 1.5 | The industrial parks situated in the new Member States are structured on similar lines to those in the fifteen ‘old’ Member States and in many other parts of the world. In legislative texts and terminology, such organisations are variously designated; industrial park, science park, technology park, technopole, research park, business park, innovation centre and technology incubator are some of the terms most frequently used. However, the basic idea remains the same: facilitating interaction between science, technology and economic development and creating synergies through cooperation between business and research institutions, thus facilitating market access. In addition, parks operate by providing high-quality, specialised services, with particular emphasis on business incubation, spin-off activities and networking. |
| --- | --- |

1.5

The industrial parks situated in the new Member States are structured on similar lines to those in the fifteen ‘old’ Member States and in many other parts of the world. In legislative texts and terminology, such organisations are variously designated; industrial park, science park, technology park, technopole, research park, business park, innovation centre and technology incubator are some of the terms most frequently used. However, the basic idea remains the same: facilitating interaction between science, technology and economic development and creating synergies through cooperation between business and research institutions, thus facilitating market access. In addition, parks operate by providing high-quality, specialised services, with particular emphasis on business incubation, spin-off activities and networking.

| 1.6 | Legislation on industrial and technology parks has been adopted by the two future Member States which have begun accession negotiations, Bulgaria and Romania. |
| --- | --- |

1.6

Legislation on industrial and technology parks has been adopted by the two future Member States which have begun accession negotiations, Bulgaria and Romania.

| 1.7 | Industrial parks provide a comprehensive framework and instruments to facilitate, stimulate and develop innovation and regional development. Their activities usually include business incubators, promotion of technology transfer and ‘business angel’ programmes. Industrial parks offer excellent opportunities to prepare and execute venture capital transactions. They make a substantial contribution to the operation, development and implementation of EU programmes with the same or similar objectives. They are effective partners and can also function in networks |
| --- | --- |

1.7

Industrial parks provide a comprehensive framework and instruments to facilitate, stimulate and develop innovation and regional development. Their activities usually include business incubators, promotion of technology transfer and ‘business angel’ programmes. Industrial parks offer excellent opportunities to prepare and execute venture capital transactions. They make a substantial contribution to the operation, development and implementation of EU programmes with the same or similar objectives. They are effective partners and can also function in networks

| 1.8 | Up till now, establishment and development of industrial parks in the ten new Member States have generally involved the practical application of environmental principles. In the case of new parks, strict environmental standards are in place from the beginning as a result of harmonisation to comply with accession conditions. In the case of parks set up in response to reorganisation and industrial change, the start of park operations is often the first step towards environmental solutions. |
| --- | --- |

1.8

Up till now, establishment and development of industrial parks in the ten new Member States have generally involved the practical application of environmental principles. In the case of new parks, strict environmental standards are in place from the beginning as a result of harmonisation to comply with accession conditions. In the case of parks set up in response to reorganisation and industrial change, the start of park operations is often the first step towards environmental solutions.

| 1.9 | The phenomenon of parks reflects a combination of various development trends. These include a regional (local) as a response to globalisation, a desire to overcome various cultural, national and ethnic problems, and the pressing need to bridge the wide gaps between divergent levels of development. |
| --- | --- |

1.9

The phenomenon of parks reflects a combination of various development trends. These include a regional (local) as a response to globalisation, a desire to overcome various cultural, national and ethnic problems, and the pressing need to bridge the wide gaps between divergent levels of development.

| 1.10 | Park-related solutions have proved their worth in boosting employment and creating many new jobs (over 140 000 in Hungary since 1997). Other benefits include attracting businesses and preventing de-industrialisation (since 1997, over 2 500 companies have set up in Hungarian industrial parks). Jobs which have been created in this way tend to be connected with higher-level technologies and require greater know-how in order to meet the challenges presented by restructuring. |
| --- | --- |

1.10

Park-related solutions have proved their worth in boosting employment and creating many new jobs (over 140 000 in Hungary since 1997). Other benefits include attracting businesses and preventing de-industrialisation (since 1997, over 2 500 companies have set up in Hungarian industrial parks). Jobs which have been created in this way tend to be connected with higher-level technologies and require greater know-how in order to meet the challenges presented by restructuring.

| 1.11 | In the more developed EU countries, the fifteen ‘old’ EU Member States, institutional, legal and financial systems for regionalisation have been built up over decades, together with structures and designations of industrial development appropriate to changing conditions as a result of economic growth and evolving aid arrangements at European and national levels. In the countries which joined the EU in 2004, attention has focused on efforts to overcome significant backwardness in these areas and catching up with the rest of the EU. Industrial parks have played a prominent role in these efforts, given that they enhance competitiveness, while helping to overcome unemployment and the gap between divergent levels of regional development. Characteristic of the situation is a certain duality of economic and social structures existing at the time of accession: long-established administrative, institutional and financial elements are still present, although to a large extent these are losing ground, whereas newly developing structures of administration and governance are playing an increasingly important role.
  Industrial parks have been set up in the accession countries as an expression of new aspirations for economic and industrial policy as well as regional development. |
| --- | --- |

1.11

In the more developed EU countries, the fifteen ‘old’ EU Member States, institutional, legal and financial systems for regionalisation have been built up over decades, together with structures and designations of industrial development appropriate to changing conditions as a result of economic growth and evolving aid arrangements at European and national levels. In the countries which joined the EU in 2004, attention has focused on efforts to overcome significant backwardness in these areas and catching up with the rest of the EU. Industrial parks have played a prominent role in these efforts, given that they enhance competitiveness, while helping to overcome unemployment and the gap between divergent levels of regional development. Characteristic of the situation is a certain duality of economic and social structures existing at the time of accession: long-established administrative, institutional and financial elements are still present, although to a large extent these are losing ground, whereas newly developing structures of administration and governance are playing an increasingly important role.

Industrial parks have been set up in the accession countries as an expression of new aspirations for economic and industrial policy as well as regional development.

| 1.12 | This own-initiative opinion seeks to discuss the potential contribution which parks can offer and how they stand in relation to each other, from the perceptive of the tasks facing the EU, given that they promote activities which are conducive to economic and social cohesion in the post-accession context, and thus merit particularly close attention in connection with industrial change. It should be emphasised that it was the emergence of an internal regulatory order in the European Union which boosted the role of industrial parks in EU countries, and many of the new Member States and accession countries already responded to this shift in emphasis many years ago. At the same time, in some cases there was a lack of economic strategies capable of addressing the complex nature of opportunities offered by industrial parks and of providing leadership which took the needs of international integration into account. |
| --- | --- |

1.12

This own-initiative opinion seeks to discuss the potential contribution which parks can offer and how they stand in relation to each other, from the perceptive of the tasks facing the EU, given that they promote activities which are conducive to economic and social cohesion in the post-accession context, and thus merit particularly close attention in connection with industrial change. It should be emphasised that it was the emergence of an internal regulatory order in the European Union which boosted the role of industrial parks in EU countries, and many of the new Member States and accession countries already responded to this shift in emphasis many years ago. At the same time, in some cases there was a lack of economic strategies capable of addressing the complex nature of opportunities offered by industrial parks and of providing leadership which took the needs of international integration into account.

| 1.13 | In European Commission document IP/05/1252 the Commissioner for enterprise and industry, together with the Commissioner for science and research, pointed out that innovation and research are at the heart of business. In this respect, innovation poles as well as research-driven and industrial clusters are of relevance. Point 3.2 of the accompanying action plan calls for promotion of such organisations and for Member States to make full use of Structural Fund resources (MEMO/05/366). |
| --- | --- |

1.13

In European Commission document IP/05/1252 the Commissioner for enterprise and industry, together with the Commissioner for science and research, pointed out that innovation and research are at the heart of business. In this respect, innovation poles as well as research-driven and industrial clusters are of relevance. Point 3.2 of the accompanying action plan calls for promotion of such organisations and for Member States to make full use of Structural Fund resources (MEMO/05/366).

| 1.14 | Industrial parks, technology parks, science parks and other organisations referred to by similar terms function as innovation poles and thus contribute to achieving the priority objectives which have been set for the current phase of the Lisbon process and for the 2005-2008 BEPGs. The aim of the European Economic and Social Committee in drawing up this own-initiative opinion is to promote the development of such organisations in the fifteen ‘old’ EU Member States and the ten ‘new’ ones and to encourage co-operation between them. In addition, it aims to enhance the accessibility of aid from the European Commission and other EU institutions to industrial, technology, science and other similar parks in all Member States. |
| --- | --- |

1.14

Industrial parks, technology parks, science parks and other organisations referred to by similar terms function as innovation poles and thus contribute to achieving the priority objectives which have been set for the current phase of the Lisbon process and for the 2005-2008 BEPGs. The aim of the European Economic and Social Committee in drawing up this own-initiative opinion is to promote the development of such organisations in the fifteen ‘old’ EU Member States and the ten ‘new’ ones and to encourage co-operation between them. In addition, it aims to enhance the accessibility of aid from the European Commission and other EU institutions to industrial, technology, science and other similar parks in all Member States.

2.   Parks as innovation poles: types of park, and international trends

2.1   Types of park

Based on international experience, and also on the preceding remarks, it can be concluded that no two industrial parks are alike. It is also natural for a particular park to undergo constant change over time. The networks which are developing are a clear demonstration of this diversity of parks and their adaptability to changing needs. With the above remarks in mind, in the following analysis the activities of ‘innovation poles’ are understood not only in the stricter sense relating to innovation in industry, technology, science or other areas, but as encompassing a spectrum of activities generating added value.

This approach ties in with the European Commission's definition of innovation and competitiveness poles as close cooperative association between enterprises, training centres and public- or private-sector research institutes within a defined geographical area. Such poles run innovation-centred joint projects generating various synergies between local players. Such cooperation is concentrated in particular fields of technological or scientific activity and is intended to create a critical mass enabling competitiveness and international visibility to be achieved.

| 2.2 | Depending on their function (tasks), parks can be categorised as science parks, technology parks, innovation centres and business parks.
  Technopolises, technology poles, technological districts, entrepreneurial zones and meta-districts can be considered as more comprehensive organisational structures.
  Depending on how they are set up, two basic categories of parks can be clearly distinguished: green-field parks and reconstruction-type parks. |
| --- | --- |

2.2

Depending on their function (tasks), parks can be categorised as science parks, technology parks, innovation centres and business parks.

Technopolises, technology poles, technological districts, entrepreneurial zones and meta-districts can be considered as more comprehensive organisational structures.

Depending on how they are set up, two basic categories of parks can be clearly distinguished: green-field parks and reconstruction-type parks.

| 2.3 | In a process of continuous change, parks pass through various stages of development. There is a tendency to move away from monumental industrial infrastructures to more sophisticated production facilities suitable for products from the higher end of the value chain, with increasing emphasis on ICT and a broad spectrum of innovative services provided by park operators to companies based in the park. |
| --- | --- |

2.3

In a process of continuous change, parks pass through various stages of development. There is a tendency to move away from monumental industrial infrastructures to more sophisticated production facilities suitable for products from the higher end of the value chain, with increasing emphasis on ICT and a broad spectrum of innovative services provided by park operators to companies based in the park.

3.   A review of the situation in the new Member States

| 3.1 | In the ten countries which joined the European Union on 1 May 2004, it can be observed that industrial parks generally match the types described in point 2.1. In Cyprus there are several so-called ‘Enterprise Incubators’, co-financed by the government. These are private organisations dealing with specific projects. |
| --- | --- |

3.1

In the ten countries which joined the European Union on 1 May 2004, it can be observed that industrial parks generally match the types described in point 2.1. In Cyprus there are several so-called ‘Enterprise Incubators’, co-financed by the government. These are private organisations dealing with specific projects.

| 3.2 | In the Czech Republic, 82 industrial zones were set up through CzechInvest, the government agency to promote investment, in the framework of the governments programme to support the development of industrial zones. In 2001 further sub-programmes on Regenerating industrial zones, Building and regenerating leasable properties, and Accreditation of industrial zones were added. |
| --- | --- |

3.2

In the Czech Republic, 82 industrial zones were set up through CzechInvest, the government agency to promote investment, in the framework of the governments programme to support the development of industrial zones. In 2001 further sub-programmes on Regenerating industrial zones, Building and regenerating leasable properties, and Accreditation of industrial zones were added.

| 3.3 | There are several types of industrial park in Estonia, denoted and defined in various ways. Some of them have been set up with the support of local/regional authorities and other organisations; primarily concerned with research and development, they operate in cooperation with major universities. There are currently two such parks, in Tartu and in Tallinn. Industrial parks set up by private initiatives are profit-making companies, which are mainly active in logistics, services, commerce and other industrial sectors. |
| --- | --- |

3.3

There are several types of industrial park in Estonia, denoted and defined in various ways. Some of them have been set up with the support of local/regional authorities and other organisations; primarily concerned with research and development, they operate in cooperation with major universities. There are currently two such parks, in Tartu and in Tallinn. Industrial parks set up by private initiatives are profit-making companies, which are mainly active in logistics, services, commerce and other industrial sectors.

| 3.4 | Most ‘industrial parks’ in Poland were set up over the past few years. At present, their economic impact is negligible, primarily because the main channels for investment, and foreign investment in particular, are the 14 Special Economic Zones (SEZ). These zones were set up by government acts in 1995-97 for a period of 20 years in industrially underdeveloped regions or regions in need of industrial restructuring, as part of support for regional development. Initially they offered investors 100 % exemption from corporate tax for the first ten years, and 50 % over the next ten years, together with full exemption from property tax. On 1 January 2001, these incentives were brought into line with EU legislation. Given that the special status of SEZs will expire by December 2017 at the latest, the quantity, role and land area of industrial parks is likely to grow. |
| --- | --- |

3.4

Most ‘industrial parks’ in Poland were set up over the past few years. At present, their economic impact is negligible, primarily because the main channels for investment, and foreign investment in particular, are the 14 Special Economic Zones (SEZ). These zones were set up by government acts in 1995-97 for a period of 20 years in industrially underdeveloped regions or regions in need of industrial restructuring, as part of support for regional development. Initially they offered investors 100 % exemption from corporate tax for the first ten years, and 50 % over the next ten years, together with full exemption from property tax. On 1 January 2001, these incentives were brought into line with EU legislation. Given that the special status of SEZs will expire by December 2017 at the latest, the quantity, role and land area of industrial parks is likely to grow.

| 3.5 | In Latvia parks are referred to as ‘business parks’, and they attract companies by means of favourable infrastructure and administrative conditions. The Latvian Innovation Act provides for a national research and development programme. |
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3.5

In Latvia parks are referred to as ‘business parks’, and they attract companies by means of favourable infrastructure and administrative conditions. The Latvian Innovation Act provides for a national research and development programme.

| 3.6 | In Lithuania, decisive government efforts aimed at stimulating development of labour-intensive, relatively high-value-added industries (automotive electronics, electronics) and knowledge-based industries and services (biotechnology, IT, laser technology) have significantly contributed to industrial restructuring. The programme, launched in the late 1990s, to build ‘industrial parks’ with proper infrastructure near cities, was designed to develop Lithuania's economy, focusing as it did on industrial development in the immediate vicinity of urban centres, in view of the availability of skilled labour there. |
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3.6

In Lithuania, decisive government efforts aimed at stimulating development of labour-intensive, relatively high-value-added industries (automotive electronics, electronics) and knowledge-based industries and services (biotechnology, IT, laser technology) have significantly contributed to industrial restructuring. The programme, launched in the late 1990s, to build ‘industrial parks’ with proper infrastructure near cities, was designed to develop Lithuania's economy, focusing as it did on industrial development in the immediate vicinity of urban centres, in view of the availability of skilled labour there.

| 3.7 | In Hungary, the government has been operating a system to develop industrial parks since 1997. Individual parks submit their long-term development plans for assessment by the Ministry of Economic Affairs, and if they are of a sufficiently high standard, they are awarded the title of industrial park. The objectives of industrial parks are to enhance competitiveness, to create jobs, and to put in place the conditions for environmentally friendly industrial activity, as well as logistical and other services which comply with EU standards. There are approximately 2 500 companies, both multinationals and Hungarian small and medium enterprises, with over 140 000 employees, in Hungarian industrial parks. |
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3.7

In Hungary, the government has been operating a system to develop industrial parks since 1997. Individual parks submit their long-term development plans for assessment by the Ministry of Economic Affairs, and if they are of a sufficiently high standard, they are awarded the title of industrial park. The objectives of industrial parks are to enhance competitiveness, to create jobs, and to put in place the conditions for environmentally friendly industrial activity, as well as logistical and other services which comply with EU standards. There are approximately 2 500 companies, both multinationals and Hungarian small and medium enterprises, with over 140 000 employees, in Hungarian industrial parks.

| 3.8 | In Malta, economic statistics from recent years show that industrial manufacturing makes a relatively substantial contribution to the economy. Malta Enterprise, a company whose objective is to promote investment, has set up a Business Incubation Centre to support pioneering projects in fields such as IT, telecommunications, mechanical and electrical engineering design, industrial design, renewable energy sources and biotechnology. The Incubation Centre provides facilities for investment or financing, together with a wide range of infrastructure services, to companies operating in the above sectors. |
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3.8

In Malta, economic statistics from recent years show that industrial manufacturing makes a relatively substantial contribution to the economy. Malta Enterprise, a company whose objective is to promote investment, has set up a Business Incubation Centre to support pioneering projects in fields such as IT, telecommunications, mechanical and electrical engineering design, industrial design, renewable energy sources and biotechnology. The Incubation Centre provides facilities for investment or financing, together with a wide range of infrastructure services, to companies operating in the above sectors.

| 3.9 | Support for industrial parks in Slovakia is regulated by Act No 193 on support for industrial parks, adopted in 2001 and amended in 2003 and 2004. This act defines an industrial park as an area designated in the spatial plan in which one or more enterprises is engaged in industrial manufacture. Local and regional authorities can set up industrial parks on land owned by them; the Act also provides for joint establishment of industrial parks on the basis of a contract between two or more authorities. |
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3.9

Support for industrial parks in Slovakia is regulated by Act No 193 on support for industrial parks, adopted in 2001 and amended in 2003 and 2004. This act defines an industrial park as an area designated in the spatial plan in which one or more enterprises is engaged in industrial manufacture. Local and regional authorities can set up industrial parks on land owned by them; the Act also provides for joint establishment of industrial parks on the basis of a contract between two or more authorities.

| 3.10 | In Slovenia, parks are referred to as ‘technology parks’. Their purpose is to act as a catalyst for business ideas making use of state-of-the-art technology and a high degree of scientific know-how. In addition, they put in place the physical and intellectual infrastructure for such initiatives with particular attention to the needs of small and medium enterprises, and liaise between businesses and institutions of higher education. The Ministry of Economic Affairs defines a technological park as a legal entity which assists in the execution of projects, in contrast to incubators, which are also legal entities, but only create the starting conditions for projects. |
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3.10

In Slovenia, parks are referred to as ‘technology parks’. Their purpose is to act as a catalyst for business ideas making use of state-of-the-art technology and a high degree of scientific know-how. In addition, they put in place the physical and intellectual infrastructure for such initiatives with particular attention to the needs of small and medium enterprises, and liaise between businesses and institutions of higher education. The Ministry of Economic Affairs defines a technological park as a legal entity which assists in the execution of projects, in contrast to incubators, which are also legal entities, but only create the starting conditions for projects.

4.   Strategic aims and models

| 4.1 | Parks — however much they differ from one another — eventually tend to form networks, whose activities are embedded in the economic, industrial and innovation policies adopted by the government of a particular country in pursuing its goals. Based on an analysis of government priorities, policies can be categorised as mission-oriented — i.e. thematic, with an emphasis on government resources — or diffusion-oriented — focusing on results and synergies, or as a combination of both. |
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4.1

Parks — however much they differ from one another — eventually tend to form networks, whose activities are embedded in the economic, industrial and innovation policies adopted by the government of a particular country in pursuing its goals. Based on an analysis of government priorities, policies can be categorised as mission-oriented — i.e. thematic, with an emphasis on government resources — or diffusion-oriented — focusing on results and synergies, or as a combination of both.

| 4.2 | The two models cannot always be sharply distinguished from one another on the basis of global objectives, given that, to take one example, promoting high technology in one region by means of industrial parks not only benefits that region, but also helps to propagate innovation in general. The difference is one of emphasis. |
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4.2

The two models cannot always be sharply distinguished from one another on the basis of global objectives, given that, to take one example, promoting high technology in one region by means of industrial parks not only benefits that region, but also helps to propagate innovation in general. The difference is one of emphasis.

5.   The Lisbon strategy and industrial parks

| 5.1 | The Lisbon Strategy identifies promotion of the dissemination of innovation and technology, as well as the application and commercial exploitation of R&D results as priority tasks, in the interests of growth, employment and sustainability. Industrial parks and the accompanying organisational structures are playing an increasingly important role in helping to fulfil the organisational, financial and legal conditions for this to happen. |
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5.1

The Lisbon Strategy identifies promotion of the dissemination of innovation and technology, as well as the application and commercial exploitation of R&D results as priority tasks, in the interests of growth, employment and sustainability. Industrial parks and the accompanying organisational structures are playing an increasingly important role in helping to fulfil the organisational, financial and legal conditions for this to happen.

| 5.2 | Industrial parks have a key role to play in promoting innovation. For this reason, it is not enough for industrial parks to form networks on the basis of purely industrial or agricultural considerations; it is becoming increasingly important to mobilise the intellectual resources of universities, if economic objectives are to be achieved. It will only be possible to enhance competitiveness, make the economy more flexible and tap the benefits of human resources by mobilising intellectual resources and promoting innovation. |
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5.2

Industrial parks have a key role to play in promoting innovation. For this reason, it is not enough for industrial parks to form networks on the basis of purely industrial or agricultural considerations; it is becoming increasingly important to mobilise the intellectual resources of universities, if economic objectives are to be achieved. It will only be possible to enhance competitiveness, make the economy more flexible and tap the benefits of human resources by mobilising intellectual resources and promoting innovation.

6.   Knowledge transfer and innovation

6.1   Innovation centres and transfer agencies

| 6.1.1 | Rather than operating in one specific area, these entities act as a bridge between science and society by providing services (on either a commercial or non-profit basis) to enterprises in a given region or country. The types discussed here can be distinguished primarily according to whether they function more as agencies providing services (donors) or as (recipient) enterprises. Information centres and transfer agencies act as mediators by encouraging and helping companies to make use of research results. By contrast, organisations providing R&D services include research institutes, which in some cases are combined with recipient enterprises into a single unit. |
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6.1.1

Rather than operating in one specific area, these entities act as a bridge between science and society by providing services (on either a commercial or non-profit basis) to enterprises in a given region or country. The types discussed here can be distinguished primarily according to whether they function more as agencies providing services (donors) or as (recipient) enterprises. Information centres and transfer agencies act as mediators by encouraging and helping companies to make use of research results. By contrast, organisations providing R&D services include research institutes, which in some cases are combined with recipient enterprises into a single unit.

| 6.1.2 | The main services provided by innovation centres and transfer agencies are as follows: providing consultancy, enabling technology transfer, running a business information database, organising business meetings and trade fairs, recruiting specialists, servicing infrastructure used for experiments, providing support for spin-offs, linking up with business angels and networking. |
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6.1.2

The main services provided by innovation centres and transfer agencies are as follows: providing consultancy, enabling technology transfer, running a business information database, organising business meetings and trade fairs, recruiting specialists, servicing infrastructure used for experiments, providing support for spin-offs, linking up with business angels and networking.

| 6.1.3 | These organisations mainly provide business consultancy services. A mediating role is played, for example, by innovation centres in the Netherlands and the network of R&D attachés in Norway. By means of the services which they provide to companies, these organisations help to disseminate research results and encourage their adoption. In Germany transfer centres and agencies follow a more direct approach to technology transfer by offering such services on the same lines as processing industry service centres operating in the USA. Their services include loans of researchers funded by government programmes, with the provision of financial assistance to companies employing university researchers by covering part of their salaries. |
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6.1.3

These organisations mainly provide business consultancy services. A mediating role is played, for example, by innovation centres in the Netherlands and the network of R&D attachés in Norway. By means of the services which they provide to companies, these organisations help to disseminate research results and encourage their adoption. In Germany transfer centres and agencies follow a more direct approach to technology transfer by offering such services on the same lines as processing industry service centres operating in the USA. Their services include loans of researchers funded by government programmes, with the provision of financial assistance to companies employing university researchers by covering part of their salaries.

| 6.1.4 | Usually such agencies are established by government initiatives (or, in the case of Germany, initiatives by chambers of commerce and industry), given that, for the beneficiaries of such programmes, technological development can only be made really effective and thus benefit the long-term interests of the economy with external support, which in most cases comes from the government. At the level of finances, the situation is more varied: for example, innovation centres in the Netherlands are funded by the Ministry of Economic Affairs, and offer some of their services free of charge (for example the first 16 hours of consultancy sessions). The work of Norwegian R&D attachés is also government-funded. By contrast, in Germany and the United States support for such centres comes from a special fund, and diminishes over time: over three years in Germany, and six years in the USA, starting from a level of 50 %. Some services are provided on a commercial basis and others are on a non-profit basis. |
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6.1.4

Usually such agencies are established by government initiatives (or, in the case of Germany, initiatives by chambers of commerce and industry), given that, for the beneficiaries of such programmes, technological development can only be made really effective and thus benefit the long-term interests of the economy with external support, which in most cases comes from the government. At the level of finances, the situation is more varied: for example, innovation centres in the Netherlands are funded by the Ministry of Economic Affairs, and offer some of their services free of charge (for example the first 16 hours of consultancy sessions). The work of Norwegian R&D attachés is also government-funded. By contrast, in Germany and the United States support for such centres comes from a special fund, and diminishes over time: over three years in Germany, and six years in the USA, starting from a level of 50 %. Some services are provided on a commercial basis and others are on a non-profit basis.

6.2   Organisations providing R&D services

| 6.2.1 | The characteristic features of these more highly structured agencies are that they work to bring science and industry closer together, unite industrial and other types of research institutions and companies in networks, and also, with the help of government funding, provide R&D services on a contractual basis, mainly to small and medium enterprises. Although their activities are to a large extent linked to universities, we can still distinguish them from university agencies and parks. |
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6.2.1

The characteristic features of these more highly structured agencies are that they work to bring science and industry closer together, unite industrial and other types of research institutions and companies in networks, and also, with the help of government funding, provide R&D services on a contractual basis, mainly to small and medium enterprises. Although their activities are to a large extent linked to universities, we can still distinguish them from university agencies and parks.

| 6.2.2 | The latter organisations are also set up by means of government initiatives, and in some cases they are also state-run. They are commissioned by clients from the private sector (industries) and public sector (e.g. ministries) to publicise scientific innovations. Funding arrangements for such organisations vary considerably, from 10 % to 100 % of project expenditure. |
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6.2.2

The latter organisations are also set up by means of government initiatives, and in some cases they are also state-run. They are commissioned by clients from the private sector (industries) and public sector (e.g. ministries) to publicise scientific innovations. Funding arrangements for such organisations vary considerably, from 10 % to 100 % of project expenditure.

6.3   Types of cooperation between academia and industry in the form of parks

| 6.3.1 | These parks are sited in the vicinity of knowledge generators — usually universities or research institutes — and stand in a contractual relation with them; in some cases they function as part of them. Hungarian examples include the InfoPark or the INNOTECH Innovation Park of Budapest Technical University. However, the requisite backing comes from national or local government resources. Thanks to high quality technical infrastructure, they ensure that an increasingly wide range of conditions for innovation are in place. With the help of technological transfer, more and more phases of the innovation process can be covered and the range of activities taking place within a single industrial park can be expanded to include the creation of market-ready products, mass production, and even the establishment of new industrial sectors. |
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6.3.1

These parks are sited in the vicinity of knowledge generators — usually universities or research institutes — and stand in a contractual relation with them; in some cases they function as part of them. Hungarian examples include the InfoPark or the INNOTECH Innovation Park of Budapest Technical University. However, the requisite backing comes from national or local government resources. Thanks to high quality technical infrastructure, they ensure that an increasingly wide range of conditions for innovation are in place. With the help of technological transfer, more and more phases of the innovation process can be covered and the range of activities taking place within a single industrial park can be expanded to include the creation of market-ready products, mass production, and even the establishment of new industrial sectors.

| 6.3.2 | Many science and research parks have underpinned prosperity and diverse scientific opportunities in the areas where they are set up. There are many such areas in France (e.g. Lyons). In the case of other French parks, the ‘technopolis’ model plays a key role, and is seen as a unique new urban concept. The first Japanese parks were set up in a similar way, but within the framework of a programme, based on a similar version of the ‘technopolis’ model to the French one. The best known of these is Tsukala, a green-field development which was established as an entirely new science city. Nowadays, technopolises are set up by local initiatives. In the USA, it was in areas such as these that the first innovation parks were sited (for example Silicon Valley and the vicinity of Route 128 in Boston). |
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6.3.2

Many science and research parks have underpinned prosperity and diverse scientific opportunities in the areas where they are set up. There are many such areas in France (e.g. Lyons). In the case of other French parks, the ‘technopolis’ model plays a key role, and is seen as a unique new urban concept. The first Japanese parks were set up in a similar way, but within the framework of a programme, based on a similar version of the ‘technopolis’ model to the French one. The best known of these is Tsukala, a green-field development which was established as an entirely new science city. Nowadays, technopolises are set up by local initiatives. In the USA, it was in areas such as these that the first innovation parks were sited (for example Silicon Valley and the vicinity of Route 128 in Boston).

| 6.3.3 | Today, innovation parks exist in all the countries of the European Union, from Lisbon to Athens. The parks discussed so far are the most complex of the innovation-oriented organisations and have the greatest organisational potential, given that, in terms of promoting innovation, they offer the benefits outlined above. |
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6.3.3

Today, innovation parks exist in all the countries of the European Union, from Lisbon to Athens. The parks discussed so far are the most complex of the innovation-oriented organisations and have the greatest organisational potential, given that, in terms of promoting innovation, they offer the benefits outlined above.

7.   Recommendations

| 7.1 | In the EESC's view, the European Union should play an active role in promoting the establishment and development of industrial and technological parks as innovation poles in EU Member States and regions, thus enabling full integration of new and old Member States in the enlarged single market, which is one of the key elements of the new partnership for growth and development envisaged by the re-launched Lisbon strategy. The ultimate goal is:






  — | to boost the competitiveness of the new Member States and to reduce regional disparities, thus ensuring better overall economic performance in the EU; |
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7.1

In the EESC's view, the European Union should play an active role in promoting the establishment and development of industrial and technological parks as innovation poles in EU Member States and regions, thus enabling full integration of new and old Member States in the enlarged single market, which is one of the key elements of the new partnership for growth and development envisaged by the re-launched Lisbon strategy. The ultimate goal is:

—

to boost the competitiveness of the new Member States and to reduce regional disparities, thus ensuring better overall economic performance in the EU;

| — | to boost competitiveness at regional and local levels, enabling more effective management of industrial restructuring, of the re-use of natural, financial and human resources, and of a strategy capable of responding to the complex nature of the economic and technological opportunities and challenges presented by European integration and the global market; |
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—

to boost competitiveness at regional and local levels, enabling more effective management of industrial restructuring, of the re-use of natural, financial and human resources, and of a strategy capable of responding to the complex nature of the economic and technological opportunities and challenges presented by European integration and the global market;

| — | to ensure that full use is made of the opportunities offered by completion of the enlarged European single market, for example through networking of technology parks and industrial parks at trans-regional levels based on their global goals; |
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—

to ensure that full use is made of the opportunities offered by completion of the enlarged European single market, for example through networking of technology parks and industrial parks at trans-regional levels based on their global goals;

| — | to raise general standards in research and innovation, and commercial application and market launches of research results, by means of even closer links between SMEs, the scientific sphere and research, training of highly qualified personnel at both operational and organisational levels, modernisation of public administration and the accompanying legislative framework, and capacity building for all players participating in the parks' decision-making processes, thus helping the European Union to become the most dynamic region in the world, while spending 3 % of GDP on innovation; |
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—

to raise general standards in research and innovation, and commercial application and market launches of research results, by means of even closer links between SMEs, the scientific sphere and research, training of highly qualified personnel at both operational and organisational levels, modernisation of public administration and the accompanying legislative framework, and capacity building for all players participating in the parks' decision-making processes, thus helping the European Union to become the most dynamic region in the world, while spending 3 % of GDP on innovation;

| — | to use European networks of technology and industrial parks to stimulate interaction between industry, the services sector and the financial sector, at the same time as enhancing technological links and building up the capacity to take on and propagate new knowledge, thus boosting innovation and competitiveness and ensuring that objectives such as growth, competitiveness, employment, sustainable development and equal opportunities are compatible with one another and achievable through interaction and consensus; |
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—

to use European networks of technology and industrial parks to stimulate interaction between industry, the services sector and the financial sector, at the same time as enhancing technological links and building up the capacity to take on and propagate new knowledge, thus boosting innovation and competitiveness and ensuring that objectives such as growth, competitiveness, employment, sustainable development and equal opportunities are compatible with one another and achievable through interaction and consensus;

| — | to monitor and evaluate the performance, effective technical capacities, actual achievements and other beneficial effects of industrial and technology parks; this should be done on a regular basis and in reference to standardised criteria laid down in advance; |
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—

to monitor and evaluate the performance, effective technical capacities, actual achievements and other beneficial effects of industrial and technology parks; this should be done on a regular basis and in reference to standardised criteria laid down in advance;

| — | to ensure compliance with the EU legislative framework, including competition and state aid rules, while taking into consideration the continuing development of such rules. |
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—

to ensure compliance with the EU legislative framework, including competition and state aid rules, while taking into consideration the continuing development of such rules.

| 7.2.1 | In the EESC's view, policies to promote networks of industrial and technology parks must be developed at three levels, i.e. European, national and regional/local, in full compliance with the subsidiarity principle enshrined in the Treaties and with EU legislation, including competition law. |
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7.2.1

In the EESC's view, policies to promote networks of industrial and technology parks must be developed at three levels, i.e. European, national and regional/local, in full compliance with the subsidiarity principle enshrined in the Treaties and with EU legislation, including competition law.

| 7.2.2 | The EESC advocates a global, integrated approach encompassing the Seventh Framework Programme for research, technological development and demonstration activities, European Investment Fund (EIF) and European Investment Bank (EIB) funding, the European growth imitative, the Structural Funds, the multiannual programme for enterprise and entrepreneurship, the new partnership policy instrument, the competitiveness and innovation framework programme, and Community programmes in the fields of education and training, while taking into account the broad economic policy guidelines for 2005-2008. Adopting such an approach will ensure flexibility in choice of instruments, close coordination, consistency and simplicity, thus facilitating participation in programmes and enabling proposals to be approached from a variety of perspectives. All of this would benefit the development of pan-European networks by supporting integrated cooperation programmes between industrial parks, technology parks and industrial districts at inter-regional and trans-regional level. |
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7.2.2

The EESC advocates a global, integrated approach encompassing the Seventh Framework Programme for research, technological development and demonstration activities, European Investment Fund (EIF) and European Investment Bank (EIB) funding, the European growth imitative, the Structural Funds, the multiannual programme for enterprise and entrepreneurship, the new partnership policy instrument, the competitiveness and innovation framework programme, and Community programmes in the fields of education and training, while taking into account the broad economic policy guidelines for 2005-2008. Adopting such an approach will ensure flexibility in choice of instruments, close coordination, consistency and simplicity, thus facilitating participation in programmes and enabling proposals to be approached from a variety of perspectives. All of this would benefit the development of pan-European networks by supporting integrated cooperation programmes between industrial parks, technology parks and industrial districts at inter-regional and trans-regional level.

| 7.2.3 | Concerning the mechanisms of the new competitiveness and innovation framework programme (see INT/270, study group), the EESC would propose that the ‘Entrepreneurship and Innovation’ and ‘ICT Policy Support’ programmes explicitly mention the development of networks of industrial parks, technology parks and industrial districts, with particular reference to promotion of such networks providing funding for the initial stages and facilitating access to venture capital, and measures to promote the introduction and more effective use of information and communication technologies through the e-Europe and i2010 initiatives. The new mechanisms of the competitiveness and innovation framework programme must include support for networks of industrial and technological parks and districts; this should also help to boost SME participation in the Seventh Framework Programme for research, technological development and demonstration activities. |
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7.2.3

Concerning the mechanisms of the new competitiveness and innovation framework programme (see INT/270, study group), the EESC would propose that the ‘Entrepreneurship and Innovation’ and ‘ICT Policy Support’ programmes explicitly mention the development of networks of industrial parks, technology parks and industrial districts, with particular reference to promotion of such networks providing funding for the initial stages and facilitating access to venture capital, and measures to promote the introduction and more effective use of information and communication technologies through the e-Europe and i2010 initiatives. The new mechanisms of the competitiveness and innovation framework programme must include support for networks of industrial and technological parks and districts; this should also help to boost SME participation in the Seventh Framework Programme for research, technological development and demonstration activities.

| 7.2.4 | With regard to individual programmes included in the seventh framework programme, particularly the ‘capacities’, ‘people’ and ‘JRC’ (Joint Research Centre) programmes, the EESC would make the following recommendations:






  — | stronger support measures are needed for SMEs, particularly with regard to research, and organisations and associations of SMEs; it should be acknowledged that the pan-European network of industrial and technology parks and clusters and industrial districts are fully eligible to submit research proposals; |
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7.2.4

With regard to individual programmes included in the seventh framework programme, particularly the ‘capacities’, ‘people’ and ‘JRC’ (Joint Research Centre) programmes, the EESC would make the following recommendations:

—

stronger support measures are needed for SMEs, particularly with regard to research, and organisations and associations of SMEs; it should be acknowledged that the pan-European network of industrial and technology parks and clusters and industrial districts are fully eligible to submit research proposals;

| — | measures should be taken to enhance the research and knowledge potential of European regions, to support the development of industrial and technology parks and clusters as well as European and pan-European networks of parks and clusters, to finance ‘Foresight’ participatory technology activities with a view to formulating medium and long-term plans and strategies, together with Foresight activities relating to the theme of ‘socio-economic sciences and the humanities’, which is part of the ‘capacities’ specific programme; |
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—

measures should be taken to enhance the research and knowledge potential of European regions, to support the development of industrial and technology parks and clusters as well as European and pan-European networks of parks and clusters, to finance ‘Foresight’ participatory technology activities with a view to formulating medium and long-term plans and strategies, together with Foresight activities relating to the theme of ‘socio-economic sciences and the humanities’, which is part of the ‘capacities’ specific programme;

| — | financial and human resources envisaged by the ‘industry-academia pathways and partnership’ action included in the ‘people’ specific programme, and in particular researchers who recognise the special concerns relevant to the development of SMEs, should be made available to meet the needs of industrial and technology parks and clusters; |
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—

financial and human resources envisaged by the ‘industry-academia pathways and partnership’ action included in the ‘people’ specific programme, and in particular researchers who recognise the special concerns relevant to the development of SMEs, should be made available to meet the needs of industrial and technology parks and clusters;

| — | the expertise of the Joint Research Centre must be made fully accessible to industrial and technology parks and clusters, by funding their participation in indirect activities with regard to networking, promoting training and mobility, and establishing technology platforms; in doing so, they should take advantage of the high European added-value offered by the JCR and its research institutes, in particular the IPTS in Seville. |
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—

the expertise of the Joint Research Centre must be made fully accessible to industrial and technology parks and clusters, by funding their participation in indirect activities with regard to networking, promoting training and mobility, and establishing technology platforms; in doing so, they should take advantage of the high European added-value offered by the JCR and its research institutes, in particular the IPTS in Seville.

| 7.2.5 | With regard to the EIF, the EIB, the growth initiative, and Structural and Cohesion Funds, action should be taken to follow up the conclusions of the March 2005 European summit by creating more and better synergies in the field of research and innovation between Community funds, the EIF and the EIB. The European Council also pointed out that regional and local players must be given much greater ownership of the Lisbon strategy, with its three pillars (economic, social and environmental). The EESC recommends stepping up efforts to develop cohesion policy — which promotes convergence, competitiveness and territorial cooperation — and concentrating more resources on the development of innovation and the knowledge-based society in such a way as to anticipate and stimulate economic changes tending to enhance competitiveness and economic competitive advantages; it also recommends enhancing the vocational skills of the labour force, especially in the new Member States. To this end, activities and networks of industrial and technology parks and clusters should be developed, through European territorial cooperation and public-private partnerships (PPPs) and funding programmes such as the EIF's Innovation 2010 initiative. |
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7.2.5

With regard to the EIF, the EIB, the growth initiative, and Structural and Cohesion Funds, action should be taken to follow up the conclusions of the March 2005 European summit by creating more and better synergies in the field of research and innovation between Community funds, the EIF and the EIB. The European Council also pointed out that regional and local players must be given much greater ownership of the Lisbon strategy, with its three pillars (economic, social and environmental). The EESC recommends stepping up efforts to develop cohesion policy — which promotes convergence, competitiveness and territorial cooperation — and concentrating more resources on the development of innovation and the knowledge-based society in such a way as to anticipate and stimulate economic changes tending to enhance competitiveness and economic competitive advantages; it also recommends enhancing the vocational skills of the labour force, especially in the new Member States. To this end, activities and networks of industrial and technology parks and clusters should be developed, through European territorial cooperation and public-private partnerships (PPPs) and funding programmes such as the EIF's Innovation 2010 initiative.

| 7.2.6 | The fifth multiannual programme for enterprise and entrepreneurship and the European Charter for Small Enterprises highlight the need for development of the education and training of entrepreneurs, measures to enable cheaper and faster start-ups, more modern legislation and regulation, better availability of skilled labour, easier access to online services, improved fiscal and financial conditions, strengthening the technological capacity of SMEs, and accessibility to successful e-business models and best practice. The EESC has always been strongly in favour of Community action with an impact on industrial and technological parks and clusters. |
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7.2.6

The fifth multiannual programme for enterprise and entrepreneurship and the European Charter for Small Enterprises highlight the need for development of the education and training of entrepreneurs, measures to enable cheaper and faster start-ups, more modern legislation and regulation, better availability of skilled labour, easier access to online services, improved fiscal and financial conditions, strengthening the technological capacity of SMEs, and accessibility to successful e-business models and best practice. The EESC has always been strongly in favour of Community action with an impact on industrial and technological parks and clusters.

| 7.2.7 | The EESC feels that it would be useful if the New European Neighbourhood and Partnership Instrument, and in particular that part of it which was previously covered by action areas 2 and 3 of the INTERREG programme, were to include measures concerning industrial and technological parks and clusters in its funding for inter-regional, trans-regional, European and pan-European networks. |
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7.2.7

The EESC feels that it would be useful if the New European Neighbourhood and Partnership Instrument, and in particular that part of it which was previously covered by action areas 2 and 3 of the INTERREG programme, were to include measures concerning industrial and technological parks and clusters in its funding for inter-regional, trans-regional, European and pan-European networks.

| 7.2.8 | The EESC advocates cooperation in the Member States with job centres and with all institutional players at EU level with an interest in job creation to ensure that parks remain in a position to generate new jobs, taking advantage of the opportunities offered by networking. Representatives of business, trade unions, local authorities and NGOs must be involved to ensure that jobs involving significant additional high-quality (tacit) knowledge are created. Employees working in parks must be enabled to participate on an ongoing basis on training and retraining adapted to industrial restructuring. In line with EESC opinion CESE 1073/2005 adopted on 28-29 September (CCMI/019), it should be emphasised that social dialogue and employee participation are crucial in preparing for industrial change and channelling the process in the right direction. |
| --- | --- |

7.2.8

The EESC advocates cooperation in the Member States with job centres and with all institutional players at EU level with an interest in job creation to ensure that parks remain in a position to generate new jobs, taking advantage of the opportunities offered by networking. Representatives of business, trade unions, local authorities and NGOs must be involved to ensure that jobs involving significant additional high-quality (tacit) knowledge are created. Employees working in parks must be enabled to participate on an ongoing basis on training and retraining adapted to industrial restructuring. In line with EESC opinion CESE 1073/2005 adopted on 28-29 September (CCMI/019), it should be emphasised that social dialogue and employee participation are crucial in preparing for industrial change and channelling the process in the right direction.

| 7.2.9 | The EESC advocates measures aimed at improving European training and educational systems and developing new paradigms of production and environmentally friendly consumption, by means of educational and training activities to assist in the development of networks of industrial and technological parks and clusters. The new training and educational programmes in such parks and clusters could also contribute to making highly skilled professions in industry and technology more attractive for young Europeans. |
| --- | --- |

7.2.9

The EESC advocates measures aimed at improving European training and educational systems and developing new paradigms of production and environmentally friendly consumption, by means of educational and training activities to assist in the development of networks of industrial and technological parks and clusters. The new training and educational programmes in such parks and clusters could also contribute to making highly skilled professions in industry and technology more attractive for young Europeans.

| 7.2.10 | In keeping with the conclusions adopted by the EESC on this subject in earlier opinions — and in particular in opinion 374/2005 of 6 April 2005 on European industrial districts — the EESC would emphasise that it is vital to develop industrial parks and industrial districts as innovation poles and European platforms (European Platform for Innovation Poles), enabling a joint strategic vision and capacity-building activities and cultural development of the trade unions together with professional associations, in cooperation with the relevant players of organised civil society. In doing so, full use must be made of all appropriate instruments for promoting innovation and knowledge transfer: exchanging best practice, setting basic harmonised requirements for identification, taking joint training measures, providing direct access to JRC expertise, developing common terminology and classifications, as well as exploiting and creating potential synergies between the resources of industrial parks and clusters in various countries, with a view to enabling them to take direct part in Community programmes and initiatives. At the same time, common systems for the evaluation, monitoring and benchmarking of European industrial and technological parks and clusters and industrial districts must be put in place. |
| --- | --- |

7.2.10

In keeping with the conclusions adopted by the EESC on this subject in earlier opinions — and in particular in opinion 374/2005 of 6 April 2005 on European industrial districts — the EESC would emphasise that it is vital to develop industrial parks and industrial districts as innovation poles and European platforms (European Platform for Innovation Poles), enabling a joint strategic vision and capacity-building activities and cultural development of the trade unions together with professional associations, in cooperation with the relevant players of organised civil society. In doing so, full use must be made of all appropriate instruments for promoting innovation and knowledge transfer: exchanging best practice, setting basic harmonised requirements for identification, taking joint training measures, providing direct access to JRC expertise, developing common terminology and classifications, as well as exploiting and creating potential synergies between the resources of industrial parks and clusters in various countries, with a view to enabling them to take direct part in Community programmes and initiatives. At the same time, common systems for the evaluation, monitoring and benchmarking of European industrial and technological parks and clusters and industrial districts must be put in place.

Brussels, 14 December 2005.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

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| 17.3.2006 | EN | Official Journal of the European Union | C 65/58 |
| --- | --- | --- | --- |

17.3.2006

EN

Official Journal of the European Union

C 65/58

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Opinion of the ‘European Economic and Social Committee on the Communication from the Commission — Restructuring and employment — Anticipating and accompanying restructuring in order to develop employment: the role of the European Union’

(COM(2005) 120 final)

(2006/C 65/12)

On 28 April 2005 the European Commission decided to consult the European Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on the abovementioned proposal.

The Consultative Commission on Industrial Change (CCMI), which was responsible for preparing the Committee's work on the subject, adopted its opinion on 23 November 2005. The rapporteur was Mr Zöhrer and the co-rapporteur was Mr Soury-Lavergne.

At its 422nd plenary session, held on 14 and 15 December 2005 (meeting of 14 December), the European Economic and Social Committee adopted the following opinion by 121 votes to 1, with 9 abstentions.

Executive summary

The EESC welcomes the comprehensive, inter-sectoral approach selected by the Commission. The Commission has taken up an issue which is equally important for both enterprises and employees. Industrial change and the ability of those affected to prepare themselves for it are key factors in helping to maintain competitiveness. Success in this field does, however, depend upon tackling the social consequences of industrial change.

The EESC in essence agrees with the Commission's analysis of the phenomenon, but would welcome a more in-depth analysis.

Restructuring always involves fear of adverse consequences, particularly for workers. But well managed restructuring can also give rise to new challenges and opportunities. It all depends, essentially, on how the situation is dealt with in the company, how the various stages are managed and how the various players work together and develop a common spirit which enables them to identify the opportunities.

The Committee shares the view that answers to restructuring must be part of the strategy for growth and employment.

Closer coordination within the Commission through the establishment of a task force and regular dialogue with the European Parliament and the Council are welcome measures.

The EESC broadly endorses the priorities set out by the Commission in respect of the review of the European Employment Strategy. The Employment Strategy cannot be addressed without reference to the macroeconomic context and industrial policy.

As regards the reform of the financial instruments, the EESC agrees that they should be directed more towards the anticipation and management of restructuring.

In the Committee's view, the aim in industrial policy should now be, above all, to step up the sectoral approach, which makes it possible to identify tailor-made approaches for the individual sectors. The improvement of legislation applying to enterprises is a key point which requires more specific consideration and clarification.

The EESC regards technology initiatives, especially the technology platforms, as one of the most important means of improving the situation. Care must also be taken to establish an environment that is innovation-friendly.

Turning to competition policy, the question arises as to whether the measures currently available are adequate. In this connection, the EESC stresses the need for greater focus on the relationship between state aid, restructuring and production relocation.

The EESC takes the view that the Dublin-based European Monitoring Centre on Change (EMCC) also has a key role to play.

Special attention should be paid to the extension of the sectoral social dialogue. The EESC agrees with the Commission that, by virtue of their sectoral knowledge, the social partners are able to play a special role in alerting the authorities. This instrument should, however, not only come into play in crisis situations.

The EESC awaits with interest the Communication on Corporate social responsibility (CSR) announced by the Commission.

The EESC welcomes in principle the establishment of a Restructuring Forum. The Forum's aim must be to explain best practices and discuss local barriers (regulations) to introducing them.

In addition to the regulatory modernisation and simplification measures already provided for in the Lisbon Action Programme — measures which the EESC has always welcomed — the Commission announces that it is to submit a Green Paper on the development of labour law. In restructuring, perhaps more than elsewhere, the aim of developing labour law must be to ensure a balance between flexibility and security.

With regard to promoting intra-Community mobility, the EESC regards the proposal for a Directive on Improving the portability of supplementary pension rights — the sole proposal put forward — as being a somewhat meagre contribution. A package of incentives to facilitate mobility will have to be considered involving areas such as qualifications, the labour market, social legislation and taxation, including the removal of administrative barriers to the free movement of labour.

The EESC welcomes the idea of giving the social partners the opportunity to continue, in concrete terms, their work on the subject of restructuring.

European Works Councils (EWC) have a significant role to play in company restructuring. Consultations on the review of the EWC Directive should therefore embrace this issue, but they need to cover a broader context.

The Committee shares the Commission's conviction that restructuring must not be synonymous with social decline and a loss of economic substance.

Adverse consequences for workers cannot be entirely avoided. In addition to the requirements set out by the Commission, therefore, measures taken at Community level must also aim to give workers the necessary protection in periods of transition.

1.   Introduction

| 1.1 | Both the Social Agenda, which was adopted on 9 February 2005, and the Communication on the Review of the sustainable development strategy (1), foresee that the Commission will develop a strategy for managing restructuring operations focused on improved interaction between the relevant European policies, greater involvement of the social partners, enhanced synergy between policies and financial levers, and adaptation of the frameworks of legislation and collective agreements. |
| --- | --- |

1.1

Both the Social Agenda, which was adopted on 9 February 2005, and the Communication on the Review of the sustainable development strategy (1), foresee that the Commission will develop a strategy for managing restructuring operations focused on improved interaction between the relevant European policies, greater involvement of the social partners, enhanced synergy between policies and financial levers, and adaptation of the frameworks of legislation and collective agreements.

| 1.2 | The Commission's Communication of 31 March 2005 on Restructuring and Employment (2) sets out the measures which the EU has to introduce or strengthen in order to mobilise its available potential. The Commission adopts both a horizontal and a sectoral perspective and proposes a series of measures in a variety of EU policy areas. |
| --- | --- |

1.2

The Commission's Communication of 31 March 2005 on Restructuring and Employment (2) sets out the measures which the EU has to introduce or strengthen in order to mobilise its available potential. The Commission adopts both a horizontal and a sectoral perspective and proposes a series of measures in a variety of EU policy areas.

| 1.3 | Since the Commission Communication is intended for a wide public, the text includes general points, particularly regarding the restructuring faced by businesses in the common situation of grappling with the need to adapt. |
| --- | --- |

1.3

Since the Commission Communication is intended for a wide public, the text includes general points, particularly regarding the restructuring faced by businesses in the common situation of grappling with the need to adapt.

2.   Gist of the Commission document

| 2.1 | The Commission firmly believes that restructuring must not be synonymous with social decline and a loss of economic substance. On the contrary, restructuring can underpin economic and social progress — but only if such measures are properly prepared, and provided firms can manage the necessary change quickly and effectively and there is public action to help ensure that the change is carried out in sound conditions. |
| --- | --- |

2.1

The Commission firmly believes that restructuring must not be synonymous with social decline and a loss of economic substance. On the contrary, restructuring can underpin economic and social progress — but only if such measures are properly prepared, and provided firms can manage the necessary change quickly and effectively and there is public action to help ensure that the change is carried out in sound conditions.

| 2.2 | The restructuring of enterprises often entails costs that can be very high, not only for the workers concerned but also for the local or regional economy. The preservation of social cohesion, which is a distinctive characteristic of the European social model, requires the introduction of accompanying policies designed to minimise the social costs and to promote the search for alternative sources of jobs and income. |
| --- | --- |

2.2

The restructuring of enterprises often entails costs that can be very high, not only for the workers concerned but also for the local or regional economy. The preservation of social cohesion, which is a distinctive characteristic of the European social model, requires the introduction of accompanying policies designed to minimise the social costs and to promote the search for alternative sources of jobs and income.

| 2.3 | It follows that the response at Community level must focus on four essential requirements:






  — | A need for consistency between the various policies, if growth and the ensuing restructuring are to avoid destroying human capital. |
| --- | --- | --- |

2.3

It follows that the response at Community level must focus on four essential requirements:

—

A need for consistency between the various policies, if growth and the ensuing restructuring are to avoid destroying human capital.

| — | A need for a long-term perspective encompassing the various Community policies. If the economic and social players are to act effectively, they need to be able to see the way ahead. |
| --- | --- |

—

A need for a long-term perspective encompassing the various Community policies. If the economic and social players are to act effectively, they need to be able to see the way ahead.

| — | A need for participation on the part of all the stakeholders, first and foremost the social partners. |
| --- | --- |

—

A need for participation on the part of all the stakeholders, first and foremost the social partners.

| — | A need to pay heed to the local dimension — it is, after all, at local level that anticipating change is most effective. The European Union's regional and cohesion policy must act as a catalyst here. |
| --- | --- |

—

A need to pay heed to the local dimension — it is, after all, at local level that anticipating change is most effective. The European Union's regional and cohesion policy must act as a catalyst here.

| 2.4 | The Communication sets out the measures to be developed or strengthened by mobilising the various means available to the Union through cross-cutting and sectoral action. When these measures are implemented, it is necessary to limit as far as possible the burdens imposed on enterprises, while ensuring improved anticipation and management of restructuring operations. |
| --- | --- |

2.4

The Communication sets out the measures to be developed or strengthened by mobilising the various means available to the Union through cross-cutting and sectoral action. When these measures are implemented, it is necessary to limit as far as possible the burdens imposed on enterprises, while ensuring improved anticipation and management of restructuring operations.

| 2.5 | Specifically, Annex I to the Communication sets out a series of 12 proposed measures, including:






  — | review of the European Employment Strategy; |
| --- | --- | --- |

2.5

Specifically, Annex I to the Communication sets out a series of 12 proposed measures, including:

—

review of the European Employment Strategy;

| — | reform of the financial instruments and creation of a growth adjustment fund; |
| --- | --- |

—

reform of the financial instruments and creation of a growth adjustment fund;

| — | creation of a ‘Restructuring’ Forum; |
| --- | --- |

—

creation of a ‘Restructuring’ Forum;

| — | enhanced monitoring of sectors most liable to undergo restructuring in the short-term. |
| --- | --- |

—

enhanced monitoring of sectors most liable to undergo restructuring in the short-term.

3.   General comments

| 3.1 | The EESC welcomes the comprehensive, inter-sectoral approach selected by the Commission. The Commission has taken up an issue which is equally important for both enterprises and employees. The EESC has already set out its views on this issue in various earlier opinions. Industrial change and the ability of those affected to prepare themselves for it are a key factor in helping to maintain competitiveness. Success in this field does, however, depend upon tackling the social consequences of industrial change. |
| --- | --- |

3.1

The EESC welcomes the comprehensive, inter-sectoral approach selected by the Commission. The Commission has taken up an issue which is equally important for both enterprises and employees. The EESC has already set out its views on this issue in various earlier opinions. Industrial change and the ability of those affected to prepare themselves for it are a key factor in helping to maintain competitiveness. Success in this field does, however, depend upon tackling the social consequences of industrial change.

| 3.2 | The Commission's Communication addresses the issue of ‘restructuring’. A question which clearly also arises in this context is how this term is to be defined. In a variety of earlier opinions, the EESC drew the following distinctions between ‘industrial change’ and ‘restructuring’: ‘industrial change’ represents an ongoing process of development in a given enterprise or sector, whereas ‘restructuring’ refers to a specific form of industrial change, generally characterised by an abrupt process of (frequently forced) adjustment to take account of general economic conditions with a view to regaining competitiveness. |
| --- | --- |

3.2

The Commission's Communication addresses the issue of ‘restructuring’. A question which clearly also arises in this context is how this term is to be defined. In a variety of earlier opinions, the EESC drew the following distinctions between ‘industrial change’ and ‘restructuring’: ‘industrial change’ represents an ongoing process of development in a given enterprise or sector, whereas ‘restructuring’ refers to a specific form of industrial change, generally characterised by an abrupt process of (frequently forced) adjustment to take account of general economic conditions with a view to regaining competitiveness.

| 3.2.1 | Even if the Commission does not make this distinction between the two terms, which would make the text clearer, the EESC recommends that it pursue a more differentiated approach. The key to tackling industrial change is clearly to be found in the anticipation and pro-active shaping of this change. Industrial restructuring, for its part, presents a growing and more complex challenge in a global context. These two issues require the adoption of a different approach and different measures. |
| --- | --- |

3.2.1

Even if the Commission does not make this distinction between the two terms, which would make the text clearer, the EESC recommends that it pursue a more differentiated approach. The key to tackling industrial change is clearly to be found in the anticipation and pro-active shaping of this change. Industrial restructuring, for its part, presents a growing and more complex challenge in a global context. These two issues require the adoption of a different approach and different measures.

| 3.2.2 | The promotion of change cannot be an end in itself. A clearly defined and forward-looking long-term industrial policy can exert a positive influence on change and mitigate its consequences by giving rise to new opportunities. The Committee will examine the new Commission Communication on a new industrial policy (COM 2005 — ...) in this light. |
| --- | --- |

3.2.2

The promotion of change cannot be an end in itself. A clearly defined and forward-looking long-term industrial policy can exert a positive influence on change and mitigate its consequences by giving rise to new opportunities. The Committee will examine the new Commission Communication on a new industrial policy (COM 2005 — ...) in this light.

| 3.3 | The EESC agrees in principle with the Commission's analysis of the phenomenon. Essentially, the Commission sets out four main reasons for restructuring:






  — | The development of the European single market and the opening-up of economies to international competition. |
| --- | --- | --- |

3.3

The EESC agrees in principle with the Commission's analysis of the phenomenon. Essentially, the Commission sets out four main reasons for restructuring:

—

The development of the European single market and the opening-up of economies to international competition.

| — | Technological innovation. |
| --- | --- |

—

Technological innovation.

| — | The development of the regulatory framework. |
| --- | --- |

—

The development of the regulatory framework.

| — | Changes in consumer demand. |
| --- | --- |

—

Changes in consumer demand.

| 3.3.1 | The Commission restricts its analysis, then, to very familiar unspecific factors. Another crucial issue is whether restructuring is the subject of long-term planning to avoid certain developments or is triggered at short notice by external pressures or management failures. One example of this is the development of the relationship between market potential and production capacities: ignoring this will result in overcapacities, which sooner or later are themselves a cause of restructuring. As these scenarios imply different approaches, the Committee would welcome a more in-depth analysis. |
| --- | --- |

3.3.1

The Commission restricts its analysis, then, to very familiar unspecific factors. Another crucial issue is whether restructuring is the subject of long-term planning to avoid certain developments or is triggered at short notice by external pressures or management failures. One example of this is the development of the relationship between market potential and production capacities: ignoring this will result in overcapacities, which sooner or later are themselves a cause of restructuring. As these scenarios imply different approaches, the Committee would welcome a more in-depth analysis.

| 3.3.2 | Restructuring always involves fear of adverse consequences, particularly for workers. But well managed restructuring can also give rise to new challenges and opportunities. There are many examples of successful and less successful restructuring. It all depends, essentially, on how the situation is dealt with in the company, how the various stages are managed and how the various players work together and develop a common spirit which enables them to identify the opportunities. |
| --- | --- |

3.3.2

Restructuring always involves fear of adverse consequences, particularly for workers. But well managed restructuring can also give rise to new challenges and opportunities. There are many examples of successful and less successful restructuring. It all depends, essentially, on how the situation is dealt with in the company, how the various stages are managed and how the various players work together and develop a common spirit which enables them to identify the opportunities.

| 3.4 | The Communication proposes few practical measures and some are merely announced for the future. The EESC is aware that the Commission cannot go much further as things stand, but it feels nonetheless that the Communication is a useful basis for developing Community policy on this issue, and that that policy requires coordination among the directorates-general concerned and the Member States. |
| --- | --- |

3.4

The Communication proposes few practical measures and some are merely announced for the future. The EESC is aware that the Commission cannot go much further as things stand, but it feels nonetheless that the Communication is a useful basis for developing Community policy on this issue, and that that policy requires coordination among the directorates-general concerned and the Member States.

4.   Specific comments

| 4.1 | The EESC agrees that responses to restructuring must form part of the strategy for promoting growth and employment. Tackling industrial change can make a key contribution towards achieving the Lisbon objectives. |
| --- | --- |

4.1

The EESC agrees that responses to restructuring must form part of the strategy for promoting growth and employment. Tackling industrial change can make a key contribution towards achieving the Lisbon objectives.

| 4.1.1 | In this regard, the EU must consider what contribution it can make in addition to the measures adopted at local, regional and national level. It has an essential role to play in furthering the discussion process in the Member States and helping to raise awareness of the issue. It can also use all the instruments at its disposal to anticipate and foster change. |
| --- | --- |

4.1.1

In this regard, the EU must consider what contribution it can make in addition to the measures adopted at local, regional and national level. It has an essential role to play in furthering the discussion process in the Member States and helping to raise awareness of the issue. It can also use all the instruments at its disposal to anticipate and foster change.

4.2   Mobilising horizontal EU measures

| 4.2.1 | Closer coordination within the Commission through the establishment of an internal task force, and regular dialogue with the European Parliament and the Council are welcome measures. Involving all the directorates-general concerned could help to develop synergies between the different areas of policy seeking to anticipate and manage change. In the EESC's view, however, steps must be taken to ensure that the task force concentrates on its coordinating role and that responsibilities for legislation and the implementation of EU measures continue to be clearly defined within the Commission. |
| --- | --- |

4.2.1

Closer coordination within the Commission through the establishment of an internal task force, and regular dialogue with the European Parliament and the Council are welcome measures. Involving all the directorates-general concerned could help to develop synergies between the different areas of policy seeking to anticipate and manage change. In the EESC's view, however, steps must be taken to ensure that the task force concentrates on its coordinating role and that responsibilities for legislation and the implementation of EU measures continue to be clearly defined within the Commission.

| 4.2.2 | The EESC broadly endorses the priorities set out by the Commission in respect of the review of the European Employment Strategy. In this connection, there needs to be particular focus on training, lifelong learning and effective organisation of work, including sound management of human resources. The Employment Strategy cannot be addressed without reference to the macroeconomic context and industrial policy. The coordination of economic policies with industrial policy and the Employment Strategy would enable change to be managed better.
  Stable, predictable and coordinated macroeconomic conditions in Europe are an important basis for successfully managing restructuring measures.
  The local conditions in which restructuring takes place are crucial and must be integrated into an overall policy. |
| --- | --- |

4.2.2

The EESC broadly endorses the priorities set out by the Commission in respect of the review of the European Employment Strategy. In this connection, there needs to be particular focus on training, lifelong learning and effective organisation of work, including sound management of human resources. The Employment Strategy cannot be addressed without reference to the macroeconomic context and industrial policy. The coordination of economic policies with industrial policy and the Employment Strategy would enable change to be managed better.

Stable, predictable and coordinated macroeconomic conditions in Europe are an important basis for successfully managing restructuring measures.

The local conditions in which restructuring takes place are crucial and must be integrated into an overall policy.

| 4.2.3 | As regards the reform of the financial instruments, the EESC agrees that they should be directed more towards the anticipation and management of restructuring, but feels that the general objectives of the existing Funds should be retained. |
| --- | --- |

4.2.3

As regards the reform of the financial instruments, the EESC agrees that they should be directed more towards the anticipation and management of restructuring, but feels that the general objectives of the existing Funds should be retained.

| 4.2.4 | The financial instruments proposed by the Commission under the heading ‘the Community's capacity to intervene in a crisis’ were initially regarded with scepticism in the Council. However, in the Committee's view, a detailed discussion on the possibilities of financial intervention to facilitate change where unforeseen events have had severe regional, sectoral or social repercussions is still necessary. It therefore supports the Commission in its endeavours to create a set of instruments of this kind. |
| --- | --- |

4.2.4

The financial instruments proposed by the Commission under the heading ‘the Community's capacity to intervene in a crisis’ were initially regarded with scepticism in the Council. However, in the Committee's view, a detailed discussion on the possibilities of financial intervention to facilitate change where unforeseen events have had severe regional, sectoral or social repercussions is still necessary. It therefore supports the Commission in its endeavours to create a set of instruments of this kind.

| 4.2.5 | The EESC has already set out its view on industrial policy in its opinion of December 2004 (3). In its view, the aim should now be, above all, to step up the sectoral approach, which makes it possible to identify tailor-made approaches for the individual sectors. These measures should not, however, only embrace economic fields which are in a state of crisis; analyses should be carried out in the greatest possible number of sectors which are of importance to the EU in order to tackle industrial change at an early stage and take a pro-active line in shaping change. The social dialogue needs to play an essential role in this context.
  The improvement of legislation applying to enterprises is a key point which requires more specific consideration and clarification, with a view to easing the burden on enterprises without lowering social and environmental standards. |
| --- | --- |

4.2.5

The EESC has already set out its view on industrial policy in its opinion of December 2004 (3). In its view, the aim should now be, above all, to step up the sectoral approach, which makes it possible to identify tailor-made approaches for the individual sectors. These measures should not, however, only embrace economic fields which are in a state of crisis; analyses should be carried out in the greatest possible number of sectors which are of importance to the EU in order to tackle industrial change at an early stage and take a pro-active line in shaping change. The social dialogue needs to play an essential role in this context.

The improvement of legislation applying to enterprises is a key point which requires more specific consideration and clarification, with a view to easing the burden on enterprises without lowering social and environmental standards.

| 4.2.6 | The EESC also regards the technology initiatives, especially the technology platforms, as one of the most important means of improving the situation. Technological innovation is the key to breaking out of apparent gridlocks, particularly in the fields of energy, waste emissions and product recycling. The ensuing technological advances would help to make the industrial sectors concerned competitive once again. |
| --- | --- |

4.2.6

The EESC also regards the technology initiatives, especially the technology platforms, as one of the most important means of improving the situation. Technological innovation is the key to breaking out of apparent gridlocks, particularly in the fields of energy, waste emissions and product recycling. The ensuing technological advances would help to make the industrial sectors concerned competitive once again.

| 4.2.6.1 | In this context, steps also need to be taken to ensure that an innovation-friendly environment is created. The crucial elements here are tax incentives and protection of intellectual property. However, consideration should also be given to the need for organisational and social innovation when tackling restructuring. |
| --- | --- |

4.2.6.1

In this context, steps also need to be taken to ensure that an innovation-friendly environment is created. The crucial elements here are tax incentives and protection of intellectual property. However, consideration should also be given to the need for organisational and social innovation when tackling restructuring.

| 4.2.7 | Turning to competition policy, the question arises as to whether the measures currently available are adequate. An increasing number of elements affecting competitiveness which are not addressed by competition policy are playing a prominent role; one example is corporate taxation.
  As regards state aid, reform redirecting aid towards the areas which contribute most to growth and employment is still a long way away. In this connection, the EESC stresses the need for greater focus on the relationship between state aid, restructuring and production relocation. The rules on state aid must remain non-discriminatory and promotion of social cohesion must continue. In this context, the Committee recommends that particular attention be paid to practices outside the European Union. |
| --- | --- |

4.2.7

Turning to competition policy, the question arises as to whether the measures currently available are adequate. An increasing number of elements affecting competitiveness which are not addressed by competition policy are playing a prominent role; one example is corporate taxation.

As regards state aid, reform redirecting aid towards the areas which contribute most to growth and employment is still a long way away. In this connection, the EESC stresses the need for greater focus on the relationship between state aid, restructuring and production relocation. The rules on state aid must remain non-discriminatory and promotion of social cohesion must continue. In this context, the Committee recommends that particular attention be paid to practices outside the European Union.

| 4.2.8 | On the subject of the EU's external policy, the EESC has already set out its views in a number of opinions. |
| --- | --- |

4.2.8

On the subject of the EU's external policy, the EESC has already set out its views in a number of opinions.

| 4.2.9 | The EESC takes the view that the Dublin-based European Monitoring Centre on Change (EMCC) also has a key role to play with a view to developing the requisite analytical instruments for monitoring restructuring. The CCMI should continue to strengthen its cooperation with the Monitoring Centre. |
| --- | --- |

4.2.9

The EESC takes the view that the Dublin-based European Monitoring Centre on Change (EMCC) also has a key role to play with a view to developing the requisite analytical instruments for monitoring restructuring. The CCMI should continue to strengthen its cooperation with the Monitoring Centre.

4.3   Strengthening the partnership for change

| 4.3.1 | Special attention should be paid to the extension of the sectoral social dialogue. The EESC agrees with the Commission that, by virtue of their sectoral knowledge, the social partners are able to play a special role in alerting the authorities. This instrument should, however, not only come into play in crisis situations but should apply in the case of all situations in which, in the view of the social partners, there is a need to take action, not only when they wish to alert the Commission to ‘a particularly worrying development’. This approach would be more in line with the requirements in respect of anticipating and accompanying restructuring. |
| --- | --- |

4.3.1

Special attention should be paid to the extension of the sectoral social dialogue. The EESC agrees with the Commission that, by virtue of their sectoral knowledge, the social partners are able to play a special role in alerting the authorities. This instrument should, however, not only come into play in crisis situations but should apply in the case of all situations in which, in the view of the social partners, there is a need to take action, not only when they wish to alert the Commission to ‘a particularly worrying development’. This approach would be more in line with the requirements in respect of anticipating and accompanying restructuring.

| 4.3.2 | The EESC awaits with interest the Communication on Corporate social responsibility (CSR) announced by the Commission; this will focus on positive initiatives being taken by enterprises and the various stakeholders to address restructuring. There is clearly a need to publicise and promote not only the development of the legal bases but also examples of good practice in tackling change. The EESC draws attention, above all, to the need to take account in these processes also of those parties which are indirectly affected by the restructuring of individual enterprises (e.g. suppliers, service-providers, etc.).
  The EESC has already set out its views on CSR in an earlier opinion. |
| --- | --- |

4.3.2

The EESC awaits with interest the Communication on Corporate social responsibility (CSR) announced by the Commission; this will focus on positive initiatives being taken by enterprises and the various stakeholders to address restructuring. There is clearly a need to publicise and promote not only the development of the legal bases but also examples of good practice in tackling change. The EESC draws attention, above all, to the need to take account in these processes also of those parties which are indirectly affected by the restructuring of individual enterprises (e.g. suppliers, service-providers, etc.).

The EESC has already set out its views on CSR in an earlier opinion.

| 4.3.3 | The EESC welcomes in principle the establishment of a Restructuring Forum. The Forum's aim must be to explain best practices and discuss local barriers (regulations) to introducing them. It is still too early to assess the results. The Committee is very willing, however, to contribute its expertise to the Forum and help to ensure it adds value to EU policy-making. For this to happen, its modus operandi must not entail the creation of a new bureaucracy and it must focus on those questions which have so far not been adequately addressed. The civil society organisations concerned must have the opportunity to take part in its work. |
| --- | --- |

4.3.3

The EESC welcomes in principle the establishment of a Restructuring Forum. The Forum's aim must be to explain best practices and discuss local barriers (regulations) to introducing them. It is still too early to assess the results. The Committee is very willing, however, to contribute its expertise to the Forum and help to ensure it adds value to EU policy-making. For this to happen, its modus operandi must not entail the creation of a new bureaucracy and it must focus on those questions which have so far not been adequately addressed. The civil society organisations concerned must have the opportunity to take part in its work.

4.4   Adapting the framework of regulation and collective agreement

| 4.4.1 | In addition to the regulatory modernisation and simplification measures already provided for in the Lisbon Action Programme — measures which the EESC has always welcomed — the Commission announces that it is to submit a Green Paper on the Development of labour law. In restructuring, perhaps more than elsewhere, the aim of developing labour law must be to ensure a balance between flexibility and security. |
| --- | --- |

4.4.1

In addition to the regulatory modernisation and simplification measures already provided for in the Lisbon Action Programme — measures which the EESC has always welcomed — the Commission announces that it is to submit a Green Paper on the Development of labour law. In restructuring, perhaps more than elsewhere, the aim of developing labour law must be to ensure a balance between flexibility and security.

| 4.4.2 | With regard to promoting intra-Community mobility, the EESC regards the proposal for a Directive on Improving the portability of supplementary pension rights — the sole proposal put forward — as being a somewhat meagre contribution. Worker mobility in relation to restructuring is a very complex issue and cross-border mobility is just one aspect of it. Workers must be able to adapt to new circumstances brought about by restructuring. At the outside, this could mean a career change or looking for a new job. Thought therefore needs to be given to what measures must be taken at Community, national or regional level to make this transition easier for workers. A package of incentives to facilitate mobility will have to be considered involving areas such as qualifications, the labour market, social legislation and taxation, including the removal of administrative barriers to the free movement of labour. |
| --- | --- |

4.4.2

With regard to promoting intra-Community mobility, the EESC regards the proposal for a Directive on Improving the portability of supplementary pension rights — the sole proposal put forward — as being a somewhat meagre contribution. Worker mobility in relation to restructuring is a very complex issue and cross-border mobility is just one aspect of it. Workers must be able to adapt to new circumstances brought about by restructuring. At the outside, this could mean a career change or looking for a new job. Thought therefore needs to be given to what measures must be taken at Community, national or regional level to make this transition easier for workers. A package of incentives to facilitate mobility will have to be considered involving areas such as qualifications, the labour market, social legislation and taxation, including the removal of administrative barriers to the free movement of labour.

4.5   Second phase of the consultation of the social partners on company restructuring and European works councils

| 4.5.1 | The Commission has here, for the first time in a Communication aimed at a wide readership, initiated a consultation of the social partners on two different issues. This method is not universally endorsed and it has yet to be established whether the right process for consulting the social partners has been selected in this case. |
| --- | --- |

4.5.1

The Commission has here, for the first time in a Communication aimed at a wide readership, initiated a consultation of the social partners on two different issues. This method is not universally endorsed and it has yet to be established whether the right process for consulting the social partners has been selected in this case.

| 4.5.2 | Irrespective of these procedural questions, the EESC welcomes the idea of giving the social partners the opportunity to continue, in concrete terms, their work on the subject of restructuring. |
| --- | --- |

4.5.2

Irrespective of these procedural questions, the EESC welcomes the idea of giving the social partners the opportunity to continue, in concrete terms, their work on the subject of restructuring.

| 4.5.3 | European Works Councils (EWC) have a significant role to play in company restructuring. Consultations on the review of the EWC Directive should therefore embrace this issue, but they need to cover a broader context. The right of employees, laid down in the EWC Directive, to be informed and consulted is not confined to the issue of restructuring. |
| --- | --- |

4.5.3

European Works Councils (EWC) have a significant role to play in company restructuring. Consultations on the review of the EWC Directive should therefore embrace this issue, but they need to cover a broader context. The right of employees, laid down in the EWC Directive, to be informed and consulted is not confined to the issue of restructuring.

4.6   The Commission's conclusions

| 4.6.1 | The Committee shares the Commission's conviction that restructuring must not be synonymous with social decline and a loss of economic substance. Restructuring can make an appreciable contribution to economic and social progress. But the Commission has rightly noted, the conditions in which restructuring takes place are of crucial importance. |
| --- | --- |

4.6.1

The Committee shares the Commission's conviction that restructuring must not be synonymous with social decline and a loss of economic substance. Restructuring can make an appreciable contribution to economic and social progress. But the Commission has rightly noted, the conditions in which restructuring takes place are of crucial importance.

| 4.6.2 | However, adverse consequences for workers cannot be entirely avoided. In addition to the requirements set out by the Commission, therefore, measures taken at Community level must also aim to give workers the necessary protection in periods of transition. |
| --- | --- |

4.6.2

However, adverse consequences for workers cannot be entirely avoided. In addition to the requirements set out by the Commission, therefore, measures taken at Community level must also aim to give workers the necessary protection in periods of transition.

Brussels, 14 December 2005.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  The 2005 Review of the EU Sustainable Development Strategy; Initial Stocktaking and Future Orientations (COM(2005) 37 final), dated likewise 9 February 2005.

1

(2)  COM(2005) 120 final.

2

(3)  JO C 157 of 28.6.2005 – Fostering structural change: an industrial policy for an enlarged Europe (COM(2004) 274 final).

3

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| 17.3.2006 | EN | Official Journal of the European Union | C 65/63 |
| --- | --- | --- | --- |

17.3.2006

EN

Official Journal of the European Union

C 65/63

---

Opinion of the European Economic and Social Committee on the Proposal for a Council Decision establishing the specific ‘Programme Prevention, Preparedness and Consequence Management of Terrorism, for the Period 2007-2013. General Programme Security and Safeguarding Liberties’

(COM(2005) 124 final — 2005/0034 (CNS))

(2006/C 65/13)

On 25 July 2005, the Council decided to consult the European Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on the abovementioned proposal.

The Section for Employment, Social Affairs and Citizenship, which was responsible for the Committee's work on the subject, adopted its opinion on 14 November 2005. The rapporteur was Mr Cabra de Luna.

At its 422nd plenary session, held on 14 and 15 December 2005 (meeting of 14 December 2005), the European Economic and Social Committee adopted the following opinion by 126 votes, with ten abstentions.

1.   Introduction

| 1.1 | The Commission has forwarded to the Council and the European Parliament its Proposal for a Council Decision establishing a framework programme on Security and Safeguarding Liberties, comprising two instruments: a specific programme Prevention, Preparedness and Consequence Management of Terrorism, and another, Prevention of and Fight against Crime, both for the period 2007-2013. The framework programme is consistent with the Commission's intention to support the development of the Area of Freedom, Security and Justice under the 2007-2013 financial perspectives by extending this to cover citizenship, thus placing the traditional concept of Justice and Home Affairs (JHA) within a wider context, in line with the United Nations' new approach to Human Security involving ‘a broader, more comprehensive concept for security’ (1). This innovation is extremely interesting and represents an important step towards establishing a concept of security shared by all social players. The added value of this framework programme is provided by its European dimension, which enables the generation of synergies between European and national fields of action. |
| --- | --- |

1.1

The Commission has forwarded to the Council and the European Parliament its Proposal for a Council Decision establishing a framework programme on Security and Safeguarding Liberties, comprising two instruments: a specific programme Prevention, Preparedness and Consequence Management of Terrorism, and another, Prevention of and Fight against Crime, both for the period 2007-2013. The framework programme is consistent with the Commission's intention to support the development of the Area of Freedom, Security and Justice under the 2007-2013 financial perspectives by extending this to cover citizenship, thus placing the traditional concept of Justice and Home Affairs (JHA) within a wider context, in line with the United Nations' new approach to Human Security involving ‘a broader, more comprehensive concept for security’ (1). This innovation is extremely interesting and represents an important step towards establishing a concept of security shared by all social players. The added value of this framework programme is provided by its European dimension, which enables the generation of synergies between European and national fields of action.

| 1.2 | The Commission insists that in Europe, citizenship, freedom, security and justice must be developed in parallel and on an equal basis, with a balance between the principles of democracy and respect for human rights, fundamental liberties and the rule of law. The Union is gradually increasing its activities in this field: beginning with the Vienna Action Plan (2) and following the lines of action of the Tampere European Council of 1999, the Union has been responding through legislation and financial support programmes. Furthermore, these lines of action were clarified in the Treaty on European Union and the Hague Programme, adopted by the European Council of November 2004. The European Security and Defence Policy and the European Union Plan of Action on Combating Terrorism also highlight the Union's approach to fighting terrorism. |
| --- | --- |

1.2

The Commission insists that in Europe, citizenship, freedom, security and justice must be developed in parallel and on an equal basis, with a balance between the principles of democracy and respect for human rights, fundamental liberties and the rule of law. The Union is gradually increasing its activities in this field: beginning with the Vienna Action Plan (2) and following the lines of action of the Tampere European Council of 1999, the Union has been responding through legislation and financial support programmes. Furthermore, these lines of action were clarified in the Treaty on European Union and the Hague Programme, adopted by the European Council of November 2004. The European Security and Defence Policy and the European Union Plan of Action on Combating Terrorism also highlight the Union's approach to fighting terrorism.

| 1.3 | However, the European Parliament and the Court of Justice need to be more involved in all these areas, to safeguard liberties in the context of the policies that have been proposed and adopted by the EU. |
| --- | --- |

1.3

However, the European Parliament and the Court of Justice need to be more involved in all these areas, to safeguard liberties in the context of the policies that have been proposed and adopted by the EU.

| 1.4 | However, the Union's focus with regard to the development of the Area of Freedom, Security and Justice has thus far been on legislative action, with relatively meagre financing. Therefore, its efforts must now centre on the operational aspects, particularly in relation to the fight against terrorism, an especially insidious form of criminality that requires urgent action (3). |
| --- | --- |

1.4

However, the Union's focus with regard to the development of the Area of Freedom, Security and Justice has thus far been on legislative action, with relatively meagre financing. Therefore, its efforts must now centre on the operational aspects, particularly in relation to the fight against terrorism, an especially insidious form of criminality that requires urgent action (3).

| 1.5 | Terrorism, as a form of criminality, constitutes one of the biggest threats facing citizens today. The premise of the framework programme is that criminal acts threaten individual liberties and rights, democratic societies and the rule of law; therefore, freedom is only possible within a framework of security and legal guarantees. Public bodies and civil society must have the resources to keep up with the growing sophistication of terrorists and criminals who operate in an organised fashion and on an international scale; in this way it will be possible to cofinance bilateral and national projects aimed at boosting innovation, and applying the resulting experiences at a transnational or European level. |
| --- | --- |

1.5

Terrorism, as a form of criminality, constitutes one of the biggest threats facing citizens today. The premise of the framework programme is that criminal acts threaten individual liberties and rights, democratic societies and the rule of law; therefore, freedom is only possible within a framework of security and legal guarantees. Public bodies and civil society must have the resources to keep up with the growing sophistication of terrorists and criminals who operate in an organised fashion and on an international scale; in this way it will be possible to cofinance bilateral and national projects aimed at boosting innovation, and applying the resulting experiences at a transnational or European level.

| 1.6 | Organised crime represents a significant threat for the EU. According to Europol, approximately half of all organised crime groups in the Union are made up of citizens of the Member States; many of these have connections with non-EU countries associated with various forms of crime, such as drug trafficking, illegal immigration and people trafficking, financial crimes, smuggling and different types of property offences. |
| --- | --- |

1.6

Organised crime represents a significant threat for the EU. According to Europol, approximately half of all organised crime groups in the Union are made up of citizens of the Member States; many of these have connections with non-EU countries associated with various forms of crime, such as drug trafficking, illegal immigration and people trafficking, financial crimes, smuggling and different types of property offences.

| 1.7 | The fight against terrorism and organised crime should not jeopardise individual liberties and the rule of law; on the contrary, it should seek to preserve them. The democratic constitution, the evolution of the concept of individual liberties and the presumption of innocence cannot be undermined, nor questioned, by policies combating terrorism and organised crime. |
| --- | --- |

1.7

The fight against terrorism and organised crime should not jeopardise individual liberties and the rule of law; on the contrary, it should seek to preserve them. The democratic constitution, the evolution of the concept of individual liberties and the presumption of innocence cannot be undermined, nor questioned, by policies combating terrorism and organised crime.

| 1.8 | The fact that transnational cooperation between these groups is increasing is cause for concern, not only because this provides more opportunities for criminals, but also because it makes police or legal action difficult. It is impossible to fight transnational crime if police forces cannot act beyond the borders of their own countries. Organised crime groups exploit this weakness by living in one Member State and operating in another. Free movement of goods, people, capital and services is in many ways positive, but organised crime groups know how to exploit these freedoms and the flexibility of a legal area inadequately equipped for curbing their activities. |
| --- | --- |

1.8

The fact that transnational cooperation between these groups is increasing is cause for concern, not only because this provides more opportunities for criminals, but also because it makes police or legal action difficult. It is impossible to fight transnational crime if police forces cannot act beyond the borders of their own countries. Organised crime groups exploit this weakness by living in one Member State and operating in another. Free movement of goods, people, capital and services is in many ways positive, but organised crime groups know how to exploit these freedoms and the flexibility of a legal area inadequately equipped for curbing their activities.

| 1.9 | According to Europol, there are currently about 3 000 organised crime groups, involving some 30 000 identified members, actively operating within the Union. However, these figures, based on data provided by the Member States, are merely illustrative; in reality, the numbers are much greater. The size, structure, organisation and other characteristics of such groups differ as much within Member States as between them. Organised crime groups in the EU are involved in all kinds of criminal activities, particularly drug trafficking, illegal immigration, people trafficking, smuggling, stealing works of art from museums and churches, fraud and financial crimes. |
| --- | --- |

1.9

According to Europol, there are currently about 3 000 organised crime groups, involving some 30 000 identified members, actively operating within the Union. However, these figures, based on data provided by the Member States, are merely illustrative; in reality, the numbers are much greater. The size, structure, organisation and other characteristics of such groups differ as much within Member States as between them. Organised crime groups in the EU are involved in all kinds of criminal activities, particularly drug trafficking, illegal immigration, people trafficking, smuggling, stealing works of art from museums and churches, fraud and financial crimes.

| 1.10 | The EESC has already stated its views on this subject, in its opinion (4) on the Commission Working Document — The relationship between safeguarding internal security and complying with international protection obligations and instruments
   (5). The opinion's conclusions included the following:






  a. | The Committee fully supports coordinated action against terrorism at Community level and the open coordination method recommended by the Commission. However, it calls for great caution and very careful thought regarding preventive and punitive measures, notwithstanding the justifiable depth of emotion aroused by the unspeakable attacks perpetrated in the United States on 11 September, and other terrorist crimes committed in various EU and third countries. |
| --- | --- | --- |

1.10

The EESC has already stated its views on this subject, in its opinion (4) on the Commission Working Document — The relationship between safeguarding internal security and complying with international protection obligations and instruments
   (5). The opinion's conclusions included the following:

a.

The Committee fully supports coordinated action against terrorism at Community level and the open coordination method recommended by the Commission. However, it calls for great caution and very careful thought regarding preventive and punitive measures, notwithstanding the justifiable depth of emotion aroused by the unspeakable attacks perpetrated in the United States on 11 September, and other terrorist crimes committed in various EU and third countries.

| b. | While reasserting that the safeguarding of human rights and international protection instruments must be given priority over all other considerations, the Committee is aware that the common policy for internal security and fighting terrorism needs improving. Without questioning political and humanist ethics there must be effective protection for people and property, and to that end a balance must be struck between the differing requirements involved in protecting the various rights and freedoms. |
| --- | --- |

b.

While reasserting that the safeguarding of human rights and international protection instruments must be given priority over all other considerations, the Committee is aware that the common policy for internal security and fighting terrorism needs improving. Without questioning political and humanist ethics there must be effective protection for people and property, and to that end a balance must be struck between the differing requirements involved in protecting the various rights and freedoms.

2.   Gist of the Commission document

To improve management of the security risks that affect the Union's citizens, ensuring their rights and liberties by

| 1) | promoting and developing coordination, cooperation and mutual understanding between police forces, national authorities and other relevant bodies, |
| --- | --- |

1)

promoting and developing coordination, cooperation and mutual understanding between police forces, national authorities and other relevant bodies,

| 2) | stimulating, promoting and developing horizontal methods and tools to create strategies to fight terrorism and crime, such as public-private partnerships, codes of conduct and best practice, comparative statistics and crime detection techniques and |
| --- | --- |

2)

stimulating, promoting and developing horizontal methods and tools to create strategies to fight terrorism and crime, such as public-private partnerships, codes of conduct and best practice, comparative statistics and crime detection techniques and

| 3) | sharing information, knowledge and standards to protect vital infrastructures and to manage the consequences of terrorism and crime, as regards civil protection and the protection of victims of terrorism and witnesses. |
| --- | --- |

3)

sharing information, knowledge and standards to protect vital infrastructures and to manage the consequences of terrorism and crime, as regards civil protection and the protection of victims of terrorism and witnesses.

2.1   Types of action proposed

| — | European projects initiated and managed by the Commission, coordination mechanisms and networks, inter alia, analytical activities such as studies and activities aimed at identifying solutions, together with specific policies, training and exchange of staff; |
| --- | --- |

—

European projects initiated and managed by the Commission, coordination mechanisms and networks, inter alia, analytical activities such as studies and activities aimed at identifying solutions, together with specific policies, training and exchange of staff;

| — | transnational projects initiated and managed by at least two Member States (or one Member State and one candidate country); |
| --- | --- |

—

transnational projects initiated and managed by at least two Member States (or one Member State and one candidate country);

| — | national projects with Member States; |
| --- | --- |

—

national projects with Member States;

| — | subsidies for NGOs carrying out tasks with a European dimension. |
| --- | --- |

—

subsidies for NGOs carrying out tasks with a European dimension.

2.2   The following will receive special support

| — | operational cooperation and coordination actions (strengthening networking — links and relations, trust and mutual understanding, exchange and dissemination of information, experience and best practice); |
| --- | --- |

—

operational cooperation and coordination actions (strengthening networking — links and relations, trust and mutual understanding, exchange and dissemination of information, experience and best practice);

| — | analytical, follow-up and evaluation actions; |
| --- | --- |

—

analytical, follow-up and evaluation actions;

| — | development and transfer of technology and methodology; |
| --- | --- |

—

development and transfer of technology and methodology;

| — | training, exchange of staff and experts; |
| --- | --- |

—

training, exchange of staff and experts;

| — | information and distribution activities. |
| --- | --- |

—

information and distribution activities.

2.3   Respect for the principles of subsidiarity and proportionality

With regard to the principle of subsidiarity, the framework programme does not intervene in areas covered by programmes managed by each Member State's national authorities; rather, it focuses on issues where value can be added at European level. In this sense, it complements national programmes and maximises synergies with bilateral and multilateral activities.

With regard to the principle of proportionality, actions are defined as generally as possible and the administrative and financial arrangements for their implementation are kept as simple as possible.

2.4   Simplification and rationalisation

The legal form and management of the proposed instruments are simplified, financing rationalised, assignment of priorities made more flexible and transparency increased. Potential beneficiaries will be able to apply using a standard system.

2.5   Budgetary allocation

The proposed budget for the framework programme totals EUR 735 million, of which EUR 137,4 million will be for the instrument Prevention, Preparedness and Consequence Management of Terrorism, and EUR 597,6 million for Prevention of and Fight against Crime.

2.6   Types of intervention and methods of implementation

| — | subsidies following a call for tender; |
| --- | --- |

—

subsidies following a call for tender;

| — | public service contracts. |
| --- | --- |

—

public service contracts.

3.   General comments — Dimensions of the threats posed by crime and terrorism to EU citizens' well-being

| 3.1 | According to Europol, organised crime groups use the political and economic instability of countries outside the Union to facilitate their illegal activities, particularly in countries of origin and transit. Through corruption and the promise of a better future, people may become involved, either actively or passively, in crime. This growth in criminality will serve to perpetuate some of the structural deficiencies that provided opportunities for criminal activity in the first place, delaying the introduction of democratic or economic reforms for example. |
| --- | --- |

3.1

According to Europol, organised crime groups use the political and economic instability of countries outside the Union to facilitate their illegal activities, particularly in countries of origin and transit. Through corruption and the promise of a better future, people may become involved, either actively or passively, in crime. This growth in criminality will serve to perpetuate some of the structural deficiencies that provided opportunities for criminal activity in the first place, delaying the introduction of democratic or economic reforms for example.

| 3.2 | Terrorism is a direct assault on human dignity and the most fundamental principles of international law; it is a threat to all states and peoples; it can appear at any moment and anywhere, and it directly attacks the basic values of the societies that form the EU and other international organisations (6): the rule of law, personal safety, respect and tolerance. Terrorist crimes are crimes against humanity, democracy and human rights; they breed hate and fear, and nurture divisions between religious, ideological and ethnic groups. |
| --- | --- |

3.2

Terrorism is a direct assault on human dignity and the most fundamental principles of international law; it is a threat to all states and peoples; it can appear at any moment and anywhere, and it directly attacks the basic values of the societies that form the EU and other international organisations (6): the rule of law, personal safety, respect and tolerance. Terrorist crimes are crimes against humanity, democracy and human rights; they breed hate and fear, and nurture divisions between religious, ideological and ethnic groups.

| 3.3 | This phenomenon has afflicted people throughout the world for decades as cities from every continent all bear the scars of attacks of varying magnitude with the same aim: to kill or cause as much harm as possible to human beings, to destroy property and infrastructure, to ruin businesses and economies, to intimidate the population or groups of people and to force the hand of governments and international organisations. |
| --- | --- |

3.3

This phenomenon has afflicted people throughout the world for decades as cities from every continent all bear the scars of attacks of varying magnitude with the same aim: to kill or cause as much harm as possible to human beings, to destroy property and infrastructure, to ruin businesses and economies, to intimidate the population or groups of people and to force the hand of governments and international organisations.

| 3.4 | The destruction of the New York World Trade Center on 11 September 2001 was the culmination of a new kind of global terrorism, which began with an earlier attempt to destroy the Twin Towers in 1993. The terrorism we now face is unprecedented in its scope, in its capacity to provoke serious conflict (7) and in its determination to kill civilians indiscriminately and on a massive scale. Civil aviation, vital infrastructure and the computer systems that run most of the processes that lend normality and modernity to our lives are easy targets for terrorist groups driven by a total determination to inflict the greatest possible damage on our societies by attacking their most vulnerable component: ordinary people. |
| --- | --- |

3.4

The destruction of the New York World Trade Center on 11 September 2001 was the culmination of a new kind of global terrorism, which began with an earlier attempt to destroy the Twin Towers in 1993. The terrorism we now face is unprecedented in its scope, in its capacity to provoke serious conflict (7) and in its determination to kill civilians indiscriminately and on a massive scale. Civil aviation, vital infrastructure and the computer systems that run most of the processes that lend normality and modernity to our lives are easy targets for terrorist groups driven by a total determination to inflict the greatest possible damage on our societies by attacking their most vulnerable component: ordinary people.

| 3.5 | Europe has suffered serious terrorist attacks, including the most recent manifestation of the campaign of global terror, in London on 21 July 2005. There is a real and constant possibility of further attacks. Therefore we must be prepared: firstly, in order to prevent such attacks, and secondly to deal with the consequences of attacks we cannot prevent, in whatever form. We are growing accustomed to bombings that cause dozens or hundreds of deaths and urban chaos; however, the terrorist groups responsible for these attacks have the determination, patience and resources necessary to carry out large-scale attacks, such as the destruction of commercial aircraft or the release of chemical, biological or ‘dirty’ bombs in densely populated areas. |
| --- | --- |

3.5

Europe has suffered serious terrorist attacks, including the most recent manifestation of the campaign of global terror, in London on 21 July 2005. There is a real and constant possibility of further attacks. Therefore we must be prepared: firstly, in order to prevent such attacks, and secondly to deal with the consequences of attacks we cannot prevent, in whatever form. We are growing accustomed to bombings that cause dozens or hundreds of deaths and urban chaos; however, the terrorist groups responsible for these attacks have the determination, patience and resources necessary to carry out large-scale attacks, such as the destruction of commercial aircraft or the release of chemical, biological or ‘dirty’ bombs in densely populated areas.

| 3.6 | This must not undermine the integrity of the rule of law and the constitutional guarantees enjoyed by every citizen. The authorities, always bound by the law, can in some ways overstep the mark in their efforts to prevent and clamp down on terrorism. |
| --- | --- |

3.6

This must not undermine the integrity of the rule of law and the constitutional guarantees enjoyed by every citizen. The authorities, always bound by the law, can in some ways overstep the mark in their efforts to prevent and clamp down on terrorism.

| 3.7 | Social and economic policy measures can help to alleviate the exclusion and resentment caused by the negative impact of rapid socio-economic change which is frequently exploited by terrorists. To this end, the following are necessary:






  — | the adoption of long-term trade, subsidy and investment policies that help to integrate marginal groups and boost their involvement; |
| --- | --- | --- |

3.7

Social and economic policy measures can help to alleviate the exclusion and resentment caused by the negative impact of rapid socio-economic change which is frequently exploited by terrorists. To this end, the following are necessary:

—

the adoption of long-term trade, subsidy and investment policies that help to integrate marginal groups and boost their involvement;

| — | new efforts to reduce structural inequalities in societies, eliminating discrimination of certain groups; |
| --- | --- |

—

new efforts to reduce structural inequalities in societies, eliminating discrimination of certain groups;

| — | programmes focussed on promoting education of children and women, employment and representation of the socially excluded; |
| --- | --- |

—

programmes focussed on promoting education of children and women, employment and representation of the socially excluded;

| — | achievement of the Millennium Development Goals by 2015. |
| --- | --- |

—

achievement of the Millennium Development Goals by 2015.

| 3.8 | The prevention of terrorist attacks plays a key role in the EU's policies on freedom, security and justice; according to Eurobarometer, eight out of ten Europeans fear terrorism and 83 % of the population of the Union believe in the added value of EU action against terrorism, and therefore demand it. The key document of the EU's counter-terrorism strategy is the EU action plan on combating terrorism
   (8). Its main lines of action are:






  1. | Deepen the international consensus and enhance international efforts to combat terrorism, |
| --- | --- | --- |

3.8

The prevention of terrorist attacks plays a key role in the EU's policies on freedom, security and justice; according to Eurobarometer, eight out of ten Europeans fear terrorism and 83 % of the population of the Union believe in the added value of EU action against terrorism, and therefore demand it. The key document of the EU's counter-terrorism strategy is the EU action plan on combating terrorism
   (8). Its main lines of action are:

1.

Deepen the international consensus and enhance international efforts to combat terrorism,

| 2. | Target actions under EU external relations towards Third Countries where counter-terrorist capacity or commitment to combating terrorism needs to be enhanced, |
| --- | --- |

2.

Target actions under EU external relations towards Third Countries where counter-terrorist capacity or commitment to combating terrorism needs to be enhanced,

| 3. | Address the factors which contribute to support for, and recruitment into, terrorism, |
| --- | --- |

3.

Address the factors which contribute to support for, and recruitment into, terrorism,

| 4. | Reduce the access of terrorists to financial and other economic resources, |
| --- | --- |

4.

Reduce the access of terrorists to financial and other economic resources,

| 5. | Maximise capacity within EU bodies and Member States to detect, investigate and prosecute terrorists and prevent terrorist attacks, |
| --- | --- |

5.

Maximise capacity within EU bodies and Member States to detect, investigate and prosecute terrorists and prevent terrorist attacks,

| 6. | Protect the security of international transport and ensure effective systems of border control, |
| --- | --- |

6.

Protect the security of international transport and ensure effective systems of border control,

| 7. | Enhance the capability of Member States to deal with the consequences of a terrorist attack. |
| --- | --- |

7.

Enhance the capability of Member States to deal with the consequences of a terrorist attack.

| 3.9 | As terrorism is a global phenomenon, the response to it must also be global, not only in the sense that international cooperation between states, organisations and international bodies is essential, but also in that all sectors of society must be involved: organised civil society (including economic and social stakeholders and organisations of general interest or various activities), all types of government institution and the general public. A process of political and civil dialogue in the general context of security and safeguarding liberty should be initiated. |
| --- | --- |

3.9

As terrorism is a global phenomenon, the response to it must also be global, not only in the sense that international cooperation between states, organisations and international bodies is essential, but also in that all sectors of society must be involved: organised civil society (including economic and social stakeholders and organisations of general interest or various activities), all types of government institution and the general public. A process of political and civil dialogue in the general context of security and safeguarding liberty should be initiated.

| 3.10 | To this end, organised civil society has the capacity and duty to play a central role in the integrated response to terrorism. The fact that organised civil society is built on active citizenship gives it a more flexible, creative and varied standpoint from which to develop preventative measures more effectively than government. Organised civil society can promote the spread of knowledge and understanding, both horizontally and from the bottom up, since these are vital to the construction of inclusive societies that enable the participation of all through civic cooperation, economic activity and education.
  Furthermore, the proposals made by organised civil society on the need for a balance between security measures and measures to safeguard liberties should be taken into account by the relevant public authorities. |
| --- | --- |

3.10

To this end, organised civil society has the capacity and duty to play a central role in the integrated response to terrorism. The fact that organised civil society is built on active citizenship gives it a more flexible, creative and varied standpoint from which to develop preventative measures more effectively than government. Organised civil society can promote the spread of knowledge and understanding, both horizontally and from the bottom up, since these are vital to the construction of inclusive societies that enable the participation of all through civic cooperation, economic activity and education.

Furthermore, the proposals made by organised civil society on the need for a balance between security measures and measures to safeguard liberties should be taken into account by the relevant public authorities.

| 3.11 | All kinds of non-state actors, economic and social movements and players, media, various interest organisations, the academic community, religious leaders, the world of art and culture, global public opinion — all these can and must play a more active role in this area. |
| --- | --- |

3.11

All kinds of non-state actors, economic and social movements and players, media, various interest organisations, the academic community, religious leaders, the world of art and culture, global public opinion — all these can and must play a more active role in this area.

| 3.12 | A dynamic civil society can take on a strategic role in protecting local communities, tackling extremist ideologies and addressing the issue of political violence. Civil society is an open space where citizens can determine their own destiny; it is a form of resistance and protest, a source of information, public debate and social reflection, and a mechanism for mediation, reconciliation and compromise. Civil society provides a platform for different social groups and causes, gives a voice to minorities and nonconformists, and promotes — through its own diversity — a culture of tolerance and pluralism. Civil society includes radicals and moderates, those within the system and those on the margins, those that offer resistance and those that negotiate. |
| --- | --- |

3.12

A dynamic civil society can take on a strategic role in protecting local communities, tackling extremist ideologies and addressing the issue of political violence. Civil society is an open space where citizens can determine their own destiny; it is a form of resistance and protest, a source of information, public debate and social reflection, and a mechanism for mediation, reconciliation and compromise. Civil society provides a platform for different social groups and causes, gives a voice to minorities and nonconformists, and promotes — through its own diversity — a culture of tolerance and pluralism. Civil society includes radicals and moderates, those within the system and those on the margins, those that offer resistance and those that negotiate.

| 3.13 | Civil society can play a critical role in building a new approach to coordinated global action, until now hindered by unilateralist attitudes and recent international political disagreements. Over the last few decades, different representatives of civil society have formed dynamic international alliances — involving people and groups all over the world — in the advancement of global causes, such as gender equality, peace and human rights, the fight against AIDS, the environment, fair trade and global justice movements, etc. |
| --- | --- |

3.13

Civil society can play a critical role in building a new approach to coordinated global action, until now hindered by unilateralist attitudes and recent international political disagreements. Over the last few decades, different representatives of civil society have formed dynamic international alliances — involving people and groups all over the world — in the advancement of global causes, such as gender equality, peace and human rights, the fight against AIDS, the environment, fair trade and global justice movements, etc.

| 3.14 | There is an increasingly widespread conviction that in the fight against terrorism, state action is not enough if it does not go hand-in-hand with the active commitment of civil society and its stakeholders. As the forum of organised civil society, the Committee has the opportunity and duty to act in those areas falling within its remit, to contribute to the counter-terrorist activities being promoted in the EU and other relevant fora. Furthermore, such efforts should naturally enable the Committee, in its role of prevention, cooperation and dialogue, to contribute to the development of anti-terrorism policies that affect its area of action. The proposals for Council Decisions establishing the specific programmes Prevention, Preparedness and Consequence Management of Terrorism and Prevention of and Fight against Crime offer broad and flexible scope for all kinds of initiative. |
| --- | --- |

3.14

There is an increasingly widespread conviction that in the fight against terrorism, state action is not enough if it does not go hand-in-hand with the active commitment of civil society and its stakeholders. As the forum of organised civil society, the Committee has the opportunity and duty to act in those areas falling within its remit, to contribute to the counter-terrorist activities being promoted in the EU and other relevant fora. Furthermore, such efforts should naturally enable the Committee, in its role of prevention, cooperation and dialogue, to contribute to the development of anti-terrorism policies that affect its area of action. The proposals for Council Decisions establishing the specific programmes Prevention, Preparedness and Consequence Management of Terrorism and Prevention of and Fight against Crime offer broad and flexible scope for all kinds of initiative.

| 3.15 | The following general observations should be taken into account: |
| --- | --- |

3.15

The following general observations should be taken into account:

| 3.15.1 | The EESC strongly condemns any kind of terrorism and takes a firm stance on this issue. |
| --- | --- |

3.15.1

The EESC strongly condemns any kind of terrorism and takes a firm stance on this issue.

| 3.15.2 | The EESC firmly supports the fight against crime and terrorism and emphasises the positive impact of the appointment of the EU coordinator in the fight against terrorism, Mr Gijs de Vries. |
| --- | --- |

3.15.2

The EESC firmly supports the fight against crime and terrorism and emphasises the positive impact of the appointment of the EU coordinator in the fight against terrorism, Mr Gijs de Vries.

| 3.15.3 | Progress in fighting terrorism and crime in the EU must be consolidated. |
| --- | --- |

3.15.3

Progress in fighting terrorism and crime in the EU must be consolidated.

| 3.15.4 | In addition, there must be effective cooperation and coordination between Member States with regard to law enforcement, intelligence and judicial matters (giving priority to the principle of availability of relevant information); cooperation with third countries should also be effective and permanent. |
| --- | --- |

3.15.4

In addition, there must be effective cooperation and coordination between Member States with regard to law enforcement, intelligence and judicial matters (giving priority to the principle of availability of relevant information); cooperation with third countries should also be effective and permanent.

| 3.15.5 | Strategic public-private partnerships also play an important part in the Commission proposal. |
| --- | --- |

3.15.5

Strategic public-private partnerships also play an important part in the Commission proposal.

| 3.16 | Organised civil society can play a role at two levels: in preventing attacks and in managing their consequences, whether physical, psychological or economic. In line with the types of actions set out in the proposals, and making the most of the broad net cost by the proposals' definitions, the Committee can promote various types of general initiative, within its area of responsibility, in the same areas focussed on at the International Summit on Democracy, Terrorism and Security, which closed in Madrid on 11 March 2005. At this meeting, a plan of action entitled the Madrid Agenda was drawn up to provide a framework for the implementation of different recommendations (9). |
| --- | --- |

3.16

Organised civil society can play a role at two levels: in preventing attacks and in managing their consequences, whether physical, psychological or economic. In line with the types of actions set out in the proposals, and making the most of the broad net cost by the proposals' definitions, the Committee can promote various types of general initiative, within its area of responsibility, in the same areas focussed on at the International Summit on Democracy, Terrorism and Security, which closed in Madrid on 11 March 2005. At this meeting, a plan of action entitled the Madrid Agenda was drawn up to provide a framework for the implementation of different recommendations (9).

4.   Specific comments

| 4.1 | Proposal for a Council Decision 2005/0034 (CNS) establishing the specific Programme Prevention, Preparedness and Consequence Management of Terrorism, for the Period 2007-2013 |
| --- | --- |

4.1

Proposal for a Council Decision 2005/0034 (CNS) establishing the specific Programme Prevention, Preparedness and Consequence Management of Terrorism, for the Period 2007-2013

| 4.1.1 | The EESC agrees with the programme's general objectives, set out by the Commission in Articles 3 and 4 of the proposal. |
| --- | --- |

4.1.1

The EESC agrees with the programme's general objectives, set out by the Commission in Articles 3 and 4 of the proposal.

| 4.1.2 | With regard to the eligible actions listed in Article 5 of the proposal, the EESC believes that special attention should be given to: |
| --- | --- |

4.1.2

With regard to the eligible actions listed in Article 5 of the proposal, the EESC believes that special attention should be given to:

| 4.1.2.1 | ‘Analytical, monitoring, evaluation, audit and inspection activities’ [Article 5(2) (b)]; although basic research in this field is to be channelled through the 7th research framework programme, which according to the Commission's current proposal has set aside EUR 1 billion for this proposal, this programme should promote applied research relating to the discussion and sharing of information developed by think-tanks, academic institutions and different fora and organisations acting as centres for debate and the formulation of political proposals which strengthen the formal and informal links maintained by researchers, analysts and intellectuals with decision-makers. |
| --- | --- |

4.1.2.1

‘Analytical, monitoring, evaluation, audit and inspection activities’ [Article 5(2) (b)]; although basic research in this field is to be channelled through the 7th research framework programme, which according to the Commission's current proposal has set aside EUR 1 billion for this proposal, this programme should promote applied research relating to the discussion and sharing of information developed by think-tanks, academic institutions and different fora and organisations acting as centres for debate and the formulation of political proposals which strengthen the formal and informal links maintained by researchers, analysts and intellectuals with decision-makers.

| 4.1.2.2 | ‘Training, exchange of staff and experts’ [5(2) (d)] relating to the above activities, but especially with those that enable the creation, development and ongoing maintenance of high-quality training programmes aimed at linguists, translators and interpreters of languages on which there are currently few experts and which are used to spread both messages regarding the commission of crimes and terrorist acts and the propaganda used to justify these and attract new recruits. |
| --- | --- |

4.1.2.2

‘Training, exchange of staff and experts’ [5(2) (d)] relating to the above activities, but especially with those that enable the creation, development and ongoing maintenance of high-quality training programmes aimed at linguists, translators and interpreters of languages on which there are currently few experts and which are used to spread both messages regarding the commission of crimes and terrorist acts and the propaganda used to justify these and attract new recruits.

| 4.1.2.3 | ‘Awareness and dissemination activities’ [5(2) (e)], including those mentioned in point 4.2.2.1, putting special emphasis on the role of the media, which can serve to discredit violence, but sometimes facilitates the unlimited dissemination of propaganda by recognised terrorist and criminal groups; this means that their inalienable right to report the news without censorship has the perverse effect of giving a voice to those criminal groups with terrorist intentions: broadcasting live images of attacks, kidnappings and the murder of terrorised hostages. |
| --- | --- |

4.1.2.3

‘Awareness and dissemination activities’ [5(2) (e)], including those mentioned in point 4.2.2.1, putting special emphasis on the role of the media, which can serve to discredit violence, but sometimes facilitates the unlimited dissemination of propaganda by recognised terrorist and criminal groups; this means that their inalienable right to report the news without censorship has the perverse effect of giving a voice to those criminal groups with terrorist intentions: broadcasting live images of attacks, kidnappings and the murder of terrorised hostages.

| 4.1.3 | In Article 6 it would be appropriate to clarify in detail who may apply, as in Article 5 of the other programme. Insofar as they work in highly sensitive areas, the Commission will publish a list of the beneficiaries of subsidies each year. |
| --- | --- |

4.1.3

In Article 6 it would be appropriate to clarify in detail who may apply, as in Article 5 of the other programme. Insofar as they work in highly sensitive areas, the Commission will publish a list of the beneficiaries of subsidies each year.

| 4.1.4 | Article 14(3) stipulates that the Commission will submit to the Parliament and the Council interim evaluation reports and a communication on the implementation of the programme. The EESC should also be involved throughout the evaluation process. |
| --- | --- |

4.1.4

Article 14(3) stipulates that the Commission will submit to the Parliament and the Council interim evaluation reports and a communication on the implementation of the programme. The EESC should also be involved throughout the evaluation process.

| 4.2 | Proposal for a Council Decision establishing the specific Programme Prevention of and Fight against Crime for the Period 2007-2013 |
| --- | --- |

4.2

Proposal for a Council Decision establishing the specific Programme Prevention of and Fight against Crime for the Period 2007-2013

| 4.2.1 | The EESC agrees with the programme's general and specific objectives [Articles 2 and 3]. |
| --- | --- |

4.2.1

The EESC agrees with the programme's general and specific objectives [Articles 2 and 3].

| 4.2.2 | Although the Fundamental Rights and Justice programme provides for social and legal assistance to victims, the EESC calls for special attention to be paid to protecting witnesses and victims and promoting and developing best practice therein as part of law enforcement services [Articles 3(1) (c) and 3(2) (c)], as well as aspects relating to crime prevention and criminology and the development of horizontal methods and tools needed for strategically preventing and fighting crime [Articles 3(1) (b) and 3(2) (b)].To this end, the EESC supports the Commission's work on pilot projects to fight terrorism, people trafficking and provide financial support for the protection of victims of terrorism. Based on evaluation of these pilot projects, the EESC believes that, once implemented, they should lead to the creation of a permanent compensation fund for victims of terrorism. |
| --- | --- |

4.2.2

Although the Fundamental Rights and Justice programme provides for social and legal assistance to victims, the EESC calls for special attention to be paid to protecting witnesses and victims and promoting and developing best practice therein as part of law enforcement services [Articles 3(1) (c) and 3(2) (c)], as well as aspects relating to crime prevention and criminology and the development of horizontal methods and tools needed for strategically preventing and fighting crime [Articles 3(1) (b) and 3(2) (b)].To this end, the EESC supports the Commission's work on pilot projects to fight terrorism, people trafficking and provide financial support for the protection of victims of terrorism. Based on evaluation of these pilot projects, the EESC believes that, once implemented, they should lead to the creation of a permanent compensation fund for victims of terrorism.

| 4.2.2.1 | With regard to the protection of victims of terrorism and their families and dependants, in all its forms: the human aspect of the fight against terrorism, based on protecting victims and promoting the role of civil society, must be made an integral part of the strategy for combating terrorism. Victims suffer violence which targets the whole of society and the values it represents. Therefore, society has a moral and political obligation to recognise and respond to such violence. States must protect and guarantee the rights and liberties of their citizens, starting with the right to life and the right to live free from fear or threats. Victims are the reality of terrorism; they are the voice of society and its front line in the war on terrorism. Focussing on the victims' testimonies is the most effective way of raising awareness and building the necessary commitment in society to the fight against terrorism, and of forging a civic response. It is also the best way of discrediting and isolating terrorists, both politically and morally. To this end, the following are necessary:






  — | the international community's understanding and solidarity, sending out a clear message that respect for human rights is at the heart of the fight against terrorism; |
| --- | --- | --- |

4.2.2.1

With regard to the protection of victims of terrorism and their families and dependants, in all its forms: the human aspect of the fight against terrorism, based on protecting victims and promoting the role of civil society, must be made an integral part of the strategy for combating terrorism. Victims suffer violence which targets the whole of society and the values it represents. Therefore, society has a moral and political obligation to recognise and respond to such violence. States must protect and guarantee the rights and liberties of their citizens, starting with the right to life and the right to live free from fear or threats. Victims are the reality of terrorism; they are the voice of society and its front line in the war on terrorism. Focussing on the victims' testimonies is the most effective way of raising awareness and building the necessary commitment in society to the fight against terrorism, and of forging a civic response. It is also the best way of discrediting and isolating terrorists, both politically and morally. To this end, the following are necessary:

—

the international community's understanding and solidarity, sending out a clear message that respect for human rights is at the heart of the fight against terrorism;

| — | international measures and protection and assistance mechanisms for victims of terrorism; |
| --- | --- |

—

international measures and protection and assistance mechanisms for victims of terrorism;

| — | the debate on victims is closely connected to the debate on human rights; the debate on the human rights and fundamental liberties of individuals caught up in the war on terrorism should be broadened and should endeavour to reconcile Member States' obligation to respect human rights in combating terrorism with their obligation to adopt all measures necessary to protect people's human rights when confronted with terrorism. Unfortunately, in the Commission document being discussed here, there is no mention of this debate; |
| --- | --- |

—

the debate on victims is closely connected to the debate on human rights; the debate on the human rights and fundamental liberties of individuals caught up in the war on terrorism should be broadened and should endeavour to reconcile Member States' obligation to respect human rights in combating terrorism with their obligation to adopt all measures necessary to protect people's human rights when confronted with terrorism. Unfortunately, in the Commission document being discussed here, there is no mention of this debate;

| — | encouragement of measures to promote the commitment of civil society to fighting terrorism, with the input and active participation of civil society stakeholders, in particular victims, on the international stage. |
| --- | --- |

—

encouragement of measures to promote the commitment of civil society to fighting terrorism, with the input and active participation of civil society stakeholders, in particular victims, on the international stage.

| 4.2.2.2 | With regard to the prevention of crime: drug trafficking is the most common type of transnational crime in the EU. and well-established criminal groups in all Member States guarantee wide scale distribution throughout the Union. Furthermore, the trend in trafficking more than one substance continues to grow.
  Trafficking in human beings is a growing problem in the Union; the economic benefits of this activity are enormous. The EU must strengthen its operational capacity to initiate and support investigations into the trafficking of human beings and its associated forms, such as the sexual exploitation of children and prostitution in a wider sense. The EESC considers initiatives such as the Proposal for a Council Directive on the short-term residence permit issued to victims of action to facilitate illegal immigration or trafficking in human beings who cooperate with the competent authorities
   (10), which strengthened the instruments used to combat illegal immigration and trafficking in human beings (11), to be essential to these efforts.
  Corruption, money laundering, financial offences and counterfeiting of money are also causes for concern in the Union. Money laundering is a key activity of organised crime groups that operate in the Union, since it serves as a source of financing. All of these factors (forms of criminality and terrorist financing) only serve to create synergies that perpetuate the exploitation and abuse of human beings (12). It is particularly necessary to:






  — | encourage cooperation and strategic alliances between the public and private sectors, especially in the development of best practice, as well as in the fight against money laundering and terrorist financing, while meeting standards of transparency and professional integrity in the financial sector and non-profit organisations, in line with FATF recommendations (13) (the main international body responsible for protecting the international financial system from money laundering and terrorist financing) and the EU's Action Plan (14); |
| --- | --- | --- |

4.2.2.2

With regard to the prevention of crime: drug trafficking is the most common type of transnational crime in the EU. and well-established criminal groups in all Member States guarantee wide scale distribution throughout the Union. Furthermore, the trend in trafficking more than one substance continues to grow.

Trafficking in human beings is a growing problem in the Union; the economic benefits of this activity are enormous. The EU must strengthen its operational capacity to initiate and support investigations into the trafficking of human beings and its associated forms, such as the sexual exploitation of children and prostitution in a wider sense. The EESC considers initiatives such as the Proposal for a Council Directive on the short-term residence permit issued to victims of action to facilitate illegal immigration or trafficking in human beings who cooperate with the competent authorities
   (10), which strengthened the instruments used to combat illegal immigration and trafficking in human beings (11), to be essential to these efforts.

Corruption, money laundering, financial offences and counterfeiting of money are also causes for concern in the Union. Money laundering is a key activity of organised crime groups that operate in the Union, since it serves as a source of financing. All of these factors (forms of criminality and terrorist financing) only serve to create synergies that perpetuate the exploitation and abuse of human beings (12). It is particularly necessary to:

—

encourage cooperation and strategic alliances between the public and private sectors, especially in the development of best practice, as well as in the fight against money laundering and terrorist financing, while meeting standards of transparency and professional integrity in the financial sector and non-profit organisations, in line with FATF recommendations (13) (the main international body responsible for protecting the international financial system from money laundering and terrorist financing) and the EU's Action Plan (14);

| — | encourage statistical benchmarks and applied criminology, as well as their application to real measures and policies. |
| --- | --- |

—

encourage statistical benchmarks and applied criminology, as well as their application to real measures and policies.

| 4.3 | With regard to Article 4(2) (types of activities which may be financed): |
| --- | --- |

4.3

With regard to Article 4(2) (types of activities which may be financed):

| 4.3.1 | Specific reference should be made to the importance of interfaith and intergenerational dialogue in identifying fundamentalist beliefs and promoting best practices that foster mutual understanding, moderation and democratic tolerance, thus limiting the radicalisation and recruitment of new followers. The fight against terrorism requires us to deprive the phenomenon of its moral legitimacy; this can only be achieved through dialogue and an understanding of ‘the other side’. Actions should be promoted that enable groups of different faiths and their respective leaders to build bridges of comprehension and understanding, deepening harmony and tolerance, and helping to create a body of knowledge that enables us to identify the causes of hatred and how they can be overcome. The different religious communities must get to know each other better — there is no more effective way to do this than through measures facilitating the creation of networks between their members. |
| --- | --- |

4.3.1

Specific reference should be made to the importance of interfaith and intergenerational dialogue in identifying fundamentalist beliefs and promoting best practices that foster mutual understanding, moderation and democratic tolerance, thus limiting the radicalisation and recruitment of new followers. The fight against terrorism requires us to deprive the phenomenon of its moral legitimacy; this can only be achieved through dialogue and an understanding of ‘the other side’. Actions should be promoted that enable groups of different faiths and their respective leaders to build bridges of comprehension and understanding, deepening harmony and tolerance, and helping to create a body of knowledge that enables us to identify the causes of hatred and how they can be overcome. The different religious communities must get to know each other better — there is no more effective way to do this than through measures facilitating the creation of networks between their members.

| 4.3.2 | Without prejudice to those activities of the Migration Flows programme that relate to the social integration and employment of people, especially young people, belonging to ethnic, religious, cultural or immigrant minority groups, this programme should also develop best practice from successful methodologies used in this field, particularly with regard to training and exchange of staff and experts (Article 4(2)). |
| --- | --- |

4.3.2

Without prejudice to those activities of the Migration Flows programme that relate to the social integration and employment of people, especially young people, belonging to ethnic, religious, cultural or immigrant minority groups, this programme should also develop best practice from successful methodologies used in this field, particularly with regard to training and exchange of staff and experts (Article 4(2)).

| 4.3.3 | From the point of view of civil society organisations, the EESC is compelled to criticise the European Commission's recent preliminary proposal relating to a code of conduct for non-profit organisations to promote their transparency and financial responsibility. This proposal could have a negative impact on all European NGOs and discredit all such organisations, thus undermining their most useful social capital: the trust of the public and of local, national and European institutions.
  The EESC understands the concern to prevent the possible use of non-profit organisations to finance terrorism and other criminal activities. However, this must all be done using the ordinary instruments of prevention and prosecution available to the different Member States' authorities. Above all, work on the adoption of statutes for a European Association and a European Mutual Society, which has unfortunately been broken off, should be continued. |
| --- | --- |

4.3.3

From the point of view of civil society organisations, the EESC is compelled to criticise the European Commission's recent preliminary proposal relating to a code of conduct for non-profit organisations to promote their transparency and financial responsibility. This proposal could have a negative impact on all European NGOs and discredit all such organisations, thus undermining their most useful social capital: the trust of the public and of local, national and European institutions.

The EESC understands the concern to prevent the possible use of non-profit organisations to finance terrorism and other criminal activities. However, this must all be done using the ordinary instruments of prevention and prosecution available to the different Member States' authorities. Above all, work on the adoption of statutes for a European Association and a European Mutual Society, which has unfortunately been broken off, should be continued.

| 4.3.4 | The activities outlined in points 4.1.2.2 and 4.1.2.3 relating to ‘training, exchange of staff and experts’ and on ‘awareness and dissemination activities’ are also relevant here. |
| --- | --- |

4.3.4

The activities outlined in points 4.1.2.2 and 4.1.2.3 relating to ‘training, exchange of staff and experts’ and on ‘awareness and dissemination activities’ are also relevant here.

| 4.3.5 | Art and culture should also occupy an important place in the creation of a blueprint for a civic response to crime and terrorism, but also serve as a means of expressing and understanding other points of view, different to the widely held views in our countries. |
| --- | --- |

4.3.5

Art and culture should also occupy an important place in the creation of a blueprint for a civic response to crime and terrorism, but also serve as a means of expressing and understanding other points of view, different to the widely held views in our countries.

| 4.4 | With regard to Article 14 (Evaluation), the comments made in point 4.1.4 are reiterated. |
| --- | --- |

4.4

With regard to Article 14 (Evaluation), the comments made in point 4.1.4 are reiterated.

5.   Conclusion

| 5.1 | The EESC believes that this framework programme's two proposals are necessary and that, if in the process of interim evaluation the programme is judged to have made positive progress, the proposals should be assigned greater funding. |
| --- | --- |

5.1

The EESC believes that this framework programme's two proposals are necessary and that, if in the process of interim evaluation the programme is judged to have made positive progress, the proposals should be assigned greater funding.

| 5.2 | Furthermore, the EESC, within its own area of responsibility, must be involved in the dialogue with the Commission and the European Parliament to finalise the programme's annual plans, as well as the corresponding evaluation processes. |
| --- | --- |

5.2

Furthermore, the EESC, within its own area of responsibility, must be involved in the dialogue with the Commission and the European Parliament to finalise the programme's annual plans, as well as the corresponding evaluation processes.

| 5.3 | In addition, the EESC reiterates that the methods used in current European programmes defending liberty and security should strike a balance with the safeguarding of liberties, as stipulated in the opinion on The Hague Programme: Ten priorities for the next five years — The Partnership for European renewal in the field of Freedom, Security and Justice (COM(2005) 184 final) (SOC/209). |
| --- | --- |

5.3

In addition, the EESC reiterates that the methods used in current European programmes defending liberty and security should strike a balance with the safeguarding of liberties, as stipulated in the opinion on The Hague Programme: Ten priorities for the next five years — The Partnership for European renewal in the field of Freedom, Security and Justice (COM(2005) 184 final) (SOC/209).

| 5.4 | Protection of fundamental rights, liberties and security is the responsibility of all; it begins with the instilling of common values at primary school age, and must constantly aim to strike a balance between the three pillars — freedom, democracy, security. |
| --- | --- |

5.4

Protection of fundamental rights, liberties and security is the responsibility of all; it begins with the instilling of common values at primary school age, and must constantly aim to strike a balance between the three pillars — freedom, democracy, security.

Brussels, 14 December 2005.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

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(1)  Report on Human Security Now, United Nations http://www.humansecurity-chs.org.

1

Human Security Now

(2)  OJ C 19, 23.1.1999, p.1.

2

(3)  http://www.europol.eu.int/index.asp?page=publar2004#INTRODUCTION.

3

(4)  EESC opinion of 24 April 2002 (rapporteur working without a study group: Mr Retureau) (OJ C 149 of 21.6.2002).

4

(5)  Regarding the Commission Working Document - The relationship between safeguarding internal security and complying with international protection obligations and instruments (COM(2001) 743 final).

5

(6)  Speech by the Secretary-General of the United Nations at the Club of Madrid's Summit on Democracy, Terrorism and Security, Madrid, Spain, 11 March 2005 http://www.safe-democracy.org.

6

(7)  Rohan Gunaratna. Al Qaeda, viaje al interior del terrorismo islamista. Page 27. Editorial Servi Doc., Barcelona, 2003.

7

Al Qaeda, viaje al interior del terrorismo islamista

(8)  Note to the European Council, 16-17 June 2005, submitted by the Presidency and the EU Counter-Terrorism Coordinator:

8

http://www.consilium.eu.int/uedocs/cmsUpload/newWEBre01.en05.pdf.

(9)  http://cumbre.clubmadrid.org/agenda/la-agenda-de-madrid.html.

9

(10)  EESC opinion of 29 May 2002 (rapporteur: Mr Pariza Castaños) (OJ C 221 of 17.9.2002).

10

(11)  COM(2002) 71 final of 11.2.2002.

11

(12)  http://www.europol.eu.int/index.asp?page=publar2004#INTRODUCTION.

12

(13)  http://www.fatf-gafi.org/document/28/0,2340,en_32250379_32236930_33658140_1_1_1_1,00.html#Introduction.

13

(14)  Note to the European Council, 16-17 June 2005, submitted by the Presidency and the EU Counter-Terrorism Coordinator:

14

http://www.consilium.eu.int/uedocs/cmsUpload/newWEBre01.en05.pdf.

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| 17.3.2006 | EN | Official Journal of the European Union | C 65/70 |
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17.3.2006

EN

Official Journal of the European Union

C 65/70

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Opinion of the European Economic and Social Committee on the ‘Proposal for a Decision of the European Parliament and the Council on the European Year of Equal Opportunities for All (2007) — Towards a Just Society’

(COM(2005) 225 final — 2005/0107 (COD))

(2006/C 65/14)

On 27 October 2005, the European Economic and Social Committee, acting under Rule 29(2) of its Rules of Procedure, decided to draw up an opinion on the abovementioned proposal.

The Section for Employment, Social Affairs and Citizenship, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 8 December 2005. The rapporteur was Mária Herczog.

At its 422nd plenary session, held on 14 and 15 December 2005 (meeting of 14 December 2005), the European Economic and Social Committee adopted the following opinion by 123 votes in favour, no votes against and seven abstentions:

1.   EESC's position in brief

| 1.1 | The European Economic and Social Committee reiterates its strong support for the programme for the European Year of Equal Opportunities (2007), and its commitment to equal opportunities, European social cohesion and fundamental rights for all. |
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1.1

The European Economic and Social Committee reiterates its strong support for the programme for the European Year of Equal Opportunities (2007), and its commitment to equal opportunities, European social cohesion and fundamental rights for all.

| 1.2 | In its recent opinions on this subject the EESC has consistently emphasised the need for more tangible progress than has been achieved to date in order to eliminate all forms of discrimination as defined in Article 13. (1) The Committee acknowledges that various corrective measures have been taken to promote equal opportunities, but still feels that in many areas there is still a need for urgent action, and that the Year of Equal Opportunities in 2007 could represent a favourable opportunity to identify and highlight the groups concerned. |
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1.2

In its recent opinions on this subject the EESC has consistently emphasised the need for more tangible progress than has been achieved to date in order to eliminate all forms of discrimination as defined in Article 13. (1) The Committee acknowledges that various corrective measures have been taken to promote equal opportunities, but still feels that in many areas there is still a need for urgent action, and that the Year of Equal Opportunities in 2007 could represent a favourable opportunity to identify and highlight the groups concerned.

| 1.3 | The EESC believes that every individual residing within the EU should be guaranteed non-discrimination and equal opportunities in the enjoyment of the full range of human rights: civil, political, economic, social and cultural. Therefore, the Year should be used to advance the elimination of all types of discrimination. Although particular attention is given to the grounds covered by Article 13, the Year should be seen as an opportunity to raise awareness about the discrimination faced by specific groups that are not normally considered such as children and about issues related to discrimination not tackled yet. |
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1.3

The EESC believes that every individual residing within the EU should be guaranteed non-discrimination and equal opportunities in the enjoyment of the full range of human rights: civil, political, economic, social and cultural. Therefore, the Year should be used to advance the elimination of all types of discrimination. Although particular attention is given to the grounds covered by Article 13, the Year should be seen as an opportunity to raise awareness about the discrimination faced by specific groups that are not normally considered such as children and about issues related to discrimination not tackled yet.

| 1.4 | The EESC endorses the Social Agenda for the 2005-2010 period, which focuses on the need for equal opportunities and social cohesion, and formulates a new strategy for action in these areas. Subject to the following proposed modifications and additions, the EESC accepts and supports the objectives of the European Year of Equal Opportunities (2007), relating to rights, representation, recognition and respect and tolerance, as well as mainstreaming of the relevant issues. |
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1.4

The EESC endorses the Social Agenda for the 2005-2010 period, which focuses on the need for equal opportunities and social cohesion, and formulates a new strategy for action in these areas. Subject to the following proposed modifications and additions, the EESC accepts and supports the objectives of the European Year of Equal Opportunities (2007), relating to rights, representation, recognition and respect and tolerance, as well as mainstreaming of the relevant issues.

2.   Supporting arguments for the opinion and comments

2.1   Gist of the Commission document

| 2.1.1 | The Commission's Communication on the Social Agenda for the period 2005-2010 emphasised the importance of promoting equal opportunities for all in order to achieve a more cohesive society. It announced the Commission's intention to develop a new framework strategy on non-discrimination and equal opportunities for all (set out in the Communication accompanying this proposal). (2) One of the major initiatives announced in the Communication is to propose that 2007 be designated European Year of Equal Opportunities for All. The global objective of the Year will be to raise awareness of the benefits of a just, cohesive society where there is equality of opportunity for all. This will require tackling barriers to participation in society and promoting a climate in which Europe's diversity is seen as a source of social and cultural vitality. The specific objectives of the European Year are as follows:






  — | Rights — Raising awareness of rights to equality and non-discrimination |
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2.1.1

The Commission's Communication on the Social Agenda for the period 2005-2010 emphasised the importance of promoting equal opportunities for all in order to achieve a more cohesive society. It announced the Commission's intention to develop a new framework strategy on non-discrimination and equal opportunities for all (set out in the Communication accompanying this proposal). (2) One of the major initiatives announced in the Communication is to propose that 2007 be designated European Year of Equal Opportunities for All. The global objective of the Year will be to raise awareness of the benefits of a just, cohesive society where there is equality of opportunity for all. This will require tackling barriers to participation in society and promoting a climate in which Europe's diversity is seen as a source of social and cultural vitality. The specific objectives of the European Year are as follows:

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Rights — Raising awareness of rights to equality and non-discrimination

| — | Representation — Stimulating debate on ways to increase civil, political, economical, social, cultural participation in society |
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Representation — Stimulating debate on ways to increase civil, political, economical, social, cultural participation in society

| — | Recognition — Celebrating and accommodating diversity |
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Recognition — Celebrating and accommodating diversity

| — | Respect and tolerance — Promoting a more cohesive society |
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Respect and tolerance — Promoting a more cohesive society

The current proposal sets out the provisions for the European Year of Equal Opportunities for All and establishes a budget for the action. The proposal is based on Article 13 of the Treaty establishing the European Community. (3)

2.2   General and specific comments

| 2.2.1 | Achieving equality is, and should remain, a priority of EU policy. Although there have been significant legislative changes at European and national level in the anti-discrimination field, particular regarding the specific grounds of discrimination mentioned in Article 13 of the Treaty, further action is required to ensure more consistent implementation of equal opportunities and non-discrimination. Although indirect forms of discrimination are often discernible, they are difficult to prove, and the programme for the 2007 Year of Equal Opportunities should pay attention to this. |
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2.2.1

Achieving equality is, and should remain, a priority of EU policy. Although there have been significant legislative changes at European and national level in the anti-discrimination field, particular regarding the specific grounds of discrimination mentioned in Article 13 of the Treaty, further action is required to ensure more consistent implementation of equal opportunities and non-discrimination. Although indirect forms of discrimination are often discernible, they are difficult to prove, and the programme for the 2007 Year of Equal Opportunities should pay attention to this.

| 2.2.2 | Another area that needs to be addressed is the differences in the level and scope of protection against discrimination on different grounds. The Committee strongly recommends that discrimination on each ground — gender, race or ethnic origin, religion or belief, disability, age and sexual orientation — should be prohibited in the areas of employment, training, education, social protection, social advantages and access to goods and services. To do otherwise risks creating a hierarchy between the groups. |
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2.2.2

Another area that needs to be addressed is the differences in the level and scope of protection against discrimination on different grounds. The Committee strongly recommends that discrimination on each ground — gender, race or ethnic origin, religion or belief, disability, age and sexual orientation — should be prohibited in the areas of employment, training, education, social protection, social advantages and access to goods and services. To do otherwise risks creating a hierarchy between the groups.

| 2.2.3 | Since the drafting of the Charter of Fundamental Rights, the EU can no longer be seen as an intergovernmental association of states based on mere economic interest, and therefore adequate attention should be paid to the social groups which, as a result of various forms of exclusion, are either disadvantaged on labour markets and in economic life or, despite participation in labour markets, are still afflicted by poverty. |
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2.2.3

Since the drafting of the Charter of Fundamental Rights, the EU can no longer be seen as an intergovernmental association of states based on mere economic interest, and therefore adequate attention should be paid to the social groups which, as a result of various forms of exclusion, are either disadvantaged on labour markets and in economic life or, despite participation in labour markets, are still afflicted by poverty.

| 2.2.4 | There are social and economic arguments in favour of ensuring equal opportunities for all individuals and in particular those who are discriminated against or are in a less advantageous position due to social, economic, cultural geographical or other circumstances. If adequate support were provided, they could play a full part in society contributing both socially and economically. |
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2.2.4

There are social and economic arguments in favour of ensuring equal opportunities for all individuals and in particular those who are discriminated against or are in a less advantageous position due to social, economic, cultural geographical or other circumstances. If adequate support were provided, they could play a full part in society contributing both socially and economically.

| 2.2.5 | In the view of the EESC, the programme of the European Year of Equal Opportunities, planned for 2007, is an opportunity to highlight those who can be overlooked: for example young people, including children, who experience age discrimination; individuals who experience multiple discrimination on several grounds and inhabitants of remote or sparsely populated regions and towns who are affected by discrimination but may not have access to required services. |
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2.2.5

In the view of the EESC, the programme of the European Year of Equal Opportunities, planned for 2007, is an opportunity to highlight those who can be overlooked: for example young people, including children, who experience age discrimination; individuals who experience multiple discrimination on several grounds and inhabitants of remote or sparsely populated regions and towns who are affected by discrimination but may not have access to required services.

| 2.2.6 | The Committee considers that the Year should also provide the opportunity to further explore key challenges such as the topic of multiple discrimination often exercised towards some groups (e.g. disabled children, elderly migrants, Roma women). Finally, there is a need to take into account, in all initiatives in the anti-discrimination field, of the diverse and heterogeneous nature of the groups that most face discrimination. |
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2.2.6

The Committee considers that the Year should also provide the opportunity to further explore key challenges such as the topic of multiple discrimination often exercised towards some groups (e.g. disabled children, elderly migrants, Roma women). Finally, there is a need to take into account, in all initiatives in the anti-discrimination field, of the diverse and heterogeneous nature of the groups that most face discrimination.

| 2.2.7 | The European Year should be an opportunity to improve the situation of more groups. Showing the way ahead, special attention should be given to the UN's Convention on the Rights of the Child, a document ratified by all EU Member States, and thus opening the door to its inclusion among the principles adopted by the EU Member States, and making the protection of children's rights a European requirement in the future. |
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2.2.7

The European Year should be an opportunity to improve the situation of more groups. Showing the way ahead, special attention should be given to the UN's Convention on the Rights of the Child, a document ratified by all EU Member States, and thus opening the door to its inclusion among the principles adopted by the EU Member States, and making the protection of children's rights a European requirement in the future.

| 2.2.8 | It would still be premature to assess the initial impact of the Year of People with Disabilities (2003) and of the action plan then adopted (2004-2010), (4) but what is clear (5) is that this social group, thanks to the impact of the European year, is receiving more attention in the Member States, and that members of the public have easier access to more accurate information on their fellow-citizens with disabilities. However, in order to achieve real changes, an appropriate evaluation of progress to date and follow-up of the European Years are essential. An opinion on the evaluation and follow-up of the European Year of People with Disabilities is currently being prepared by the EESC. |
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2.2.8

It would still be premature to assess the initial impact of the Year of People with Disabilities (2003) and of the action plan then adopted (2004-2010), (4) but what is clear (5) is that this social group, thanks to the impact of the European year, is receiving more attention in the Member States, and that members of the public have easier access to more accurate information on their fellow-citizens with disabilities. However, in order to achieve real changes, an appropriate evaluation of progress to date and follow-up of the European Years are essential. An opinion on the evaluation and follow-up of the European Year of People with Disabilities is currently being prepared by the EESC.

| 2.2.9 | Among the indirect benefits of the Year, when any legislation is drawn up the chapter on monitoring should take account not only of the percentage of EU citizens who have learned more about social groups systematically encountering discrimination, but also of specific changes occurring in everyday life and administrative practices. |
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2.2.9

Among the indirect benefits of the Year, when any legislation is drawn up the chapter on monitoring should take account not only of the percentage of EU citizens who have learned more about social groups systematically encountering discrimination, but also of specific changes occurring in everyday life and administrative practices.

| 2.2.10 | The mainstreaming of the different grounds of discrimination in all EU policies and initiatives, as well as the consideration of the specific requirements of a specific ground when developing actions related to other grounds (e.g. taking into account disability issues when considering the other grounds) is the key to advancing the elimination of discrimination and the promotion of equal opportunities. The experience already gained in this field regarding areas such as gender could be transferred to other grounds of discrimination. |
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2.2.10

The mainstreaming of the different grounds of discrimination in all EU policies and initiatives, as well as the consideration of the specific requirements of a specific ground when developing actions related to other grounds (e.g. taking into account disability issues when considering the other grounds) is the key to advancing the elimination of discrimination and the promotion of equal opportunities. The experience already gained in this field regarding areas such as gender could be transferred to other grounds of discrimination.

| 2.2.11 | It is of vital importance to emphasise not only that discrimination, xenophobia and racism are unacceptable, but also that there is a need for multicultural European values and for implementation of the directives which have already been adopted in the field of EU anti-discrimination policy. |
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2.2.11

It is of vital importance to emphasise not only that discrimination, xenophobia and racism are unacceptable, but also that there is a need for multicultural European values and for implementation of the directives which have already been adopted in the field of EU anti-discrimination policy.

| 2.2.12 | In several of its opinions, (6) the EESC has emphasised the need to involve NGOs, as well as representatives of the relevant minority groups, public- and private-sector employers, the social economy, employees and regions. At the same time, those affected by discrimination and groups and organisations representing them must be involved in all stages and at all levels of implementation. In planning, implementing and monitoring support, it is necessary to ensure more effectively (perhaps by means of reports from alternative sources) that, for instance, there is adequate communication with NGOs. |
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2.2.12

In several of its opinions, (6) the EESC has emphasised the need to involve NGOs, as well as representatives of the relevant minority groups, public- and private-sector employers, the social economy, employees and regions. At the same time, those affected by discrimination and groups and organisations representing them must be involved in all stages and at all levels of implementation. In planning, implementing and monitoring support, it is necessary to ensure more effectively (perhaps by means of reports from alternative sources) that, for instance, there is adequate communication with NGOs.

| 2.2.13 | Special attention and recognition should be given to the role of the NGOs and organisations representing the groups facing discrimination. Their involvement in the European Year should be ensured at all levels (local, regional, national and European) and all stages (over-all planning, implementation, enforcement, evaluation and follow-up of the Year). In particular, the role of Social Economy companies and organisations (cooperatives, associations, foundations and mutual funds) in the fight against discrimination should be highlighted and taken into account. |
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2.2.13

Special attention and recognition should be given to the role of the NGOs and organisations representing the groups facing discrimination. Their involvement in the European Year should be ensured at all levels (local, regional, national and European) and all stages (over-all planning, implementation, enforcement, evaluation and follow-up of the Year). In particular, the role of Social Economy companies and organisations (cooperatives, associations, foundations and mutual funds) in the fight against discrimination should be highlighted and taken into account.

| 2.2.14 | The Committee is encouraged that the Commission recognises the importance of working with employers and employees in order to encourage and support the development of workplace non-discrimination and diversity policies. The EESC recommends that The European Year should be used to:






  — | identify and promote the exchange of information and examples of good practice; |
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2.2.14

The Committee is encouraged that the Commission recognises the importance of working with employers and employees in order to encourage and support the development of workplace non-discrimination and diversity policies. The EESC recommends that The European Year should be used to:

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identify and promote the exchange of information and examples of good practice;

| — | raise awareness among companies about the added value of respecting and integrating equal opportunities within their recruitment and career progression policies; |
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raise awareness among companies about the added value of respecting and integrating equal opportunities within their recruitment and career progression policies;

| — | create partnerships and sustainable networks between employers and other stakeholders including NGOs and organisations that work with groups who face discrimination; |
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create partnerships and sustainable networks between employers and other stakeholders including NGOs and organisations that work with groups who face discrimination;

| — | link with and advance the forthcoming Commission Plan on Corporate Social Responsibility (to be released in January 2006). |
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link with and advance the forthcoming Commission Plan on Corporate Social Responsibility (to be released in January 2006).

| 2.2.15 | The Year of Equal Opportunities should be solidly prepared on the basis of previous experience. Appropriate information should be suitably worded and presented in clear language so as to be comprehensible to all, and so as to ensure the availability of training and educational opportunities, adequate media attention, coordination with other policies, and provision of the requisite technical assistance. Research findings, together with examples of best practice and successful programmes, should be more widely publicised and made more adaptable. |
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2.2.15

The Year of Equal Opportunities should be solidly prepared on the basis of previous experience. Appropriate information should be suitably worded and presented in clear language so as to be comprehensible to all, and so as to ensure the availability of training and educational opportunities, adequate media attention, coordination with other policies, and provision of the requisite technical assistance. Research findings, together with examples of best practice and successful programmes, should be more widely publicised and made more adaptable.

| 2.2.16 | The EESC feels that the planned budget is very limited considering the ambitions and, indeed, the needs. Attention should be paid to the allocation of the available resources to ensure that those primarily involved will have access to them. |
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2.2.16

The EESC feels that the planned budget is very limited considering the ambitions and, indeed, the needs. Attention should be paid to the allocation of the available resources to ensure that those primarily involved will have access to them.

| 2.2.17 | It should also be made clear during the Year of Equal Opportunities that everybody, and not only the groups mentioned in Article 13 and this opinion, should have the chance to further develop their skills and potential, primarily by means of social inclusion and education, thus ensuring equal opportunities. |
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2.2.17

It should also be made clear during the Year of Equal Opportunities that everybody, and not only the groups mentioned in Article 13 and this opinion, should have the chance to further develop their skills and potential, primarily by means of social inclusion and education, thus ensuring equal opportunities.

Brussels, 14 December 2005.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

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(1)  EESC opinion on Poverty among Women in Europe (rapporteur: Brenda King) - JO C 24 of 31.1.2006; EESC opinion on the Social Agenda (rapporteur: Ursula Engelen-Kefer) – JO C 294 of 25.11.2005; EESC opinion on the European Social Fund (rapporteur: Ursula Engelen-Kefer) – OJ C 234, 22.9.2005; EESC opinion on the Commission programme for Employment and Social Solidarity – PROGRESS (rapporteur: Wolfgang Greif) – JO C 234 of 22.3.2006; EESC opinion on EQUAL (rapporteur: Sukhdev Sharma) – OJ C 241, 28.9.2004; EESC opinion on European Year of People with Disabilities (rapporteur: Miguel Ángel Cabra de Luna) – OJ C 110, 30.4.2004.

1

(2)  Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions – Non-discrimination and equal opportunities for all – A framework strategy (COM(2005) 224).

2

(3)  Article 13 of the Treaty establishing the European Community: (1) Without prejudice to other provisions of this Treaty and within the limits of the powers conferred by it upon the Community, the Council, acting unanimously on a proposal from the Commission and after consulting the European Parliament, may take appropriate action to combat discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation. (2) By way of derogation from paragraph 1, when the Council adopts Community incentive measures, excluding any harmonisation of the laws and regulations of the Member States, to support action taken by the Member States in order to contribute to the achievement of the objectives referred to in paragraph 1, it shall act in accordance with the procedure referred to in Article 251.

3

(4)  EESC opinion, see SOC 163 – OJ C 110 of 30.4.2004.

4

(5)  See: Eurobarometer.

5

(6)  See SOC/189 - OJ C 234 of 22.9.2005.

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| 17.3.2006 | EN | Official Journal of the European Union | C 65/73 |
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17.3.2006

EN

Official Journal of the European Union

C 65/73

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Opinion of the European Economic and Social Committee on ‘How to integrate social aspects into the Economic Partnership Agreement negotiations’

(2006/C 65/15)

In a letter of 2 July 2004 from Commissioner Loyola de Palacio, the Commission, in accordance with Article 262 of the Treaty establishing the European Community, asked the European Economic and Social Committee to draw up an opinion on How to integrate social aspects into the Economic Partnership Agreement negotiations

The Section for External Relations, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 10 November 2005. The rapporteur was Antonello Pezzini and the co-rapporteur Gérard Dantin.

At its 422nd plenary session (meeting of 14 December 2005) the European Economic and Social Committee adopted the following opinion by 125 votes to 2 with 7 abstentions:

1.   Introduction

1.1   The framework of the opinion

| 1.1.1 | This opinion is the response to a request made by Commissioner Loyola Palacio. In her letter of referral of 2 July 2004, after stating that ‘the Commission appreciates the active role played by the Economic and Social Committee in promoting an open dialogue between the non-state actors of the ACP and the European Union’ she asks the Committee to draw up an ‘exploratory opinion on how to include social aspects in the negotiations on the Economic Partnership Agreements, concentrating on employment, labour standards, social security and gender questions’. |
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1.1.1

This opinion is the response to a request made by Commissioner Loyola Palacio. In her letter of referral of 2 July 2004, after stating that ‘the Commission appreciates the active role played by the Economic and Social Committee in promoting an open dialogue between the non-state actors of the ACP and the European Union’ she asks the Committee to draw up an ‘exploratory opinion on how to include social aspects in the negotiations on the Economic Partnership Agreements, concentrating on employment, labour standards, social security and gender questions’.

| 1.1.2 | The Economic Partnership Agreements (EPA) are governed by Article 37 of the Cotonou Agreement. They are to be concluded by 31 December 2007 and aim at fostering ‘the smooth and gradual integration of the ACP States into the world economy, with due regard for their political choices and development priorities, thereby promoting their sustainable development and contributing to poverty eradication in the ACP countries’ (Art. 34(1)). More generally, they form part of the implementation of the ‘development strategy’ set out in Articles 19 to 27 (Title 1) of the Cotonou Agreement. |
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1.1.2

The Economic Partnership Agreements (EPA) are governed by Article 37 of the Cotonou Agreement. They are to be concluded by 31 December 2007 and aim at fostering ‘the smooth and gradual integration of the ACP States into the world economy, with due regard for their political choices and development priorities, thereby promoting their sustainable development and contributing to poverty eradication in the ACP countries’ (Art. 34(1)). More generally, they form part of the implementation of the ‘development strategy’ set out in Articles 19 to 27 (Title 1) of the Cotonou Agreement.

| 1.1.3 | The Commission's letter of referral is in line with Article 37 and Title 1 of the Cotonou Agreement. This determines the framework of the present exploratory opinion. |
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1.1.3

The Commission's letter of referral is in line with Article 37 and Title 1 of the Cotonou Agreement. This determines the framework of the present exploratory opinion.

| 1.2 | This referral shows the importance which the Commission attaches to taking the social dimension into account in the negotiations on the Economic Partnership Agreements. |
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1.2

This referral shows the importance which the Commission attaches to taking the social dimension into account in the negotiations on the Economic Partnership Agreements.

| 1.2.1 | The Committee welcomes the Commission's concern and approach. |
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1.2.1

The Committee welcomes the Commission's concern and approach.

| 1.2.2 | Indeed, there cannot be optimum development without a parallel social development. These concepts must go hand in hand if economic progress is to be fully effective and thus improve the way of life and the welfare of the people concerned. |
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1.2.2

Indeed, there cannot be optimum development without a parallel social development. These concepts must go hand in hand if economic progress is to be fully effective and thus improve the way of life and the welfare of the people concerned.

| 1.2.3 | Moreover, the implementation of the EPA will lead inevitably to necessary structural reforms, transforming many aspects of the way the people of the ACP countries live at present. These structural reforms, which will in many cases be difficult to cope with, must be accompanied by parallel social progress if the economic partnership agreements are not to be rejected by the peoples concerned. |
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1.2.3

Moreover, the implementation of the EPA will lead inevitably to necessary structural reforms, transforming many aspects of the way the people of the ACP countries live at present. These structural reforms, which will in many cases be difficult to cope with, must be accompanied by parallel social progress if the economic partnership agreements are not to be rejected by the peoples concerned.

| 1.2.4 | From this viewpoint the participation of civil society in the various stages of the process based on the Economic Partnership Agreements is central. |
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1.2.4

From this viewpoint the participation of civil society in the various stages of the process based on the Economic Partnership Agreements is central.

| 1.3 | In general terms the Cotonou Agreement provides for a gradual removal of barriers to trade between the two parties and regards the negotiation period as useful and suitable for developing the capacities of the public and private sectors. |
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1.3

In general terms the Cotonou Agreement provides for a gradual removal of barriers to trade between the two parties and regards the negotiation period as useful and suitable for developing the capacities of the public and private sectors.

| 1.3.1 | The underlying aims of the EPA negotiations — part of the implementation of the Cotonou Agreement — essentially cover the following aspects: eradication of poverty; sustainable development; effective participation by women; involvement of non-state actors; special care to maintain public expenditure in the social sectors at a sufficient level (1). |
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1.3.1

The underlying aims of the EPA negotiations — part of the implementation of the Cotonou Agreement — essentially cover the following aspects: eradication of poverty; sustainable development; effective participation by women; involvement of non-state actors; special care to maintain public expenditure in the social sectors at a sufficient level (1).

| 1.3.2 | The Cotonou Agreement provides for the EPA to cover a wide range of sectors: competition policy (2); intellectual property rights (3); health and plant health measures (4); trade and environment questions (5); trade and labour standards (6); consumer protection (7); food safety (8); investments (9). |
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1.3.2

The Cotonou Agreement provides for the EPA to cover a wide range of sectors: competition policy (2); intellectual property rights (3); health and plant health measures (4); trade and environment questions (5); trade and labour standards (6); consumer protection (7); food safety (8); investments (9).

| 1.4 | The EPA — the framework of which has several dimensions (cf. Appendix 2) — are regarded as reciprocal free trade agreements which are to be negotiated on a bilateral basis between the EU and the ACP countries or regions. An important principle is that the EPA will have to be consistent with the rules of the WTO. |
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1.4

The EPA — the framework of which has several dimensions (cf. Appendix 2) — are regarded as reciprocal free trade agreements which are to be negotiated on a bilateral basis between the EU and the ACP countries or regions. An important principle is that the EPA will have to be consistent with the rules of the WTO.

| 1.4.1 | Both the ACP countries and the EU are convinced that the objective should be a more balanced and fairer multilateral trade system under the aegis of the WTO, based on a clear relationship between trade and development and on really differentiated treatment for developing countries — especially the LDCs and the small island countries — and ultimately characterised by transparency and effective involvement in the decision-making process. |
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1.4.1

Both the ACP countries and the EU are convinced that the objective should be a more balanced and fairer multilateral trade system under the aegis of the WTO, based on a clear relationship between trade and development and on really differentiated treatment for developing countries — especially the LDCs and the small island countries — and ultimately characterised by transparency and effective involvement in the decision-making process.

| 1.5 | The negotiations so far (see Appendix 3) have brought out certain serious divergences between the ACP countries and the European Union, as the ACP-EU Joint Parliamentary Assembly has rightly pointed out. |
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1.5

The negotiations so far (see Appendix 3) have brought out certain serious divergences between the ACP countries and the European Union, as the ACP-EU Joint Parliamentary Assembly has rightly pointed out.

| 1.5.1 | It must not be forgotten that foreign debt constitutes for many ACP countries an insurmountable obstacle to economic and social development (10). Moreover, this is one of the reasons why the first stage of the EPA negotiations did not lead to a binding framework agreement as the ACP countries had wished. |
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1.5.1

It must not be forgotten that foreign debt constitutes for many ACP countries an insurmountable obstacle to economic and social development (10). Moreover, this is one of the reasons why the first stage of the EPA negotiations did not lead to a binding framework agreement as the ACP countries had wished.

2.   General comments

| 2.1 | Many ACP countries, particularly those of southern Africa, take the view that the prospects of regional integration will lead initially to a reduction in income, particularly as a result of the reduction in customs duties. It therefore seems necessary at this stage to provide for a greater financial commitment on the basis of the various contribution rates. Subsequently, since in many ACP countries customs duties make up a large part of public income, tax systems must be developed as rapidly as possible to compensate for any such reduction. These countries must be supported in their efforts to develop efficient tax systems. Moreover, the ACP countries have shown only slight progress towards practical forms of regional trade cooperation. Existing or forthcoming agreements, apart from being limited to certain regions, have not generally achieved the objective of increasing inter-regional trade. Indeed, few of the existing areas of integration show significant trade at infra-regional level. |
| --- | --- |

2.1

Many ACP countries, particularly those of southern Africa, take the view that the prospects of regional integration will lead initially to a reduction in income, particularly as a result of the reduction in customs duties. It therefore seems necessary at this stage to provide for a greater financial commitment on the basis of the various contribution rates. Subsequently, since in many ACP countries customs duties make up a large part of public income, tax systems must be developed as rapidly as possible to compensate for any such reduction. These countries must be supported in their efforts to develop efficient tax systems. Moreover, the ACP countries have shown only slight progress towards practical forms of regional trade cooperation. Existing or forthcoming agreements, apart from being limited to certain regions, have not generally achieved the objective of increasing inter-regional trade. Indeed, few of the existing areas of integration show significant trade at infra-regional level.

| 2.1.1 | At present in all six regional areas the negotiations have turned out to be long and complex. The planned deadline of 2007 will certainly not be respected. The transition period will be longer and will extend well beyond 2008. The main difficulties are found in southern and eastern Africa. Indeed, the African states show much more interest in infrastructure problems (roads, hospitals, training centres, agricultural development etc.) than in the problems concerning aspects of civil society (11). |
| --- | --- |

2.1.1

At present in all six regional areas the negotiations have turned out to be long and complex. The planned deadline of 2007 will certainly not be respected. The transition period will be longer and will extend well beyond 2008. The main difficulties are found in southern and eastern Africa. Indeed, the African states show much more interest in infrastructure problems (roads, hospitals, training centres, agricultural development etc.) than in the problems concerning aspects of civil society (11).

| 2.1.2 | In each region there are task forces which continuously monitor the trade negotiations (12). The organisations representing civil society must, of necessity, be consulted by the task force so that it is aware of their analyses and their proposals on social matters and on all development-related issues in general. To this end, civil-society representatives must form regional organisations which will enable them to draw up positions collectively. The European Union must provide financial and technical assistance to contribute to the practical implementation of an initiative of this kind. |
| --- | --- |

2.1.2

In each region there are task forces which continuously monitor the trade negotiations (12). The organisations representing civil society must, of necessity, be consulted by the task force so that it is aware of their analyses and their proposals on social matters and on all development-related issues in general. To this end, civil-society representatives must form regional organisations which will enable them to draw up positions collectively. The European Union must provide financial and technical assistance to contribute to the practical implementation of an initiative of this kind.

| 2.1.3 | The Committee has already come out in favour of strong involvement of civil society (13), also bearing in mind that, in the Cotonou Agreement, the provisions on participation of non-state actors are found in more than 30 articles, in a final declaration, and in Annex IV on implementation and management procedures. The statements which best express this approach are found in the ‘Fundamental Principles’ (Article 2) and in Chapter 2, which is entirely devoted to ‘the actors of the partnership’. |
| --- | --- |

2.1.3

The Committee has already come out in favour of strong involvement of civil society (13), also bearing in mind that, in the Cotonou Agreement, the provisions on participation of non-state actors are found in more than 30 articles, in a final declaration, and in Annex IV on implementation and management procedures. The statements which best express this approach are found in the ‘Fundamental Principles’ (Article 2) and in Chapter 2, which is entirely devoted to ‘the actors of the partnership’.

| 2.1.4 | The EESC thinks it would be important to extend Europe's experience of using the Structural Funds, especially in the Objective 1 regions, to the ACP regions (14). |
| --- | --- |

2.1.4

The EESC thinks it would be important to extend Europe's experience of using the Structural Funds, especially in the Objective 1 regions, to the ACP regions (14).

| 2.2 | The participation of civil society in the implementation of the Economic Partnership Agreements is one of the essential conditions for the effectiveness of their results. |
| --- | --- |

2.2

The participation of civil society in the implementation of the Economic Partnership Agreements is one of the essential conditions for the effectiveness of their results.

| 2.2.1 | Article 6 of the Cotonou Agreement defines non-state actors as: the private sector; the economic and social partners, including the trade union organisations; civil society in all its forms, according to national characteristics (15). |
| --- | --- |

2.2.1

Article 6 of the Cotonou Agreement defines non-state actors as: the private sector; the economic and social partners, including the trade union organisations; civil society in all its forms, according to national characteristics (15).

| 2.2.2 | There are very frequent references to civil society throughout the Agreement (16): in particular, Article 4 defines the way in which it must be involved (17). |
| --- | --- |

2.2.2

There are very frequent references to civil society throughout the Agreement (16): in particular, Article 4 defines the way in which it must be involved (17).

| 2.2.3 | In most of the ACP countries civil society is not very organised. The Economic Partnership Agreement (EPA) negotiations therefore represent an opportunity to improve the organisation of civil society and thereby its capacity to make proposals. Only thus will it subsequently be able to play a greater role on the ground in implementing guidelines adopted and to help boost growth by bringing about an increase in competitiveness and enhancing the social dimension. |
| --- | --- |

2.2.3

In most of the ACP countries civil society is not very organised. The Economic Partnership Agreement (EPA) negotiations therefore represent an opportunity to improve the organisation of civil society and thereby its capacity to make proposals. Only thus will it subsequently be able to play a greater role on the ground in implementing guidelines adopted and to help boost growth by bringing about an increase in competitiveness and enhancing the social dimension.

| 2.2.4 | In this respect it is important for the negotiations involving all the ACP countries to lay down certain obligatory criteria: as well as rational integration into the world economy, they should aim at trade development accompanied by the relevant social rights, reduction of poverty and respect for workers' rights
   (18). These are the criteria that should guide regional negotiations. |
| --- | --- |

2.2.4

In this respect it is important for the negotiations involving all the ACP countries to lay down certain obligatory criteria: as well as rational integration into the world economy, they should aim at trade development accompanied by the relevant social rights, reduction of poverty and respect for workers' rights
   (18). These are the criteria that should guide regional negotiations.

| 2.2.5 | It should be pointed out that many elements relating to employment, social security and gender questions, and the close connection between trade development and labour standards, are only mentioned in overall terms in the Commission's EPA ‘negotiating mandate’ and then only in the preamble. |
| --- | --- |

2.2.5

It should be pointed out that many elements relating to employment, social security and gender questions, and the close connection between trade development and labour standards, are only mentioned in overall terms in the Commission's EPA ‘negotiating mandate’ and then only in the preamble.

| 2.2.6 | The documents provided by the Commission on the results of the first phase of negotiations between the EU and the various ACP regions do not address social or gender questions in sufficient depth. |
| --- | --- |

2.2.6

The documents provided by the Commission on the results of the first phase of negotiations between the EU and the various ACP regions do not address social or gender questions in sufficient depth.

| 2.2.7 | That runs counter to the principle that the EPA represent the economic dimension of the Cotonou Agreement and that the values relating to all aspects of human life, which are strongly highlighted in the Cotonou Agreement, should be included and endorsed in the EPA negotiations. |
| --- | --- |

2.2.7

That runs counter to the principle that the EPA represent the economic dimension of the Cotonou Agreement and that the values relating to all aspects of human life, which are strongly highlighted in the Cotonou Agreement, should be included and endorsed in the EPA negotiations.

| 2.3 | To ensure the efficiency of the results of the Economic Partnership Agreements in social terms, it is necessary to set up for the socio-occupational social actors a framework which generates unity of place and unity of time. |
| --- | --- |

2.3

To ensure the efficiency of the results of the Economic Partnership Agreements in social terms, it is necessary to set up for the socio-occupational social actors a framework which generates unity of place and unity of time.

| 2.3.1 | In order to achieve satisfactory results both in the negotiations and in the implementation of their content, this framework will encourage the development of an effective participatory methodology, associating economic and social actors right from the stage of preparing contributions. |
| --- | --- |

2.3.1

In order to achieve satisfactory results both in the negotiations and in the implementation of their content, this framework will encourage the development of an effective participatory methodology, associating economic and social actors right from the stage of preparing contributions.

| 2.3.2 | However, for the time being, the negotiations in progress have to contend with serious and growing inequalities between the two parties, whether in terms of their level of development, quality of life and social rights or with regard to terms of trade, but even more to the autonomous capacity for proposal, management and control. These inequalities and imbalances make the negotiations on the EPA very complex and sensitive. This complexity must not stand in the way of the necessary inclusion of social aspects in the negotiations, either directly or as a clearly identified, certain result of economic and/or commercial options chosen. The main emphasis should be on employment and entrepreneurship, labour standards, social security and gender questions (19). |
| --- | --- |

2.3.2

However, for the time being, the negotiations in progress have to contend with serious and growing inequalities between the two parties, whether in terms of their level of development, quality of life and social rights or with regard to terms of trade, but even more to the autonomous capacity for proposal, management and control. These inequalities and imbalances make the negotiations on the EPA very complex and sensitive. This complexity must not stand in the way of the necessary inclusion of social aspects in the negotiations, either directly or as a clearly identified, certain result of economic and/or commercial options chosen. The main emphasis should be on employment and entrepreneurship, labour standards, social security and gender questions (19).

| 2.3.3 | At regional level, some roadmaps provide for civil society to be involved in the negotiating phases and in the national and regional committees. However, the levels of involvement and satisfaction of civil-society representatives in the partnership process are not yet known. |
| --- | --- |

2.3.3

At regional level, some roadmaps provide for civil society to be involved in the negotiating phases and in the national and regional committees. However, the levels of involvement and satisfaction of civil-society representatives in the partnership process are not yet known.

| 2.3.4 | The EESC's regular meetings with social and economic representatives from the ACP countries place it in a position to assess their level of involvement during the various phases of the processes. |
| --- | --- |

2.3.4

The EESC's regular meetings with social and economic representatives from the ACP countries place it in a position to assess their level of involvement during the various phases of the processes.

3.   The participation of civil society

| 3.1 | In most of the ACP countries civil society is not very organised. The economic partnership agreement negotiations can represent an opportunity to improve the organisation of civil society and thereby its capacity to make proposals. This is one of the conditions which will enable it to play a major role later on the ground in implementing guidelines adopted, thus helping to boost growth by bringing about an increase in competitiveness and enhancing the social dimension. Improving the organisation of civil society and hence its capacity to act will depend on the determination of the Commission and that of the countries concerned. |
| --- | --- |

3.1

In most of the ACP countries civil society is not very organised. The economic partnership agreement negotiations can represent an opportunity to improve the organisation of civil society and thereby its capacity to make proposals. This is one of the conditions which will enable it to play a major role later on the ground in implementing guidelines adopted, thus helping to boost growth by bringing about an increase in competitiveness and enhancing the social dimension. Improving the organisation of civil society and hence its capacity to act will depend on the determination of the Commission and that of the countries concerned.

| 3.1.1 | A regular, comprehensive assessment of the participation of the economic and social actors in all the phases of implementation of the EPA could create a positive dynamic leading to constant improvement. This assessment should be carried out by the institutional negotiators. |
| --- | --- |

3.1.1

A regular, comprehensive assessment of the participation of the economic and social actors in all the phases of implementation of the EPA could create a positive dynamic leading to constant improvement. This assessment should be carried out by the institutional negotiators.

| 3.1.2 | The consultation and involvement of different sectors of civil society during the negotiations and monitoring of the work carried out would also help to give direction and substance to the common endeavours to improve quality of life for society as a whole, through the EPA and in line with the Cotonou principles.
  Examples of good practice should be translated into local languages and disseminated more widely. |
| --- | --- |

3.1.2

The consultation and involvement of different sectors of civil society during the negotiations and monitoring of the work carried out would also help to give direction and substance to the common endeavours to improve quality of life for society as a whole, through the EPA and in line with the Cotonou principles.

Examples of good practice should be translated into local languages and disseminated more widely.

| 3.2 | To implement and make the most of an effective participatory methodology — an essential condition for the effectiveness and quality of civil society's contribution — it is necessary to provide all the conditions which enable non-state actors to meet, debate, draw up objectives collectively and propose them in the EPA negotiations, follow their progress and above all ensure and follow their implementation on the ground and assess their impact. |
| --- | --- |

3.2

To implement and make the most of an effective participatory methodology — an essential condition for the effectiveness and quality of civil society's contribution — it is necessary to provide all the conditions which enable non-state actors to meet, debate, draw up objectives collectively and propose them in the EPA negotiations, follow their progress and above all ensure and follow their implementation on the ground and assess their impact.

| 3.2.1 | The combination of these conditions reflects the need to create a space for the socio-occupational actors which would ensure both unity of time and unity of place. |
| --- | --- |

3.2.1

The combination of these conditions reflects the need to create a space for the socio-occupational actors which would ensure both unity of time and unity of place.

| 3.2.2 | To that end, as indicated in the final declaration of the
  24th meeting of ACP-EU economic and social interest groups
  held in Brussels at the end of June, the European Economic and Social Committee proposes the setting up of regional social dialogue committees comprising the socio-occupational actors to help to draw up, propose and ensure the implementation and follow-up of social development programmes. |
| --- | --- |

3.2.2

To that end, as indicated in the final declaration of the
  24th meeting of ACP-EU economic and social interest groups
  held in Brussels at the end of June, the European Economic and Social Committee proposes the setting up of regional social dialogue committees comprising the socio-occupational actors to help to draw up, propose and ensure the implementation and follow-up of social development programmes.

| 3.2.3 | In general terms, the tasks of the Regional Social Dialogue Committees should essentially cover:






  — | application and monitoring of the ILO Conventions, particularly those concerning fundamental social rights; |
| --- | --- | --- |

3.2.3

In general terms, the tasks of the Regional Social Dialogue Committees should essentially cover:

—

application and monitoring of the ILO Conventions, particularly those concerning fundamental social rights;

| — | promotion of decent jobs and social development; |
| --- | --- |

—

promotion of decent jobs and social development;

| — | the economic and social impact of the EPA at regional level and that of regional integration. |
| --- | --- |

—

the economic and social impact of the EPA at regional level and that of regional integration.

| 3.2.3.1 | More precisely, the Regional Committees could concentrate, with the possible help of specialised groups, on drawing up proposals concerning:






  — | promotion of jobs: objectives and methods; decent work (remuneration, working conditions, etc.); |
| --- | --- | --- |

3.2.3.1

More precisely, the Regional Committees could concentrate, with the possible help of specialised groups, on drawing up proposals concerning:

—

promotion of jobs: objectives and methods; decent work (remuneration, working conditions, etc.);

| — | education; |
| --- | --- |

—

education;

| — | initial and continuous vocational training; |
| --- | --- |

—

initial and continuous vocational training;

| — | social protection arrangements; |
| --- | --- |

—

social protection arrangements;

| — | negotiated developments in the ‘informal’ sectors; |
| --- | --- |

—

negotiated developments in the ‘informal’ sectors;

| — | equality between the sexes; |
| --- | --- |

—

equality between the sexes;

| — | sustainable development, with particular focus on the environment; |
| --- | --- |

—

sustainable development, with particular focus on the environment;

| — | infrastructure and investment. |
| --- | --- |

—

infrastructure and investment.

| 3.2.4 | The ILO could cooperate, in terms of organisational and operational methodology, in setting up the Regional Social Dialogue Committees. Indeed, in the context of its PRODIAF programme (regional programme for the promotion of social dialogue in French-speaking Africa) the ILO has acquired considerable experience. This experience could be used to help make the committees more effective. |
| --- | --- |

3.2.4

The ILO could cooperate, in terms of organisational and operational methodology, in setting up the Regional Social Dialogue Committees. Indeed, in the context of its PRODIAF programme (regional programme for the promotion of social dialogue in French-speaking Africa) the ILO has acquired considerable experience. This experience could be used to help make the committees more effective.

| 3.2.5 | On the composition of the Regional Committee, the eligibility criteria could be based on the agreement between the ACP states and the Council of the European Union as regards access to EDF (European Development Fund) resources. |
| --- | --- |

3.2.5

On the composition of the Regional Committee, the eligibility criteria could be based on the agreement between the ACP states and the Council of the European Union as regards access to EDF (European Development Fund) resources.

| 3.2.6 | Insofar as there exist in the homogenous regions already set up (Caribbean etc.) platforms, forums or other structured groupings of non-state actors — set up to meet the needs resulting from the drawing up of National and Regional Indicative Programmes — changes to them should be envisaged in order to meet the objectives of the Regional Social Dialogue Committees. |
| --- | --- |

3.2.6

Insofar as there exist in the homogenous regions already set up (Caribbean etc.) platforms, forums or other structured groupings of non-state actors — set up to meet the needs resulting from the drawing up of National and Regional Indicative Programmes — changes to them should be envisaged in order to meet the objectives of the Regional Social Dialogue Committees.

| 3.2.7 | For the sake of effectiveness the Regional Social Dialogue Committees could be associated as required with the work of the Regional Preparatory Task Forces (RPTF). Indeed, the RPTF play a key role in that they ensure that the needs expressed during the negotiating phases are met when aid is programmed. |
| --- | --- |

3.2.7

For the sake of effectiveness the Regional Social Dialogue Committees could be associated as required with the work of the Regional Preparatory Task Forces (RPTF). Indeed, the RPTF play a key role in that they ensure that the needs expressed during the negotiating phases are met when aid is programmed.

| 3.2.7.1 | The involvement of these committees would enable organised civil society to acquire a greater role and be able to monitor sustainable development within the negotiations and in the phases of practical action at regional level. |
| --- | --- |

3.2.7.1

The involvement of these committees would enable organised civil society to acquire a greater role and be able to monitor sustainable development within the negotiations and in the phases of practical action at regional level.

| 3.2.7.2 | As has been stressed a number of times, issues related to agriculture and the various environmental aspects are particularly significant in the ACP countries, and it is important that they be constantly addressed in the negotiating phases, not least by means of the direct participation of local representatives from the sector. |
| --- | --- |

3.2.7.2

As has been stressed a number of times, issues related to agriculture and the various environmental aspects are particularly significant in the ACP countries, and it is important that they be constantly addressed in the negotiating phases, not least by means of the direct participation of local representatives from the sector.

| 3.2.7.3 | The Regional Social Dialogue Committees will be able to play an increasingly practical, proactive role, particularly since, once funding and organisational questions have been resolved, they will be able to dialogue with the ACP-EU Follow-up Committee and to benefit from exchanges of expertise with the European Economic and Social Committee. |
| --- | --- |

3.2.7.3

The Regional Social Dialogue Committees will be able to play an increasingly practical, proactive role, particularly since, once funding and organisational questions have been resolved, they will be able to dialogue with the ACP-EU Follow-up Committee and to benefit from exchanges of expertise with the European Economic and Social Committee.

4.   Development of employment

| 4.1 | Decent jobs are the essential tool in combating poverty, since they can:






  — | generate income and hence purchasing power and markets; |
| --- | --- | --- |

4.1

Decent jobs are the essential tool in combating poverty, since they can:

—

generate income and hence purchasing power and markets;

| — | get people and groups out of a situation of dependence on assistance; |
| --- | --- |

—

get people and groups out of a situation of dependence on assistance;

| — | produce goods and services which are accessible to the general public and meet their needs; |
| --- | --- |

—

produce goods and services which are accessible to the general public and meet their needs;

| — | help to finance social benefits: education and training, pensions, unemployment benefit, health care — in short what is known as ‘social security’. |
| --- | --- |

—

help to finance social benefits: education and training, pensions, unemployment benefit, health care — in short what is known as ‘social security’.

| 4.1.1 | Employment policies must stimulate and combine the contributions of the public and private sectors as well as the achievements of the social and solidarity-based economy. |
| --- | --- |

4.1.1

Employment policies must stimulate and combine the contributions of the public and private sectors as well as the achievements of the social and solidarity-based economy.

| 4.1.2 | Employment development programmes should envisage: a gradual, negotiated insertion of the informal economy into the private or public sectors, inter alia, by promoting international labour standards (particularly basic rights); a commitment by enterprises which benefit from public funds resulting from calls for tender (investment, various works) to respect international labour standards and the rules designed to protect the environment (climate, biodiversity, Kyoto Protocol, protection of forests etc.). This is partly a question of the social responsibility of enterprises. |
| --- | --- |

4.1.2

Employment development programmes should envisage: a gradual, negotiated insertion of the informal economy into the private or public sectors, inter alia, by promoting international labour standards (particularly basic rights); a commitment by enterprises which benefit from public funds resulting from calls for tender (investment, various works) to respect international labour standards and the rules designed to protect the environment (climate, biodiversity, Kyoto Protocol, protection of forests etc.). This is partly a question of the social responsibility of enterprises.

| 4.1.3 | These programmes should also sketch out guidelines on the necessary economic, fiscal and administrative reforms, the fight against corruption, the setting-up, for example, of tax credits and other services intended particularly for SMEs and craft industries. |
| --- | --- |

4.1.3

These programmes should also sketch out guidelines on the necessary economic, fiscal and administrative reforms, the fight against corruption, the setting-up, for example, of tax credits and other services intended particularly for SMEs and craft industries.

| 4.1.4 | The objectives of the partnership are, as is well known, to promote and speed up the economic, cultural and social development of the ACP states. The main aim is the reduction and, ultimately, the elimination of poverty. The EPA should enhance the partnership, helping economies to open up, particularly on the south-south axis, and to achieve greater liberalisation with clear rules which are attractive to domestic and foreign investors. |
| --- | --- |

4.1.4

The objectives of the partnership are, as is well known, to promote and speed up the economic, cultural and social development of the ACP states. The main aim is the reduction and, ultimately, the elimination of poverty. The EPA should enhance the partnership, helping economies to open up, particularly on the south-south axis, and to achieve greater liberalisation with clear rules which are attractive to domestic and foreign investors.

| 4.1.5 | A great effort must be made to enable the ACP countries to open up culturally and economically, in particular by taking the opportunity afforded by the EPA to create a customs union, furthering mutual interests and increasingly encouraging regional integration. |
| --- | --- |

4.1.5

A great effort must be made to enable the ACP countries to open up culturally and economically, in particular by taking the opportunity afforded by the EPA to create a customs union, furthering mutual interests and increasingly encouraging regional integration.

| 4.2 | Unfortunately, at the start of the negotiations no impact study was carried out on employment to provide a record of the original situation. Such a study would have made it easier to assess progress made. |
| --- | --- |

4.2

Unfortunately, at the start of the negotiations no impact study was carried out on employment to provide a record of the original situation. Such a study would have made it easier to assess progress made.

| 4.2.1 | A great effort must be made to enable the ACP countries to open up culturally and economically, in particular by taking the opportunity afforded by the EPA to create a customs union, furthering mutual interests and increasingly encouraging regional integration. Alongside this, the public sector in particular must also be strengthened, inter alia with regard to investment in education, healthcare and social services in general, in order to provide support for the private sector. |
| --- | --- |

4.2.1

A great effort must be made to enable the ACP countries to open up culturally and economically, in particular by taking the opportunity afforded by the EPA to create a customs union, furthering mutual interests and increasingly encouraging regional integration. Alongside this, the public sector in particular must also be strengthened, inter alia with regard to investment in education, healthcare and social services in general, in order to provide support for the private sector.

| 4.2.2 | It is also the task of cooperation to support:






  — | promotion of the dialogue between the public and private sectors; |
| --- | --- | --- |

4.2.2

It is also the task of cooperation to support:

—

promotion of the dialogue between the public and private sectors;

| — | development of entrepreneurial skills and an enterprise culture; |
| --- | --- |

—

development of entrepreneurial skills and an enterprise culture;

| — | the elimination of undeclared casual work, while respecting the rule of law. |
| --- | --- |

—

the elimination of undeclared casual work, while respecting the rule of law.

| 4.2.3 | Measures taken under the preceding agreements (20) have produced some results, but clearly not all that could be desired, above all in the field of promotion of the private sector and of its role in stimulating economic growth and diversification. |
| --- | --- |

4.2.3

Measures taken under the preceding agreements (20) have produced some results, but clearly not all that could be desired, above all in the field of promotion of the private sector and of its role in stimulating economic growth and diversification.

| 4.2.4 | In working out the development programme, the socio-occupational actors should make detailed analyses of the difficulties encountered in the promotion, protection and supportive measures in favour of very small, small and medium-sized enterprises. |
| --- | --- |

4.2.4

In working out the development programme, the socio-occupational actors should make detailed analyses of the difficulties encountered in the promotion, protection and supportive measures in favour of very small, small and medium-sized enterprises.

| 4.3 | The fundamental options for development, especially in Africa, are based on agriculture. This will remain for a long time to come the main axis around which to build possible measures:






  — | in the development of traditional agricultural practices to make them more effective; |
| --- | --- | --- |

4.3

The fundamental options for development, especially in Africa, are based on agriculture. This will remain for a long time to come the main axis around which to build possible measures:

—

in the development of traditional agricultural practices to make them more effective;

| — | in the establishment of infrastructures and widespread social services; |
| --- | --- |

—

in the establishment of infrastructures and widespread social services;

| — | in the development of small-scale craft industry and entrepreneurial activities, often linked to the agri-food sector. |
| --- | --- |

—

in the development of small-scale craft industry and entrepreneurial activities, often linked to the agri-food sector.

| 4.3.1 | For the agricultural sector to develop and be consolidated, trade between the ACP countries and the EU must be governed, particularly in the coming years, by flexible rules which make it possible to incorporate health and plant health rules and enable new small businesses to be created, reinforced and diversified, with the protection of appropriate safeguard clauses. |
| --- | --- |

4.3.1

For the agricultural sector to develop and be consolidated, trade between the ACP countries and the EU must be governed, particularly in the coming years, by flexible rules which make it possible to incorporate health and plant health rules and enable new small businesses to be created, reinforced and diversified, with the protection of appropriate safeguard clauses.

| 4.3.2 | Measures in the agricultural sector should, in time, succeed in:






  — | developing agri-food safety standards for export outlets; |
| --- | --- | --- |

4.3.2

Measures in the agricultural sector should, in time, succeed in:

—

developing agri-food safety standards for export outlets;

| — | improving access to the agricultural market through marketing; |
| --- | --- |

—

improving access to the agricultural market through marketing;

| — | removing red tape and improving logistics; |
| --- | --- |

—

removing red tape and improving logistics;

| — | promoting training in services and research; |
| --- | --- |

—

promoting training in services and research;

| — | developing cooperative and agricultural credit institutions; |
| --- | --- |

—

developing cooperative and agricultural credit institutions;

| — | adopting clear, widely-supported rules on real estate; |
| --- | --- |

—

adopting clear, widely-supported rules on real estate;

| — | encouraging a gradual transition from employment in farming to employment in developing rural services. |
| --- | --- |

—

encouraging a gradual transition from employment in farming to employment in developing rural services.

| 4.3.2.1 | These results can be achieved through cooperation, introduced as part of both the EPA and aid projects, focusing on:






  — | integrated rural development projects; |
| --- | --- | --- |

4.3.2.1

These results can be achieved through cooperation, introduced as part of both the EPA and aid projects, focusing on:

—

integrated rural development projects;

| — | creation and consolidation of farmers' and workers' associations and associations of women in the farming, agri-industry and agricultural credit sectors; |
| --- | --- |

—

creation and consolidation of farmers' and workers' associations and associations of women in the farming, agri-industry and agricultural credit sectors;

| — | creation of farm property registers; |
| --- | --- |

—

creation of farm property registers;

| — | legislation on food certification, supplemented by certification institutes, the introduction of plant health standards and soil analysis, contributing to environmental protection; |
| --- | --- |

—

legislation on food certification, supplemented by certification institutes, the introduction of plant health standards and soil analysis, contributing to environmental protection;

| — | measures in the field of irrigation and drinking water; |
| --- | --- |

—

measures in the field of irrigation and drinking water;

| — | capacity-building among public and private organisations and institutions. |
| --- | --- |

—

capacity-building among public and private organisations and institutions.

| 4.3.3 | Vast agricultural areas are still subject to drought, even where they are close to lakes or fresh water, simply because there is a lack not only of irrigating infrastructure but also of professionals capable of organising the supply of water by pumping. |
| --- | --- |

4.3.3

Vast agricultural areas are still subject to drought, even where they are close to lakes or fresh water, simply because there is a lack not only of irrigating infrastructure but also of professionals capable of organising the supply of water by pumping.

| 4.3.4 | Hydraulic systems, acquired with cooperation funds, often lie idle because of a lack of professionals able to operate them or, in most cases, to repair them. |
| --- | --- |

4.3.4

Hydraulic systems, acquired with cooperation funds, often lie idle because of a lack of professionals able to operate them or, in most cases, to repair them.

| 4.3.4.1 | In other cases, the obstacles to the development of small enterprises are represented by the slowness of the feasible technological changes and constraints of a cultural (21) and institutional nature. |
| --- | --- |

4.3.4.1

In other cases, the obstacles to the development of small enterprises are represented by the slowness of the feasible technological changes and constraints of a cultural (21) and institutional nature.

| 4.3.5 | In yet other cases, the combination of serious imbalances in the distribution of resources and the weakness of organisational models has limited the results and could, for a long time to come, keep many communities in a precarious condition where they are subject to growing migratory pressure. |
| --- | --- |

4.3.5

In yet other cases, the combination of serious imbalances in the distribution of resources and the weakness of organisational models has limited the results and could, for a long time to come, keep many communities in a precarious condition where they are subject to growing migratory pressure.

| 4.4 | The EPA negotiation phases should help to enhance the private sector's capacity to analyse the situation. However, the private sector's capacity for action also needs to be built up away from the negotiating table, with cooperation at local level, in which civil society representatives must always be directly involved. |
| --- | --- |

4.4

The EPA negotiation phases should help to enhance the private sector's capacity to analyse the situation. However, the private sector's capacity for action also needs to be built up away from the negotiating table, with cooperation at local level, in which civil society representatives must always be directly involved.

| 4.4.1 | The process of training new entrepreneurs, of setting up enterprises, of making the most of the gender component, and of increasing the skills and making the most of human resources in general has been covered by EESC information reports and opinions, some of them recent. |
| --- | --- |

4.4.1

The process of training new entrepreneurs, of setting up enterprises, of making the most of the gender component, and of increasing the skills and making the most of human resources in general has been covered by EESC information reports and opinions, some of them recent.

| 4.5 | In the ACP countries industry, particularly the processing industry, is poorly developed or not developed at all. The casual sector and craft SMEs account for 70 % of employment in production. These two sectors are of key importance and warrant special attention, requiring policies promoting development and providing adequate solutions. |
| --- | --- |

4.5

In the ACP countries industry, particularly the processing industry, is poorly developed or not developed at all. The casual sector and craft SMEs account for 70 % of employment in production. These two sectors are of key importance and warrant special attention, requiring policies promoting development and providing adequate solutions.

| 4.5.1 | Many of the traditional problems confronting SMEs (lack of funds, difficulties in exploiting technology, limited managerial capacity, low productivity, regulatory constraints) are made worse in a globalised system and in an environment dominated by technology, especially if set in a context like that of the ACP countries, marked by serious structural and infrastructural weaknesses. |
| --- | --- |

4.5.1

Many of the traditional problems confronting SMEs (lack of funds, difficulties in exploiting technology, limited managerial capacity, low productivity, regulatory constraints) are made worse in a globalised system and in an environment dominated by technology, especially if set in a context like that of the ACP countries, marked by serious structural and infrastructural weaknesses.

| 4.5.2 | The objective of regional integration through the Economic Partnership Agreements should be to encourage the establishment and consolidation of certain structures which are essential for encouraging access by small and very small firms to funding, information, markets, training and technological updating. However, representatives of socio-occupational organisations play a role in the management of these structures, and these representatives must be given the opportunity to be trained, to grow, to learn new skills and to exchange views. The EPA has a contribution to make here too. |
| --- | --- |

4.5.2

The objective of regional integration through the Economic Partnership Agreements should be to encourage the establishment and consolidation of certain structures which are essential for encouraging access by small and very small firms to funding, information, markets, training and technological updating. However, representatives of socio-occupational organisations play a role in the management of these structures, and these representatives must be given the opportunity to be trained, to grow, to learn new skills and to exchange views. The EPA has a contribution to make here too.

| 4.5.3 | One of the basic elements is the category-based organisation. Just as labour productivity grows in proportion as the trade union presence improves, so too the efficiency of small and very small firms can only improve if its representative bodies grow sufficiently as well. |
| --- | --- |

4.5.3

One of the basic elements is the category-based organisation. Just as labour productivity grows in proportion as the trade union presence improves, so too the efficiency of small and very small firms can only improve if its representative bodies grow sufficiently as well.

| 4.5.4 | Through category-based organisations it is possible externally to defend the values of the firm and the enterprise culture and internally to strengthen the capacities for management, updating and respect for all who contribute to the development of enterprise and of society. |
| --- | --- |

4.5.4

Through category-based organisations it is possible externally to defend the values of the firm and the enterprise culture and internally to strengthen the capacities for management, updating and respect for all who contribute to the development of enterprise and of society.

| 4.5.5 | Essentially, the values proper to the concept of the social responsibility of enterprises can be shared with the ACP countries as well in the appropriate timescale only if the Economic Partnership Agreements incorporate the elements which have enabled Europe to become an example of a social market economy. This kind of economy requires the strength and maturity of both workers' and employers' representative organisations. |
| --- | --- |

4.5.5

Essentially, the values proper to the concept of the social responsibility of enterprises can be shared with the ACP countries as well in the appropriate timescale only if the Economic Partnership Agreements incorporate the elements which have enabled Europe to become an example of a social market economy. This kind of economy requires the strength and maturity of both workers' and employers' representative organisations.

| 4.6 | Given the scale of the inequalities mentioned above, some subjects in the EPA negotiations are particularly strategic. It should be emphasised that trade and economic integration as motors of competitiveness and growth must make it possible to raise living and working standards and improve social rights rather than reducing them. |
| --- | --- |

4.6

Given the scale of the inequalities mentioned above, some subjects in the EPA negotiations are particularly strategic. It should be emphasised that trade and economic integration as motors of competitiveness and growth must make it possible to raise living and working standards and improve social rights rather than reducing them.

| 4.6.1 | From this viewpoint there is a vital need to make studies of economic and social impact (ex-ante and ex-post) with the participation of the socio-economic actors in the region (22). |
| --- | --- |

4.6.1

From this viewpoint there is a vital need to make studies of economic and social impact (ex-ante and ex-post) with the participation of the socio-economic actors in the region (22).

| 4.7 | The primacy of human rights, and particularly workers' rights. The EPA must guarantee the primacy of human rights and particularly social rights, as defined by the ILO, in all aspects of trade and finance. These rights must be systematically integrated into all EPA negotiations at regional level. |
| --- | --- |

4.7

The primacy of human rights, and particularly workers' rights. The EPA must guarantee the primacy of human rights and particularly social rights, as defined by the ILO, in all aspects of trade and finance. These rights must be systematically integrated into all EPA negotiations at regional level.

| 4.7.1 | Visible links must be established between foreign debt reduction and greater investment in social protection, using the public resources that are freed up when debt payments are reduced. |
| --- | --- |

4.7.1

Visible links must be established between foreign debt reduction and greater investment in social protection, using the public resources that are freed up when debt payments are reduced.

| 4.7.2 | Indeed, the countries with a sizeable debt have little scope for manoeuvre in launching measures to combat poverty (23). New efforts should be urged to relieve the indebtedness of most of the indebted countries. However, such a measure should be accompanied by a commitment on the part of governments to meet national objectives. |
| --- | --- |

4.7.2

Indeed, the countries with a sizeable debt have little scope for manoeuvre in launching measures to combat poverty (23). New efforts should be urged to relieve the indebtedness of most of the indebted countries. However, such a measure should be accompanied by a commitment on the part of governments to meet national objectives.

| 4.7.3 | A practical social development plan. A negotiating period must be used to implement a practical social development programme pursuing the development objectives of the Cotonou Agreement (24) and also involving the economic and social forces. This programme should form an integral part of the EPA as regards choices of approaches and objectives, its implementing strategy and the impact studies. It must be based on these and, of necessity, support the increasing competitiveness and growth that should be generated by trade liberalisation. |
| --- | --- |

4.7.3

A practical social development plan. A negotiating period must be used to implement a practical social development programme pursuing the development objectives of the Cotonou Agreement (24) and also involving the economic and social forces. This programme should form an integral part of the EPA as regards choices of approaches and objectives, its implementing strategy and the impact studies. It must be based on these and, of necessity, support the increasing competitiveness and growth that should be generated by trade liberalisation.

| 4.8 | This programme must be comprehensive and multi-dimensional: it could include rehabilitation of education and of health services, income guarantee measures for small rural producers and small-scale fishermen, active policies for promotion, protection and development of decent jobs (25) and, lastly, a truly participatory approach involving organised civil society. |
| --- | --- |

4.8

This programme must be comprehensive and multi-dimensional: it could include rehabilitation of education and of health services, income guarantee measures for small rural producers and small-scale fishermen, active policies for promotion, protection and development of decent jobs (25) and, lastly, a truly participatory approach involving organised civil society.

| 4.8.1 | The programme, targeting human resources, could follow the EU's example and make use of its expertise in managing the European Social Fund (ESF). The measures should focus on skilling and reskilling to foster a more open trade culture and be agreed with organised civil society representatives. |
| --- | --- |

4.8.1

The programme, targeting human resources, could follow the EU's example and make use of its expertise in managing the European Social Fund (ESF). The measures should focus on skilling and reskilling to foster a more open trade culture and be agreed with organised civil society representatives.

5.   Individual and social rights

| 5.1 | In many ACP countries the situation remains difficult as regards basic social indicators and economic activity. The current negotiations on the EPA therefore represent a great opportunity for the ACP countries. The quality of these agreements will be decisive for future development. |
| --- | --- |

5.1

In many ACP countries the situation remains difficult as regards basic social indicators and economic activity. The current negotiations on the EPA therefore represent a great opportunity for the ACP countries. The quality of these agreements will be decisive for future development.

| 5.1.1 | It is also important at this stage to bear in mind that the main objectives of the EPA negotiations are, like those of the humanitarian aid negotiations, the development of the ACP countries and the reduction of poverty. The two parties must work together in harmony and ensure that their respective positions reflect these priorities well. Hence the need for sustained coordination. |
| --- | --- |

5.1.1

It is also important at this stage to bear in mind that the main objectives of the EPA negotiations are, like those of the humanitarian aid negotiations, the development of the ACP countries and the reduction of poverty. The two parties must work together in harmony and ensure that their respective positions reflect these priorities well. Hence the need for sustained coordination.

| 5.2 | It is clear from the history of civilisation that education and vocational training are the bases for development. The former enables man to read, to understand and to see his place in history and the latter enables him to obtain food and to work materials, thus helping to perpetuate the work of ongoing construction of the world (26). |
| --- | --- |

5.2

It is clear from the history of civilisation that education and vocational training are the bases for development. The former enables man to read, to understand and to see his place in history and the latter enables him to obtain food and to work materials, thus helping to perpetuate the work of ongoing construction of the world (26).

| 5.2.1 | Experience of cooperation has shown that the main reasons why initiatives fail often include:






  — | failure to place training at the heart of development policy; |
| --- | --- | --- |

5.2.1

Experience of cooperation has shown that the main reasons why initiatives fail often include:

—

failure to place training at the heart of development policy;

| — | it is difficult for beneficiary countries to implement reforms that would enable them to use both domestic and international resources rationally; |
| --- | --- |

—

it is difficult for beneficiary countries to implement reforms that would enable them to use both domestic and international resources rationally;

| — | low level of involvement of the stakeholders directly concerned, particularly when it comes to passing on technology, innovative techniques and entrepreneurship. |
| --- | --- |

—

low level of involvement of the stakeholders directly concerned, particularly when it comes to passing on technology, innovative techniques and entrepreneurship.

| 5.2.2 | Training during the EPA preparation and implementation phases is essential if cooperation initiatives are to succeed. At the root of failed cooperation projects often lie failure to pass on practical skills, management techniques or a number of elements which potential local operators need to be able to make assessments, take operational decisions or exploit opportunities for integration into regional markets, which are constantly changing. |
| --- | --- |

5.2.2

Training during the EPA preparation and implementation phases is essential if cooperation initiatives are to succeed. At the root of failed cooperation projects often lie failure to pass on practical skills, management techniques or a number of elements which potential local operators need to be able to make assessments, take operational decisions or exploit opportunities for integration into regional markets, which are constantly changing.

| 5.2.3 | Even more than economic concerns, a lack of human and cultural resources has been the greatest problem when it comes to modernisation measures, consolidating the market and increasing competitiveness, enhancing formal economic structures, modernising agriculture and integrating agriculture and industry. |
| --- | --- |

5.2.3

Even more than economic concerns, a lack of human and cultural resources has been the greatest problem when it comes to modernisation measures, consolidating the market and increasing competitiveness, enhancing formal economic structures, modernising agriculture and integrating agriculture and industry.

| 5.3 | Planned long-term training measures are essential to build up insubstantial production structures. There are three basic strands of measures to be integrated: sectoral policies — agriculture, in particular, measures to improve the production system, measures to improve distribution. |
| --- | --- |

5.3

Planned long-term training measures are essential to build up insubstantial production structures. There are three basic strands of measures to be integrated: sectoral policies — agriculture, in particular, measures to improve the production system, measures to improve distribution.

| 5.3.1 | An initiative is needed to stimulate the private sector by:






  — | investment in human resources and research, to introduce skills necessary for launching socially-acceptable development processes which are sustainable in the long term; |
| --- | --- | --- |

5.3.1

An initiative is needed to stimulate the private sector by:

—

investment in human resources and research, to introduce skills necessary for launching socially-acceptable development processes which are sustainable in the long term;

| — | organisation- and institution-building, including institution-building in central and local public administrations, economic bodies and, in particular, employers' and workers' associations; |
| --- | --- |

—

organisation- and institution-building, including institution-building in central and local public administrations, economic bodies and, in particular, employers' and workers' associations;

| — | development and dissemination of ‘technological packages’ (27); |
| --- | --- |

—

development and dissemination of ‘technological packages’ (27);

| — | practical courses on product storage, transport and processing, which help to improve market operation. The development of forms of association could be a particularly significant contribution here; they could draw on expertise from all over Europe and would be supported by a system of incentives for the private sector allowing lower transport and processing costs in addition to the introduction of new processes. |
| --- | --- |

—

practical courses on product storage, transport and processing, which help to improve market operation. The development of forms of association could be a particularly significant contribution here; they could draw on expertise from all over Europe and would be supported by a system of incentives for the private sector allowing lower transport and processing costs in addition to the introduction of new processes.

| 5.3.2 | Investment in human capital is the most important element in development processes and this must be a point of reference in the EPA negotiations planned. Basic education makes it possible for training to be assimilated and disseminated in the different sectors and facilitates the formation of associations and technology upgrading. |
| --- | --- |

5.3.2

Investment in human capital is the most important element in development processes and this must be a point of reference in the EPA negotiations planned. Basic education makes it possible for training to be assimilated and disseminated in the different sectors and facilitates the formation of associations and technology upgrading.

| 5.3.3 | Education is also extremely beneficial for women, who play a key role in society and the economy. In most of the ACP countries, women are the only source of sustained, reliable income in villages. This means that the economy as a whole could benefit from training being provided for women in particular (28). |
| --- | --- |

5.3.3

Education is also extremely beneficial for women, who play a key role in society and the economy. In most of the ACP countries, women are the only source of sustained, reliable income in villages. This means that the economy as a whole could benefit from training being provided for women in particular (28).

| 5.3.4 | In each region, the EPA should be able to guarantee and improve:






  — | non-discriminatory access to education; |
| --- | --- | --- |

5.3.4

In each region, the EPA should be able to guarantee and improve:

—

non-discriminatory access to education;

| — | development and dissemination of vocational training in technical subjects; |
| --- | --- |

—

development and dissemination of vocational training in technical subjects;

| — | close cooperation between non-state actors and NGOs, to ensure more widespread and more effective distribution of training opportunities; |
| --- | --- |

—

close cooperation between non-state actors and NGOs, to ensure more widespread and more effective distribution of training opportunities;

| — | exchanges of expertise between European (29) and ACP organisations (30). |
| --- | --- |

—

exchanges of expertise between European (29) and ACP organisations (30).

| 5.3.5 | There is a close relationship between level of education and prospects for a stable job. However, an environment also needs to be created which leads educated young people to give their country and region of origin the benefit of their skills (31). |
| --- | --- |

5.3.5

There is a close relationship between level of education and prospects for a stable job. However, an environment also needs to be created which leads educated young people to give their country and region of origin the benefit of their skills (31).

| 5.3.6 | The practice of providing work-experience placements for young people in private companies or public institutions, which has yielded excellent results in European countries, should be extended to the ACP countries and be discussed as part of the EPA negotiations. |
| --- | --- |

5.3.6

The practice of providing work-experience placements for young people in private companies or public institutions, which has yielded excellent results in European countries, should be extended to the ACP countries and be discussed as part of the EPA negotiations.

| 5.3.7 | Essentially, the wide-ranging subject of education and training should become a key element in the negotiation process. |
| --- | --- |

5.3.7

Essentially, the wide-ranging subject of education and training should become a key element in the negotiation process.

| 5.4 | In a period characterised by the well-known phenomena of globalisation, civil society has produced a culture based on the values and concepts which distinguish a social market economy, namely: individual responsibility, recognition of the rule of law, respect for the person and for property, transparency, human dignity, equality and freedom, recognition of basic trade-union and workers' rights, sound labour relations, access to education and, lastly, training for all regardless of gender, and a high level of social protection. These values and concepts constitute the basis of the EU's approach to globalisation. |
| --- | --- |

5.4

In a period characterised by the well-known phenomena of globalisation, civil society has produced a culture based on the values and concepts which distinguish a social market economy, namely: individual responsibility, recognition of the rule of law, respect for the person and for property, transparency, human dignity, equality and freedom, recognition of basic trade-union and workers' rights, sound labour relations, access to education and, lastly, training for all regardless of gender, and a high level of social protection. These values and concepts constitute the basis of the EU's approach to globalisation.

| 5.4.1 | As well as underpinning peace and progress, these values have been confirmed and consolidated in recent decades through the regionalisation process which has spread through Europe since the Second World War; they are the platform and good practice on which the EPA process must be built with the ACP countries. |
| --- | --- |

5.4.1

As well as underpinning peace and progress, these values have been confirmed and consolidated in recent decades through the regionalisation process which has spread through Europe since the Second World War; they are the platform and good practice on which the EPA process must be built with the ACP countries.

| 5.4.2 | Exchange between government and civil society in the developing countries, as well as yielding a high return in terms of political consensus, has a specific value in that it helps to bring decision-making centres into closer touch with the various demands arising from real conditions in the different areas concerned. |
| --- | --- |

5.4.2

Exchange between government and civil society in the developing countries, as well as yielding a high return in terms of political consensus, has a specific value in that it helps to bring decision-making centres into closer touch with the various demands arising from real conditions in the different areas concerned.

| 5.4.3 | The practice of such a partnership significantly increases the chances of the country's policy responding to the need to spread the benefits of social and economic democracy as widely as possible among the resident population, with a noticeable effect on the reduction of poverty and consequently on the effectiveness of social policies. |
| --- | --- |

5.4.3

The practice of such a partnership significantly increases the chances of the country's policy responding to the need to spread the benefits of social and economic democracy as widely as possible among the resident population, with a noticeable effect on the reduction of poverty and consequently on the effectiveness of social policies.

| 5.4.4 | The development of civil society and the practice of grass-roots democracy do not arise spontaneously, however. They are the fruit of a participation culture formed by practices and models which, although consolidated, tend towards continuous improvement. The good quality and usefulness of these models, and their application to everyday life, are the strong message which should be included in the Partnership Agreements. |
| --- | --- |

5.4.4

The development of civil society and the practice of grass-roots democracy do not arise spontaneously, however. They are the fruit of a participation culture formed by practices and models which, although consolidated, tend towards continuous improvement. The good quality and usefulness of these models, and their application to everyday life, are the strong message which should be included in the Partnership Agreements.

| 5.4.5 | If the ACP countries had the possibility, thorough far-reaching cultural processes and continuous exchanges with European civil society organisations, to make these models their own and anchor them in their social reality, they would probably succeed in overcoming the serious existing imbalances much more quickly. |
| --- | --- |

5.4.5

If the ACP countries had the possibility, thorough far-reaching cultural processes and continuous exchanges with European civil society organisations, to make these models their own and anchor them in their social reality, they would probably succeed in overcoming the serious existing imbalances much more quickly.

| 5.4.6 | From this point of view, as the EU body that represents organised civil society, the EESC confirms ‘the fundamental role played by women as leading players in development, and emphasise[s] the need to promote their organisations and ensure that they participate fairly in advisory and decision-making bodies’ (32). |
| --- | --- |

5.4.6

From this point of view, as the EU body that represents organised civil society, the EESC confirms ‘the fundamental role played by women as leading players in development, and emphasise[s] the need to promote their organisations and ensure that they participate fairly in advisory and decision-making bodies’ (32).

| 5.4.6.1 | The aim is not just better integration of women in civil society, but rather to create the basic conditions that would enable them to become truly involved, valued, and supported, so that they achieve equality with men (33) in making the specific contribution to their country's development for which they have been equipped by their role in society. |
| --- | --- |

5.4.6.1

The aim is not just better integration of women in civil society, but rather to create the basic conditions that would enable them to become truly involved, valued, and supported, so that they achieve equality with men (33) in making the specific contribution to their country's development for which they have been equipped by their role in society.

| 5.5 | A World Bank study of February 2003 states that reducing income disparities and wage discrimination and improving economic performance depend on a high level of trade union membership and on sound labour relations (34), and underlines the need for action to achieve a better balance between economic and social values (35). |
| --- | --- |

5.5

A World Bank study of February 2003 states that reducing income disparities and wage discrimination and improving economic performance depend on a high level of trade union membership and on sound labour relations (34), and underlines the need for action to achieve a better balance between economic and social values (35).

| 5.6 | The social dimension of the Cotonou Agreement and its impact on the EPA must be based on the fundamental ILO conventions, particularly those relating to:






  — | freedom of association, of action and of negotiation; |
| --- | --- | --- |

5.6

The social dimension of the Cotonou Agreement and its impact on the EPA must be based on the fundamental ILO conventions, particularly those relating to:

—

freedom of association, of action and of negotiation;

| — | prohibition of forced labour; |
| --- | --- |

—

prohibition of forced labour;

| — | elimination of child labour; |
| --- | --- |

—

elimination of child labour;

| — | non-discrimination and equality between men and women. |
| --- | --- |

—

non-discrimination and equality between men and women.

| 5.6.1 | To the above can be added:






  — | Convention No 183 (2000) on the protection of motherhood; |
| --- | --- | --- |

5.6.1

To the above can be added:

—

Convention No 183 (2000) on the protection of motherhood;

| — | Convention No 102 (1952) on social protection; |
| --- | --- |

—

Convention No 102 (1952) on social protection;

| — | Convention No 122 (1964) on promotion of employment; |
| --- | --- |

—

Convention No 122 (1964) on promotion of employment;

| — | Convention No 142 (1975): Recommendation on making the most of human resources; |
| --- | --- |

—

Convention No 142 (1975): Recommendation on making the most of human resources;

| — | Convention No 81 (industrial sectors) and Convention No 129 (agriculture) on labour inspection; |
| --- | --- |

—

Convention No 81 (industrial sectors) and Convention No 129 (agriculture) on labour inspection;

| — | Convention No 97 on migrant workers. |
| --- | --- |

—

Convention No 97 on migrant workers.

| 5.6.2 | The optimum social requirement (commitment to guarantee at least the eight ‘basic rights’ Conventions of the ILO) should be an obligatory condition for any investment in the ACP countries. The same applies to public calls for tender for services funded by the EDF or other funds covered by the Cotonou Agreement. |
| --- | --- |

5.6.2

The optimum social requirement (commitment to guarantee at least the eight ‘basic rights’ Conventions of the ILO) should be an obligatory condition for any investment in the ACP countries. The same applies to public calls for tender for services funded by the EDF or other funds covered by the Cotonou Agreement.

| 5.6.3 | Some financial measures promoting entrepreneurship and the setting-up and development of businesses should be linked to specific actions implementing businesses' social responsibility. For instance, incentives could be introduced for both businesses which run staff skilling courses and small and very small businesses whose owners can show they are familiar with and apply the established principles of health and safety in the workplace. |
| --- | --- |

5.6.3

Some financial measures promoting entrepreneurship and the setting-up and development of businesses should be linked to specific actions implementing businesses' social responsibility. For instance, incentives could be introduced for both businesses which run staff skilling courses and small and very small businesses whose owners can show they are familiar with and apply the established principles of health and safety in the workplace.

6.   Gender issues

| 6.1 | Gender issues (36) must always be borne in mind, both with regard to development aid and in EPA negotiations. |
| --- | --- |

6.1

Gender issues (36) must always be borne in mind, both with regard to development aid and in EPA negotiations.

| 6.1.1 | Analyses carried out thus far and specific experience in ACP countries highlight:






  — | limited access for girls and women to education and training (37); |
| --- | --- | --- |

6.1.1

Analyses carried out thus far and specific experience in ACP countries highlight:

—

limited access for girls and women to education and training (37);

| — | limited access to financial resources, especially to microcredit (38); |
| --- | --- |

—

limited access to financial resources, especially to microcredit (38);

| — | obstacles to women owning real estate; |
| --- | --- |

—

obstacles to women owning real estate;

| — | the disparity in access to the regular labour market; |
| --- | --- |

—

the disparity in access to the regular labour market;

| — | income differences between men and women; |
| --- | --- |

—

income differences between men and women;

| — | the increase in HIV infection rates in girls and women; |
| --- | --- |

—

the increase in HIV infection rates in girls and women;

| — | violence and arrogance towards women. |
| --- | --- |

—

violence and arrogance towards women.

| 6.2 | As part of the EPA negotiation process, targeted studies need to be commissioned and followed up by Commission delegations in ACP regions and countries in order to identify women's organisations and assess their scope and activity. |
| --- | --- |

6.2

As part of the EPA negotiation process, targeted studies need to be commissioned and followed up by Commission delegations in ACP regions and countries in order to identify women's organisations and assess their scope and activity.

| 6.2.1 | Commission delegation officials must be constantly involved in the cultural and gender debate. The delegations should be specifically tasked with promoting gender mainstreaming (39) in order to establish a capacity-building strategy targeting women (40). |
| --- | --- |

6.2.1

Commission delegation officials must be constantly involved in the cultural and gender debate. The delegations should be specifically tasked with promoting gender mainstreaming (39) in order to establish a capacity-building strategy targeting women (40).

| 6.2.2 | Given that the programmed participation of the EU delegations and the Regional Preparatory Task Forces that are following the EPA negotiations, together with any planned development cooperation initiatives, must be underpinned by the Community acquis
   (41), the EESC calls for the impact studies to include uniform gender statistics in order to provide a clearer picture of the impact of the various trade measures on men and women in the ACP countries and regions. |
| --- | --- |

6.2.2

Given that the programmed participation of the EU delegations and the Regional Preparatory Task Forces that are following the EPA negotiations, together with any planned development cooperation initiatives, must be underpinned by the Community acquis
   (41), the EESC calls for the impact studies to include uniform gender statistics in order to provide a clearer picture of the impact of the various trade measures on men and women in the ACP countries and regions.

| 6.3 | If we are to address the gender dimension in the Economic Partnership Agreements, we must recognise that the transition towards free trade with the European Union will have a particular impact on women as producers and consumers, and that they are consequently an important part in the process (42). An impact analysis would enable us to establish the economic sector in which the introduction of free trade would benefit women as consumers without penalising them as producers. |
| --- | --- |

6.3

If we are to address the gender dimension in the Economic Partnership Agreements, we must recognise that the transition towards free trade with the European Union will have a particular impact on women as producers and consumers, and that they are consequently an important part in the process (42). An impact analysis would enable us to establish the economic sector in which the introduction of free trade would benefit women as consumers without penalising them as producers.

| 6.3.1 | As is widely known, women occupy a central position in agriculture in most ACP countries, particularly in Africa. They would therefore be more vulnerable to any increase in Community agricultural exports to local and regional markets. |
| --- | --- |

6.3.1

As is widely known, women occupy a central position in agriculture in most ACP countries, particularly in Africa. They would therefore be more vulnerable to any increase in Community agricultural exports to local and regional markets.

| 6.3.2 | Since women are, de facto, already penalised by the WTO rules on liberalisation of agriculture (43), it is worth looking at the sectors that are particularly important for women, in order to






  — | provide any simple and effective safeguards that might be needed; |
| --- | --- | --- |

6.3.2

Since women are, de facto, already penalised by the WTO rules on liberalisation of agriculture (43), it is worth looking at the sectors that are particularly important for women, in order to

—

provide any simple and effective safeguards that might be needed;

| — | exclude them, if necessary, from the products earmarked for the transition towards free trade; |
| --- | --- |

—

exclude them, if necessary, from the products earmarked for the transition towards free trade;

| — | provide for some special provisions to address the specific interests of some regions. |
| --- | --- |

—

provide for some special provisions to address the specific interests of some regions.

| 6.3.3 | The gender-focused analysis of the development problems associated with EPAs should aim to establish the areas in which women are at a particular disadvantage in terms of access to production resources, and show how access can be facilitated so that women can better equip themselves to deal with free trade with the EU. |
| --- | --- |

6.3.3

The gender-focused analysis of the development problems associated with EPAs should aim to establish the areas in which women are at a particular disadvantage in terms of access to production resources, and show how access can be facilitated so that women can better equip themselves to deal with free trade with the EU.

| 6.3.4 | Another crucial aspect of the analysis is to stress how women already benefit from government and EU programmes to improve their access to resources. |
| --- | --- |

6.3.4

Another crucial aspect of the analysis is to stress how women already benefit from government and EU programmes to improve their access to resources.

| 6.3.5 | Any prospective studies must enable the players to target the type of aid women most need in order to address the challenge of free trade. |
| --- | --- |

6.3.5

Any prospective studies must enable the players to target the type of aid women most need in order to address the challenge of free trade.

| 6.4 | In addition to women and those most in need, gender issues also affect small-scale producers, who are the weakest link in the EPA negotiations. In terms of economic and budget problems, two areas are of vital importance to women and small-scale producers, and must consequently be taken into consideration in the Agreements:






  — | social services, e.g. education, health, water usage, maternity care; |
| --- | --- | --- |

6.4

In addition to women and those most in need, gender issues also affect small-scale producers, who are the weakest link in the EPA negotiations. In terms of economic and budget problems, two areas are of vital importance to women and small-scale producers, and must consequently be taken into consideration in the Agreements:

—

social services, e.g. education, health, water usage, maternity care;

| — | economic services, especially in terms of agriculture, infrastructure, farm roads, financial policies, access to microcredit, innovation. |
| --- | --- |

—

economic services, especially in terms of agriculture, infrastructure, farm roads, financial policies, access to microcredit, innovation.

| 6.4.1 | Generally speaking, the EPA budgets for social and economic services are fairly insubstantial if the aim is to protect regional domestic markets or offer alternative help with supply limitations. An in-depth impact analysis should indicate a target level for aid, given that the transition to free trade with the EU will lead to reduced income for the ACPs. |
| --- | --- |

6.4.1

Generally speaking, the EPA budgets for social and economic services are fairly insubstantial if the aim is to protect regional domestic markets or offer alternative help with supply limitations. An in-depth impact analysis should indicate a target level for aid, given that the transition to free trade with the EU will lead to reduced income for the ACPs.

| 6.5 | In order to improve female integration and participation in the social and economic life of ACP countries, specific actions will need to be planned, e.g.:






  — | establishing restricted channels for women-only access to European funds for various projects (capacity-building, entrepreneurship, microcredit, women's organisations, training, etc.) (44); |
| --- | --- | --- |

6.5

In order to improve female integration and participation in the social and economic life of ACP countries, specific actions will need to be planned, e.g.:

—

establishing restricted channels for women-only access to European funds for various projects (capacity-building, entrepreneurship, microcredit, women's organisations, training, etc.) (44);

| — | more support for women's training programmes; |
| --- | --- |

—

more support for women's training programmes;

| — | upgrading actions to boost female entrepreneurship. |
| --- | --- |

—

upgrading actions to boost female entrepreneurship.

| 6.6 | The most important thing is, however, to insist on women's right to equal access to education and training, as provided for in the third point of the Millennium Development Goals. |
| --- | --- |

6.6

The most important thing is, however, to insist on women's right to equal access to education and training, as provided for in the third point of the Millennium Development Goals.

7.   Conclusions and recommendations

| 7.1 | At present all the developed countries are having difficulty in managing the various aspects of globalisation. There is no doubt that the gradual liberalisation of the markets, which underpins the process, will have varying effects on different countries. |
| --- | --- |

7.1

At present all the developed countries are having difficulty in managing the various aspects of globalisation. There is no doubt that the gradual liberalisation of the markets, which underpins the process, will have varying effects on different countries.

| 7.1.1 | The countries with a well developed system of services and an economy in which the Value Added (45) of the manufacturing sector (GVA 2) has declined are in an advantageous position in a globalised system. In this historical phase — more so than in the past — it is the capacity to provide advanced services which helps determine the success of an economy. |
| --- | --- |

7.1.1

The countries with a well developed system of services and an economy in which the Value Added (45) of the manufacturing sector (GVA 2) has declined are in an advantageous position in a globalised system. In this historical phase — more so than in the past — it is the capacity to provide advanced services which helps determine the success of an economy.

| 7.1.2 | The productive structures of the ACP countries are known to be weak or non-existent, and their services system are in an even worse state. It is therefore a matter of helping them to gain access, through more widespread use of commerce and production, to instruments to reduce hunger and poverty. This means, however, that the processes of liberalisation and reduction of customs tariffs will be lengthy, and will take longer than previously envisaged. |
| --- | --- |

7.1.2

The productive structures of the ACP countries are known to be weak or non-existent, and their services system are in an even worse state. It is therefore a matter of helping them to gain access, through more widespread use of commerce and production, to instruments to reduce hunger and poverty. This means, however, that the processes of liberalisation and reduction of customs tariffs will be lengthy, and will take longer than previously envisaged.

| 7.1.3 | It also means that the current process can only be successful if it involves and motivates society. But the responses and consensus are expressed through organisations and associations; these are still very fragile or, in many states, still impeded in their work. |
| --- | --- |

7.1.3

It also means that the current process can only be successful if it involves and motivates society. But the responses and consensus are expressed through organisations and associations; these are still very fragile or, in many states, still impeded in their work.

| 7.1.4 | The first, and fundamental, commitment to be met through the Partnership Agreements is that of strengthening in the various regions the associations of workers, entrepreneurs, consumers, the equal opportunity organisations, and the many others which help to produce culture and guide consensus towards measures to speed up human, social and economic progress. |
| --- | --- |

7.1.4

The first, and fundamental, commitment to be met through the Partnership Agreements is that of strengthening in the various regions the associations of workers, entrepreneurs, consumers, the equal opportunity organisations, and the many others which help to produce culture and guide consensus towards measures to speed up human, social and economic progress.

| 7.2 | The ACP countries are very different in terms of language, culture and religion, and hence their civil society practices also vary considerably. Some studies have been made of these characteristics (46), which could become important in the course of the partnership negotiations. |
| --- | --- |

7.2

The ACP countries are very different in terms of language, culture and religion, and hence their civil society practices also vary considerably. Some studies have been made of these characteristics (46), which could become important in the course of the partnership negotiations.

| 7.2.1 | Such differences between countries should lead to differentiated regions giving rise to EPAs which differ in their content. |
| --- | --- |

7.2.1

Such differences between countries should lead to differentiated regions giving rise to EPAs which differ in their content.

| 7.2.2 | While, on the one hand, the division of the ACP countries into six macro-areas makes it possible to develop South-South relations and thus extend the positive experiment so far conducted by the European Union, it should however be emphasised that very different levels of development have been attained by the ACP countries called upon to share economic and social relations. This necessitates a considerable effort on the part of the Commission to pick out certain specific identities of individual regions on which to focus the attention and interests of civil society. |
| --- | --- |

7.2.2

While, on the one hand, the division of the ACP countries into six macro-areas makes it possible to develop South-South relations and thus extend the positive experiment so far conducted by the European Union, it should however be emphasised that very different levels of development have been attained by the ACP countries called upon to share economic and social relations. This necessitates a considerable effort on the part of the Commission to pick out certain specific identities of individual regions on which to focus the attention and interests of civil society.

| 7.2.3 | The large-scale projects discussed in Johannesburg, which also underpin the Action Plan for the new millennium (health services, access to water supplies, reduction of famine, sustainable development, capacity building etc.) are the main points to which to draw the attention of civil society, so that the latter perceives itself as a protagonist in the processes of change. |
| --- | --- |

7.2.3

The large-scale projects discussed in Johannesburg, which also underpin the Action Plan for the new millennium (health services, access to water supplies, reduction of famine, sustainable development, capacity building etc.) are the main points to which to draw the attention of civil society, so that the latter perceives itself as a protagonist in the processes of change.

| 7.2.4 | The approach, both during the negotiations and in the various stages of implementation of the projects, must be above all one of listening and sensitivity. Managing to combine the various social aspects with the economic, cultural and environmental aspects is an objective that will require a particular effort. |
| --- | --- |

7.2.4

The approach, both during the negotiations and in the various stages of implementation of the projects, must be above all one of listening and sensitivity. Managing to combine the various social aspects with the economic, cultural and environmental aspects is an objective that will require a particular effort.

| 7.3 | As the Commissioner, Peter Mandelson, maintains, trade must be used during the EPA negotiations as one of the factors of development. While free trade is clearly not in itself the cure for famine and poverty, nor the optimum instrument for achieving sustainable development, it must be regarded as one of the factors capable of promoting competitiveness, as part of a partnership project. |
| --- | --- |

7.3

As the Commissioner, Peter Mandelson, maintains, trade must be used during the EPA negotiations as one of the factors of development. While free trade is clearly not in itself the cure for famine and poverty, nor the optimum instrument for achieving sustainable development, it must be regarded as one of the factors capable of promoting competitiveness, as part of a partnership project.

| 7.3.1 | The EESC calls for appropriate funds to be allocated to strengthening the representation of civil society in the six areas of the ACP countries and in the already existing relations between organised civil society in the EU countries and in the ACP countries. |
| --- | --- |

7.3.1

The EESC calls for appropriate funds to be allocated to strengthening the representation of civil society in the six areas of the ACP countries and in the already existing relations between organised civil society in the EU countries and in the ACP countries.

| 7.3.2 | Consequently, all trade rules complexities should be discussed and resolved in consultation with civil society representatives, since it is they who will have to deal with the consequences of the decisions. |
| --- | --- |

7.3.2

Consequently, all trade rules complexities should be discussed and resolved in consultation with civil society representatives, since it is they who will have to deal with the consequences of the decisions.

| 7.3.3 | In particular, the European Commission should support as a matter of urgency the funding of regional cooperation structures including civil society actors in the ACP countries, and primarily the social partners, to promote the association and direct integration of the latter in the process of ACP regional integration and in the preparation of the EPAs. For its part, the European Economic and Social Committee's ACP-EU Follow-up Committee has agreed to give priority to encouraging the development of such regional cooperation networks of civil society in connection with the preparation of the EPAs. |
| --- | --- |

7.3.3

In particular, the European Commission should support as a matter of urgency the funding of regional cooperation structures including civil society actors in the ACP countries, and primarily the social partners, to promote the association and direct integration of the latter in the process of ACP regional integration and in the preparation of the EPAs. For its part, the European Economic and Social Committee's ACP-EU Follow-up Committee has agreed to give priority to encouraging the development of such regional cooperation networks of civil society in connection with the preparation of the EPAs.

| 7.4 | The Economic Partnership Agreements will be fully and positively effective only to the extent that the participation of the economic and social actors is guaranteed in the planning, preparation and implementation of the agreements, and particularly in the impact studies, as well as in the negotiation and definition of the inherent social aspects. |
| --- | --- |

7.4

The Economic Partnership Agreements will be fully and positively effective only to the extent that the participation of the economic and social actors is guaranteed in the planning, preparation and implementation of the agreements, and particularly in the impact studies, as well as in the negotiation and definition of the inherent social aspects.

| 7.4.1 | The positive aspects of the EPA (regional development, creation of national and regional internal markets etc.) may be offset by:






  — | the considerable differences in levels of development between the EU and the ACP countries; |
| --- | --- | --- |

7.4.1

The positive aspects of the EPA (regional development, creation of national and regional internal markets etc.) may be offset by:

—

the considerable differences in levels of development between the EU and the ACP countries;

| — | the very unequal distribution of the markets between the partners in technical and financial terms. |
| --- | --- |

—

the very unequal distribution of the markets between the partners in technical and financial terms.

| 7.5 | The results of the impact studies will make it possible to decide whether to continue with the integration process, amend it or postpone it, with safeguard clauses or moratoria allowing for regular reviews. |
| --- | --- |

7.5

The results of the impact studies will make it possible to decide whether to continue with the integration process, amend it or postpone it, with safeguard clauses or moratoria allowing for regular reviews.

| 7.6 | The impact studies will be able to suggest any corrections needed to WTO rules, so that EPAs can be adapted to the needs of LDCs. |
| --- | --- |

7.6

The impact studies will be able to suggest any corrections needed to WTO rules, so that EPAs can be adapted to the needs of LDCs.

| 7.6.1 | It is clear that LDCs will have to meet significant social and economic costs in the transition towards free trade. Most of the benefits ensuing from the EPAs will be difficult to quantify. The Commission ought, therefore, to assess with ACP civil society representatives the real costs and benefits that will ensue from concluding the EPAs with the EU. |
| --- | --- |

7.6.1

It is clear that LDCs will have to meet significant social and economic costs in the transition towards free trade. Most of the benefits ensuing from the EPAs will be difficult to quantify. The Commission ought, therefore, to assess with ACP civil society representatives the real costs and benefits that will ensue from concluding the EPAs with the EU.

| 7.7 | In any case, the success of the EPAs is closely linked to the involvement of society throughout the negotiation phase. |
| --- | --- |

7.7

In any case, the success of the EPAs is closely linked to the involvement of society throughout the negotiation phase.

| 7.8 | As always, the EESC is prepared to step up its cooperation with the Commission and make its experience available in order to enhance dialogue and exchange of best practice with representatives from ACP regions. It would do this by planning meetings and seminars and organising internships for people with a clearly defined professional profile that are active in civil society associations. |
| --- | --- |

7.8

As always, the EESC is prepared to step up its cooperation with the Commission and make its experience available in order to enhance dialogue and exchange of best practice with representatives from ACP regions. It would do this by planning meetings and seminars and organising internships for people with a clearly defined professional profile that are active in civil society associations.

| 7.9 | The Regional Preparatory Task Forces active in every region should include some ACP civil society representatives, especially entrepreneurs and trade unions. |
| --- | --- |

7.9

The Regional Preparatory Task Forces active in every region should include some ACP civil society representatives, especially entrepreneurs and trade unions.

| 7.10 | As recommended by the 24th meeting of ACP-EU economic and social interest groups, the EESC, with the agreement of Commissioner Mandelson, expressed at that meeting, proposes the creation of regional social dialogue committees, including socio-occupational representatives to contribute to drawing up and proposing social development programmes and ensuring their follow up and implementation. The committees' sphere of action could cover the economic, social and regional impact of EPAs, the implementation and monitoring of ILO core social standards, the promotion of employment and social development, the development of vocational training, social protection provisions, and negotiated developments in the informal economy. |
| --- | --- |

7.10

As recommended by the 24th meeting of ACP-EU economic and social interest groups, the EESC, with the agreement of Commissioner Mandelson, expressed at that meeting, proposes the creation of regional social dialogue committees, including socio-occupational representatives to contribute to drawing up and proposing social development programmes and ensuring their follow up and implementation. The committees' sphere of action could cover the economic, social and regional impact of EPAs, the implementation and monitoring of ILO core social standards, the promotion of employment and social development, the development of vocational training, social protection provisions, and negotiated developments in the informal economy.

| 7.11 | The European Economic and Social Committee is also convinced that, on the basis of the mandate ensuing from the Cotonou Agreement, key social and gender aspects and the development of employment opportunities and social protection guarantees must be part and parcel of the negotiations and subsequently translated into reality. |
| --- | --- |

7.11

The European Economic and Social Committee is also convinced that, on the basis of the mandate ensuing from the Cotonou Agreement, key social and gender aspects and the development of employment opportunities and social protection guarantees must be part and parcel of the negotiations and subsequently translated into reality.

| 7.12 | The issues referred to above are crucial to positive economic and social development and must, in any case, be seriously considered in the development policy framework that must accompany and complement the EPA negotiations. |
| --- | --- |

7.12

The issues referred to above are crucial to positive economic and social development and must, in any case, be seriously considered in the development policy framework that must accompany and complement the EPA negotiations.

| 7.13 | The globalisation process has probably reached a point where citizens' ‘collective preferences and feelings’ call for greater attention. This would make it possible to reduce domestic and international tension and avoid the constant increase in ‘ideological’ trade wars that existing machinery and external rules, and even experts in the field, seem unable to resolve alone. |
| --- | --- |

7.13

The globalisation process has probably reached a point where citizens' ‘collective preferences and feelings’ call for greater attention. This would make it possible to reduce domestic and international tension and avoid the constant increase in ‘ideological’ trade wars that existing machinery and external rules, and even experts in the field, seem unable to resolve alone.

| 7.14 | In short, the EESC takes the view — as expressed in previous Committee opinions — that the EPAs represent a very difficult challenge for the EU and for the global economy. They will be concluded later than expected (47) and will only be successful if they manage to involve civil society and enhance the role of women in the decision-making process and in implementing specific initiatives. |
| --- | --- |

7.14

In short, the EESC takes the view — as expressed in previous Committee opinions — that the EPAs represent a very difficult challenge for the EU and for the global economy. They will be concluded later than expected (47) and will only be successful if they manage to involve civil society and enhance the role of women in the decision-making process and in implementing specific initiatives.

Brussels, 14 December 2005

The President

of the European Economic and Social Committee

Anne-Marie Sigmund

---

(1)  Article 25, Cotonou Agreement.

1

(2)  Addis Ababa resolution of the Joint Parliamentary Assembly, preamble Q(3643/04/DEF.).

2

(3)  Article 46, Cotonou Agreement.

3

(4)  Article 48, relating to the WTO Agreements.

4

(5)  Article 49.

5

(6)  Article 50.

6

(7)  Article 51.

7

(8)  Article 54.

8

(9)  Article 75.

9

(10)  Article 45, Cotonou Agreement.

10

(11)  Views expressed in meetings with Commission officials.

11

(12)  They are made up of representatives of each state and representatives of the Commission drawn from the delegations.

12

(13)  Cf. CESE 521/2002, (rapporteur Mr Baeza Sanjuan).

13

(14)  The vertical partnership goes hand in hand with the horizontal partnership, which includes the mandatory participation of civil society in drawing up and managing regional operation plans.

14

(15)  The Commission documents (DG Development) specify the categories other than workers and employers: human rights organisations; grassroots organisations; women's organisations; young people's associations; child protection organisations; representatives of native populations; environmental protection organisations; agricultural organisations; consumers' associations; representatives of religious bodies; NGOs; cultural and media associations.

15

(16)  Cf. in particular the following articles: Articles 2, 4-7, 8, 9, 10, 15, 17, 19-24,25, 33, 37, 56, 57, 58, 65, 70, 71, 72, 74-78, 81. Civil society is also mentioned in the Joint Declaration on the actors in the partnership (Declaration 1 annexed to the Final Act), in Annex IV, Article 4, in the Compendium on cooperation strategies, and in the programming guidelines.

16

(17)  Civil society actors must be constantly informed, and they receive funds; they must be involved in the implementation of the projects; they enjoy cultural and financial support for continuing improvements in their organisation.

17

(18)  Article 50 of the Cotonou Agreement and ILO fundamental standards.

18

(19)  OJ C 74, 23.3.2005.

19

(20)  Association Convention of the Treaty of Rome (Art. 131); Yaoundé I and II; Lomé I, II, III, IV and IVa.

20

(21)  In many African cultures property does not belong to the individual family but to the ‘mbumba’, the entire extended patriarchal family of several dozen people. This is an obstacle to the accumulation of wealth, which becomes the property of all, including those who have not produced it.

21

(22)  Cf. footnote 17.

22

(23)  The fight against poverty through promotion of sustainable development: a partnership approach (CESE 104/2003, Rapporteur Mr Ehnmark).

23

(24)  Cf. Articles 19-27.

24

(25)  Cf. also the ILO ‘Decent Work’ strategy.

25

(26)  Aristotle said that man's brain and culture enable him to understand the world while training and the work of his hands enable him to make a contribution to it.

26

(27)  Seed varieties; production techniques; machinery; water transport, conservation and management.

27

(28)  OJ C 74, 23.3.2005.

28

(29)  Employers', workers', consumers', equal-opportunities, animal-welfare etc. associations.

29

(30)  European experiences of managing vocational training, in centres run jointly by representatives of the social partners and administrations, have yielded valuable results, for both young people and the labour market.

30

(31)  Recent OECD studies show that 50 % of young people who leave developing countries have professional qualifications and could therefore make a very valuable contribution to the development of their country.

31

(32)  Cf. Opinion on the Green Paper on relations between the European Union and the ACP countries on the eve of the 21st century - challenges and options for a new partnership (Rapporteur: Mr Malosse), REX 152/1997.

32

(33)  OJ C 74, 23.3.2005 — The role of women's organisations as non-state actors in implementing the Cotonou Agreement (Rapporteur: Ms Florio).

33

(34)  Trade unions and collective bargaining: economic effects in a globalised environment, World Bank, Washington, 2003.

34

(35)  OJ C 221, 8.9.2005.

35

(36)  See attached – footnote 39.

36

(37)  Cf. REX 154, rapporteur: Susanna Florio: in developing countries 61 % of men have at least a basic school education, compared to 41 % of women.

37

(38)  According to FAO studies, women in Africa receive only 10 % of loans earmarked for small land owners.

38

(39)  Gender issues affect women in particular, but also people who might be discriminated against for economic, religious, racial, age and cultural reasons.

39

(40)  Article 3 of the Treaty states that ‘in all its activities, including those relating to development cooperation, the EU shall aim to eliminate inequalities, and to promote equality, between men and women’.

40

(41)  COM(2001) 295 final, Programme of Action for the mainstreaming of gender equality in Community Development Cooperation (2001/2006).

41

(42)  Dakar, October 2003, Aprodev Conference, The gender dimension of EPAs.

42

(43)  GERA Programme, Phase II/Third World Network-Africa.

43

(44)  The EU has vast experience in this field. Cf. the ILO programme for European women in the 1980s and the numerous projects funded by the former DG V to promote equal opportunities for men and women. The ongoing EQUAL Programme should also be mentioned.

44

(45)  GVA6 (gross value added of the six most important economic sectors which together determine the GDP) – GVA1: agriculture; GVA2: manufacturing sector; GVA3: building; GVA4: commerce and tourism; GVA5: credit and services to enterprises; GVA6: administration.

45

(46)  These include those commissioned by the African Development Bank.

46

(47)  It is instructive to consider the problems still facing the European Union fifty years after its creation.

47

---

| 17.3.2006 | EN | Official Journal of the European Union | C 65/86 |
| --- | --- | --- | --- |

17.3.2006

EN

Official Journal of the European Union

C 65/86

---

Opinion of the European Economic and Social Committee on the ‘Communication from the Commission — Consultation document on state aid for innovation’

(COM(2005) 436 final)

(2006/C 65/16)

On 21 September 2005 the European Commission decided, under Article 262 of the Treaty establishing the European Community, to consult the European Economic and Social Committee on the Communication from the Commission — Consultation document on state aid for innovation

The Bureau of the European Economic and Social Committee instructed the Section for the Single Market, Production and Consumption to prepare the work on the subject.

Given the urgency of the work, the European Economic and Social Committee appointed Mr Pezzini as rapporteur-general at its 422nd plenary session of 14 December 2005, and adopted the following opinion by 80 votes in favour with two abstentions.

1.   Summary and recommendations

| 1.1 | The Committee welcomes the consultation document on state aid for innovation, through which the Commission intends to establish a framework of legal certainty, as well as defining criteria for the granting of more targeted aid and achieving a simplification of the regulatory context. |
| --- | --- |

1.1

The Committee welcomes the consultation document on state aid for innovation, through which the Commission intends to establish a framework of legal certainty, as well as defining criteria for the granting of more targeted aid and achieving a simplification of the regulatory context.

| 1.1.1 | The EESC is aware that the Commission document opens up for the first time a thorough debate on matters which are now extremely topical:






  — | what we mean by innovation; |
| --- | --- | --- |

1.1.1

The EESC is aware that the Commission document opens up for the first time a thorough debate on matters which are now extremely topical:

—

what we mean by innovation;

| — | where the dividing line is between the innovation phase which qualifies for aid and the marketing phase; |
| --- | --- |

—

where the dividing line is between the innovation phase which qualifies for aid and the marketing phase;

| — | what action is appropriate to allow SMEs to compensate for the well-known limitations on their growth; |
| --- | --- |

—

what action is appropriate to allow SMEs to compensate for the well-known limitations on their growth;

| — | in the present process of globalisation, how our main partners behave in the matter of innovation, and what limits we have imposed on ourselves by adhering to the WTO rules. |
| --- | --- |

—

in the present process of globalisation, how our main partners behave in the matter of innovation, and what limits we have imposed on ourselves by adhering to the WTO rules.

| 1.2 | The answers to these questions will influence the new legal framework to be proposed by the Commission; this framework will need to reflect the commitment of the Member States to combine development and progress on the one hand with respect for the rules, especially those of competition, on the other. |
| --- | --- |

1.2

The answers to these questions will influence the new legal framework to be proposed by the Commission; this framework will need to reflect the commitment of the Member States to combine development and progress on the one hand with respect for the rules, especially those of competition, on the other.

| 1.3 | The insufficient competitiveness of Europe is largely due to a modest level of innovation, often resulting from market failures. In these cases state aid can help to stimulate the actors of the market itself to invest more in product and process innovation (1). |
| --- | --- |

1.3

The insufficient competitiveness of Europe is largely due to a modest level of innovation, often resulting from market failures. In these cases state aid can help to stimulate the actors of the market itself to invest more in product and process innovation (1).

| 1.4 | The alternative to innovation is the decline of the Union in cultural and economic terms. The EESC is fully aware of this and, through the participation of its members in the various sectors of organised civil society, it is endeavouring to ensure that (partly through proper use of state aid):






  — | the externalities of the market are overcome or guided; |
| --- | --- | --- |

1.4

The alternative to innovation is the decline of the Union in cultural and economic terms. The EESC is fully aware of this and, through the participation of its members in the various sectors of organised civil society, it is endeavouring to ensure that (partly through proper use of state aid):

—

the externalities of the market are overcome or guided;

| — | entrepreneurial initiative is strengthened; |
| --- | --- |

—

entrepreneurial initiative is strengthened;

| — | suitable measures are identified in the various fields to help micro, small and medium sized enterprises and make them innovative; |
| --- | --- |

—

suitable measures are identified in the various fields to help micro, small and medium sized enterprises and make them innovative;

| — | entrepreneurs and operators working in the social sector are helped to understand and use the innovations which are constantly being made in the process of globalisation of the markets; |
| --- | --- |

—

entrepreneurs and operators working in the social sector are helped to understand and use the innovations which are constantly being made in the process of globalisation of the markets;

| — | forms of private enforcement are developed, facilitating respect for, and full application of, the rules (2); |
| --- | --- |

—

forms of private enforcement are developed, facilitating respect for, and full application of, the rules (2);

| — | practical form is given to the European Research Area (ERA), through the coordinated action of the technological poles and the advanced training schools, so as to disseminate and apply the results of the research (3); |
| --- | --- |

—

practical form is given to the European Research Area (ERA), through the coordinated action of the technological poles and the advanced training schools, so as to disseminate and apply the results of the research (3);

| — | instruments and means are used to take action on initial and continuing training to adapt professional capacities to the constantly innovating requirements of the market, to help society to understand the constant changes and to disseminate and consolidate the principles of the social responsibility of enterprises (4). |
| --- | --- |

—

instruments and means are used to take action on initial and continuing training to adapt professional capacities to the constantly innovating requirements of the market, to help society to understand the constant changes and to disseminate and consolidate the principles of the social responsibility of enterprises (4).

| 1.5 | Up to now the Commission has not issued specific rules on state aid for innovation. In accordance with Articles 87 and 88 of the Treaty, it has taken account of innovation in the context of other categories of aid: aid for regional purposes, aid for training, investment capital measures, aid for employment, measures to assist SMEs. |
| --- | --- |

1.5

Up to now the Commission has not issued specific rules on state aid for innovation. In accordance with Articles 87 and 88 of the Treaty, it has taken account of innovation in the context of other categories of aid: aid for regional purposes, aid for training, investment capital measures, aid for employment, measures to assist SMEs.

| 1.5.1 | To some extent innovation came under the heading of state aid for research and development (5), which was extended from 30 June 2002 to 31 December 2005 (6). |
| --- | --- |

1.5.1

To some extent innovation came under the heading of state aid for research and development (5), which was extended from 30 June 2002 to 31 December 2005 (6).

| 1.6 | On many questions raised here by the Commission the EESC has already given its views unanimously or by a large majority in earlier opinions:






  — | to grant the appropriate state aid to remedy market failures; |
| --- | --- | --- |

1.6

On many questions raised here by the Commission the EESC has already given its views unanimously or by a large majority in earlier opinions:

—

to grant the appropriate state aid to remedy market failures;

| — | to take action to compensate for the limits of externalities; |
| --- | --- |

—

to take action to compensate for the limits of externalities;

| — | to agree on shared criteria for drawing up ex-ante assessment criteria, particularly in the field of SMEs; |
| --- | --- |

—

to agree on shared criteria for drawing up ex-ante assessment criteria, particularly in the field of SMEs;

| — | to regard innovative processes as important not only in the technological field but also in the field of services, commerce and administration, product and process innovation; |
| --- | --- |

—

to regard innovative processes as important not only in the technological field but also in the field of services, commerce and administration, product and process innovation;

| — | to provide for increases in aid for innovation in the cohesion regions and in the areas with geographical difficulties (mountain areas, islands and isolated rural areas), partly through the proper use of ‘tax advantages’ (less burdensome tax treatment) of a regional nature (7); |
| --- | --- |

—

to provide for increases in aid for innovation in the cohesion regions and in the areas with geographical difficulties (mountain areas, islands and isolated rural areas), partly through the proper use of ‘tax advantages’ (less burdensome tax treatment) of a regional nature (7);

| — | to develop and maintain new forms of financial aid for SMEs, such as the development of microcredits and support for operating credit, the securisation of credits, and sureties for micro and small enterprises, which find it difficult to obtain access to forms of risk capital given their company form which is generally personal; |
| --- | --- |

—

to develop and maintain new forms of financial aid for SMEs, such as the development of microcredits and support for operating credit, the securisation of credits, and sureties for micro and small enterprises, which find it difficult to obtain access to forms of risk capital given their company form which is generally personal;

| — | to support organisations which assist the innovation activities of micro, small and medium-sized enterprises with advice and practical measures; |
| --- | --- |

—

to support organisations which assist the innovation activities of micro, small and medium-sized enterprises with advice and practical measures;

| — | to train, partly with public funds, professional experts in the various fields of knowledge capable of assisting micro and small enterprises by guiding them towards innovation processes; |
| --- | --- |

—

to train, partly with public funds, professional experts in the various fields of knowledge capable of assisting micro and small enterprises by guiding them towards innovation processes;

| — | to strengthen the centres of excellence with public/private investments and encourage their links with enterprises and with the academic world. |
| --- | --- |

—

to strengthen the centres of excellence with public/private investments and encourage their links with enterprises and with the academic world.

| 1.7 | The Committee has already had occasion to emphasise that state aid intended to encourage investment in innovative projects carried out by SMEs must also take account of the growth of the enterprises and of:






  — | support for regional and transregional innovation networks; |
| --- | --- | --- |

1.7

The Committee has already had occasion to emphasise that state aid intended to encourage investment in innovative projects carried out by SMEs must also take account of the growth of the enterprises and of:

—

support for regional and transregional innovation networks;

| — | promotion of the policy of industrial districts and technology parks; |
| --- | --- |

—

promotion of the policy of industrial districts and technology parks;

| — | the involvement of business angels and service intermediaries such as venture technologists, brokers and patent advisers; |
| --- | --- |

—

the involvement of business angels and service intermediaries such as venture technologists, brokers and patent advisers;

| — | the setting up of centres for transfer of technology and venture capital; |
| --- | --- |

—

the setting up of centres for transfer of technology and venture capital;

| — | the training and hiring of skilled technical staff (8). |
| --- | --- |

—

the training and hiring of skilled technical staff (8).

2.   Reasons

2.1   Summary of the Communication

| 2.1.1 | The Commission's aim is to open up a debate leading to an improvement in the Community rules on state aid for innovation projects. |
| --- | --- |

2.1.1

The Commission's aim is to open up a debate leading to an improvement in the Community rules on state aid for innovation projects.

| 2.1.2 | The Commission anticipates and clarifies its position on six general sectors:






  — | support for the creation of innovative enterprises and their growth in the initial phase; |
| --- | --- | --- |

2.1.2

The Commission anticipates and clarifies its position on six general sectors:

—

support for the creation of innovative enterprises and their growth in the initial phase;

| — | the use of risk capital; |
| --- | --- |

—

the use of risk capital;

| — | ways of integrating in the existing system the innovation which is introduced into research and development projects; |
| --- | --- |

—

ways of integrating in the existing system the innovation which is introduced into research and development projects;

| — | aid to SMEs to enable them to acquire services provided by specialised bodies acting as innovation intermediaries; |
| --- | --- |

—

aid to SMEs to enable them to acquire services provided by specialised bodies acting as innovation intermediaries;

| — | aid to SMEs to enable them to benefit from the assistance of highly skilled researchers and engineers and to make possible effective exchanges with universities and large enterprises; |
| --- | --- |

—

aid to SMEs to enable them to benefit from the assistance of highly skilled researchers and engineers and to make possible effective exchanges with universities and large enterprises;

| — | promotion and development of poles of excellence, likely to be useful to all firms and to attract private investors. |
| --- | --- |

—

promotion and development of poles of excellence, likely to be useful to all firms and to attract private investors.

| 2.1.3 | Provided that:






  — | the aid is intended to overcome a well-defined market failure; |
| --- | --- | --- |

2.1.3

Provided that:

—

the aid is intended to overcome a well-defined market failure;

| — | the aid is the most suitable instrument; |
| --- | --- |

—

the aid is the most suitable instrument;

| — | the aid stimulates the beneficiaries to innovate and is proportionate to the problem addressed; |
| --- | --- |

—

the aid stimulates the beneficiaries to innovate and is proportionate to the problem addressed;

| — | distortions of competition are limited. |
| --- | --- |

—

distortions of competition are limited.

2.2   The current situation

| 2.2.1 | In its earlier opinions the EESC always underlined the importance of controlling state aid with a view to bringing about in the EU:






  — | a competition policy leading to convergence between the various economies of the Member States; |
| --- | --- | --- |

2.2.1

In its earlier opinions the EESC always underlined the importance of controlling state aid with a view to bringing about in the EU:

—

a competition policy leading to convergence between the various economies of the Member States;

| — | a business approach based on innovation and entrepreneurship; |
| --- | --- |

—

a business approach based on innovation and entrepreneurship;

| — | a careful cohesion policy which takes account of the less favoured regions; |
| --- | --- |

—

a careful cohesion policy which takes account of the less favoured regions;

| — | sustainable growth which respects the need to improve labour conditions, enterprises and the environment. |
| --- | --- |

—

sustainable growth which respects the need to improve labour conditions, enterprises and the environment.

| 2.2.2 | While on the one hand competition policy (9) is essential to ensure that the internal market functions and develops properly, without distortions caused by discriminatory rules, on the other hand state intervention can be desirable and necessary to compensate for the limits of the market and market failures. |
| --- | --- |

2.2.2

While on the one hand competition policy (9) is essential to ensure that the internal market functions and develops properly, without distortions caused by discriminatory rules, on the other hand state intervention can be desirable and necessary to compensate for the limits of the market and market failures.

| 2.2.2.1 | The Lisbon strategy itself, revisited and enriched with new pragmatism in the spring of 2005 (10), calls for special attention to be given to:






  — | market failures; |
| --- | --- | --- |

2.2.2.1

The Lisbon strategy itself, revisited and enriched with new pragmatism in the spring of 2005 (10), calls for special attention to be given to:

—

market failures;

| — | economic and social cohesion; |
| --- | --- |

—

economic and social cohesion;

| — | sustainable development; |
| --- | --- |

—

sustainable development;

| — | innovation. |
| --- | --- |

—

innovation.

| 2.2.3 | The level of state aid has fallen slightly in recent years (11), and above all it has been directed mainly towards horizontal objectives. In 2003 horizontal aid represented 79 % of all aid; within this percentage, 14 % was allocated to research and development (12). This was also noted by the European Council of March 2005, which reaffirmed the need to grant suitable derogations where they may be necessary to compensate for market failures. |
| --- | --- |

2.2.3

The level of state aid has fallen slightly in recent years (11), and above all it has been directed mainly towards horizontal objectives. In 2003 horizontal aid represented 79 % of all aid; within this percentage, 14 % was allocated to research and development (12). This was also noted by the European Council of March 2005, which reaffirmed the need to grant suitable derogations where they may be necessary to compensate for market failures.

| 2.2.3.1 | The European Parliament, in its resolution on Strengthening European competitiveness: consequences of industrial changes on the policy and role of SMEs (13), also expresses satisfaction at the reduction in the overall volume of aid and reaffirms the usefulness of aid allocated to research, development, training and advice for small enterprises. |
| --- | --- |

2.2.3.1

The European Parliament, in its resolution on Strengthening European competitiveness: consequences of industrial changes on the policy and role of SMEs (13), also expresses satisfaction at the reduction in the overall volume of aid and reaffirms the usefulness of aid allocated to research, development, training and advice for small enterprises.

| 2.2.4 | In the context of the process of reforming the aid system (14), on which the EESC has also given its views (15), the European Parliament reaffirms the need to work out a clear line of action on reform of state aid for innovation, understood in its widest sense rather than being restricted to technological aspects (16), and capable of operating horizontally in all sectors which can make a substantial contribution to the Lisbon strategy, including the commercial and services sector. |
| --- | --- |

2.2.4

In the context of the process of reforming the aid system (14), on which the EESC has also given its views (15), the European Parliament reaffirms the need to work out a clear line of action on reform of state aid for innovation, understood in its widest sense rather than being restricted to technological aspects (16), and capable of operating horizontally in all sectors which can make a substantial contribution to the Lisbon strategy, including the commercial and services sector.

| 2.2.5 | The EESC emphasises the fact that in 2004 the Commission presented a number of structured proposals for a general reform of aid which take account of market failures. These proposals, also supported by the Committee, are becoming reality through the communications already issued. |
| --- | --- |

2.2.5

The EESC emphasises the fact that in 2004 the Commission presented a number of structured proposals for a general reform of aid which take account of market failures. These proposals, also supported by the Committee, are becoming reality through the communications already issued.

| 2.2.6 | Moreover, the EESC is fully aware that the situation in this field is very dynamic, because it is subject to variations in the political, social, economic and legal framework and to the acceleration of the process of globalisation of the markets. Suitable periodic adaptations are therefore necessary (17), while maintaining clarity and transparency of the legal reference framework. |
| --- | --- |

2.2.6

Moreover, the EESC is fully aware that the situation in this field is very dynamic, because it is subject to variations in the political, social, economic and legal framework and to the acceleration of the process of globalisation of the markets. Suitable periodic adaptations are therefore necessary (17), while maintaining clarity and transparency of the legal reference framework.

| 2.2.7 | In terms of globalisation of markets special attention should be given on the one hand to the multilateral reference framework of the WTO and on the other to that of Europe's main trading partners. |
| --- | --- |

2.2.7

In terms of globalisation of markets special attention should be given on the one hand to the multilateral reference framework of the WTO and on the other to that of Europe's main trading partners.

| 2.2.8 | In the United States of America, the United States Small Business Administration (SBA) grants small and medium-sized enterprises, through a number of federal public programmes, various forms of aid for innovation, to which must be added the aid granted by the individual states as well as the federal initiative known as the Small Business Innovation Research Programme — SBIR. |
| --- | --- |

2.2.8

In the United States of America, the United States Small Business Administration (SBA) grants small and medium-sized enterprises, through a number of federal public programmes, various forms of aid for innovation, to which must be added the aid granted by the individual states as well as the federal initiative known as the Small Business Innovation Research Programme — SBIR.

| 2.2.8.1 | The SBA runs a series of programmes:






  — | Basic Loan Program, providing guarantees (up to 75 %) for loans which can amount to as much as 2 million dollars per enterprise |
| --- | --- | --- |

2.2.8.1

The SBA runs a series of programmes:

—

Basic Loan Program, providing guarantees (up to 75 %) for loans which can amount to as much as 2 million dollars per enterprise

| — | SBA Investment Program, for Angels Capital and Venture Capital investments |
| --- | --- |

—

SBA Investment Program, for Angels Capital and Venture Capital investments

| — | Certified Development Company ‘504’ Loan Program, with aid for innovation and modernization up to 4 million dollars |
| --- | --- |

—

Certified Development Company ‘504’ Loan Program, with aid for innovation and modernization up to 4 million dollars

| — | Microloan Program, with short term aid up to 35 000 dollars through intermediaries |
| --- | --- |

—

Microloan Program, with short term aid up to 35 000 dollars through intermediaries

| — | Prequalification Loan Program, with aid up to 250 000 dollars, through intermediaries |
| --- | --- |

—

Prequalification Loan Program, with aid up to 250 000 dollars, through intermediaries

| — | Export Working Capital Program, with 90 % guarantee, up to a maximum of 1.5 million dollars |
| --- | --- |

—

Export Working Capital Program, with 90 % guarantee, up to a maximum of 1.5 million dollars

| — | SBA Express, with aid up to 350 000 dollars and 50 % guarantee |
| --- | --- |

—

SBA Express, with aid up to 350 000 dollars and 50 % guarantee

| — | SBA Community Express, with aid up to 250 000 dollars and 75 % guarantee |
| --- | --- |

—

SBA Community Express, with aid up to 250 000 dollars and 75 % guarantee

| — | SBA Secondary Market Program and SBA Asset Sales Program, to facilitate access to the shares market |
| --- | --- |

—

SBA Secondary Market Program and SBA Asset Sales Program, to facilitate access to the shares market

| — | SBA Women's Network for Entrepreneurial Training Initiative, to train women entrepreneurs. |
| --- | --- |

—

SBA Women's Network for Entrepreneurial Training Initiative, to train women entrepreneurs.

| 2.2.8.2 | The SBIR initiative, concerned with the granting of public aid to innovation and research in smaller enterprises, provides seed capital assistance for feasibility studies, of amounts up to 100 000 dollars in the first phase and up to 750 000 dollars in the second phase in which prototypes are being developed; for the third phase, no action by the SBIR funds is envisaged, but mechanisms for finding public and private funds come into play for the marketing phase. |
| --- | --- |

2.2.8.2

The SBIR initiative, concerned with the granting of public aid to innovation and research in smaller enterprises, provides seed capital assistance for feasibility studies, of amounts up to 100 000 dollars in the first phase and up to 750 000 dollars in the second phase in which prototypes are being developed; for the third phase, no action by the SBIR funds is envisaged, but mechanisms for finding public and private funds come into play for the marketing phase.

| 2.2.9 | Recent recommendations by the EURAB, a consultative body set up by the European Commission which brings together the European academic and business worlds, have emphasised the need to adopt a similar mechanism at Community and Member State level to supplement the actions of the RTD&D framework programme, stressing that ‘This may require a revision of EU rules for state aid.’ (18) |
| --- | --- |

2.2.9

Recent recommendations by the EURAB, a consultative body set up by the European Commission which brings together the European academic and business worlds, have emphasised the need to adopt a similar mechanism at Community and Member State level to supplement the actions of the RTD&D framework programme, stressing that ‘This may require a revision of EU rules for state aid.’ (18)

| 2.2.10 | In Japan, the Agency for Small and Medium-sized Enterprises provides various types of public support for innovation, such as:






  — | the Start Up programme, which covers part of the costs of practical application of R&D, technological assessment, acquisition of patents (50 % reduction of registration and renewal costs for 3 years); |
| --- | --- | --- |

2.2.10

In Japan, the Agency for Small and Medium-sized Enterprises provides various types of public support for innovation, such as:

—

the Start Up programme, which covers part of the costs of practical application of R&D, technological assessment, acquisition of patents (50 % reduction of registration and renewal costs for 3 years);

| — | the Creative Technologies R&D programme; |
| --- | --- |

—

the Creative Technologies R&D programme;

| — | the Local Revitalisation R&D programme; |
| --- | --- |

—

the Local Revitalisation R&D programme;

| — | the programme to promote cooperation between industry, the academic world, government and other public officials; |
| --- | --- |

—

the programme to promote cooperation between industry, the academic world, government and other public officials;

| — | the Small Business Innovation Research System, the Japanese SBIR, which has the aim of promoting the development of SMEs' technological capacity, granting public aid for their creative activities and financing the marketing of the research results; |
| --- | --- |

—

the Small Business Innovation Research System, the Japanese SBIR, which has the aim of promoting the development of SMEs' technological capacity, granting public aid for their creative activities and financing the marketing of the research results;

| — | the programme which supports with public funds the introduction and development of information technologies in enterprises; |
| --- | --- |

—

the programme which supports with public funds the introduction and development of information technologies in enterprises;

| — | the ‘Subsidies for SMEs Business Innovation’ programme; |
| --- | --- |

—

the ‘Subsidies for SMEs Business Innovation’ programme;

| — | the ‘Subsidies for Strengthening SMEs Business Resource’ programme; |
| --- | --- |

—

the ‘Subsidies for Strengthening SMEs Business Resource’ programme;

| — | the ‘Credit Guarantees Exemption’ programme; |
| --- | --- |

—

the ‘Credit Guarantees Exemption’ programme;

| — | measures to reduce interest rates on credits provided by the Japan Finance Corporation for Small and Medium Enterprise (JASME), the National Life Finance Corporation (NLFC) and the Shoko Chukin Bank; |
| --- | --- |

—

measures to reduce interest rates on credits provided by the Japan Finance Corporation for Small and Medium Enterprise (JASME), the National Life Finance Corporation (NLFC) and the Shoko Chukin Bank;

| — | the tax concessions plan for SMEs; |
| --- | --- |

—

the tax concessions plan for SMEs;

| — | the investments plan up to 300 000 Yen, by the ‘Small and Medium Business Investment and Consultation Companies’; |
| --- | --- |

—

the investments plan up to 300 000 Yen, by the ‘Small and Medium Business Investment and Consultation Companies’;

| — | the incentives plan set up by the law on ‘Promotion of Improvement of Employment Management in Small and Medium-sized Enterprises for Securing Manpower and Creating Quality Jobs’. |
| --- | --- |

—

the incentives plan set up by the law on ‘Promotion of Improvement of Employment Management in Small and Medium-sized Enterprises for Securing Manpower and Creating Quality Jobs’.

| 2.2.11 | With regard to the Multilateral WTO Agreements, the concept of ‘specific state aid’ is defined as a subsidy which may be granted only to an enterprise, an industry or a group of industries in a state granting the subsidy. WTO rules apply only to such aid, with the exception of the agricultural sector, and two categories are envisaged: prohibited aid and activable aid. |
| --- | --- |

2.2.11

With regard to the Multilateral WTO Agreements, the concept of ‘specific state aid’ is defined as a subsidy which may be granted only to an enterprise, an industry or a group of industries in a state granting the subsidy. WTO rules apply only to such aid, with the exception of the agricultural sector, and two categories are envisaged: prohibited aid and activable aid.

| 2.2.12 | Prohibited aid is aid intended to favour exports or to favour national goods over imported goods, distorting international trade and thus hampering the trade of other countries: such aid is subject to WTO assessment by accelerated procedure for the abolition of the aid measure or for tariff counter-measures to be adopted by the disadvantaged country or countries. |
| --- | --- |

2.2.12

Prohibited aid is aid intended to favour exports or to favour national goods over imported goods, distorting international trade and thus hampering the trade of other countries: such aid is subject to WTO assessment by accelerated procedure for the abolition of the aid measure or for tariff counter-measures to be adopted by the disadvantaged country or countries.

| 2.2.13 | As regards activable aid, a country bringing a complaint against an aid measure activated in another country must demonstrate that the aid has had a negative effect on its legitimate interests, on the basis of three types of ‘damage’ (19). If not the state aid measure is authorised. In the case of damage proved and recognised by the Dispute Settlement Body the country which has activated the aid must abolish it. Otherwise the complainant country has the right to impose compensatory tariffs. |
| --- | --- |

2.2.13

As regards activable aid, a country bringing a complaint against an aid measure activated in another country must demonstrate that the aid has had a negative effect on its legitimate interests, on the basis of three types of ‘damage’ (19). If not the state aid measure is authorised. In the case of damage proved and recognised by the Dispute Settlement Body the country which has activated the aid must abolish it. Otherwise the complainant country has the right to impose compensatory tariffs.

2.3   General comments

| 2.3.1 | The Committee welcomes the Commission proposal to identify the relationship which exists, and which can be improved, between state aid and innovation in Europe. It is clear that the insufficient competitiveness of the EU in comparison with other actors in world trade derives to a large extent from a weak innovation process; this weakness is made more acute by globalisation processes. |
| --- | --- |

2.3.1

The Committee welcomes the Commission proposal to identify the relationship which exists, and which can be improved, between state aid and innovation in Europe. It is clear that the insufficient competitiveness of the EU in comparison with other actors in world trade derives to a large extent from a weak innovation process; this weakness is made more acute by globalisation processes.

| 2.3.1.1 | The Committee is also pleased that the issues linking state aid to innovation are the subject of a public consultation capable of enlisting the opinion of those most directly concerned on this delicate subject. |
| --- | --- |

2.3.1.1

The Committee is also pleased that the issues linking state aid to innovation are the subject of a public consultation capable of enlisting the opinion of those most directly concerned on this delicate subject.

| 2.3.1.2 | The questions included in the communications are wide-ranging, well formulated and cover most of the issues which can arise from market failures and the possibility of simplifying the procedures. The short time available and the lack of study group discussion do not allow the rapporteur to go into the detail of the individual questions or give a fully argued answer to each of them. |
| --- | --- |

2.3.1.2

The questions included in the communications are wide-ranging, well formulated and cover most of the issues which can arise from market failures and the possibility of simplifying the procedures. The short time available and the lack of study group discussion do not allow the rapporteur to go into the detail of the individual questions or give a fully argued answer to each of them.

| 2.3.2 | The Committee is aware of the fact that state aid for innovation does not on its own constitute a solution to the problem of the EU's competitiveness. Many Community documents and a number of Committee opinions have shown the limits to the European Union's action:






  — | insufficient level of technological and other innovation; |
| --- | --- | --- |

2.3.2

The Committee is aware of the fact that state aid for innovation does not on its own constitute a solution to the problem of the EU's competitiveness. Many Community documents and a number of Committee opinions have shown the limits to the European Union's action:

—

insufficient level of technological and other innovation;

| — | insufficiency of common rules and measures; |
| --- | --- |

—

insufficiency of common rules and measures;

| — | weakness of financial markets, which are still too fragmented; |
| --- | --- |

—

weakness of financial markets, which are still too fragmented;

| — | too low a level of employment; |
| --- | --- |

—

too low a level of employment;

| — | malfunctioning of the products market; |
| --- | --- |

—

malfunctioning of the products market;

| — | lack of coordination of policies; |
| --- | --- |

—

lack of coordination of policies;

| — | difficulty in access to market services; |
| --- | --- |

—

difficulty in access to market services;

| — | inadequate support for new products or productive combinations which create added value, and of quality jobs capable of guaranteeing the European comparative advantage (20). |
| --- | --- |

—

inadequate support for new products or productive combinations which create added value, and of quality jobs capable of guaranteeing the European comparative advantage (20).

| 2.3.3 | This has led to some legal uncertainty, which can be overcome only through careful consideration of the limitations and potential advantages of state aid in this sector. |
| --- | --- |

2.3.3

This has led to some legal uncertainty, which can be overcome only through careful consideration of the limitations and potential advantages of state aid in this sector.

| 2.3.4 | Product and process innovation, in all its aspects (21), eventually has an effect on the market and is therefore in a position to influence activities which could affect competition and trade in a significant way. |
| --- | --- |

2.3.4

Product and process innovation, in all its aspects (21), eventually has an effect on the market and is therefore in a position to influence activities which could affect competition and trade in a significant way.

| 2.3.5 | Thus, in order to be able to give authorisation in advance, one must be in a position to work out a transparent and agreed specific reference framework, in a spirit of partnership and proactive cooperation, between the Commission and the Member States. |
| --- | --- |

2.3.5

Thus, in order to be able to give authorisation in advance, one must be in a position to work out a transparent and agreed specific reference framework, in a spirit of partnership and proactive cooperation, between the Commission and the Member States.

2.3.6   The definition of innovation and the innovative process

| 2.3.6.1 | The EESC is aware that the definition of innovation given in the Green Paper some time ago should be up-dated to take account of the changes which have occurred in the last ten years. It is also necessary to analyse the stages between the processes of innovation and the limit beyond which the marketing stage begins, so that the rules of competition are not unduly distorted. |
| --- | --- |

2.3.6.1

The EESC is aware that the definition of innovation given in the Green Paper some time ago should be up-dated to take account of the changes which have occurred in the last ten years. It is also necessary to analyse the stages between the processes of innovation and the limit beyond which the marketing stage begins, so that the rules of competition are not unduly distorted.

| 2.3.6.2 | There was a time when the development of society was too slow to be perceived in the space of one lifetime. Today it is so rapid that it is difficult to understand. Societies as a whole, but above all enterprises, administrations and services are today undergoing a formidable series of changes which tend to confuse acquired knowledge. |
| --- | --- |

2.3.6.2

There was a time when the development of society was too slow to be perceived in the space of one lifetime. Today it is so rapid that it is difficult to understand. Societies as a whole, but above all enterprises, administrations and services are today undergoing a formidable series of changes which tend to confuse acquired knowledge.

| 2.3.6.3 | Innovation thus becomes a social process through which the people, bodies and organisations with most knowledge, because they are given the task of exploring it, help the ‘others’ to draw the appropriate conclusions and transfer them to their professional activities and daily lives. |
| --- | --- |

2.3.6.3

Innovation thus becomes a social process through which the people, bodies and organisations with most knowledge, because they are given the task of exploring it, help the ‘others’ to draw the appropriate conclusions and transfer them to their professional activities and daily lives.

| 2.3.6.4 | If Utopia is a project for the future, innovation is the verification of all utopias (22). |
| --- | --- |

2.3.6.4

If Utopia is a project for the future, innovation is the verification of all utopias (22).

| 2.3.6.5 | After the Green Paper, the Commission has rightly defined innovation as: ‘The successful production, assimilation and exploitation of novelty in the economic and social spheres’ (23). |
| --- | --- |

2.3.6.5

After the Green Paper, the Commission has rightly defined innovation as: ‘The successful production, assimilation and exploitation of novelty in the economic and social spheres’ (23).

| 2.3.6.6 | Innovation is a complex process. Alongside the development of research activities and a better application of technology, many other factors and conditions, sometimes changeable, help to generate innovation, and among these can be mentioned:






  — | an enterprise culture orientated towards innovation; |
| --- | --- | --- |

2.3.6.6

Innovation is a complex process. Alongside the development of research activities and a better application of technology, many other factors and conditions, sometimes changeable, help to generate innovation, and among these can be mentioned:

—

an enterprise culture orientated towards innovation;

| — | the system of relationships and interrelationships with other enterprises, organisations and public bodies, essential for the creation and dissemination of knowledge and innovation; |
| --- | --- |

—

the system of relationships and interrelationships with other enterprises, organisations and public bodies, essential for the creation and dissemination of knowledge and innovation;

| — | the legal and regulatory framework of reference, especially on intellectual property; |
| --- | --- |

—

the legal and regulatory framework of reference, especially on intellectual property;

| — | access to the capital market, especially with regard to risk capital and the start-up phase; |
| --- | --- |

—

access to the capital market, especially with regard to risk capital and the start-up phase;

| — | education and training services and the relations between the academic and scientific world and the enterprise; |
| --- | --- |

—

education and training services and the relations between the academic and scientific world and the enterprise;

| — | support structures (such as incubators, district networks, industrial and technological parks) and intermediary structures for innovation. |
| --- | --- |

—

support structures (such as incubators, district networks, industrial and technological parks) and intermediary structures for innovation.

| 2.3.6.7 | The Committee has already had occasion to state that innovation is a social process (24), which is based on research, takes place in a system of competition and acquires space when it is exists in a diffuse way, a positive attitude towards change and risk. The results are an increase in competitiveness, better cohesion and greater socio-economic well-being. |
| --- | --- |

2.3.6.7

The Committee has already had occasion to state that innovation is a social process (24), which is based on research, takes place in a system of competition and acquires space when it is exists in a diffuse way, a positive attitude towards change and risk. The results are an increase in competitiveness, better cohesion and greater socio-economic well-being.

| 2.3.6.8 | In order to have objective criteria to go on, the Committee asks the Commission to specify better, with the help of the representative organisations of civil society, and with coordination by Eurostat, which production and services activities can be included among the activities which it is possible now to define as innovative. It would indeed by extremely useful to have guidelines for this complex and changeable sector. |
| --- | --- |

2.3.6.8

In order to have objective criteria to go on, the Committee asks the Commission to specify better, with the help of the representative organisations of civil society, and with coordination by Eurostat, which production and services activities can be included among the activities which it is possible now to define as innovative. It would indeed by extremely useful to have guidelines for this complex and changeable sector.

| 2.3.6.9 | Aid for innovation (according to the definition in the Green Paper (25)). In the view of the Committee, which has already had occasion to give an opinion on it (26), the existing framework should be extended to new types of aid not envisaged by the current guidelines, and further compatibility criteria should be identified, leaving greater room for manoeuvre to the Member States, with no obligation to notify. |
| --- | --- |

2.3.6.9

Aid for innovation (according to the definition in the Green Paper (25)). In the view of the Committee, which has already had occasion to give an opinion on it (26), the existing framework should be extended to new types of aid not envisaged by the current guidelines, and further compatibility criteria should be identified, leaving greater room for manoeuvre to the Member States, with no obligation to notify.

| 2.3.6.10 | The Communication emphasises the special needs of the SMEs, repeatedly mentioned by the documents of the European Parliament, the Council, the EESC and the Commission itself. The EESC is also convinced that a real stimulus to competitiveness can come above all from innovative, practical and targeted actions directed towards micro, small and medium-sized enterprises. |
| --- | --- |

2.3.6.10

The Communication emphasises the special needs of the SMEs, repeatedly mentioned by the documents of the European Parliament, the Council, the EESC and the Commission itself. The EESC is also convinced that a real stimulus to competitiveness can come above all from innovative, practical and targeted actions directed towards micro, small and medium-sized enterprises.

| 2.3.6.11 | In small as in large firms, innovation processes need the support of all the staff, with commitment at the various levels. This can happen if there is an environment sensitive to cooperation and if people are able to accept with interest the incentives to try something new. Continuous training is essential to achieving this. |
| --- | --- |

2.3.6.11

In small as in large firms, innovation processes need the support of all the staff, with commitment at the various levels. This can happen if there is an environment sensitive to cooperation and if people are able to accept with interest the incentives to try something new. Continuous training is essential to achieving this.

| 2.3.6.12 | In the EESC's view it is necessary for all Member States to increase their efforts to make science more comprehensible and to increase the number of young people taking an interest in it (27). Television programmes could also make a considerable contribution to innovation culture (28). Through training, including by television, the ability to communicate can be strengthened with a view to informing better and hence to innovating and competing. Targeted information expressed in accessible terms helps to make people more aware of science, and to generate innovation. |
| --- | --- |

2.3.6.12

In the EESC's view it is necessary for all Member States to increase their efforts to make science more comprehensible and to increase the number of young people taking an interest in it (27). Television programmes could also make a considerable contribution to innovation culture (28). Through training, including by television, the ability to communicate can be strengthened with a view to informing better and hence to innovating and competing. Targeted information expressed in accessible terms helps to make people more aware of science, and to generate innovation.

Brussels, 14 December 2005.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  In 2003 the export of high-technology products as a percentage of total exports was: for the EU-25 17.8 %; for Japan 22.7 %; for the USA 26.9 % (Source: Eurostat, Science and Technology 8/2005).

1

(2)  INT. 268

2

(3)  The objective is to overcome the ‘European paradox’: we are in the forefront of research, but we are weak in the commercial use of research results.

3

(4)  Cf. Green Paper on the social responsibility of enterprises.

4

(5)  OJ C 45 of 17 February 1996 as amended by OJ C 48 of 13 February 1998.

5

(6)  OJ C 111 of 8 May 2002.

6

(7)  Cf. financial engineering and the social function of credit.

7

(8)  INT. 268.

8

(9)  Treaty, Title VI, Section II: Competition, taxation and approximation of laws.

9

(10)  COM(2005) 24 final of 2 February 2005. The Member States should reduce and reorientate state aid to overcome market failures in the sectors which have potential for growth and to stimulate innovation.

10

(11)  In the period 1999-2001, it represented 0.61 % of the Community GDP, and in the period 2001-2003 0.59 % COM(2005)147 final of 20 April 2005.

11

(12)  Source: COM(2005) 147 final, 20 April 2005, Table 7: 23 % to environment and energy saving; 21 % to regional development; 13 % to SMEs; 3 % to training; 3 % to employment; 2 % to culture and protecting the heritage.

12

(13)  Resolution PE_6TA (2005) 0230 (EP report A6-0148/2005 of 12 May 2005, Point 36).

13

(14)  COM(2005) 107 final ‘Action plan on reform of state aid’.

14

(15)  INT. 268.

15

(16)  Cf. note 5, EP Resolution, Point 50.

16

(17)  Cf. SEC(2005) 795 of 7 June 2005.

17

(18)  EURAB – European Research Advisory board, 02.053 final ‘improving innovation’ 2005.

18

(19)  The agreement defines three types of damage they can cause. One country's subsidies can hurt a domestic industry in an importing country. They can hurt rival exporters from another country when the two compete in third markets. And domestic subsidies in one country can hurt exporters trying to compete in the subsidizing country's domestic market.

19

(20)  EP, Committee for Employment and Social Affairs. Opinion for the ITRE Commission A-6 0148/2005, Point 4.

20

(21)  Cf. Green Paper on innovation COM(95) 688 final.

21

(22)  Cf. Oscar Wilde.

22

(23)  COM(2003) 112 final.

23

(24)  Cf. Opinion on the Green Paper on innovation, Sirkeinen, Konitzer, OJEC C 212/1996.

24

(25)  COM(1995) 688 final.

25

(26)  INT. 268.

26

(27)  In 2003 27 % of the active population of the EU-25, about 50 million people, worked in the specialist and technical field, RHSTO (Source: Eurostat, Science and Technology, 11/2004).

27

(28)  According to statistical data, 7 people out of 10 glean their information from television channels.

28

---

| 17.3.2006 | EN | Official Journal of the European Union | C 65/92 |
| --- | --- | --- | --- |

17.3.2006

EN

Official Journal of the European Union

C 65/92

---

Opinion of the European Economic and Social Committee on the ‘Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions — The Commission's contribution to the period of reflection and beyond: Plan D for Democracy, Dialogue and Debate’

(COM(2005) 494 final)

(2006/C 65/17)

On 13 October 2005, the European Commission decided to consult the European Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on the Commission's contribution to the period of reflection and beyond: Plan D for Democracy, Dialogue and Debate.

and under Rule 19, paragraph 1 of its Rules of Procedure, the Committee decided at its 421st plenary session held on 26 and 27 October 2005 to establish a subcommittee to prepare its work on the matter.

The Subcommittee on Reflection and beyond: Plan D for Democracy, Dialogue and Debate, which was responsible for preparing the Committee's work on the subject, adopted its draft opinion on 1 December 2005. The rapporteur was Ms Jillian van Turnhout.

At its 422nd plenary session held on 14 and 15 December 2005 (meeting of 14 December), the European Economic and Social Committee adopted the following opinion by 83 votes to 7 with 13 abstentions.

1.   Executive Summary

The Committee has deliberately opted for a short and entirely operational response to the European Commission's communication. It sets out a small number of concrete measures where it believes the Committee, alone and in cooperation with the other institutions, could make a significant contribution to the broad debate during the reflection period and beyond. The two basic messages are: to anticipate the Constitutional Treaty's provisions on the democratic life of the Union by making participatory democracy, through the twin pillars of civil dialogue and reinforced European social dialogue, more of a reality now; and to ensure that the voice of organised civil society and that of its representatives is heard in the broad debate.

2.   Introduction

Given:

| — | the very short period in which the opinion was to be drafted; |
| --- | --- |

—

the very short period in which the opinion was to be drafted;

| — | the more detailed approach set out in the Committee's 26 October 2005 opinion to the European Parliament on the reflection period (1); |
| --- | --- |

—

the more detailed approach set out in the Committee's 26 October 2005 opinion to the European Parliament on the reflection period (1);

| — | the impending adoption by the European Commission of its White Paper on a communication strategy; |
| --- | --- |

—

the impending adoption by the European Commission of its White Paper on a communication strategy;

| — | the intention announced by the European Council in its 16 and 17 June 2005 conclusions (2) to take stock of the situation in the first half of 2006 and therefore the urgency of encouraging the broadest possible debate in the Union and in the Member States, including at the level of organised civil society; |
| --- | --- |

—

the intention announced by the European Council in its 16 and 17 June 2005 conclusions (2) to take stock of the situation in the first half of 2006 and therefore the urgency of encouraging the broadest possible debate in the Union and in the Member States, including at the level of organised civil society;

the Committee decided, in order to help in establishing the broadest possible debate with the aim of supporting participatory democracy at local, regional, national and European Union level, to restrict itself in this opinion to a few operational recommendations through which the Committee itself could encourage that debate and improve its own role as a bridge between Europe and organised civil society.

The Committee welcomes the European Commission's initiative in presenting its ‘Plan D’ Communication. The Committee is however of the view that, whilst the plan is necessarily ambitious in its objectives, the real impact of the proposals made could be questioned, in particular in view of the absence of concrete indications of how the measures it proposes would be implemented. The Committee therefore looks forward to studying in due course the concrete proposals it expects the Commission to make. For its part, the Committee declares its intention of helping to render the Commission's proposals more operational, particularly in those areas concerning the involvement of organised civil society.

3.   Recommendations

| 3.1 | Building on the success of a pilot scheme, the Committee undertakes to generalise the use by its members of the ‘electronic visiting card’ system, whereby customised newsletters are sent out to personal mailing lists, thus enhancing the Committee members' bridging function. |
| --- | --- |

3.1

Building on the success of a pilot scheme, the Committee undertakes to generalise the use by its members of the ‘electronic visiting card’ system, whereby customised newsletters are sent out to personal mailing lists, thus enhancing the Committee members' bridging function.

| 3.2 | Building on the success of the stakeholders' forums held in Brussels in April and November 2005 on sustainable development and ‘bridging the gap’ respectively, and in particular on the successful use of a customised version of the Open Space method, the Committee undertakes to help its members and national economic and social councils organise similar such stakeholders forums at the Member State level. The Committee could help by:






  — | involving its various networks of members and their organisations and thus capitalising on their potential multiplier effects; |
| --- | --- | --- |

3.2

Building on the success of the stakeholders' forums held in Brussels in April and November 2005 on sustainable development and ‘bridging the gap’ respectively, and in particular on the successful use of a customised version of the Open Space method, the Committee undertakes to help its members and national economic and social councils organise similar such stakeholders forums at the Member State level. The Committee could help by:

—

involving its various networks of members and their organisations and thus capitalising on their potential multiplier effects;

| — | providing expertise on Open Space moderation; |
| --- | --- |

—

providing expertise on Open Space moderation;

| — | drafting a manual, based on the Committee's experience to date, on how best to organise such forums; |
| --- | --- |

—

drafting a manual, based on the Committee's experience to date, on how best to organise such forums;

| — | seeking institutional involvement, particularly of the European Commission, as both co-organiser and participant. |
| --- | --- |

—

seeking institutional involvement, particularly of the European Commission, as both co-organiser and participant.

Such forums cannot on their own resolve the European Union's communication problems but they can, alongside improved consultation mechanisms, contribute to increased civic participation in the European debate.

| 3.3 | Building on the recommendations set out in its opinion to the European Parliament on the reflection period, the Committee will continue to encourage the institutions to anticipate the Constitutional Treaty's provisions on participatory democracy. The EESC notably:






  — | calls on the European Commission to put forward one or more proposals setting out new ways and processes enhancing the involvement of organised civil society in the policy-making and legislative processes of the European Union in the spirit of Article I-47 of the Constitutional Treaty; |
| --- | --- | --- |

3.3

Building on the recommendations set out in its opinion to the European Parliament on the reflection period, the Committee will continue to encourage the institutions to anticipate the Constitutional Treaty's provisions on participatory democracy. The EESC notably:

—

calls on the European Commission to put forward one or more proposals setting out new ways and processes enhancing the involvement of organised civil society in the policy-making and legislative processes of the European Union in the spirit of Article I-47 of the Constitutional Treaty;

| — | calls on the Commission to take concrete steps to increase direct involvement of citizens in the political process at EU level by considering putting forward a proposal aiming at giving legal force to the European citizens' initiative as provided for in Article I-47(4) of the Constitutional Treaty; |
| --- | --- |

—

calls on the Commission to take concrete steps to increase direct involvement of citizens in the political process at EU level by considering putting forward a proposal aiming at giving legal force to the European citizens' initiative as provided for in Article I-47(4) of the Constitutional Treaty;

| — | calls on the European Commission to consider putting forward a proposal for a true communication policy; |
| --- | --- |

—

calls on the European Commission to consider putting forward a proposal for a true communication policy;

| — | looks forward to the full implementation of and respect for the new protocol of cooperation between the European Commission and the European Economic and Social Committee (3), which provides for ‘a more intensive culture of dialogue and consultation with organised civil society and its representative institution in the preparation and implementation of the Union's policies and decisions’. |
| --- | --- |

—

looks forward to the full implementation of and respect for the new protocol of cooperation between the European Commission and the European Economic and Social Committee (3), which provides for ‘a more intensive culture of dialogue and consultation with organised civil society and its representative institution in the preparation and implementation of the Union's policies and decisions’.

| 3.4 | Responding to the spirit of the European Commission's ‘Plan D’, the Committee calls upon the European Commission and in particular its representations in the Member States fully to involve the Committee's members in all initiatives aimed at encouraging debate at the Member State level, thereby guaranteeing that the voice of organised civil society is more systematically and appropriately heard. |
| --- | --- |

3.4

Responding to the spirit of the European Commission's ‘Plan D’, the Committee calls upon the European Commission and in particular its representations in the Member States fully to involve the Committee's members in all initiatives aimed at encouraging debate at the Member State level, thereby guaranteeing that the voice of organised civil society is more systematically and appropriately heard.

| 3.5 | In this context, notes the various specific actions proposed by the European Commission in stimulating a wider public debate and in promoting citizens' participation in the democratic process and calls upon it to involve to the full the Committee and its members, above all wherever the voice of organised civil society should be heard. |
| --- | --- |

3.5

In this context, notes the various specific actions proposed by the European Commission in stimulating a wider public debate and in promoting citizens' participation in the democratic process and calls upon it to involve to the full the Committee and its members, above all wherever the voice of organised civil society should be heard.

| 3.6 | Also in this context, the Committee notes Part 5 of the Communication on funding and, in particular, the Commission's belief that ‘the remaining resources should be used to support Member State and civil society initiatives’. As detailed above, the Committee is prepared to decentralise its successful stakeholders' forum format and would therefore be prepared to enter into similar cooperative actions with the European Commission, including through joint funding, at the member state level. |
| --- | --- |

3.6

Also in this context, the Committee notes Part 5 of the Communication on funding and, in particular, the Commission's belief that ‘the remaining resources should be used to support Member State and civil society initiatives’. As detailed above, the Committee is prepared to decentralise its successful stakeholders' forum format and would therefore be prepared to enter into similar cooperative actions with the European Commission, including through joint funding, at the member state level.

Brussels, 14 December 2005.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  ‘The reflection period: structure, themes and framework for an evaluation of the debate on the European Union’.

1

(2)  Ref. doc. 10255/1/05 rev. 1.

2

(3)  Signed in Brussels on 7 November 2005. Text available on the EESC website.

3

---

| 17.3.2006 | EN | Official Journal of the European Union | C 65/94 |
| --- | --- | --- | --- |

17.3.2006

EN

Official Journal of the European Union

C 65/94

---

Opinion of the European Economic and Social Committee on ‘The road to the European knowledge-based society — the contribution of organised civil society to the Lisbon Strategy’

(2006/C 65/18)

On 22 April 2005, the future Austrian EU Presidency decided to consult the European Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on The road to the European knowledge-based society — the contribution of organised civil society to the Lisbon Strategy

and under Rule 19(1) of its Rules of Procedure, the Committee decided to establish a subcommittee to prepare its work on the matter.

The subcommittee adopted its draft opinion on 9 November. The rapporteur was Mr Jan Olsson, the co-rapporteurs were Ms Eva Belabed and Mr Joost van Iersel.

At its 422nd plenary session, held on 14 and 15 December 2005 (meeting of 14 December 2005), the European Economic and Social Committee adopted the following opinion by 127 votes to 1 with 8 abstentions.

Recommendations and conclusions

| 1. | The EESC suggests that Member States and EU institutions commit themselves beyond 2010 to establish a Common European Area of Knowledge, based on intensified cooperation in Learning, Innovation and Research policies. This will be an important step in the relaunch of the Lisbon Strategy as well as in underpinning the European model of society, thereby also bridging the gap between Europe and its citizens. |
| --- | --- |

1.

The EESC suggests that Member States and EU institutions commit themselves beyond 2010 to establish a Common European Area of Knowledge, based on intensified cooperation in Learning, Innovation and Research policies. This will be an important step in the relaunch of the Lisbon Strategy as well as in underpinning the European model of society, thereby also bridging the gap between Europe and its citizens.

| 2. | This relaunch requires the public authorities and organised civil society in each country to be mobilised for this objective, by defining key priorities and proposing and implementing actions both on their own and in cooperation with each other, which also should be reflected in the national reform programme. |
| --- | --- |

2.

This relaunch requires the public authorities and organised civil society in each country to be mobilised for this objective, by defining key priorities and proposing and implementing actions both on their own and in cooperation with each other, which also should be reflected in the national reform programme.

| 3. | Member States, the European Commission, European and national parliaments, businesses and financial institutions as well as civil society must commit themselves to a Common European Area of Knowledge aimed at all citizens, organisations and companies and based on clearly defined targets, benchmarks, timetables as well as clear responsibilities. |
| --- | --- |

3.

Member States, the European Commission, European and national parliaments, businesses and financial institutions as well as civil society must commit themselves to a Common European Area of Knowledge aimed at all citizens, organisations and companies and based on clearly defined targets, benchmarks, timetables as well as clear responsibilities.

| 4. | The Internal Market remains the major cornerstone of the integration process, leading to improved economic performance, more and better jobs, social progress and sustainability. The interaction between the Common European Area of Knowledge and the Internal Market will release new potential for growth. Therefore, obstacles to the Internal Market that hamper the transition to the knowledge economy must be removed as quickly as possible |
| --- | --- |

4.

The Internal Market remains the major cornerstone of the integration process, leading to improved economic performance, more and better jobs, social progress and sustainability. The interaction between the Common European Area of Knowledge and the Internal Market will release new potential for growth. Therefore, obstacles to the Internal Market that hamper the transition to the knowledge economy must be removed as quickly as possible

| 5. | All citizens, all sectors and all regions must be encouraged to take part and be able to reap the rewards of the knowledge society, which provides unique opportunities to bridge existing divides. |
| --- | --- |

5.

All citizens, all sectors and all regions must be encouraged to take part and be able to reap the rewards of the knowledge society, which provides unique opportunities to bridge existing divides.

| 6. | Mobility is a way to acquire and transfer skills. Free circulation of labour, researchers and students must be stimulated, accompanied by decent wages and working conditions. |
| --- | --- |

6.

Mobility is a way to acquire and transfer skills. Free circulation of labour, researchers and students must be stimulated, accompanied by decent wages and working conditions.

| 7. | The EU, Member States and regions must redirect their public spending to growth-enhancing investments. Member States in cooperation with private stakeholders, should commit themselves to realising a ‘National Programme for Boosting Knowledge’ backed by EU funding. |
| --- | --- |

7.

The EU, Member States and regions must redirect their public spending to growth-enhancing investments. Member States in cooperation with private stakeholders, should commit themselves to realising a ‘National Programme for Boosting Knowledge’ backed by EU funding.

| 8. | The EESC urges that the European Commission proposals concerning the 2007-13 Financial Perspectives for funding research, innovation and learning be upheld. The proposed 7th Research Framework programme must be fully realised and targeted to contribute to European innovative capacity. |
| --- | --- |

8.

The EESC urges that the European Commission proposals concerning the 2007-13 Financial Perspectives for funding research, innovation and learning be upheld. The proposed 7th Research Framework programme must be fully realised and targeted to contribute to European innovative capacity.

| 9. | The EESC urges business, financial institutions and private foundations to increase their investments in the knowledge economy and that they be supported in doing so by fiscal incentives. |
| --- | --- |

9.

The EESC urges business, financial institutions and private foundations to increase their investments in the knowledge economy and that they be supported in doing so by fiscal incentives.

| 10. | The European Commission should have more power to give policy directions and monitor progress. It should publish an annual report on progress to be discussed by the Council and the European and national Parliaments, as well as the concerned stakeholders and the public. |
| --- | --- |

10.

The European Commission should have more power to give policy directions and monitor progress. It should publish an annual report on progress to be discussed by the Council and the European and national Parliaments, as well as the concerned stakeholders and the public.

| 11. | The EESC suggests the launch of a permanent and structured debate to motivate the decision-makers at all levels and to further the dialogue with citizens. |
| --- | --- |

11.

The EESC suggests the launch of a permanent and structured debate to motivate the decision-makers at all levels and to further the dialogue with citizens.

| 12. | National parliaments as well as national economic and social committees have a crucial role and must participate in the debate. Local and regional actors should be involved. |
| --- | --- |

12.

National parliaments as well as national economic and social committees have a crucial role and must participate in the debate. Local and regional actors should be involved.

| 13. | Private stakeholders should act and take responsibility through tangible contributions and actions. Social and civil dialogue are important tools to further life long learning, innovation and technology policies. |
| --- | --- |

13.

Private stakeholders should act and take responsibility through tangible contributions and actions. Social and civil dialogue are important tools to further life long learning, innovation and technology policies.

| 14. | A sound macroeconomic policy focusing on growth and employment, should create the conditions for creating the knowledge society and should give priority to demand pull policies for new technologies. |
| --- | --- |

14.

A sound macroeconomic policy focusing on growth and employment, should create the conditions for creating the knowledge society and should give priority to demand pull policies for new technologies.

| 15. | Life long learning is the key to the knowledge society. The EESC reiterates its call for a Charter of Life Long Learning to be implemented at all levels. It should be supported by public and private investments as well as by the structural funds. Employment policies and new forms of social protection need to create favourable conditions to enable workers to fully participate in lifelong learning. The Danish flexicurity approach may be an inspiring example. |
| --- | --- |

15.

Life long learning is the key to the knowledge society. The EESC reiterates its call for a Charter of Life Long Learning to be implemented at all levels. It should be supported by public and private investments as well as by the structural funds. Employment policies and new forms of social protection need to create favourable conditions to enable workers to fully participate in lifelong learning. The Danish flexicurity approach may be an inspiring example.

| 16. | High ambitions to foster health, sustainable environment, quality in urban and rural infrastructure, smart transport solutions, safe and reorganised workplaces and cultural heritage will generate new technologies and new innovative products and services and should be supported by healthy conditions for innovation and job creation in enterprises. |
| --- | --- |

16.

High ambitions to foster health, sustainable environment, quality in urban and rural infrastructure, smart transport solutions, safe and reorganised workplaces and cultural heritage will generate new technologies and new innovative products and services and should be supported by healthy conditions for innovation and job creation in enterprises.

| 17. | Dissemination of knowledge is a critical factor in policies to boost innovation and competitiveness. Industrial regions, technology parks and other innovative environments should be promoted. |
| --- | --- |

17.

Dissemination of knowledge is a critical factor in policies to boost innovation and competitiveness. Industrial regions, technology parks and other innovative environments should be promoted.

1.   Introduction

| 1.1 | This EESC opinion is about how organised civil society can contribute to the knowledge society. It will focus on the role that social partners and other civil society organisations can play in establishing a ‘Common European Area of Knowledge’ as one of the major planks of the Lisbon Strategy. It stresses the responsibility of civil society organisations in Member States to mobilise for this objective. The opinion will be underpinned by other EESC opinions on related subjects and by a Summary report drafted in collaboration with the national economic and social councils. |
| --- | --- |

1.1

This EESC opinion is about how organised civil society can contribute to the knowledge society. It will focus on the role that social partners and other civil society organisations can play in establishing a ‘Common European Area of Knowledge’ as one of the major planks of the Lisbon Strategy. It stresses the responsibility of civil society organisations in Member States to mobilise for this objective. The opinion will be underpinned by other EESC opinions on related subjects and by a Summary report drafted in collaboration with the national economic and social councils.

2.   Context and analysis

| 2.1 | Europe is a project for people by people. However current developments have created a gap between Europe and its citizens At the same time the sustainability of our unique model of society based on democracy, social and civil dialogue, a social market economy and cohesion is threatened by increasing global competition, an ageing population and environmental pressures. Different philosophies over which policy directions to take lie behind the current EU crisis. In order to restore confidence in the European project, policies must first of all be refocused on their original aims of economic and social progress and improving working and living conditions. The crisis constitutes a crucial opportunity for reorientation. |
| --- | --- |

2.1

Europe is a project for people by people. However current developments have created a gap between Europe and its citizens At the same time the sustainability of our unique model of society based on democracy, social and civil dialogue, a social market economy and cohesion is threatened by increasing global competition, an ageing population and environmental pressures. Different philosophies over which policy directions to take lie behind the current EU crisis. In order to restore confidence in the European project, policies must first of all be refocused on their original aims of economic and social progress and improving working and living conditions. The crisis constitutes a crucial opportunity for reorientation.

| 2.2 | Central to such a reorientation are policies to achieve sustainable growth, create more and better jobs and raise real incomes through the realisation of a knowledge society based upon human resources, learning, research and innovation.
  Enterprises are in a key position for this reorientation. They should direct their investments accordingly, but for this they need framework conditions that support their potential for innovation, growth and job creation. |
| --- | --- |

2.2

Central to such a reorientation are policies to achieve sustainable growth, create more and better jobs and raise real incomes through the realisation of a knowledge society based upon human resources, learning, research and innovation.

Enterprises are in a key position for this reorientation. They should direct their investments accordingly, but for this they need framework conditions that support their potential for innovation, growth and job creation.

| 2.3 | The knowledge society, based on the responsibility of private and public stakeholders, must make for a more cohesive society which combats all kinds of inequalities. And in turn social cohesion is a prerequisite for a smoother transition to the knowledge society. |
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2.3

The knowledge society, based on the responsibility of private and public stakeholders, must make for a more cohesive society which combats all kinds of inequalities. And in turn social cohesion is a prerequisite for a smoother transition to the knowledge society.

| 2.4 | Prospects look rather alarming (1). Business-funded research has been decreasing since 2000. EU total R&D expenditure is stagnating and falls short of the 3 % target. It stands at 2 % compared to 2.7 % in the US and over 3 % in Japan. The brain-drain is a very worrying phenomenon. Moreover, large emerging economics like China are catching up with the EU in terms of research expenditure.
  The European Innovation Scoreboard shows that Europe lags behind the USA in 10 out of 11 indicators. This is a result of active US policies to support research and innovation through inter alia, public procurement, tax cuts, guarantees for venture capital funds and SME loans. |
| --- | --- |

2.4

Prospects look rather alarming (1). Business-funded research has been decreasing since 2000. EU total R&D expenditure is stagnating and falls short of the 3 % target. It stands at 2 % compared to 2.7 % in the US and over 3 % in Japan. The brain-drain is a very worrying phenomenon. Moreover, large emerging economics like China are catching up with the EU in terms of research expenditure.

The European Innovation Scoreboard shows that Europe lags behind the USA in 10 out of 11 indicators. This is a result of active US policies to support research and innovation through inter alia, public procurement, tax cuts, guarantees for venture capital funds and SME loans.

| 2.5 | However, an assessment of research expenditure and innovative performance of the EU vis-à-vis the USA requires a deeper analysis. Europe has strengths both at Member State and sector level. European cooperation in aeronautics and the Galileo project can be highlighted as examples as well as the fact that the number of engineering students is higher than in the US. To boost its innovative capacity, Europe needs increased investments in life long learning, an additional 700 000 researchers, more technological poles and clusters, support for SMEs and better methods of disseminating knowledge. |
| --- | --- |

2.5

However, an assessment of research expenditure and innovative performance of the EU vis-à-vis the USA requires a deeper analysis. Europe has strengths both at Member State and sector level. European cooperation in aeronautics and the Galileo project can be highlighted as examples as well as the fact that the number of engineering students is higher than in the US. To boost its innovative capacity, Europe needs increased investments in life long learning, an additional 700 000 researchers, more technological poles and clusters, support for SMEs and better methods of disseminating knowledge.

| 2.6 | Public investment in education is not progressing as rapidly as it should. The PISA study highlights some of the failures of the education system. Participation in adult education has only reached 65 % of the 2010 target. School dropouts continue at the same level. University students face unemployment when they graduate. Moreover, by 2015 over a million primary and secondary teachers will have to be recruited (2). The Commission could carry out a study on basic learning, in order to identify the keys to success in the most successful countries in the international PISA survey.
  Private and public stakeholders must recognise that the whole of the education system needs to be reformed in order to improve performance and provide everyone from early childhood through to old age, with opportunities to take an active part in the knowledge society. They must lend their full support to this reform, which also requires new pedagogical concepts and qualified teaching staff. |
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2.6

Public investment in education is not progressing as rapidly as it should. The PISA study highlights some of the failures of the education system. Participation in adult education has only reached 65 % of the 2010 target. School dropouts continue at the same level. University students face unemployment when they graduate. Moreover, by 2015 over a million primary and secondary teachers will have to be recruited (2). The Commission could carry out a study on basic learning, in order to identify the keys to success in the most successful countries in the international PISA survey.

Private and public stakeholders must recognise that the whole of the education system needs to be reformed in order to improve performance and provide everyone from early childhood through to old age, with opportunities to take an active part in the knowledge society. They must lend their full support to this reform, which also requires new pedagogical concepts and qualified teaching staff.

| 2.7 | The transition towards the knowledge society is changing the nature and organisation of work and the structure of enterprises. A knowledge-driven society and new technologies offer great opportunities but also generate new risks and leave many behind. Jobs are restructured and tasks are redefined.
  There is also a risk of relocation of headquarters, research and production from Europe.
  New and better jobs have to be created by increased investment in learning, innovation and technology. The brain-drain has to be counteracted by finding new attractive sources of employment for university graduates in all Member States. |
| --- | --- |

2.7

The transition towards the knowledge society is changing the nature and organisation of work and the structure of enterprises. A knowledge-driven society and new technologies offer great opportunities but also generate new risks and leave many behind. Jobs are restructured and tasks are redefined.

There is also a risk of relocation of headquarters, research and production from Europe.

New and better jobs have to be created by increased investment in learning, innovation and technology. The brain-drain has to be counteracted by finding new attractive sources of employment for university graduates in all Member States.

| 2.8 | The knowledge society is a fundamental choice in addressing the challenges and it affects many areas of policy making. Its realisation requires an overall and comprehensive approach. Progress towards the knowledge society must be seen in a longer-term perspective beyond 2010. Policies must be pursued in a determined way. |
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2.8

The knowledge society is a fundamental choice in addressing the challenges and it affects many areas of policy making. Its realisation requires an overall and comprehensive approach. Progress towards the knowledge society must be seen in a longer-term perspective beyond 2010. Policies must be pursued in a determined way.

| 2.9 | To sharpen its global competitive edge by relying on its capacity to use the know-how and creativity of its people to produce high value-added products and services constitutes both a challenge and an opportunity for Europe. Resources have to be reoriented towards growth-enhancing technologies and innovative systems, safeguarding as well as adapting where necessary the essential elements of the European economic and social model in the wider context of sustainable development. |
| --- | --- |

2.9

To sharpen its global competitive edge by relying on its capacity to use the know-how and creativity of its people to produce high value-added products and services constitutes both a challenge and an opportunity for Europe. Resources have to be reoriented towards growth-enhancing technologies and innovative systems, safeguarding as well as adapting where necessary the essential elements of the European economic and social model in the wider context of sustainable development.

| 2.10 | Knowledge creation, knowledge application and knowledge dissemination have to meet societal needs. Everyone has the right to reap the rewards of the knowledge society, everybody has a responsibility to take part in and contribute to the achievement of the knowledge society, if given adequate support. |
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2.10

Knowledge creation, knowledge application and knowledge dissemination have to meet societal needs. Everyone has the right to reap the rewards of the knowledge society, everybody has a responsibility to take part in and contribute to the achievement of the knowledge society, if given adequate support.

| 2.11 | Putting people first means focusing on learning, understanding, civilisation and cultural patterns to foster an environment that stimulates knowledge in its broadest sense. It is about human aspirations for knowledge which are not based predominantly on immediate benefit and which serve as the basis for the mix of theoretical, social and practical skills that are needed for the future. |
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2.11

Putting people first means focusing on learning, understanding, civilisation and cultural patterns to foster an environment that stimulates knowledge in its broadest sense. It is about human aspirations for knowledge which are not based predominantly on immediate benefit and which serve as the basis for the mix of theoretical, social and practical skills that are needed for the future.

| 2.12 | Lifelong learning is the key to the knowledge society. High quality lifelong learning, based on models that make education and training accessible to everybody, gives people the opportunity to refresh their ideas, continually enhance their skills and play a full part in their community, family, neighbourhood and workplace. It is the basis for innovation, labour mobility and productivity growth. Motivation for lifelong learning starts by fostering the curiosity for learning in early childhood. |
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2.12

Lifelong learning is the key to the knowledge society. High quality lifelong learning, based on models that make education and training accessible to everybody, gives people the opportunity to refresh their ideas, continually enhance their skills and play a full part in their community, family, neighbourhood and workplace. It is the basis for innovation, labour mobility and productivity growth. Motivation for lifelong learning starts by fostering the curiosity for learning in early childhood.

| 2.13 | It is fundamental to strengthen and coordinate the links in the knowledge chain. The triangle linking private and public research institutions, universities and business (especially SMEs), should be reinforced. National and cross-border exchanges of qualified staff between industry and university can both help greatly. Basic education — from childcare facilities to secondary education — and lifelong learning must be linked to universities in order to raise the quality of teachers and training staff and update their knowledge. |
| --- | --- |

2.13

It is fundamental to strengthen and coordinate the links in the knowledge chain. The triangle linking private and public research institutions, universities and business (especially SMEs), should be reinforced. National and cross-border exchanges of qualified staff between industry and university can both help greatly. Basic education — from childcare facilities to secondary education — and lifelong learning must be linked to universities in order to raise the quality of teachers and training staff and update their knowledge.

3.   Shortcomings of the Lisbon Strategy

| 3.1 | ‘Alongside undeniable progress, there are shortcomings and obvious delays’ in implementing the Lisbon Strategy the European Council stated in March 2005 (3). |
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3.1

‘Alongside undeniable progress, there are shortcomings and obvious delays’ in implementing the Lisbon Strategy the European Council stated in March 2005 (3).

| 3.2 | There are many reasons for these shortcomings and delays. |
| --- | --- |

3.2

There are many reasons for these shortcomings and delays.

| 3.2.1 | Commitment to the Strategy is lacking. It must be recalled that the Lisbon Strategy was launched by the European Council without a clearly defined role for the EU Commission. A fundamental problem is the inconsistency of a European strategy that has to be implemented mainly at national level. Member States have not shown real commitment to the objectives and actions agreed upon. The open method of coordination (OMC) has not delivered the expected results. National action plans on employment, social inclusion and in other areas have been transformed into bureaucratic activity reports and the intentions of the Strategy only partially implemented. Fragmentation between policy areas continues. There is too little support from the EU budget. Good practice from other Member States is not taken into account. Member States also fail to take into consideration the social and economic effects of their policies on other Member States. |
| --- | --- |

3.2.1

Commitment to the Strategy is lacking. It must be recalled that the Lisbon Strategy was launched by the European Council without a clearly defined role for the EU Commission. A fundamental problem is the inconsistency of a European strategy that has to be implemented mainly at national level. Member States have not shown real commitment to the objectives and actions agreed upon. The open method of coordination (OMC) has not delivered the expected results. National action plans on employment, social inclusion and in other areas have been transformed into bureaucratic activity reports and the intentions of the Strategy only partially implemented. Fragmentation between policy areas continues. There is too little support from the EU budget. Good practice from other Member States is not taken into account. Member States also fail to take into consideration the social and economic effects of their policies on other Member States.

| 3.2.2 | The European Commission plays only a minor role in the Strategy. It does not have sufficient and effective powers to give policy directions and monitor progress. For instance, the open method of coordination has no alarm system that would enable warnings to be issued. |
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3.2.2

The European Commission plays only a minor role in the Strategy. It does not have sufficient and effective powers to give policy directions and monitor progress. For instance, the open method of coordination has no alarm system that would enable warnings to be issued.

| 3.2.3 | The Strategy is too abstract. Having largely become an exercise for bureaucrats and experts the Lisbon Strategy is not a reality, either in the minds of people or in the media and the political debate. The effects of the strategy are not visible. Public opinion does not make a distinction between the effects of globalisation, EU policy and national policy on their living and working conditions. The differences and the interrelations between different policy levels must be highlighted so that people can have a full and clearer picture of what the EU stands for. |
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3.2.3

The Strategy is too abstract. Having largely become an exercise for bureaucrats and experts the Lisbon Strategy is not a reality, either in the minds of people or in the media and the political debate. The effects of the strategy are not visible. Public opinion does not make a distinction between the effects of globalisation, EU policy and national policy on their living and working conditions. The differences and the interrelations between different policy levels must be highlighted so that people can have a full and clearer picture of what the EU stands for.

| 3.2.4 | The Strategy is a top-down process. Even if there has sometimes been reasonable consultation, particularly in those countries with a strong tradition of social and civil dialogue, there is still much too little involvement of organised civil society in the Member States. This is certainly the case with the OMC for research and education. Consultation is often formal and restricted to the national level and does not give the concerned civil society organisations at all levels sufficient opportunities to take part. Employers and trade unions as well as other stakeholders have to be made more aware of their responsibilities and roles. Low involvement also means that the reforms undertaken may miss the target and have negative social and economic consequences for those concerned. The EU focuses too much on structural reforms while it still lacks policies that empower citizens and their organisations to take on the challenges of a changing world. |
| --- | --- |

3.2.4

The Strategy is a top-down process. Even if there has sometimes been reasonable consultation, particularly in those countries with a strong tradition of social and civil dialogue, there is still much too little involvement of organised civil society in the Member States. This is certainly the case with the OMC for research and education. Consultation is often formal and restricted to the national level and does not give the concerned civil society organisations at all levels sufficient opportunities to take part. Employers and trade unions as well as other stakeholders have to be made more aware of their responsibilities and roles. Low involvement also means that the reforms undertaken may miss the target and have negative social and economic consequences for those concerned. The EU focuses too much on structural reforms while it still lacks policies that empower citizens and their organisations to take on the challenges of a changing world.

4.   The re-launch of the Lisbon Strategy — European Council March 2005

| 4.1. | These shortcomings and delays led the European Council to re-launch the Lisbon Strategy, giving priority to growth and employment. ‘Europe must renew the basis of its competitiveness, increase its growth potential and productivity and strengthen social cohesion placing the main emphasis on knowledge, innovation and the optimisation of human capital’
   (4)
  . And the Council continued:
  ‘A genuine dialogue must be encouraged among those directly involved in the knowledge-based society in the public and the private sector’ (5).
  The European Council fixed clearly defined objectives and suggested several actions to boost knowledge and innovation (6) twenty four integrated guidelines were established for the period 2005-2008 indicating three areas for reform: the macroeconomic, and microeconomic spheres and employment (7). |
| --- | --- |

4.1.

These shortcomings and delays led the European Council to re-launch the Lisbon Strategy, giving priority to growth and employment. ‘Europe must renew the basis of its competitiveness, increase its growth potential and productivity and strengthen social cohesion placing the main emphasis on knowledge, innovation and the optimisation of human capital’
   (4)
  . And the Council continued:

‘A genuine dialogue must be encouraged among those directly involved in the knowledge-based society in the public and the private sector’ (5).

The European Council fixed clearly defined objectives and suggested several actions to boost knowledge and innovation (6) twenty four integrated guidelines were established for the period 2005-2008 indicating three areas for reform: the macroeconomic, and microeconomic spheres and employment (7).

| 4.2. | In order to make the refocusing of the Lisbon Strategy effective, the European Council called for improved governance based on increased Member State involvement (8).
  Member States were required to draw up national reform programmes, by the 15th of October, based on consultation with all stakeholders that will identify key priorities for action. Contributions and responsibilities of the main stakeholders involved should be highlighted. However, changing political situations in some countries have caused delays. The Open Method of Coordination (OMC) will be used in some areas. |
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4.2.

In order to make the refocusing of the Lisbon Strategy effective, the European Council called for improved governance based on increased Member State involvement (8).

Member States were required to draw up national reform programmes, by the 15th of October, based on consultation with all stakeholders that will identify key priorities for action. Contributions and responsibilities of the main stakeholders involved should be highlighted. However, changing political situations in some countries have caused delays. The Open Method of Coordination (OMC) will be used in some areas.

5.   A Common European Area of Knowledge

| 5.1 | The EESC proposes a Common European Area of Knowledge to which the Member States and EU institutions should commit themselves beyond 2010, in order to achieve the Lisbon Strategy objectives through increased European cooperation in Learning, Innovation and Research. This proposal was agreed with the national Economic and Social Councils in the Luxemburg declaration (9). |
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5.1

The EESC proposes a Common European Area of Knowledge to which the Member States and EU institutions should commit themselves beyond 2010, in order to achieve the Lisbon Strategy objectives through increased European cooperation in Learning, Innovation and Research. This proposal was agreed with the national Economic and Social Councils in the Luxemburg declaration (9).

| 5.2 | The cooperation should be based on clearly defined targets complemented by appropriate legislative and non-legislative measures. A key factor will be to develop efficient systems for transferring knowledge and exploiting best practice. |
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5.2

The cooperation should be based on clearly defined targets complemented by appropriate legislative and non-legislative measures. A key factor will be to develop efficient systems for transferring knowledge and exploiting best practice.

| 5.3 | The EESC recognises that the constitutional base for the Common European Area of Knowledge is not the same as for the CAP, the EMU or the Internal Market. However to make progress all the relevant provisions of the Treaty should be fully exploited. Member States should make up for the lack of constitutional competence by showing political determination and put into operation common European policies through better and more efficient cooperation in order to realise the Common European Area of Knowledge. The Commission's role would need to be enhanced, so as to enable it to spearhead the process. |
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5.3

The EESC recognises that the constitutional base for the Common European Area of Knowledge is not the same as for the CAP, the EMU or the Internal Market. However to make progress all the relevant provisions of the Treaty should be fully exploited. Member States should make up for the lack of constitutional competence by showing political determination and put into operation common European policies through better and more efficient cooperation in order to realise the Common European Area of Knowledge. The Commission's role would need to be enhanced, so as to enable it to spearhead the process.

| 5.4 | Civil society organisations in Member States also have a responsibility for progress towards the Common European Area of Knowledge. Major private stakeholders in each country must be mobilised. In this way, they can be protagonists in the ‘genuine dialogue’ that the European Council called for and can partly compensate for the lack of political will. They must define key priorities and propose and implement actions on their own and in coordination with the public authorities. In addition, the issue of financial means must be addressed. The social partners should try to reach agreements to promote the knowledge society. Other sectors of organised civil society, including higher education and the research community, must contribute accordingly and elaborate their own platforms for reform. |
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5.4

Civil society organisations in Member States also have a responsibility for progress towards the Common European Area of Knowledge. Major private stakeholders in each country must be mobilised. In this way, they can be protagonists in the ‘genuine dialogue’ that the European Council called for and can partly compensate for the lack of political will. They must define key priorities and propose and implement actions on their own and in coordination with the public authorities. In addition, the issue of financial means must be addressed. The social partners should try to reach agreements to promote the knowledge society. Other sectors of organised civil society, including higher education and the research community, must contribute accordingly and elaborate their own platforms for reform.

| 5.5 | The Internal Market, remains the major cornerstone of the integration process leading to improved economic performance, social progress and sustainability. The interaction between the Common European Area of Knowledge and the Internal Market implies synergy effects that will release new potentials for growth. Measures to boost learning, innovation and research will lead to higher competitiveness. A well-functioning Internal Market will allow for free circulation not only of goods, labour, services and capital but also of knowledge and ideas. |
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5.5

The Internal Market, remains the major cornerstone of the integration process leading to improved economic performance, social progress and sustainability. The interaction between the Common European Area of Knowledge and the Internal Market implies synergy effects that will release new potentials for growth. Measures to boost learning, innovation and research will lead to higher competitiveness. A well-functioning Internal Market will allow for free circulation not only of goods, labour, services and capital but also of knowledge and ideas.

| 5.5.1 | Therefore, certain remaining obstacles to the Internal Market that hamper the transition to the knowledge economy must be removed as quickly as possible. To realise these synergies and potentials, it is important to adopt the legislation on the Community Patent and the Intellectual Property Rights regime. |
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5.5.1

Therefore, certain remaining obstacles to the Internal Market that hamper the transition to the knowledge economy must be removed as quickly as possible. To realise these synergies and potentials, it is important to adopt the legislation on the Community Patent and the Intellectual Property Rights regime.

| 5.5.2 | ‘Investments of businesses and other stakeholders in learning, innovation and research should be facilitated, including by state aid regimes and public procurement and within the framework of competition rules.’ |
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5.5.2

‘Investments of businesses and other stakeholders in learning, innovation and research should be facilitated, including by state aid regimes and public procurement and within the framework of competition rules.’

| 5.5.3 | A modernised EU industrial policy that is characterised by a sectoral approach is a fundamental building block for the knowledge society pooling excellence and providing stable and predictable framework conditions for the industry to develop. |
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5.5.3

A modernised EU industrial policy that is characterised by a sectoral approach is a fundamental building block for the knowledge society pooling excellence and providing stable and predictable framework conditions for the industry to develop.

| 5.5.4 | It is also important to allow higher labour mobility in general between the Member States and to stimulate free circulation of researchers and students. Mobility is a natural way to acquire and transfer skills but has to be accompanied by decent wages and working conditions. |
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5.5.4

It is also important to allow higher labour mobility in general between the Member States and to stimulate free circulation of researchers and students. Mobility is a natural way to acquire and transfer skills but has to be accompanied by decent wages and working conditions.

| 5.5.5 | Universities and vocational training institutions must support the Common European Area of Knowledge by adapting a European approach to their activities. Existing instruments for the recognition of qualifications must be promoted (10). |
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5.5.5

Universities and vocational training institutions must support the Common European Area of Knowledge by adapting a European approach to their activities. Existing instruments for the recognition of qualifications must be promoted (10).

| 5.6 | A Common European Area of Knowledge is based on the fundamental right for everyone to reap the rewards of research, new technologies, innovation and learning. All people, all sectors and all regions must be able to participate. There must be adequate conditions for lifelong learning giving everybody the opportunity to participate. Education and vocational training are prerequisites for the knowledge society and, as public goods, must be managed by the public authorities in order to guarantee access for all, with the same rights and opportunities. |
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5.6

A Common European Area of Knowledge is based on the fundamental right for everyone to reap the rewards of research, new technologies, innovation and learning. All people, all sectors and all regions must be able to participate. There must be adequate conditions for lifelong learning giving everybody the opportunity to participate. Education and vocational training are prerequisites for the knowledge society and, as public goods, must be managed by the public authorities in order to guarantee access for all, with the same rights and opportunities.

| 5.6.1 | The knowledge society should not be a project for the elite convinced by the benefits of new technologies. Instead it must be conceived as part of an overall project and articulated with the other policies that are aimed at all citizens. It involves personal development, civic education and life long learning commensurate with the challenges of the 21st century. It is a unique opportunity to bridge existing divides and bring down existing barriers. To this effect it is crucial that new technologies are made accessible also to disadvantaged groups such as migrants and people with disabilities. New technologies and innovations must therefore to a greater extent be generated by initiatives and demand from users. |
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5.6.1

The knowledge society should not be a project for the elite convinced by the benefits of new technologies. Instead it must be conceived as part of an overall project and articulated with the other policies that are aimed at all citizens. It involves personal development, civic education and life long learning commensurate with the challenges of the 21st century. It is a unique opportunity to bridge existing divides and bring down existing barriers. To this effect it is crucial that new technologies are made accessible also to disadvantaged groups such as migrants and people with disabilities. New technologies and innovations must therefore to a greater extent be generated by initiatives and demand from users.

| 5.6.2 | High quality basic education is fundamental. It is essential that everybody masters the basic skills in order to achieve the goal of education attainment for all. The underpinning for quality childcare facilities, that will give all children, irrespective of their social background, equal learning opportunities in the earliest phases of life. |
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5.6.2

High quality basic education is fundamental. It is essential that everybody masters the basic skills in order to achieve the goal of education attainment for all. The underpinning for quality childcare facilities, that will give all children, irrespective of their social background, equal learning opportunities in the earliest phases of life.

6.   Increased funding is needed to achieve the knowledge society

| 6.1 | In order to realise the Common European Area of Knowledge the EU, Member States and regions must redirect their public spending to growth-enhancing investments in learning, innovation and research. The EESC proposes that the Member States, in cooperation with the private stakeholders, commit themselves to realising a ‘National Programme for Boosting Knowledge’ with the aim of increasing investments in knowledge infrastructure and learning facilities for everybody. |
| --- | --- |

6.1

In order to realise the Common European Area of Knowledge the EU, Member States and regions must redirect their public spending to growth-enhancing investments in learning, innovation and research. The EESC proposes that the Member States, in cooperation with the private stakeholders, commit themselves to realising a ‘National Programme for Boosting Knowledge’ with the aim of increasing investments in knowledge infrastructure and learning facilities for everybody.

| 6.2 | In doing so, Member States and regions can be backed up by EU funding from the structural and cohesion funds. The 7th R& D framework programme will also play a crucial role. The Competitiveness and Innovation Programme (CIP), the Life Long Learning and the Progress programmes are important supportive instruments. |
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6.2

In doing so, Member States and regions can be backed up by EU funding from the structural and cohesion funds. The 7th R& D framework programme will also play a crucial role. The Competitiveness and Innovation Programme (CIP), the Life Long Learning and the Progress programmes are important supportive instruments.

| 6.3 | The EESC urges that the European Commission proposals concerning the 2007-13 Financial Perspectives for funding research, innovation and learning be upheld. |
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6.3

The EESC urges that the European Commission proposals concerning the 2007-13 Financial Perspectives for funding research, innovation and learning be upheld.

| 6.4 | The 7th R&D framework programme is a test case. The European Commission has proposed a doubling of resources to EUR 72 billion. The Committee urges that this level be maintained. Otherwise the 3 per cent target for research spending will be jeopardised. If Member States decide to reduce the level of EU spending originally proposed, they must compensate through supplying additional resources at national level. |
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6.4

The 7th R&D framework programme is a test case. The European Commission has proposed a doubling of resources to EUR 72 billion. The Committee urges that this level be maintained. Otherwise the 3 per cent target for research spending will be jeopardised. If Member States decide to reduce the level of EU spending originally proposed, they must compensate through supplying additional resources at national level.

| 6.5 | The EESC urges business, financial institutions and private foundations to take their responsibility for increasing their investments in the knowledge economy. It favours public-private partnership arrangements at European, national and regional level as a method of financing investment. The EESC suggests that fiscal incentives to boost R&D through grants, tax credits and loan guarantees be introduced throughout the EU under the condition that the knowledge generated is made accessible. Special financial and other assistance must be directed to SMEs, including social economy organisations, in order for them to participate fully in the Common European Area of Knowledge. There must also be adequate funding and incentives for citizens and their organisations to actively take part. |
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6.5

The EESC urges business, financial institutions and private foundations to take their responsibility for increasing their investments in the knowledge economy. It favours public-private partnership arrangements at European, national and regional level as a method of financing investment. The EESC suggests that fiscal incentives to boost R&D through grants, tax credits and loan guarantees be introduced throughout the EU under the condition that the knowledge generated is made accessible. Special financial and other assistance must be directed to SMEs, including social economy organisations, in order for them to participate fully in the Common European Area of Knowledge. There must also be adequate funding and incentives for citizens and their organisations to actively take part.

7.   Improving governance

| 7.1 | The EESC endorses the summit conclusions on improved governance, as they respond to its persistent requests to involve Member States' governments and all stakeholders at regional and national level including parliamentary bodies. The Committee trusts that National Reform programmes will be drawn up in consultation with organised civil society, also involving the Social and Economic Committees in those countries where they exist. The Committee will follow this consultation procedure closely. |
| --- | --- |

7.1

The EESC endorses the summit conclusions on improved governance, as they respond to its persistent requests to involve Member States' governments and all stakeholders at regional and national level including parliamentary bodies. The Committee trusts that National Reform programmes will be drawn up in consultation with organised civil society, also involving the Social and Economic Committees in those countries where they exist. The Committee will follow this consultation procedure closely.

| 7.2 | The Integrated Guidelines decided by the Council do not really reflect the need for cohesion between the areas for reform, but remain fragmented. A case in point is that around ten guidelines are related to the knowledge society. The Council should consider a reformulation in order to integrate different policy initiatives that can establish a Common European Area of Knowledge. |
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7.2

The Integrated Guidelines decided by the Council do not really reflect the need for cohesion between the areas for reform, but remain fragmented. A case in point is that around ten guidelines are related to the knowledge society. The Council should consider a reformulation in order to integrate different policy initiatives that can establish a Common European Area of Knowledge.

| 7.3 | The Committee emphasises management and effective implementation as important elements of the process. This requires, on the one hand, goals, benchmarks and timetables, and on the other hand, clear responsibilities to develop, implement, and monitor actions. |
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7.3

The Committee emphasises management and effective implementation as important elements of the process. This requires, on the one hand, goals, benchmarks and timetables, and on the other hand, clear responsibilities to develop, implement, and monitor actions.

| 7.4 | Even if ownership of the Lisbon Strategy lies with the Member States, the capacity of the Commission should be strengthened in order to give policy directions, monitor progress and send strong reminders to countries failing to meet their commitments under the national reform programmes for instance by:






  — | coordinating the relevant Community financial resources, programmes and agencies in an integrated EU programme for a Common European Area of Knowledge; |
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7.4

Even if ownership of the Lisbon Strategy lies with the Member States, the capacity of the Commission should be strengthened in order to give policy directions, monitor progress and send strong reminders to countries failing to meet their commitments under the national reform programmes for instance by:

—

coordinating the relevant Community financial resources, programmes and agencies in an integrated EU programme for a Common European Area of Knowledge;

| — | reviewing and if necessary adapting existing scoreboards to measure progress towards a Common European Area of Knowledge focusing in particular on targets, deadlines and evaluation of the efforts undertaken by the Member States; |
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—

reviewing and if necessary adapting existing scoreboards to measure progress towards a Common European Area of Knowledge focusing in particular on targets, deadlines and evaluation of the efforts undertaken by the Member States;

| — | measuring the real involvement of stakeholders in the elaboration of the National Reform Programmes; |
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—

measuring the real involvement of stakeholders in the elaboration of the National Reform Programmes;

| — | building a framework for convergence with a precise timetable and real participation by stakeholders in the OMC particularly those concerning research, education/training and employment; developing indicators, benchmarks and data that reflects citizens' concerns and aspirations; |
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—

building a framework for convergence with a precise timetable and real participation by stakeholders in the OMC particularly those concerning research, education/training and employment; developing indicators, benchmarks and data that reflects citizens' concerns and aspirations;

| — | summarising the development towards the knowledge society in an Annual Report. |
| --- | --- |

—

summarising the development towards the knowledge society in an Annual Report.

| 7.5 | The Competitiveness and Employment Councils as well as the European Parliament and national parliaments should discuss the Annual Report and should also involve relevant stakeholders and the public. |
| --- | --- |

7.5

The Competitiveness and Employment Councils as well as the European Parliament and national parliaments should discuss the Annual Report and should also involve relevant stakeholders and the public.

| 7.6 | The EESC suggests the launch of a permanent and structured debate to motivate decision-makers at all levels and the further development of public dialogue, in order to take on board citizens' aspirations and concerns and thereby fend off growing scepticism and lack of commitment. The debate must also include the local, regional and European levels and use innovative methods. Future challenges and strategic choices have to be addressed. |
| --- | --- |

7.6

The EESC suggests the launch of a permanent and structured debate to motivate decision-makers at all levels and the further development of public dialogue, in order to take on board citizens' aspirations and concerns and thereby fend off growing scepticism and lack of commitment. The debate must also include the local, regional and European levels and use innovative methods. Future challenges and strategic choices have to be addressed.

| 7.7 | National parliaments have a crucial role and must participate. The EESC also recommends that debates on the National Reform Programmes be organised in each parliament prior to the debate in the Council, during the same month and, if possible, the same week. National economic and social councils and similar bodies also have a responsibility in this respect and in the countries where such councils do not exist social partners and other civil society organisations have to stimulate the debate. |
| --- | --- |

7.7

National parliaments have a crucial role and must participate. The EESC also recommends that debates on the National Reform Programmes be organised in each parliament prior to the debate in the Council, during the same month and, if possible, the same week. National economic and social councils and similar bodies also have a responsibility in this respect and in the countries where such councils do not exist social partners and other civil society organisations have to stimulate the debate.

| 7.8 | Innovation and learning has a local base. The EESC underlines the involvement of regional and local actors in creating a Common European Area of Knowledge and their responsibility for taking on co-ownership of the Lisbon Strategy. In particular, city regions and metropolitan areas are important in this respect, but the participation of all other regions must also be promoted. The EESC wholeheartedly supports the fact that one of the three priorities of the future cohesion policy is to encourage innovation, entrepreneurship and the knowledge economy. |
| --- | --- |

7.8

Innovation and learning has a local base. The EESC underlines the involvement of regional and local actors in creating a Common European Area of Knowledge and their responsibility for taking on co-ownership of the Lisbon Strategy. In particular, city regions and metropolitan areas are important in this respect, but the participation of all other regions must also be promoted. The EESC wholeheartedly supports the fact that one of the three priorities of the future cohesion policy is to encourage innovation, entrepreneurship and the knowledge economy.

8.   Participation of organised civil society — how major stakeholders can contribute

| 8.1 | The European Council urged the EESC to set up an interactive network of civil society initiatives with Member States' economic and social committees and other partner organisations aimed at promoting the implementation of the strategy (11). This process is now underway. Cooperation on this opinion and the Summary report is an important step in this direction. Best practice and experience of organised civil society participation in actions and policies to achieve the knowledge society will be highlighted (12). |
| --- | --- |

8.1

The European Council urged the EESC to set up an interactive network of civil society initiatives with Member States' economic and social committees and other partner organisations aimed at promoting the implementation of the strategy (11). This process is now underway. Cooperation on this opinion and the Summary report is an important step in this direction. Best practice and experience of organised civil society participation in actions and policies to achieve the knowledge society will be highlighted (12).

| 8.2 | There is an urgent need to bridge the existing information deficit between the citizens and Europe, Their aspirations and concerns must be focused. A modern approach to communication and awareness raising is needed in order to involve, motivate and possibly convince the public and have citizens take responsibility. Press and media must also engage themselves more in the debate over the future of Europe. In this respect the Committee refers to the Commission Action Plan proposed by Ms Wallström, based on three principles ‘Listen, Communicate, Go Local’ (13). The conclusions of the Stakeholders Forum organised by the Committee in cooperation with the Commission on 7-8 November should be followed up. |
| --- | --- |

8.2

There is an urgent need to bridge the existing information deficit between the citizens and Europe, Their aspirations and concerns must be focused. A modern approach to communication and awareness raising is needed in order to involve, motivate and possibly convince the public and have citizens take responsibility. Press and media must also engage themselves more in the debate over the future of Europe. In this respect the Committee refers to the Commission Action Plan proposed by Ms Wallström, based on three principles ‘Listen, Communicate, Go Local’ (13). The conclusions of the Stakeholders Forum organised by the Committee in cooperation with the Commission on 7-8 November should be followed up.

| 8.3 | Participation also means that private stakeholders must act and take responsibility through tangible contributions and actions. Private-led initiatives contributing to the Common European Area of Knowledge must be welcomed and supported by the public authorities. |
| --- | --- |

8.3

Participation also means that private stakeholders must act and take responsibility through tangible contributions and actions. Private-led initiatives contributing to the Common European Area of Knowledge must be welcomed and supported by the public authorities.

| 8.4 | The EESC would like to highlight the potential contribution of some of the major stakeholders:






  — | Social dialogue is an important tool in building the knowledge society. It is important to include SMEs in the dialogue. Life long learning, innovation and supplementary social protection are some of the important issues that can be addressed in the social dialogue. |
| --- | --- | --- |

8.4

The EESC would like to highlight the potential contribution of some of the major stakeholders:

—

Social dialogue is an important tool in building the knowledge society. It is important to include SMEs in the dialogue. Life long learning, innovation and supplementary social protection are some of the important issues that can be addressed in the social dialogue.

| — | The social partners in many Member States have made important contributions, in particular through common declarations and collective bargaining agreements on lifelong learning. However, far from all workers are covered by such joint agreements. Although very diverse in nature, the actions have common strands such as the right for all workers to participate in continuous training and the establishment of career development schemes and qualifications assessment frameworks. The implementation at national level of the framework agreement between the European social partners concluded in 2002 merits an evaluation. |
| --- | --- |

—

The social partners in many Member States have made important contributions, in particular through common declarations and collective bargaining agreements on lifelong learning. However, far from all workers are covered by such joint agreements. Although very diverse in nature, the actions have common strands such as the right for all workers to participate in continuous training and the establishment of career development schemes and qualifications assessment frameworks. The implementation at national level of the framework agreement between the European social partners concluded in 2002 merits an evaluation.

| — | Collective bargaining can correct the market failures of firms that do not invest enough in training (14). Through sectoral and nationwide collective agreements a level playing field is established, allowing enterprises to increase investment in training for lower-skilled workers too. Access to lifelong learning has increased by mutualising the finance of investment in human resources. |
| --- | --- |

—

Collective bargaining can correct the market failures of firms that do not invest enough in training (14). Through sectoral and nationwide collective agreements a level playing field is established, allowing enterprises to increase investment in training for lower-skilled workers too. Access to lifelong learning has increased by mutualising the finance of investment in human resources.

| — | Businesses are key actors to create more and better jobs in the Common European Area of Knowledge. They should anticipate and manage change by making strategic investments in knowledge generation and knowledge application, and openly report their actions in lifelong learning, innovation and research as well as in restructuring as part of their corporate social responsibility. |
| --- | --- |

—

Businesses are key actors to create more and better jobs in the Common European Area of Knowledge. They should anticipate and manage change by making strategic investments in knowledge generation and knowledge application, and openly report their actions in lifelong learning, innovation and research as well as in restructuring as part of their corporate social responsibility.

| — | Finance and venture capital institutions can supply private equity and venture capital and funds for innovative enterprises particularly SMEs and together with the public authorities develop integrated packages of support. They should make use of the new facilities offered by the Competitiveness and Innovation Programme (CIP) (15) and the European Investment Fund (EIF) and find new financial solutions. |
| --- | --- |

—

Finance and venture capital institutions can supply private equity and venture capital and funds for innovative enterprises particularly SMEs and together with the public authorities develop integrated packages of support. They should make use of the new facilities offered by the Competitiveness and Innovation Programme (CIP) (15) and the European Investment Fund (EIF) and find new financial solutions.

| — | Social economy organisations based on solidarity can promote both economic and social innovations to create employment and combat social exclusion by integrating disadvantaged groups. |
| --- | --- |

—

Social economy organisations based on solidarity can promote both economic and social innovations to create employment and combat social exclusion by integrating disadvantaged groups.

| — | Non-formal learning organisations outside of the public education system — for instance those run by the social partners or associations — have proved to be highly efficient in supplying and adapting lifelong learning structures and methods to enable all social groups to take part in the knowledge society. |
| --- | --- |

—

Non-formal learning organisations outside of the public education system — for instance those run by the social partners or associations — have proved to be highly efficient in supplying and adapting lifelong learning structures and methods to enable all social groups to take part in the knowledge society.

| — | Consumers can favour and stimulate innovations and technologies aimed at improving quality of life with due regard to social and ethical consequences. |
| --- | --- |

—

Consumers can favour and stimulate innovations and technologies aimed at improving quality of life with due regard to social and ethical consequences.

| — | Young people may particularly benefit as they are open to new knowledge and technologies. Within the Lisbon strategy they can contribute under the Youth Pact (16). Important areas for action are the creation of employment facilities for students in higher education and measures to reduce early school drop-outs. |
| --- | --- |

—

Young people may particularly benefit as they are open to new knowledge and technologies. Within the Lisbon strategy they can contribute under the Youth Pact (16). Important areas for action are the creation of employment facilities for students in higher education and measures to reduce early school drop-outs.

| — | The professions and self-employed workers also have a role to play in the knowledge society through the introduction of access qualifications and life-long learning for their work areas. |
| --- | --- |

—

The professions and self-employed workers also have a role to play in the knowledge society through the introduction of access qualifications and life-long learning for their work areas.

| — | Universities and higher education establishments must participate actively as they are key institutions for progress towards the knowledge society. It is important to encourage cooperation between industry and academia in order to transfer the results of applied research and also to promote the transnational mobility of students. |
| --- | --- |

—

Universities and higher education establishments must participate actively as they are key institutions for progress towards the knowledge society. It is important to encourage cooperation between industry and academia in order to transfer the results of applied research and also to promote the transnational mobility of students.

| — | The research community can together with the Member States enhance the value of research as a profession, and involve researchers in cooperation across national borders, in accordance with the European Charter for Researchers and the code of conduct for the recruitment of researchers, thereby making research careers more attractive. |
| --- | --- |

—

The research community can together with the Member States enhance the value of research as a profession, and involve researchers in cooperation across national borders, in accordance with the European Charter for Researchers and the code of conduct for the recruitment of researchers, thereby making research careers more attractive.

9.   Four priority proposals

9.1   Create a positive macroeconomic policy framework for the knowledge society

| 9.1.1 | At the summit the European Council endorsed a reform to be introduced in the Stability and Growth Pact. According to this reform macroeconomic stability and conformity with the rules remain a central concern (17). However, redirecting public expenditure towards R&D and innovation is one of the relevant factors to be taken into account by the EU when assessing temporary public deficits that exceed 3 per cent or when defining adjustment trajectories. |
| --- | --- |

9.1.1

At the summit the European Council endorsed a reform to be introduced in the Stability and Growth Pact. According to this reform macroeconomic stability and conformity with the rules remain a central concern (17). However, redirecting public expenditure towards R&D and innovation is one of the relevant factors to be taken into account by the EU when assessing temporary public deficits that exceed 3 per cent or when defining adjustment trajectories.

| 9.1.2 | Economic growth and employment are needed as they facilitate the achievement of most other policy goals and cushion the impact of reforms. However, current EU policy lacks sufficient focus on growth and employment. The policy mix set out in the Broad Economic Policy Guidelines is out of balance, since it is based on achieving stability at the expense of growth and focused mainly on supply-side measures. It neglects the fact that reforms to increase the potential for growth must be supplemented by measures to stimulate effective demand. |
| --- | --- |

9.1.2

Economic growth and employment are needed as they facilitate the achievement of most other policy goals and cushion the impact of reforms. However, current EU policy lacks sufficient focus on growth and employment. The policy mix set out in the Broad Economic Policy Guidelines is out of balance, since it is based on achieving stability at the expense of growth and focused mainly on supply-side measures. It neglects the fact that reforms to increase the potential for growth must be supplemented by measures to stimulate effective demand.

| 9.1.3 | Also significant in this respect is the closer coordination of economic policies between Member States as well as linking macroeconomic dialogue to the tripartite summit of social partners and opening up in-depth discussions with the ECB. |
| --- | --- |

9.1.3

Also significant in this respect is the closer coordination of economic policies between Member States as well as linking macroeconomic dialogue to the tripartite summit of social partners and opening up in-depth discussions with the ECB.

| 9.1.4 | Against this background macroeconomic policies, namely budgetary and tax policies, should foster the knowledge society, particularly by giving priority to a demand pull for new technologies. |
| --- | --- |

9.1.4

Against this background macroeconomic policies, namely budgetary and tax policies, should foster the knowledge society, particularly by giving priority to a demand pull for new technologies.

9.2   Provide a framework and resources for lifelong learning

| 9.2.1 | The spring summit stated that ‘Lifelong learning is a sine qua non if the Lisbon objectives are to be achieved’ (18). |
| --- | --- |

9.2.1

The spring summit stated that ‘Lifelong learning is a sine qua non if the Lisbon objectives are to be achieved’ (18).

| 9.2.2 | It should be noted that the countries with the best economic and social performances have the highest percentage of the adult population in education and training, while the opposite is true of the poorest performers. The ‘second chance’ principle should be recognised, and a contract suggested to all those who missed the opportunity for initial training the first time round. This could take different forms, e.g. offering training courses or ‘time vouchers’ valid at any stage of life in order to refresh basic knowledge. |
| --- | --- |

9.2.2

It should be noted that the countries with the best economic and social performances have the highest percentage of the adult population in education and training, while the opposite is true of the poorest performers. The ‘second chance’ principle should be recognised, and a contract suggested to all those who missed the opportunity for initial training the first time round. This could take different forms, e.g. offering training courses or ‘time vouchers’ valid at any stage of life in order to refresh basic knowledge.

| 9.2.3 | It is essential to make the conclusions of the summit reality. The EESC reiterates its call for a Europe-wide Charter for Lifelong Learning (19). The EU and Member States together with the major stakeholders, have to determine the key priorities and actions, giving them a legal basis and providing sufficient financial resources. The Member States should commit themselves to implementing the Charter at all levels through ‘lifelong learning pacts’ or similar arrangements. Roles and responsibilities of both the public and private sector should be defined within the context that lifelong learning is a service of general interest. |
| --- | --- |

9.2.3

It is essential to make the conclusions of the summit reality. The EESC reiterates its call for a Europe-wide Charter for Lifelong Learning (19). The EU and Member States together with the major stakeholders, have to determine the key priorities and actions, giving them a legal basis and providing sufficient financial resources. The Member States should commit themselves to implementing the Charter at all levels through ‘lifelong learning pacts’ or similar arrangements. Roles and responsibilities of both the public and private sector should be defined within the context that lifelong learning is a service of general interest.

| 9.2.4 | There is a need to invest substantially in all phases of lifelong learning, including early childhood. Member States should agree on a quantitative objective expressed as a percentage for investment in education including lifelong learning. However, the public budget alone will not meet the bill for education and training and has to be supplemented by collective or other agreements between employers and workers, by enterprise and by the individual according to his or her possibilities. Private and public stakeholders have a role to motivate and empower people to take part and make them responsible for adapting to changing circumstances. |
| --- | --- |

9.2.4

There is a need to invest substantially in all phases of lifelong learning, including early childhood. Member States should agree on a quantitative objective expressed as a percentage for investment in education including lifelong learning. However, the public budget alone will not meet the bill for education and training and has to be supplemented by collective or other agreements between employers and workers, by enterprise and by the individual according to his or her possibilities. Private and public stakeholders have a role to motivate and empower people to take part and make them responsible for adapting to changing circumstances.

| 9.2.5 | The EU and Member States should also agree on a minimum level of resources for lifelong learning under the structural funds, for instance at least one third of the total (20). The funds should focus on and support ‘lifelong learning pacts’ which increase access to training for all workers as well as initiatives that are tailor-made for the most disadvantaged groups. Each Member State must demonstrate that it is using the European Social Fund to help implement the national reform programme. |
| --- | --- |

9.2.5

The EU and Member States should also agree on a minimum level of resources for lifelong learning under the structural funds, for instance at least one third of the total (20). The funds should focus on and support ‘lifelong learning pacts’ which increase access to training for all workers as well as initiatives that are tailor-made for the most disadvantaged groups. Each Member State must demonstrate that it is using the European Social Fund to help implement the national reform programme.

| 9.2.6 | At local level, open learning centres, lifelong learning pacts or similar training schemes can be established in a broad partnership. Universities must also play a larger role in lifelong learning. |
| --- | --- |

9.2.6

At local level, open learning centres, lifelong learning pacts or similar training schemes can be established in a broad partnership. Universities must also play a larger role in lifelong learning.

9.3   User-friendly innovation and technology policies

| 9.3.1 | The EESC strongly supports the conclusions of the Spring summit with respect to pushing for the 7th RD framework programme to fill the technological gap and the need for Member States to develop comprehensive innovation policies that are to be supported by the CIP in order to promote the competitiveness of SMEs in particular. It also supports the proposal that Europe needs an active industrial policy through different technological initiatives (21). |
| --- | --- |

9.3.1

The EESC strongly supports the conclusions of the Spring summit with respect to pushing for the 7th RD framework programme to fill the technological gap and the need for Member States to develop comprehensive innovation policies that are to be supported by the CIP in order to promote the competitiveness of SMEs in particular. It also supports the proposal that Europe needs an active industrial policy through different technological initiatives (21).

| 9.3.2 | Research programmes need closer monitoring and evaluation to make sure that resources are targeted to contribute to European innovative capacity. Innovation must be considered an all-embracing concept and focus not only on processes, products and technology but also on governance, sustainable development and economic answers to social issues in order to underpin the European model of society. Innovations should permeate all societal processes. Social and civil dialogue are important accompanying measures to further innovation. Involving workers and other stakeholders in the conception of new products and technologies will cushion the effects of restructuring. |
| --- | --- |

9.3.2

Research programmes need closer monitoring and evaluation to make sure that resources are targeted to contribute to European innovative capacity. Innovation must be considered an all-embracing concept and focus not only on processes, products and technology but also on governance, sustainable development and economic answers to social issues in order to underpin the European model of society. Innovations should permeate all societal processes. Social and civil dialogue are important accompanying measures to further innovation. Involving workers and other stakeholders in the conception of new products and technologies will cushion the effects of restructuring.

| 9.3.3 | High ambitions to foster good health, a sustainable environment, quality in urban and rural infrastructure, smart transport solutions, safe and reorganised workplaces and cultural heritage will bring forward new technologies and new innovative products and services. New technologies and innovation can thereby favour the quality of life and work, responding both to societal needs and the market, while also taking social and ethical consequences into account. |
| --- | --- |

9.3.3

High ambitions to foster good health, a sustainable environment, quality in urban and rural infrastructure, smart transport solutions, safe and reorganised workplaces and cultural heritage will bring forward new technologies and new innovative products and services. New technologies and innovation can thereby favour the quality of life and work, responding both to societal needs and the market, while also taking social and ethical consequences into account.

| 9.3.4 | Europe needs to put much more emphasis on technological transfer, exploiting the results of the 7th framework programme and promoting an innovation-friendly market in order to increase competitiveness. EU and national mechanisms for dissemination of knowledge — whether research results, new technologies, innovative systems or learning methods — should be given priority and more resources used for this purpose. A new generation of public-private partnerships can be developed as a model for promoting the dissemination of knowledge. More efforts should be made to more rapidly transform technological development into commercial products and services. |
| --- | --- |

9.3.4

Europe needs to put much more emphasis on technological transfer, exploiting the results of the 7th framework programme and promoting an innovation-friendly market in order to increase competitiveness. EU and national mechanisms for dissemination of knowledge — whether research results, new technologies, innovative systems or learning methods — should be given priority and more resources used for this purpose. A new generation of public-private partnerships can be developed as a model for promoting the dissemination of knowledge. More efforts should be made to more rapidly transform technological development into commercial products and services.

| 9.3.5 | The EESC calls for a more regular and systematic dialogue with key stakeholders at all levels in order to pursue and monitor user-friendly innovation and technology policies. The European Commission should support such an approach by issuing guidelines and recommendations and also benchmarking good practice. In this context, it is important to promote industrial regions, technology parks and other innovative environments. |
| --- | --- |

9.3.5

The EESC calls for a more regular and systematic dialogue with key stakeholders at all levels in order to pursue and monitor user-friendly innovation and technology policies. The European Commission should support such an approach by issuing guidelines and recommendations and also benchmarking good practice. In this context, it is important to promote industrial regions, technology parks and other innovative environments.

| 9.3.6 | Particular attention must be paid to involving SMEs as well as social economy enterprises and responding to their needs, giving them access to RTD and research services as well as engaging them in RTD activities. SMEs have an important role to play in creating regional clusters of excellence. Introducing measures to increase the SME share of the public market must also be considered, and the successful US experience of providing support for new high-tech small enterprises can serve as a model. |
| --- | --- |

9.3.6

Particular attention must be paid to involving SMEs as well as social economy enterprises and responding to their needs, giving them access to RTD and research services as well as engaging them in RTD activities. SMEs have an important role to play in creating regional clusters of excellence. Introducing measures to increase the SME share of the public market must also be considered, and the successful US experience of providing support for new high-tech small enterprises can serve as a model.

| 9.3.7 | The industry-led technology platforms launched in 2003 by stakeholders with the support of the Commission, are set to become powerful actors in EU research policy and a base for its industrial policy. The EESC suggests that industry should react positively to the demand of the European Commission that it play a still more active role in the technology platforms. However, the EESC also suggests that the platforms be open to social partners and other civil society organisations so that they can also take part in defining the research agenda. |
| --- | --- |

9.3.7

The industry-led technology platforms launched in 2003 by stakeholders with the support of the Commission, are set to become powerful actors in EU research policy and a base for its industrial policy. The EESC suggests that industry should react positively to the demand of the European Commission that it play a still more active role in the technology platforms. However, the EESC also suggests that the platforms be open to social partners and other civil society organisations so that they can also take part in defining the research agenda.

9.4   Social protection must facilitate the transition to the knowledge society

| 9.4.1 | A strong sense of job security is necessary to motivate workers to actively take part in the transition to the knowledge society. Flexibility has to be coupled with active labour market policies encouraging workers to participate in life long learning. The Danish experience of flexicurity may be an inspiring example. |
| --- | --- |

9.4.1

A strong sense of job security is necessary to motivate workers to actively take part in the transition to the knowledge society. Flexibility has to be coupled with active labour market policies encouraging workers to participate in life long learning. The Danish experience of flexicurity may be an inspiring example.

| 9.4.2 | New forms of social protection must be defined to facilitate the up-grading of skills and the occupational mobility of workers and their choices between work, training and family life, but also for new forms of work organisations and for transitions between different statuses. Through this, labour market contracts and conditions that threaten worker rights and have negative impacts on their ability to participate in the knowledge society can be avoided. |
| --- | --- |

9.4.2

New forms of social protection must be defined to facilitate the up-grading of skills and the occupational mobility of workers and their choices between work, training and family life, but also for new forms of work organisations and for transitions between different statuses. Through this, labour market contracts and conditions that threaten worker rights and have negative impacts on their ability to participate in the knowledge society can be avoided.

| 9.4.3 | The Kok I (22) report suggested that employment insurance and social protection systems have to support flexibility by facilitating such transitions during the life-cycle of each individual person. For instance, new forms of work-life cycle insurance can be established, e.g. through setting up personal ‘learning accounts’ partly funded by social contributions. |
| --- | --- |

9.4.3

The Kok I (22) report suggested that employment insurance and social protection systems have to support flexibility by facilitating such transitions during the life-cycle of each individual person. For instance, new forms of work-life cycle insurance can be established, e.g. through setting up personal ‘learning accounts’ partly funded by social contributions.

| 9.4.4 | The EESC suggests that the Social Protection Committee look into this matter, and should, inter alia, identify good practice and propose guidelines for such new forms of protection. The Committee will also contribute with its opinion on flexicurity (23). |
| --- | --- |

9.4.4

The EESC suggests that the Social Protection Committee look into this matter, and should, inter alia, identify good practice and propose guidelines for such new forms of protection. The Committee will also contribute with its opinion on flexicurity (23).

Brussels, 14 December 2005

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

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(1)  European Innovation Scoreboard 2004 – Comparative analysis of innovation performance, Commission Staff Working Paper, SEC (2004) 1475 of 19.11.2004.

1

(2)  Progress towards the Lisbon objectives in education and training (2005 report), Commission Staff Working Paper, SEC (2005) 419 of 2203.2005.

2

(3)  Presidency Conclusions European Council 22-23 March 2005, point 4.

3

(4)  Presidency Conclusions European Council 22-23 March 2005, point 5.

4

(5)  Idem, point 10.

5

(6)  Idem, points 20-28.

6

(7)  See appendix.

7

(8)  Presidency Conclusions European Council 22-23 March 2005, points 38-41.

8

(9)  Luxemburg declaration of presidents of ESCs of European Union and of the EESC. 26 November 2004.

9

(10)  For instance the European Qualifications Framework (EQF), the Europe The European Credit Transfer System (ECTS) and the European Credit Transfer System in Vocational Training (ECVET).

10

(11)  Idem.

11

(12)  A website has been opened http://www.esc.eu.int/lisbon_strategy/index_en.asp. More details on this proposal can be found in the EESC opinion ‘Improving the implementation of the Lisbon Strategy’, points 6.4.-6.9 (OJ C 120 of 20.5.2005, page 79).

12

(13)  Action Plan to Improve Communicating Europe.

13

(14)  ‘Facing the Challenge’, Report from the High Level Group chaired by Wim Kok, November 2004.

14

(15)  Proposal for a Decision of the European Parliament and the Council establishing a Competitiveness and Innovation Framework Programme (2007-2013), COM(2005) 121 final of 6.4.2005.

15

(16)  Presidency Conclusions, European Council, 22-23 March 2005, point 37 and Annex I.

16

(17)  The Committee is currently drawing up an opinion on Strengthening economic governance — The reform of the Stability and Growth Pact (ECO/160).

17

(18)  Presidency Conclusions. European Council 22-23 March 2005, point 34.

18

(19)  EESC opinion ‘Improving the implementation of the Lisbon Strategy’OJ C 120 of 20.5.2005, page 79).

19

(20)  37 per cent of total EU Structural Funds allocated to Ireland were spent on investment in human resources.

20

(21)  Presidency Conclusions European Council 22-23 March 2005, points 13, 14 and 16.

21

(22)  Report of the High Level Group on the future of the social policy in an enlarged European Union, May 2004.

22

(23)  Flexicurity: The case of Denmark (ECO/167), to be available in 2006.

23

Flexicurity: The case of Denmark

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| 17.3.2006 | EN | Official Journal of the European Union | C 65/103 |
| --- | --- | --- | --- |

17.3.2006

EN

Official Journal of the European Union

C 65/103

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Opinion of the European Economic and Social Committee on the ‘Proposal for a Council Directive amending Directive 77/388/EEC as regards certain measures to simplify the procedure for charging value added tax and to assist in countering tax evasion and avoidance, and repealing certain Decisions granting derogations’

(COM(2005) 89 final — 2005/0019 (CNS))

(2006/C 65/19)

On 14 April 2005 the Council decided to consult the European Economic and Social Committee, under Article 93 of the Treaty establishing the European Community, on the abovementioned proposal.

The Section for Economic and Monetary Union and Economic and Social Cohesion, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 8 November 2005. The rapporteur was Mr Páleník.

At its 422nd plenary session, held on 14 and 15 December 2005 (meeting of 15 December), the European Economic and Social Committee adopted the following opinion by 69 votes to 1 with 3 abstentions.

1.   Introduction

| 1.1 | In March 2005 the Commission presented a proposal for a Council Directive (1) amending the Sixth VAT Directive (77/388/EEC) in order to simplify the collection of VAT and to assist in countering tax evasion and avoidance. |
| --- | --- |

1.1

In March 2005 the Commission presented a proposal for a Council Directive (1) amending the Sixth VAT Directive (77/388/EEC) in order to simplify the collection of VAT and to assist in countering tax evasion and avoidance.

| 1.2 | Under Article 27 of the Sixth VAT Directive, the Council, acting on a proposal from the Commission, may allow Member States to introduce special measures for derogation from the provisions of the Sixth VAT Directive in order to simplify the procedure for collecting the tax or to prevent tax evasion. This provision has been used very frequently and at present Member States can make use of more than 140 derogations. The Commission anticipates that the number of derogations granted will continue to rise in the near future due to the new Member States. |
| --- | --- |

1.2

Under Article 27 of the Sixth VAT Directive, the Council, acting on a proposal from the Commission, may allow Member States to introduce special measures for derogation from the provisions of the Sixth VAT Directive in order to simplify the procedure for collecting the tax or to prevent tax evasion. This provision has been used very frequently and at present Member States can make use of more than 140 derogations. The Commission anticipates that the number of derogations granted will continue to rise in the near future due to the new Member States.

2.   The Commission proposal — COM(2005) 89 final

| 2.1 | As part of the strategy to improve the operation of the VAT system in the internal market (2), the Commission has undertaken to rationalise the large number of special derogations. Many of these have proved themselves effective and have been used in more than one Member State. However, the Council examines each application for these special derogations individually and the process is therefore very lengthy. The Commission document therefore proposes that frequently used derogations be made available to all Member States through an amendment to the Sixth VAT Directive. |
| --- | --- |

2.1

As part of the strategy to improve the operation of the VAT system in the internal market (2), the Commission has undertaken to rationalise the large number of special derogations. Many of these have proved themselves effective and have been used in more than one Member State. However, the Council examines each application for these special derogations individually and the process is therefore very lengthy. The Commission document therefore proposes that frequently used derogations be made available to all Member States through an amendment to the Sixth VAT Directive.

| 2.2 | The Commission document proposes inserting the following measures into the Sixth VAT Directive:






  — | changes to the rules on ‘grouping’ and ‘transfers of going concerns’ to prevent unjustified benefit or disadvantage to those involved, |
| --- | --- | --- |

2.2

The Commission document proposes inserting the following measures into the Sixth VAT Directive:

—

changes to the rules on ‘grouping’ and ‘transfers of going concerns’ to prevent unjustified benefit or disadvantage to those involved,

| — | measures to prevent the avoidance of VAT on gold held as an investment which is then used as a raw material for making consumer goods, |
| --- | --- |

—

measures to prevent the avoidance of VAT on gold held as an investment which is then used as a raw material for making consumer goods,

| — | re-valuation in special cases of the taxable value of goods or services on the basis of their open market value, |
| --- | --- |

—

re-valuation in special cases of the taxable value of goods or services on the basis of their open market value,

| — | clarification and highlighting of the status of capital services, |
| --- | --- |

—

clarification and highlighting of the status of capital services,

| — | changes to the reverse charge mechanism in certain sectors of industry. |
| --- | --- |

—

changes to the reverse charge mechanism in certain sectors of industry.

| 2.3 | In the case of grouping of businesses and the transfer of going concerns, the Commission takes the opportunity to strengthen the powers of Member States in areas which can be exploited for tax avoidance and evasion. In its proposal, therefore, it allows the Member States to take steps to ensure that the operation of the rules leads to a fair result which does not unjustifiably benefit or prejudice those concerned. |
| --- | --- |

2.3

In the case of grouping of businesses and the transfer of going concerns, the Commission takes the opportunity to strengthen the powers of Member States in areas which can be exploited for tax avoidance and evasion. In its proposal, therefore, it allows the Member States to take steps to ensure that the operation of the rules leads to a fair result which does not unjustifiably benefit or prejudice those concerned.

| 2.4 | Investment gold, held in the form of bars or wafers, for example, is exempt from VAT. When the gold is sold in a form in which it no longer qualifies as investment gold, for example when it is used for jewellery, VAT is payable. If a customer provides his own gold for working, only the service is taxable. The gold itself will not be taxable even though it has lost its status as investment gold and no longer qualifies for exemption. This is the abuse which a number of existing derogations seek to counteract, and the Commission is therefore submitting a proposal for an optional rule allowing all Member States to rule that the gold contained in the product shall also be taxable on the basis of its current open market value. |
| --- | --- |

2.4

Investment gold, held in the form of bars or wafers, for example, is exempt from VAT. When the gold is sold in a form in which it no longer qualifies as investment gold, for example when it is used for jewellery, VAT is payable. If a customer provides his own gold for working, only the service is taxable. The gold itself will not be taxable even though it has lost its status as investment gold and no longer qualifies for exemption. This is the abuse which a number of existing derogations seek to counteract, and the Commission is therefore submitting a proposal for an optional rule allowing all Member States to rule that the gold contained in the product shall also be taxable on the basis of its current open market value.

| 2.5 | In order to counter tax avoidance and evasion, the Commission proposal enables Member States to revalue supplies, providing further criteria are met. This revaluation can be done in three precisely defined circumstances only and only if there is some connection between the parties involved. Member States will have to define this connection in terms of the categories set out in the Directive in order to apply the rule. The proposal requires revaluation on the basis of the open market value. The open market value means the full amount that a customer would have to pay to obtain the goods or services in question at the marketing stage at which the supply takes place, at the time of the supply and under conditions of fair competition. The proposal explicitly states that, unless justified by market conditions, the open market value shall not be less than the cost to the supplier of making the supply. |
| --- | --- |

2.5

In order to counter tax avoidance and evasion, the Commission proposal enables Member States to revalue supplies, providing further criteria are met. This revaluation can be done in three precisely defined circumstances only and only if there is some connection between the parties involved. Member States will have to define this connection in terms of the categories set out in the Directive in order to apply the rule. The proposal requires revaluation on the basis of the open market value. The open market value means the full amount that a customer would have to pay to obtain the goods or services in question at the marketing stage at which the supply takes place, at the time of the supply and under conditions of fair competition. The proposal explicitly states that, unless justified by market conditions, the open market value shall not be less than the cost to the supplier of making the supply.

| 2.6 | The Commission specifies that the adjustment of deductions of input VAT on capital goods under Article 20 of the Sixth VAT Directive may equally apply to services of a capital nature which are treated as having a continuing asset book value. |
| --- | --- |

2.6

The Commission specifies that the adjustment of deductions of input VAT on capital goods under Article 20 of the Sixth VAT Directive may equally apply to services of a capital nature which are treated as having a continuing asset book value.

| 2.7 | At the same time, the Commission extends the use of an optional reverse charge mechanism to specified supplies made to taxable persons in sectors of the economy which have proved difficult to police. The application of this mechanism transfers the obligation to pay tax to the recipient of a service. The areas covered are services relating to buildings, supplies of staff relating to building services, the supply of land and buildings as referred to in Article 13(B)(g) and (h) where the supplier has opted for taxation of the supply pursuant to point (C)(b) of that Article, and supply of waste, scrap and recyclable material from some treatment services. Member States may similarly use the reverse charge mechanism in special cases when the supply is made by a vendor in financial difficulties who is unable to honour his debts, including his obligations to the tax authorities. Use of the reverse charge mechanism in the Member States is subject to consultation with the VAT Committee. |
| --- | --- |

2.7

At the same time, the Commission extends the use of an optional reverse charge mechanism to specified supplies made to taxable persons in sectors of the economy which have proved difficult to police. The application of this mechanism transfers the obligation to pay tax to the recipient of a service. The areas covered are services relating to buildings, supplies of staff relating to building services, the supply of land and buildings as referred to in Article 13(B)(g) and (h) where the supplier has opted for taxation of the supply pursuant to point (C)(b) of that Article, and supply of waste, scrap and recyclable material from some treatment services. Member States may similarly use the reverse charge mechanism in special cases when the supply is made by a vendor in financial difficulties who is unable to honour his debts, including his obligations to the tax authorities. Use of the reverse charge mechanism in the Member States is subject to consultation with the VAT Committee.

| 2.8 | According to the Commission, there are ten decisions under Article 27 of the Sixth VAT Directive to which the proposal would apply and which would be repealed by the Directive as a result. It has determined that there are seven decisions to which the proposal would apply, but which would not need to be repealed. |
| --- | --- |

2.8

According to the Commission, there are ten decisions under Article 27 of the Sixth VAT Directive to which the proposal would apply and which would be repealed by the Directive as a result. It has determined that there are seven decisions to which the proposal would apply, but which would not need to be repealed.

3.   The EESC's remarks on the proposal

| 3.1 | The EESC supports simplification of the VAT system in the internal market in line with the provisions of Commission Communication COM(2000) 348 final. |
| --- | --- |

3.1

The EESC supports simplification of the VAT system in the internal market in line with the provisions of Commission Communication COM(2000) 348 final.

| 3.2 | The EESC agrees with the Commission that the number of special measures for derogations from the provisions of the Sixth VAT Directive should be rationalised, as they make it difficult for those trading across borders to understand the tax system. The EESC supports making some frequently used derogations available to all Member States by amending and expanding the Sixth VAT Directive. |
| --- | --- |

3.2

The EESC agrees with the Commission that the number of special measures for derogations from the provisions of the Sixth VAT Directive should be rationalised, as they make it difficult for those trading across borders to understand the tax system. The EESC supports making some frequently used derogations available to all Member States by amending and expanding the Sixth VAT Directive.

| 3.3 | The EESC takes the view that these changes and additions to the Sixth VAT Directive, if correctly implemented in the Member States, will be an effective instrument in countering the problem of tax evasion and avoidance. |
| --- | --- |

3.3

The EESC takes the view that these changes and additions to the Sixth VAT Directive, if correctly implemented in the Member States, will be an effective instrument in countering the problem of tax evasion and avoidance.

| 3.4 | The EESC has no objections to the Commission's proposal where it relates to the grouping of businesses, transfers of going concerns and taxation of investment gold used, for example, for making jewellery, and the Committee sees it as a logical solution to previous shortcomings. |
| --- | --- |

3.4

The EESC has no objections to the Commission's proposal where it relates to the grouping of businesses, transfers of going concerns and taxation of investment gold used, for example, for making jewellery, and the Committee sees it as a logical solution to previous shortcomings.

| 3.5 | The EESC recognises that in a few cases, where there is suspicion of tax evasion by over- or undervaluing transactions, the taxable amount should be set at the open market value. Difficulties may arise in practice, however, in determining a significant difference between the value of the transaction and the open market value, as there is no clear definition of either open market value, which depends on the assessment of the parties involved, or of a significant difference of value. The EESC is concerned that lack of clarity could cause uncertainty for businesses. The use of the instrument in the legislation of Member States should, therefore, be conditional upon a precise definition of open market value and quantification of what is deemed a significant difference. |
| --- | --- |

3.5

The EESC recognises that in a few cases, where there is suspicion of tax evasion by over- or undervaluing transactions, the taxable amount should be set at the open market value. Difficulties may arise in practice, however, in determining a significant difference between the value of the transaction and the open market value, as there is no clear definition of either open market value, which depends on the assessment of the parties involved, or of a significant difference of value. The EESC is concerned that lack of clarity could cause uncertainty for businesses. The use of the instrument in the legislation of Member States should, therefore, be conditional upon a precise definition of open market value and quantification of what is deemed a significant difference.

| 3.6 | The EESC shares the Commission's view that it needs to be made clear that the adjustment of deductions of input VAT on capital goods also applies to services of the same character. |
| --- | --- |

3.6

The EESC shares the Commission's view that it needs to be made clear that the adjustment of deductions of input VAT on capital goods also applies to services of the same character.

| 3.7 | The EESC considers the reverse charge mechanism to be a tool that could be needed for preventing tax avoidance and evasion. It is particularly apt where the vendor is in financial difficulties and there are real doubts about his ability to meet his tax obligations. Experience with the reverse charge mechanism in practice may suggest other areas in which its optional use could be considered. |
| --- | --- |

3.7

The EESC considers the reverse charge mechanism to be a tool that could be needed for preventing tax avoidance and evasion. It is particularly apt where the vendor is in financial difficulties and there are real doubts about his ability to meet his tax obligations. Experience with the reverse charge mechanism in practice may suggest other areas in which its optional use could be considered.

4.   General remarks of the Committee

| 4.1 | The proposal for a Council Directive is realistic in terms of implementation and meets the Commission's aim — to which it committed itself in its Communication to the Council and the European Parliament of 7 June 2000 — of rationalising some of the large number of derogations from the Sixth VAT Directive currently in force. The EESC points out, however, that a more comprehensive overhaul of VAT law and further harmonisation of tax rules would do far more to make the common VAT system simpler and more effective. |
| --- | --- |

4.1

The proposal for a Council Directive is realistic in terms of implementation and meets the Commission's aim — to which it committed itself in its Communication to the Council and the European Parliament of 7 June 2000 — of rationalising some of the large number of derogations from the Sixth VAT Directive currently in force. The EESC points out, however, that a more comprehensive overhaul of VAT law and further harmonisation of tax rules would do far more to make the common VAT system simpler and more effective.

| 4.2 | It should be pointed out that the undue complexity of EU laws and directives generally hampers their correct and prompt implementation and effective enforcement in the Member States. In this sense, the proposal, assuming it is implemented in the Member States correctly and quickly enough, is a step in the right direction. The EESC takes the view that it should be followed by further steps to simplify the common VAT system. |
| --- | --- |

4.2

It should be pointed out that the undue complexity of EU laws and directives generally hampers their correct and prompt implementation and effective enforcement in the Member States. In this sense, the proposal, assuming it is implemented in the Member States correctly and quickly enough, is a step in the right direction. The EESC takes the view that it should be followed by further steps to simplify the common VAT system.

Brussels, 15 December 2005.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  COM(2005) 89 final.

1

(2)  COM(2000) 348 final and COM(2003) 614 final.

2

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| 17.3.2006 | EN | Official Journal of the European Union | C 65/105 |
| --- | --- | --- | --- |

17.3.2006

EN

Official Journal of the European Union

C 65/105

---

Opinion of the European Economic and Social Committee on ‘Renewable energy sources’

(2006/C 65/20)

On 10 February 2005, the European Economic and Social Committee, acting under Rule 29(2) of its Rules of Procedure, decided to draw up an own-initiative opinion on Renewable energy sources.

The Section for Transport, Energy, Infrastructure and the Information Society, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 24 November 2005. The rapporteur was Ms Sirkeinen and the co-rapporteur was Mr Wolf.

At its 422nd plenary session of 14 and 15 December 2005 (meeting of 15 December 2005), the European Economic and Social Committee adopted the following opinion by 142 votes to 1 with 2 abstentions.

The EESC has recently been adopting important opinions
   (1)
  on key energy issues. The emphasis so far has been on individual forms of energy and their sources. The strategic aim of this series of opinions, which is concluded by this opinion and the opinion (TEN/212) on traditional fossil fuels — coal, oil and natural gas — is to provide a solid basis for establishing workable and realistic options for a future energy mix. A subsequent opinion‘The energy supply of the EU: strategy for an optimal energy mix’will then draw all these opinions together.

1.   Introduction

| 1.1 | Usable energy (2) is the mainstay of our contemporary way of life and culture. Its ready availability opened the door to our present-day standard of living. The need for a secure, inexpensive, environmentally sound and sustainable supply of usable energy is at the heart of the Lisbon, Gothenburg and Barcelona European Council decisions. |
| --- | --- |

1.1

Usable energy (2) is the mainstay of our contemporary way of life and culture. Its ready availability opened the door to our present-day standard of living. The need for a secure, inexpensive, environmentally sound and sustainable supply of usable energy is at the heart of the Lisbon, Gothenburg and Barcelona European Council decisions.

| 1.2 | We witness a fast growth in global demand, mainly in newly industrialised and some developing countries, of limited fossil energy resources. A large part of the supply comes from areas where normal market or political rules do not apply, and energy is increasingly getting into political focus. Prices are unstable and the trend is rising. As to the environmental aspects of energy, some competitors are less concerned than others, in particular regarding the potential effects on the global climate. Fossil energy is the subject of a separate opinion by the EESC, prepared in parallel with this one. |
| --- | --- |

1.2

We witness a fast growth in global demand, mainly in newly industrialised and some developing countries, of limited fossil energy resources. A large part of the supply comes from areas where normal market or political rules do not apply, and energy is increasingly getting into political focus. Prices are unstable and the trend is rising. As to the environmental aspects of energy, some competitors are less concerned than others, in particular regarding the potential effects on the global climate. Fossil energy is the subject of a separate opinion by the EESC, prepared in parallel with this one.

| 1.3 | Energy policy in the EU needs to address three main challenges: ensuring security of energy supply, satisfying economic needs and reducing effects on the environment. Security of supply in the EU faces the challenge of a high and growing dependence of external energy resources. In order to secure the basic needs of citizens at affordable prices and the competitiveness of industries, energy prices should not be artificially driven up by political decisions, but should however provide incentive to adequate investments in the energy sector. Environmental concerns need to be addressed cost-effectively, by including external costs into energy prices and with the need for global competitiveness in mind. |
| --- | --- |

1.3

Energy policy in the EU needs to address three main challenges: ensuring security of energy supply, satisfying economic needs and reducing effects on the environment. Security of supply in the EU faces the challenge of a high and growing dependence of external energy resources. In order to secure the basic needs of citizens at affordable prices and the competitiveness of industries, energy prices should not be artificially driven up by political decisions, but should however provide incentive to adequate investments in the energy sector. Environmental concerns need to be addressed cost-effectively, by including external costs into energy prices and with the need for global competitiveness in mind.

| 1.4 | In several opinions, the Committee has noted that supplying and using energy puts a strain on the environment, presents risks, depletes resources and involves the problem of external dependence and imponderables. In technical terms, none of the potential future energy supply options and technologies is perfect. None is wholly free of damaging environmental impacts. None is sufficient to cover all needs, and it is difficult to adequately gauge their long-term potential. |
| --- | --- |

1.4

In several opinions, the Committee has noted that supplying and using energy puts a strain on the environment, presents risks, depletes resources and involves the problem of external dependence and imponderables. In technical terms, none of the potential future energy supply options and technologies is perfect. None is wholly free of damaging environmental impacts. None is sufficient to cover all needs, and it is difficult to adequately gauge their long-term potential.

| 1.5 | In order to ensure a sustainable energy future, Europe must, firstly, utilise the existing potential for better energy efficiency. The EESC is preparing an exploratory opinion (demand by the EU-Commission) on this issue. Secondly, renewable energy sources have a role of preference to play as they are by definition sustainable. They can be locally produced and as such they do not emit greenhouse gases, thereby contributing both to security of supply and combating climate change. However, in the foreseeable future they cannot alone cover all needs. The EESC will start working on an opinion on the future energy mix of Europe, based on findings from its opinions on different sources of energy. |
| --- | --- |

1.5

In order to ensure a sustainable energy future, Europe must, firstly, utilise the existing potential for better energy efficiency. The EESC is preparing an exploratory opinion (demand by the EU-Commission) on this issue. Secondly, renewable energy sources have a role of preference to play as they are by definition sustainable. They can be locally produced and as such they do not emit greenhouse gases, thereby contributing both to security of supply and combating climate change. However, in the foreseeable future they cannot alone cover all needs. The EESC will start working on an opinion on the future energy mix of Europe, based on findings from its opinions on different sources of energy.

| 1.6 | The subject of this opinion is the current situation and potential for development of the following renewable energy sources: small-scale hydro-electricity, wind energy, biomass, solar energy and geothermal energy. This is in accordance with the definition of renewable energy sources in the directive on electricity from renewable energy sources, leaving out large hydropower, which in technical terms is clearly renewable and also normally included in energy statistics under renewable energy. |
| --- | --- |

1.6

The subject of this opinion is the current situation and potential for development of the following renewable energy sources: small-scale hydro-electricity, wind energy, biomass, solar energy and geothermal energy. This is in accordance with the definition of renewable energy sources in the directive on electricity from renewable energy sources, leaving out large hydropower, which in technical terms is clearly renewable and also normally included in energy statistics under renewable energy.

| 1.7 | The opinion will examine the main features of these technologies from the point of view of energy policy (security of energy supply, diversification, supply-demand balance), economic policy (cost effectiveness, competition between different energy sources, support arrangements) and environmental policy (emissions, Kyoto Protocol), and will assess the contribution they could realistically make to a future energy mix. |
| --- | --- |

1.7

The opinion will examine the main features of these technologies from the point of view of energy policy (security of energy supply, diversification, supply-demand balance), economic policy (cost effectiveness, competition between different energy sources, support arrangements) and environmental policy (emissions, Kyoto Protocol), and will assess the contribution they could realistically make to a future energy mix.

| 1.8 | The use of hydrogen is a new energy technology which attracts much attention and expectation. As an energy carrier it could provide a solution to the problem of electricity storage (from unsteady electricity sources). Hydrogen can be produced from natural gas, a fossil primary energy carrier which is in high demand for other purposes, or from water with a high input of electricity. Much R&D is still required to possibly conceive a safe and cost efficient hydrogen economy. Fuel cell technology is often linked to the efficient use of hydrogen, but in principle it can function on other fuels, including processed renewables. These possibilities are not specifically explored in this opinion, but they need further attention. |
| --- | --- |

1.8

The use of hydrogen is a new energy technology which attracts much attention and expectation. As an energy carrier it could provide a solution to the problem of electricity storage (from unsteady electricity sources). Hydrogen can be produced from natural gas, a fossil primary energy carrier which is in high demand for other purposes, or from water with a high input of electricity. Much R&D is still required to possibly conceive a safe and cost efficient hydrogen economy. Fuel cell technology is often linked to the efficient use of hydrogen, but in principle it can function on other fuels, including processed renewables. These possibilities are not specifically explored in this opinion, but they need further attention.

2.   Development of Renewable Energy Sources (RES)

| 2.1 | According to EU Commission statistics from 2002, roughly 1100 TWh of renewable energy is used in EU-25, out of the total primary energy consumption of nearly 20 000 TWh. This represents a 5.7 % share for renewables. Out of the total electricity generation of 3 018 TWh, renewable sources represent 387 TWh, which translates to a share for renewables close to 13 %. |
| --- | --- |

2.1

According to EU Commission statistics from 2002, roughly 1100 TWh of renewable energy is used in EU-25, out of the total primary energy consumption of nearly 20 000 TWh. This represents a 5.7 % share for renewables. Out of the total electricity generation of 3 018 TWh, renewable sources represent 387 TWh, which translates to a share for renewables close to 13 %.

| 2.2 | The EU has taken an active leadership role in developing renewable energy sources, with indicative targets set to increase the share of RES in the total energy mix from 6 % to 12 % and in electricity from 13 % to 21 % for EU-25. According to EU Commission's interim estimates, these targets will probably not be fully met, but nevertheless the progress achieved has been impressive. There is general consensus on the need for a steady increase of RES in the energy mix and on the continuing need for economic support. |
| --- | --- |

2.2

The EU has taken an active leadership role in developing renewable energy sources, with indicative targets set to increase the share of RES in the total energy mix from 6 % to 12 % and in electricity from 13 % to 21 % for EU-25. According to EU Commission's interim estimates, these targets will probably not be fully met, but nevertheless the progress achieved has been impressive. There is general consensus on the need for a steady increase of RES in the energy mix and on the continuing need for economic support.

| 2.3 | The use of wind energy has seen enormous growth rates in the past few years, despite coming under increasing criticism recently on both environmental and economic grounds. Meanwhile, the growth in the use of biomass has remained below expectations while its use is already significant today. |
| --- | --- |

2.3

The use of wind energy has seen enormous growth rates in the past few years, despite coming under increasing criticism recently on both environmental and economic grounds. Meanwhile, the growth in the use of biomass has remained below expectations while its use is already significant today.

| 2.4 | Whilst there is a long-established cultural tradition of harnessing the energy of flowing or dammed inland bodies of water, use of marine currents, waves and tidal flows is still in the development phase. An opinion could be devoted to these aspects at a later stage. |
| --- | --- |

2.4

Whilst there is a long-established cultural tradition of harnessing the energy of flowing or dammed inland bodies of water, use of marine currents, waves and tidal flows is still in the development phase. An opinion could be devoted to these aspects at a later stage.

| 2.5 | The level of utilisation of renewable energy sources varies widely between Member States, depending on natural circumstances and on national energy policy choices. Also the development of their use in response to EU policies varies greatly, as do the measures by which the Member States enhance their increased production and use. The Directive 2001/77/EC on Electricity production based on Renewable Energy Sources (RES-E) leaves the organisation of support to renewables to Member States, without any attempts to harmonise the support mechanisms. This is not conducive for an efficient internal market (see 5.6). |
| --- | --- |

2.5

The level of utilisation of renewable energy sources varies widely between Member States, depending on natural circumstances and on national energy policy choices. Also the development of their use in response to EU policies varies greatly, as do the measures by which the Member States enhance their increased production and use. The Directive 2001/77/EC on Electricity production based on Renewable Energy Sources (RES-E) leaves the organisation of support to renewables to Member States, without any attempts to harmonise the support mechanisms. This is not conducive for an efficient internal market (see 5.6).

| 2.6 | Support to renewable energy sources is justified for strategic reasons of security of supply and climate policy. It can also be seen in the light of internalising external costs, as a compensation for lack of internalisation or support directed now or earlier to some traditional energy sources (3). Support is not supposed to distort markets when directed to activities far from the competitive stage. |
| --- | --- |

2.6

Support to renewable energy sources is justified for strategic reasons of security of supply and climate policy. It can also be seen in the light of internalising external costs, as a compensation for lack of internalisation or support directed now or earlier to some traditional energy sources (3). Support is not supposed to distort markets when directed to activities far from the competitive stage.

| 2.7 | Vested interests may slow down changes and hinder fair competition in the energy markets. This includes governments' need of a stable tax or other revenue. Some energy sources, in particular oil products, are heavily taxed in the EU. |
| --- | --- |

2.7

Vested interests may slow down changes and hinder fair competition in the energy markets. This includes governments' need of a stable tax or other revenue. Some energy sources, in particular oil products, are heavily taxed in the EU.

3.   Principal characteristics and potential of various renewable energies

3.1   Small Hydro

| 3.1.1 | Recent growth and development. Hydro generation can be divided in large and small hydro production. Small-scale hydro production (SHPP; smaller than 10MWe) resources are plentiful in the European Union and a considerable potential is still available (nearly 6 000 MW in EU-15 alone). Total small hydro capacity in service at the end of 2003 EU-15 was estimated at about 10,700 MW. |
| --- | --- |

3.1.1

Recent growth and development. Hydro generation can be divided in large and small hydro production. Small-scale hydro production (SHPP; smaller than 10MWe) resources are plentiful in the European Union and a considerable potential is still available (nearly 6 000 MW in EU-15 alone). Total small hydro capacity in service at the end of 2003 EU-15 was estimated at about 10,700 MW.

| 3.1.2 | Role in electric systems and implications for networks. Ideal for electrification of isolated sites, SHPP also contribute to national electric power production when they are connected to the electricity grid. Access to the grid is the first and most important step in allowing independent producers to operate effectively in the market. |
| --- | --- |

3.1.2

Role in electric systems and implications for networks. Ideal for electrification of isolated sites, SHPP also contribute to national electric power production when they are connected to the electricity grid. Access to the grid is the first and most important step in allowing independent producers to operate effectively in the market.

| 3.1.3 | Economics, including support systems. SHPP have been technically feasible for centuries, and given a favourable site, it can be economically attractive. The investment costs in EU (2001) varies between EUR 1 000/kW in Greece and Spain to EUR 6 000/kW in Germany, and average production costs varies between EUR 1,8 cents/kWh in Belgium to EUR 14 cents/kWh in Austria. |
| --- | --- |

3.1.3

Economics, including support systems. SHPP have been technically feasible for centuries, and given a favourable site, it can be economically attractive. The investment costs in EU (2001) varies between EUR 1 000/kW in Greece and Spain to EUR 6 000/kW in Germany, and average production costs varies between EUR 1,8 cents/kWh in Belgium to EUR 14 cents/kWh in Austria.

| 3.1.4 | Availability and role in security of supply. SHPPs are a secure source and can contribute to security of electricity supply. SHPPs have the ability to generate electricity instantly, to supply both base-load and peak-load electricity, have a long lifetime, are relatively easy to maintain and have a very reliable and mature technology. |
| --- | --- |

3.1.4

Availability and role in security of supply. SHPPs are a secure source and can contribute to security of electricity supply. SHPPs have the ability to generate electricity instantly, to supply both base-load and peak-load electricity, have a long lifetime, are relatively easy to maintain and have a very reliable and mature technology.

| 3.1.5 | Environmental performance. Small hydropower is a clean resource, and does not involve combustion, therefore avoiding polluting emissions. Nevertheless, it has a local environmental impact, notably due to the construction work and changes in the aquatic environment, for example due to weirs which obstruct the migration of fish, but measures for reducing or eliminating these impacts are available and applicable. |
| --- | --- |

3.1.5

Environmental performance. Small hydropower is a clean resource, and does not involve combustion, therefore avoiding polluting emissions. Nevertheless, it has a local environmental impact, notably due to the construction work and changes in the aquatic environment, for example due to weirs which obstruct the migration of fish, but measures for reducing or eliminating these impacts are available and applicable.

| 3.1.6 | Prospects for future growth and role. The first objective that was set for 2003 was not reached (12 500 MW). Concerning 2010 objectives, European SHPP capacity should be found in the neighbourhood of 12 000 MW if the average annual growth rate of the last four years is applied. This figure is also going to be below the targets stated by the European Commission's White Paper. |
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3.1.6

Prospects for future growth and role. The first objective that was set for 2003 was not reached (12 500 MW). Concerning 2010 objectives, European SHPP capacity should be found in the neighbourhood of 12 000 MW if the average annual growth rate of the last four years is applied. This figure is also going to be below the targets stated by the European Commission's White Paper.

3.2   Wind power

| 3.2.1 | Recent growth and development. Wind power is today the fastest growing electricity generation technology. In specific locations with favourable conditions it may even become cost-effective without enforced support. Annual growth rates of more than 35 % between 1996 and 2004 have made Europe the leader in wind energy. At the end of 2004 the installed capacity of wind power nearly reached 35 GW in the EU 25 and more than 47 GW worldwide. |
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3.2.1

Recent growth and development. Wind power is today the fastest growing electricity generation technology. In specific locations with favourable conditions it may even become cost-effective without enforced support. Annual growth rates of more than 35 % between 1996 and 2004 have made Europe the leader in wind energy. At the end of 2004 the installed capacity of wind power nearly reached 35 GW in the EU 25 and more than 47 GW worldwide.

| 3.2.2 | Role in electric systems and implications for networks. The intensive use of wind power is associated with significant operational challenges. The availability of wind power cannot be guaranteed in most regions at all times. However, this disadvantage can be largely offset by managing demand for power in combination with other renewable energy sources such as biomass, biogas, hydroelectricity and solar power, and also by developing new storage media.
  The guarantied capacity of wind energy (capacity credit) clearly changes with the season. For instance, in Germany, from the total installed wind power capacity of 36 000 MW foreseen for 2015, the capacity of approx. 1 820 MW to 2 300 MW can be considered as guarantied for the coverage of maximum seasonal load (at a level of reliability of energy supply of 99 %). This corresponds to a share of approx. 6 % of installed wind power capacity. The needed amount of wind-related regulation and reserve power depends on the quality of short term wind power prediction and the resulting deviation between predicted and actual values of wind power feed-in. |
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3.2.2

Role in electric systems and implications for networks. The intensive use of wind power is associated with significant operational challenges. The availability of wind power cannot be guaranteed in most regions at all times. However, this disadvantage can be largely offset by managing demand for power in combination with other renewable energy sources such as biomass, biogas, hydroelectricity and solar power, and also by developing new storage media.

The guarantied capacity of wind energy (capacity credit) clearly changes with the season. For instance, in Germany, from the total installed wind power capacity of 36 000 MW foreseen for 2015, the capacity of approx. 1 820 MW to 2 300 MW can be considered as guarantied for the coverage of maximum seasonal load (at a level of reliability of energy supply of 99 %). This corresponds to a share of approx. 6 % of installed wind power capacity. The needed amount of wind-related regulation and reserve power depends on the quality of short term wind power prediction and the resulting deviation between predicted and actual values of wind power feed-in.

| 3.2.3 | Economics, including support systems. As electricity production is highly dependent on wind conditions, selecting the right site is critical to approaching economic viability (see however 3.2.2). Power production costs of wind-generated electricity have fallen steadily as the technology has developed. A cost reduction of over 50 % in the last 15 years has occurred for electricity from wind power. Presently wind power is approaching price competitiveness with other fuels. For example, in the UK onshore generation presently costs 3,2p/kWh (the wholesale price of electricity is 3p/kWh). The additional cost of making up for intermittency (eg back-up power) is 0,17p/kWh, as long as there is only 20 % wind power or less on the grid. |
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3.2.3

Economics, including support systems. As electricity production is highly dependent on wind conditions, selecting the right site is critical to approaching economic viability (see however 3.2.2). Power production costs of wind-generated electricity have fallen steadily as the technology has developed. A cost reduction of over 50 % in the last 15 years has occurred for electricity from wind power. Presently wind power is approaching price competitiveness with other fuels. For example, in the UK onshore generation presently costs 3,2p/kWh (the wholesale price of electricity is 3p/kWh). The additional cost of making up for intermittency (eg back-up power) is 0,17p/kWh, as long as there is only 20 % wind power or less on the grid.

| 3.2.4 | Availability and role in security of supply. The increased use of wind power in Europe has resulted in fluctuations now also occurring on the generation side due to the fluctuating character of wind power in-feed, thereby increasing the demands placed on control and bringing about rising grid costs. To guarantee stable grid operation despite the high volatility of wind power in-feed, transmission system operators depend on the most accurate possible forecasts of expected wind power generation.
  The foreseeable further expansion of wind energy in Europe means that in future, it will be necessary to pay more attention than before to supply reliability when designing new wind energy plants. Due to the massive and ongoing new expansion of wind power, it has become increasingly difficult to guarantee the stability of the electricity supply — particularly in the event of a power failure. Future offshore developments may provide much higher equivalent hours, compared to onshore wind. |
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3.2.4

Availability and role in security of supply. The increased use of wind power in Europe has resulted in fluctuations now also occurring on the generation side due to the fluctuating character of wind power in-feed, thereby increasing the demands placed on control and bringing about rising grid costs. To guarantee stable grid operation despite the high volatility of wind power in-feed, transmission system operators depend on the most accurate possible forecasts of expected wind power generation.

The foreseeable further expansion of wind energy in Europe means that in future, it will be necessary to pay more attention than before to supply reliability when designing new wind energy plants. Due to the massive and ongoing new expansion of wind power, it has become increasingly difficult to guarantee the stability of the electricity supply — particularly in the event of a power failure. Future offshore developments may provide much higher equivalent hours, compared to onshore wind.

| 3.2.5 | Environmental performance. Wind turbines cause virtually no pollution or emissions during their operation and very little during their manufacture, installation, maintenance and removal. Whilst wind energy is a clean technology, it is not free of impacts on the environment. The main issues are visual impacts. |
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3.2.5

Environmental performance. Wind turbines cause virtually no pollution or emissions during their operation and very little during their manufacture, installation, maintenance and removal. Whilst wind energy is a clean technology, it is not free of impacts on the environment. The main issues are visual impacts.

| 3.2.6 | Prospects for future growth and role. According to the latest projections from the European Commission, it is expected that wind power in Europe could reach a total of about 70 GW by 2010. Looking further ahead, EWEA (European Wind Energy Association) has adopted a target for a total of 180 GW to be reached by 2020, of which 70 GW would be located offshore. By 2010 this is expected to account for 50 % of the net increase, and up to 2020 for just over 70 %. |
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3.2.6

Prospects for future growth and role. According to the latest projections from the European Commission, it is expected that wind power in Europe could reach a total of about 70 GW by 2010. Looking further ahead, EWEA (European Wind Energy Association) has adopted a target for a total of 180 GW to be reached by 2020, of which 70 GW would be located offshore. By 2010 this is expected to account for 50 % of the net increase, and up to 2020 for just over 70 %.

3.3   Biomass

| 3.3.1 | Recent growth and development. In 2001, total biomass use for energy purposes was 650 TWh. To achieve the RES 12 % target 860 TWh more are needed by 2010. Each sector has to contribute: electricity 370 TWh, heat 280 TWh, and biofuels 210 TWh. This would lead to a total biomass accumulated energy production of about 1500 TWh in 2010. This additional biomass production can only be achieved in the short term with strong and targeted measures and actions in all three sectors. The share of liquid biofuels for transport in European consumption is estimated at 1 % today. However, this figure looks likely to rapidly grow because the EU has set respective objectives of 2 % and nearly 6 % for the years 2005 and 2010 through a specific directive. Biofuels should be mainly used in agriculture and forestry, and also, in view of their biodegradability, in water transport, and in other areas where they can bring particular environmental benefits, e.g. densely-populated areas where much of the bus public transport network already runs on bioenergy. |
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3.3.1

Recent growth and development. In 2001, total biomass use for energy purposes was 650 TWh. To achieve the RES 12 % target 860 TWh more are needed by 2010. Each sector has to contribute: electricity 370 TWh, heat 280 TWh, and biofuels 210 TWh. This would lead to a total biomass accumulated energy production of about 1500 TWh in 2010. This additional biomass production can only be achieved in the short term with strong and targeted measures and actions in all three sectors. The share of liquid biofuels for transport in European consumption is estimated at 1 % today. However, this figure looks likely to rapidly grow because the EU has set respective objectives of 2 % and nearly 6 % for the years 2005 and 2010 through a specific directive. Biofuels should be mainly used in agriculture and forestry, and also, in view of their biodegradability, in water transport, and in other areas where they can bring particular environmental benefits, e.g. densely-populated areas where much of the bus public transport network already runs on bioenergy.

| 3.3.2 | Role in electric systems and implications for networks. Biomass electricity can be produced by energy crops, agricultural and industrial biomass waste or through fermentation of biomass to biogas in combined heat and power plants. Biomass power plants have the ability to provide base-load capacity. |
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3.3.2

Role in electric systems and implications for networks. Biomass electricity can be produced by energy crops, agricultural and industrial biomass waste or through fermentation of biomass to biogas in combined heat and power plants. Biomass power plants have the ability to provide base-load capacity.

| 3.3.3 | Economics, incl. support systems. The cost of generating biomass varies depending on the type of technology used, on the size of the power plant and on the cost of the biomass fuel supply. There are different systems and various levels of support for biomass in European countries (in 2003). Fixed price systems range from 3 to over EUR 10 cents/kWh and compensations from levies or certificate prices vary from EUR 0,6 cents/kWh to over EUR 8 cents/kWh. |
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3.3.3

Economics, incl. support systems. The cost of generating biomass varies depending on the type of technology used, on the size of the power plant and on the cost of the biomass fuel supply. There are different systems and various levels of support for biomass in European countries (in 2003). Fixed price systems range from 3 to over EUR 10 cents/kWh and compensations from levies or certificate prices vary from EUR 0,6 cents/kWh to over EUR 8 cents/kWh.

| 3.3.4 | Availability and role in security of supply. The biomass potential in Europe is regarded to be big and not yet used sufficiently. This is clearly the case in some Member States. Biomass can originate from a number of locations or resources — forest, agriculture or waste streams. Wood from forestry and wood-based industries represents the largest resource, and procurement logistics from forest to bio-energy plants are subject to major improvements. Decentralised use, especially of timber from the thinning out of plantations and wood waste from wood chip manufacturers, for heat and electricity production and for the manufacture of wooden pellets represents an excellent opportunity to boost regional economic activity, create jobs in rural areas and reduce imports of crude oil into the EU. There are, however, concerns about over-stimulating energy use of biomass to the detriment of other, non-supported uses. |
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3.3.4

Availability and role in security of supply. The biomass potential in Europe is regarded to be big and not yet used sufficiently. This is clearly the case in some Member States. Biomass can originate from a number of locations or resources — forest, agriculture or waste streams. Wood from forestry and wood-based industries represents the largest resource, and procurement logistics from forest to bio-energy plants are subject to major improvements. Decentralised use, especially of timber from the thinning out of plantations and wood waste from wood chip manufacturers, for heat and electricity production and for the manufacture of wooden pellets represents an excellent opportunity to boost regional economic activity, create jobs in rural areas and reduce imports of crude oil into the EU. There are, however, concerns about over-stimulating energy use of biomass to the detriment of other, non-supported uses.

| 3.3.5 | Environmental performance. Wood is the renewable energy that can be best substituted for fossil fuels, and, moreover, is the leading renewable sector for primary energy production in Europe. Its use in the form of energy contributes to combating global warming since, unlike for fossil energies, the combustion-emitted carbon dioxide is reabsorbed by the growing forests. Incineration of wood-based biomass emits, however, some additional pollutants if not properly filtered. There could be a risk that intensive cultivation of particularly fast-growing and/or high-yielding biomass varieties will have a considerable influence on the sensitive regional — or if the felling of primary forest for the cultivation of biomass is considered — even global environmental and nature-protection balance. |
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3.3.5

Environmental performance. Wood is the renewable energy that can be best substituted for fossil fuels, and, moreover, is the leading renewable sector for primary energy production in Europe. Its use in the form of energy contributes to combating global warming since, unlike for fossil energies, the combustion-emitted carbon dioxide is reabsorbed by the growing forests. Incineration of wood-based biomass emits, however, some additional pollutants if not properly filtered. There could be a risk that intensive cultivation of particularly fast-growing and/or high-yielding biomass varieties will have a considerable influence on the sensitive regional — or if the felling of primary forest for the cultivation of biomass is considered — even global environmental and nature-protection balance.

| 3.3.6 | Prospects for future growth and role. Substantial industrial participation is essential in all but basic research activities if biomass energy is to contribute effectively to the EU's policy objectives. |
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3.3.6

Prospects for future growth and role. Substantial industrial participation is essential in all but basic research activities if biomass energy is to contribute effectively to the EU's policy objectives.

| 3.3.7 | Biofuels. It is under dispute (4), whether in all cases a net energy gain or even a net environmental benefit can be obtained from liquid biofuels, when balancing the invested energy from e.g. fertilizers, agro-machinery, processing etc. with the potential energy gain from the produced biofuels. On the other hand, studies commissioned by the Commission show an overall positive balance, but obviously the net result differs from one crop to another. The Committee recommends, therefore, to clarify this point, e.g. by conducting further studies on this question, as the issue of dealing with the high global oil dependence is so high on the political agenda. Another pertinent question in need of penetration is the EU security of supply and related economic and trade aspects of increased use of liqiud biofuels. |
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3.3.7

Biofuels. It is under dispute (4), whether in all cases a net energy gain or even a net environmental benefit can be obtained from liquid biofuels, when balancing the invested energy from e.g. fertilizers, agro-machinery, processing etc. with the potential energy gain from the produced biofuels. On the other hand, studies commissioned by the Commission show an overall positive balance, but obviously the net result differs from one crop to another. The Committee recommends, therefore, to clarify this point, e.g. by conducting further studies on this question, as the issue of dealing with the high global oil dependence is so high on the political agenda. Another pertinent question in need of penetration is the EU security of supply and related economic and trade aspects of increased use of liqiud biofuels.

3.4   Photovoltaics

| 3.4.1 | Recent growth and development. In 2003, an additional 180 MWp of photovoltaic installations was put into service in the EU, bringing total European capacity up to about 570 MWp. Furthermore, an ever greater share of this installed capacity is now connected to the power grid: Grid-connected installations now represent 86 % of the total cumulated European capacity. |
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3.4.1

Recent growth and development. In 2003, an additional 180 MWp of photovoltaic installations was put into service in the EU, bringing total European capacity up to about 570 MWp. Furthermore, an ever greater share of this installed capacity is now connected to the power grid: Grid-connected installations now represent 86 % of the total cumulated European capacity.

| 3.4.2 | Role in electric systems and implications for networks. The most popular type of solar PV system for homes and businesses in the developed world is grid connected. Connection to the local electricity network allows any power so produced to be sold to the utility.
  Otherwise, if completely independent of the grid, the system needs a battery to which it is connected enabling the use of normal appliances without mains power. Typical off-grid applications are industrial applications such as repeater stations for mobile phones or rural electrification. |
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3.4.2

Role in electric systems and implications for networks. The most popular type of solar PV system for homes and businesses in the developed world is grid connected. Connection to the local electricity network allows any power so produced to be sold to the utility.

Otherwise, if completely independent of the grid, the system needs a battery to which it is connected enabling the use of normal appliances without mains power. Typical off-grid applications are industrial applications such as repeater stations for mobile phones or rural electrification.

| 3.4.3 | Economics, incl. support systems. At present, investment costs, which are still relatively high, are one of the major barriers to the development of PV markets in the short to medium-term, although a downward trend in the prices of systems can be observed over time as production volumes rise, and innovative steps forward in the use of the technology are constantly made. However, on average, the price of modules has fallen by ~5 % per annum over the last 20 years, and is projected to continue to fall, while still being in the range of EUR 0.5/kWh. The current capital cost of a typical installed photovoltaic system ranges from EUR 5/W to EUR 8/W, thus making photovoltaic electricity at present by far the most costly form of renewable energy. |
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3.4.3

Economics, incl. support systems. At present, investment costs, which are still relatively high, are one of the major barriers to the development of PV markets in the short to medium-term, although a downward trend in the prices of systems can be observed over time as production volumes rise, and innovative steps forward in the use of the technology are constantly made. However, on average, the price of modules has fallen by ~5 % per annum over the last 20 years, and is projected to continue to fall, while still being in the range of EUR 0.5/kWh. The current capital cost of a typical installed photovoltaic system ranges from EUR 5/W to EUR 8/W, thus making photovoltaic electricity at present by far the most costly form of renewable energy.

| 3.4.4 | Availability and role in security of supply. Solar radiation provides a huge amount of energy to Earth. The total amount of energy, which arrives from the sun at the earth surface within the space of a year, is equal to approximately 10 000 times the annual global energy consumption. PV can contribute to increase the security of electricity supply in all cases: grid connected systems, stand-alone systems or hybrid systems. |
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3.4.4

Availability and role in security of supply. Solar radiation provides a huge amount of energy to Earth. The total amount of energy, which arrives from the sun at the earth surface within the space of a year, is equal to approximately 10 000 times the annual global energy consumption. PV can contribute to increase the security of electricity supply in all cases: grid connected systems, stand-alone systems or hybrid systems.

| 3.4.5 | Environmental performance. While generating solar power involves none of the polluting emissions or environmental safety concerns associated with conventional generation technologies, the production of photovoltaic cells is related to technologies which use also poisonous substances. Certain environmental and landscape problems associated with plants located in open country do not apply to plants installed at or on existing buildings. |
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3.4.5

Environmental performance. While generating solar power involves none of the polluting emissions or environmental safety concerns associated with conventional generation technologies, the production of photovoltaic cells is related to technologies which use also poisonous substances. Certain environmental and landscape problems associated with plants located in open country do not apply to plants installed at or on existing buildings.

| 3.4.6 | Prospects for future growth and role. Total capacity in the region of 520 MWp was expected in the European Union for the end of 2003. By the end of 2004 in Germany, 800 MWp was in place, after growth of 94 % over the year, well in excess of the 650 MWp objective in the ‘Campaign for Take-Off’. Future European Union installation capacity is estimated at approximately 1 400 MWp in 2010. Forecasts made by the EPIA (European Photovoltaic Industry Association) are much more optimistic. The European Commission scenario of 3 000 MWp at the end of the year 2010 is altogether attainable, but its success depends above all on the political will of each Member State. |
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3.4.6

Prospects for future growth and role. Total capacity in the region of 520 MWp was expected in the European Union for the end of 2003. By the end of 2004 in Germany, 800 MWp was in place, after growth of 94 % over the year, well in excess of the 650 MWp objective in the ‘Campaign for Take-Off’. Future European Union installation capacity is estimated at approximately 1 400 MWp in 2010. Forecasts made by the EPIA (European Photovoltaic Industry Association) are much more optimistic. The European Commission scenario of 3 000 MWp at the end of the year 2010 is altogether attainable, but its success depends above all on the political will of each Member State.

3.5   Solar thermal

3.5.1   Recent growth and development.

The enormous potential of solar thermal is a key issue in moving the heating and cooling sector towards sustainability, reducing environmental impact as well as energy imports. The total technical potential is estimated at 1,4 billion m2 of collector area, resulting in an annual solar yield equivalent to nearly 700 TWh/year. The market in the EU has more than doubled compared to the mid 1990s and is three times bigger than in the late 1980s. Between 1990 and 2001, the average yearly market growth has been 13.6 %. Since 2000, the market has clearly passed the mark of 1 million m2 newly installed collectors per year. After a significant contraction in 2002, mainly originated in Germany, a new peak over 1,4 million m2 was reached in 2003. The use of solar thermal energy is, so far, very unevenly spread in the EU, with Austria having a high coverage while some Mediterranean states — though climatically favoured in this respect — have had hardly any development and in others (e.g. Greece) its use is widespread. This cannot be explained by a lack of economic viability.

3.5.2   Role in electric systems and implications for networks.

Thermal energy can only be transported where district heating systems exists. There is yet no direct impact of solar thermal systems on the electric system. Converting solar heat into electrical energy by Concentrated Solar Thermal Energy systems (‘Solar Troughs’ or ‘Solar Towers’, large scale mirror and focussing technology to produce high-temperature heat to be converted in electricity) is just leaving its R&D-Status (5) and entering the demonstration and commercialisation phase with some plants in Spain.

3.5.3   Economics, incl. support systems.

Solar thermal mainly competes with conventional heating systems based on fossil fuels or electricity. Compared to those, it has a high ratio of investment costs (90 % — 99 % of the total costs) but rather low running costs. The total cost of a typical solar domestic water system for a one family house is in the range of EUR 700 — EUR 5 000. Well-designed solar thermal systems currently produce/replace heat at prices in the range of EUR 3-9 cents/kWh. Given the current prices of electricity, oil and gas and expected increases, such systems could, in combination with modern, well insulated storage systems, become widely available for water heating and heat production.

3.5.4   Availability and role in security of supply.

The theoretical solar energy potential is immense. However, the practical potential of solar thermal energy is restricted by both technical and socio-economic factors. Also, during cloudy winter days, when heat demand is at its peak, the energy is least available.

3.5.5   Environmental performance.

Solar thermal energy cause virtually no pollution or emissions during their operation. The impact is higher during their manufacture, installation, maintenance and removal. Whilst solar thermal energy is a clean technology, it is not free of impacts on the environment.

3.5.6   Prospects for future growth and role.

If the intensity of policies to support solar thermal will remain unchanged, it is expected that the area in operation at EU level will grow by almost 12 % annually. Assuming constant growth rates, then half of the growth in absolute terms will take place between 2010 and 2015. Solar thermal power will grow rapidly in the solar belts of Asia and Africa when the oil price stays as high as presently (around 60$/barrel).

3.6   Geothermal

3.6.1   Recent growth and development

3.6.1.1   Electricity

Only five European countries possess the natural resources needed to produce electricity from geothermal energy with reasonable efficiency. At the end of 2003, installed geothermal capacity in the European Union for electricity production was 820 MWe. More than 96 % (790 MWe) of this installed capacity is in Italy.

3.6.1.2   Heat

The production of heat from geothermal energy can be obtained in two very distinct ways. The first consists of directly exploiting the aquifers whose temperature is included between 30°C and 150°C (so-called low and medium energy applications). The second way to produce heat uses geothermal heat pumps. Total installed capacity for the low energy geothermal sector in the European Union was estimated at 1 130 MWth, i.e. 7,5 % growth with respect to 2002.

| 3.6.2 | Role in electric systems and implications for networks. So far, geothermal electricity can contribute to electricity generation only in areas where geothermal potential exists. |
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3.6.2

Role in electric systems and implications for networks. So far, geothermal electricity can contribute to electricity generation only in areas where geothermal potential exists.

| 3.6.3 | Economics, incl. support systems. The exploitation of geothermal energy is regarded as a high risk investment. In case of investment in an electricity generation plant, the proportion of investment in each phase can be strongly influenced by conditions specific to the site.
  Investment costs and operating costs for heat production vary considerably between countries and between type of use, as well as depending on the characteristics of the resource (local geological conditions), the local heat demand and heat consumption pattern (such as district heating systems, or individual or building geothermal heat-pump systems). Representative costs in European countries are in the following ranges:






  — | investment costs vary from EUR 0,2 — 1,2 million/MW |
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3.6.3

Economics, incl. support systems. The exploitation of geothermal energy is regarded as a high risk investment. In case of investment in an electricity generation plant, the proportion of investment in each phase can be strongly influenced by conditions specific to the site.

Investment costs and operating costs for heat production vary considerably between countries and between type of use, as well as depending on the characteristics of the resource (local geological conditions), the local heat demand and heat consumption pattern (such as district heating systems, or individual or building geothermal heat-pump systems). Representative costs in European countries are in the following ranges:

—

investment costs vary from EUR 0,2 — 1,2 million/MW

| — | production costs vary from EUR 5 — 45/MW. |
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—

production costs vary from EUR 5 — 45/MW.

| 3.6.4 | Availability and role in security of supply. The thermal energy of the earth is immense, but without very deep drilling (technology, cost) only a tiny fraction can be utilised. So far the utilisation of this energy has been mainly limited to areas of geothermal anomalies, in which geological conditions permit a carrier to transfer the heat from deep hot zones up to the surface. Hot dry rock (HDR) resources or other deep-drilling (3 to 5 km) technologies (see 3.6.6) which are currently under research are hoped to open new areas in the production of electricity within the next decade. |
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3.6.4

Availability and role in security of supply. The thermal energy of the earth is immense, but without very deep drilling (technology, cost) only a tiny fraction can be utilised. So far the utilisation of this energy has been mainly limited to areas of geothermal anomalies, in which geological conditions permit a carrier to transfer the heat from deep hot zones up to the surface. Hot dry rock (HDR) resources or other deep-drilling (3 to 5 km) technologies (see 3.6.6) which are currently under research are hoped to open new areas in the production of electricity within the next decade.

| 3.6.5 | Environmental performance. The increase in deployment of geothermal energy could have a large, positive net effect on the environment in comparison with the development of fossil fuels. Environmental problems arise during geothermal plant operation. Geothermal fluids (steam or hot water) usually contain gases such as carbon dioxide (CO2), hydrogen sulphide (H2S), ammonia (NH3), methane (CH4) and trace amounts of other gases, as well as dissolved substances whose concentrations usually increase with temperature. Sodium chloride (NaCl), boron (B), arsenic (As) and mercury (Hg) are, for example, a source of pollution if discharged into the environment. Sealed coaxial heat-pipes avoid transporting of these substances to the surface. |
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3.6.5

Environmental performance. The increase in deployment of geothermal energy could have a large, positive net effect on the environment in comparison with the development of fossil fuels. Environmental problems arise during geothermal plant operation. Geothermal fluids (steam or hot water) usually contain gases such as carbon dioxide (CO2), hydrogen sulphide (H2S), ammonia (NH3), methane (CH4) and trace amounts of other gases, as well as dissolved substances whose concentrations usually increase with temperature. Sodium chloride (NaCl), boron (B), arsenic (As) and mercury (Hg) are, for example, a source of pollution if discharged into the environment. Sealed coaxial heat-pipes avoid transporting of these substances to the surface.

| 3.6.6 | Prospects for future growth and role. First electricity: Efforts, notably in Austria, should bring the European total up to around 1 GWe. In order to supply energy which is technically useable for electricity generation in particular, geothermal reservoirs have to be located sufficiently deep. As this takes place at depths of at least 2

  km, but preferably 4-5 km or more, costly deep drilling is necessary.The second European objective concerns the production of heat. Forecasts are based on an average growth of 50 MWth per year. All of these efforts should bring the sector up to 8 200 MWth, markedly higher than the targeted 5 000 MWth. Low surface heat pumps, often considered to belong also to the heading ‘Geothermal’, however, have a large potential for efficient low-temperature applications like heating of buildings etc.
  The strategy should give appropriate emphasis to the R&D measures which are required to develop geothermal energy, until it becomes possible, in the context of a changing energy market, to provide a more accurate estimation and evaluation of the long-term costs and the achievable potential of such technology. |
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3.6.6

Formula

The second European objective concerns the production of heat. Forecasts are based on an average growth of 50 MWth per year. All of these efforts should bring the sector up to 8 200 MWth, markedly higher than the targeted 5 000 MWth. Low surface heat pumps, often considered to belong also to the heading ‘Geothermal’, however, have a large potential for efficient low-temperature applications like heating of buildings etc.

The strategy should give appropriate emphasis to the R&D measures which are required to develop geothermal energy, until it becomes possible, in the context of a changing energy market, to provide a more accurate estimation and evaluation of the long-term costs and the achievable potential of such technology.

4.   Views for the future role of renewable energies up to 2030-2040

| 4.1 | The EU Commission has outlined energy scenarios up to 2030. According to the Commission's ‘European Energy and Transport — Trends to 2030’ (6) publication, the share of renewables under baseline conditions, including wind, hydro, biomass and other renewables would reach roughly 8,6 % of primary energy use and 17 % of electricity generation by 2030. This scenario does not take into account the effects of EU renewables policies introduced in the first years of this century |
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4.1

The EU Commission has outlined energy scenarios up to 2030. According to the Commission's ‘European Energy and Transport — Trends to 2030’ (6) publication, the share of renewables under baseline conditions, including wind, hydro, biomass and other renewables would reach roughly 8,6 % of primary energy use and 17 % of electricity generation by 2030. This scenario does not take into account the effects of EU renewables policies introduced in the first years of this century

| 4.2 | The International Energy Agency IEA forecasts a world-wide doubling of electricity demand by 2030, most of this occurring in developing countries. Renewable energy sources will increase their contribution from 2 % up to 6 % globally by 2030. In OECD countries, the share of renewables will increase from 6,4 % in 2000 up to 8 % by 2030. |
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4.2

The International Energy Agency IEA forecasts a world-wide doubling of electricity demand by 2030, most of this occurring in developing countries. Renewable energy sources will increase their contribution from 2 % up to 6 % globally by 2030. In OECD countries, the share of renewables will increase from 6,4 % in 2000 up to 8 % by 2030.

| 4.3 | The IEA has also developed scenarios for electricity production from renewable sources, predicting that Europe will lead the industrialised world in developing renewables. According to their ‘reference scenario’, the share of renewable electricity in OECD Europe would amount to roughly 20 % by 2030. If a full range of policy tools now under consideration are employed in Europe, the share of renewable electricity could approach 33 % by 2030 (‘alternative scenario’). This would undoubtedly require a full range of support policies to be used to their full extent. |
| --- | --- |

4.3

The IEA has also developed scenarios for electricity production from renewable sources, predicting that Europe will lead the industrialised world in developing renewables. According to their ‘reference scenario’, the share of renewable electricity in OECD Europe would amount to roughly 20 % by 2030. If a full range of policy tools now under consideration are employed in Europe, the share of renewable electricity could approach 33 % by 2030 (‘alternative scenario’). This would undoubtedly require a full range of support policies to be used to their full extent.

| 4.4 | The European electricity industry association EURELECTRIC produces scenarios where the share of renewables, including hydro, would increase from roughly 16 % in 2000 (in EU-15) up to 22,5 % in 2020 (in EU-25), including Norway and Switzerland. |
| --- | --- |

4.4

The European electricity industry association EURELECTRIC produces scenarios where the share of renewables, including hydro, would increase from roughly 16 % in 2000 (in EU-15) up to 22,5 % in 2020 (in EU-25), including Norway and Switzerland.

| 4.5 | The European Renewable Energy Council EREC has recently published its own vision, aiming for 50 % share of renewables in the global primary energy consumption by 2040. EREC also envisions that 80 % of the global electricity generation would be based on renewables by 2040. |
| --- | --- |

4.5

The European Renewable Energy Council EREC has recently published its own vision, aiming for 50 % share of renewables in the global primary energy consumption by 2040. EREC also envisions that 80 % of the global electricity generation would be based on renewables by 2040.

| 4.6 | The World Energy Council estimates that renewables will play a rather marginal role on a global scale on short term, but their importance will increase in the long term. WEC does not support any compulsory targets for renewable energy. |
| --- | --- |

4.6

The World Energy Council estimates that renewables will play a rather marginal role on a global scale on short term, but their importance will increase in the long term. WEC does not support any compulsory targets for renewable energy.

| 4.7 | Summarising from the above scenarios, it can be concluded that the various bodies usually forecast a rather gradual change in fuel consumption, with the notable exception of EREC, which forecasts a rather revolutionary vision for the future. |
| --- | --- |

4.7

Summarising from the above scenarios, it can be concluded that the various bodies usually forecast a rather gradual change in fuel consumption, with the notable exception of EREC, which forecasts a rather revolutionary vision for the future.

| 4.8 | The European Parliament has (September Plenary) voted on a report on renewable energy, which includesa proposal for an EU target of 20 % of renewables in 2020. |
| --- | --- |

4.8

The European Parliament has (September Plenary) voted on a report on renewable energy, which includesa proposal for an EU target of 20 % of renewables in 2020.

| 4.9 | The Commission will publish its communication on the state of play of the RES-E directive before the end of 2005. This will include an estimate of reaching set targets by 2010 and possible proposals for further action, including on harmonisation of support schemes in Member States. |
| --- | --- |

4.9

The Commission will publish its communication on the state of play of the RES-E directive before the end of 2005. This will include an estimate of reaching set targets by 2010 and possible proposals for further action, including on harmonisation of support schemes in Member States.

5.   Conclusions

| 5.1 | The previous chapters have shown that renewable energy plays an important role in Europe's energy mix and holds considerable potential to increase its share in both total energy consumption and production in Europe. Many forms of renewable energy are particularly well suited for small-scale local solutions. |
| --- | --- |

5.1

The previous chapters have shown that renewable energy plays an important role in Europe's energy mix and holds considerable potential to increase its share in both total energy consumption and production in Europe. Many forms of renewable energy are particularly well suited for small-scale local solutions.

| 5.2 | No one energy form or sector can meet the overall demands of the enlarged European Union and the growing demands worldwide. The EU needs a balanced energy mix, tying in with the objectives of the sustainable development strategy. Renewables have the potential to become a significant element of this future energy mix, but many problems need to be solved before this potential, which has also been foreseen by the European Commission and Parliament, can be tapped. The EESC is currently drawing up a separate opinion on the energy mix. |
| --- | --- |

5.2

No one energy form or sector can meet the overall demands of the enlarged European Union and the growing demands worldwide. The EU needs a balanced energy mix, tying in with the objectives of the sustainable development strategy. Renewables have the potential to become a significant element of this future energy mix, but many problems need to be solved before this potential, which has also been foreseen by the European Commission and Parliament, can be tapped. The EESC is currently drawing up a separate opinion on the energy mix.

| 5.3 | Much of Europe's RES development is based on intermittent sources like wind generation and photo-voltaic panels which adds to, rather than replaces, generation capacity and network needs. This raises issues about transmission reinforcements and operational aspects of ensuring security of electricity supply. While general consensus does not yet exist on the potential extent to which intermittent sources can be absorbed by the electricity system, the limit of 15 % to 20 % of the total electrical energy contribution is often cited. Beyond this limit, only additional storage technologies (e.g. hydrogen) could help. |
| --- | --- |

5.3

Much of Europe's RES development is based on intermittent sources like wind generation and photo-voltaic panels which adds to, rather than replaces, generation capacity and network needs. This raises issues about transmission reinforcements and operational aspects of ensuring security of electricity supply. While general consensus does not yet exist on the potential extent to which intermittent sources can be absorbed by the electricity system, the limit of 15 % to 20 % of the total electrical energy contribution is often cited. Beyond this limit, only additional storage technologies (e.g. hydrogen) could help.

| 5.4 | The issue of dealing with the global oil dependence is so high on the political agenda. The Committee therefore recommends to further study the questions of net energy gain and net environmental benefit from liquid biofuels, based on different crops. Also the issues of EU security of supply and related economic and trade aspects of increased use of liquid biofuels need serious attention. |
| --- | --- |

5.4

The issue of dealing with the global oil dependence is so high on the political agenda. The Committee therefore recommends to further study the questions of net energy gain and net environmental benefit from liquid biofuels, based on different crops. Also the issues of EU security of supply and related economic and trade aspects of increased use of liquid biofuels need serious attention.

| 5.5 | Technological development is required to make use of the full potential of renewables. The extraction of heat or cold from the environment through heat pumps — a technology with huge potential — hardly receives any attention in EU renewable energies policy. Equally surprising, little attention is given in RES development to solar thermal panels for hot water production — again a technology that is much closer to market conditions in large parts of Europe. The EESC considers that even today there are considerable areas of use where fossil energy can economically be replaced by renewable energy for heating purposes. |
| --- | --- |

5.5

Technological development is required to make use of the full potential of renewables. The extraction of heat or cold from the environment through heat pumps — a technology with huge potential — hardly receives any attention in EU renewable energies policy. Equally surprising, little attention is given in RES development to solar thermal panels for hot water production — again a technology that is much closer to market conditions in large parts of Europe. The EESC considers that even today there are considerable areas of use where fossil energy can economically be replaced by renewable energy for heating purposes.

| 5.6 | Renewables require economic support, because at present many RES technologies cannot yet compete in the market. However, changes in the global energy markets, in particular increased prices and price volatility of especially oil, as well as concerns over security of supply changes the situation for renewables. The potential they offer for innovation and, after successful market entry, new business and workplaces is of increasing importance. EU as a frontrunner in renewables technology can also stimulate global success of business in this sector. |
| --- | --- |

5.6

Renewables require economic support, because at present many RES technologies cannot yet compete in the market. However, changes in the global energy markets, in particular increased prices and price volatility of especially oil, as well as concerns over security of supply changes the situation for renewables. The potential they offer for innovation and, after successful market entry, new business and workplaces is of increasing importance. EU as a frontrunner in renewables technology can also stimulate global success of business in this sector.

| 5.7 | While enhancing the use of renewable energy creates positive possibilities for new business and specific employment, it can, if wrongly managed, also become a burden on big parts of the economy, in particular consumers and energy intensive industries. Policies that contribute to ever higher energy prices can be dangerous in a situation, where all efforts have to be directed to the Lisbon Strategy, i.e. to competitiveness, economic growth and overall employment in Europe on a sustainable track. While high oil prices hit all economies on the globe, excessive electricity prices may hurt in particular the EU-25. |
| --- | --- |

5.7

While enhancing the use of renewable energy creates positive possibilities for new business and specific employment, it can, if wrongly managed, also become a burden on big parts of the economy, in particular consumers and energy intensive industries. Policies that contribute to ever higher energy prices can be dangerous in a situation, where all efforts have to be directed to the Lisbon Strategy, i.e. to competitiveness, economic growth and overall employment in Europe on a sustainable track. While high oil prices hit all economies on the globe, excessive electricity prices may hurt in particular the EU-25.

| 5.8 | Some of the current national support schemes tend to be very costly, putting both consumers' interests and the competitiveness of European industries at risk. Support schemes and network costs, assuming the EU renewables objectives will actually be reached in 2010, represent an increase of 13 % in wholesale electricity prices, or even 25 %, if support levels — which are already applied in Germany — were actually required in order to reach the target. Including estimated network and regulation costs further raises the figure to 34 %. The resulting equivalent cost per ton of avoided CO2 is estimated at EUR 88, EUR 109 and EUR 150 respectively. |
| --- | --- |

5.8

Some of the current national support schemes tend to be very costly, putting both consumers' interests and the competitiveness of European industries at risk. Support schemes and network costs, assuming the EU renewables objectives will actually be reached in 2010, represent an increase of 13 % in wholesale electricity prices, or even 25 %, if support levels — which are already applied in Germany — were actually required in order to reach the target. Including estimated network and regulation costs further raises the figure to 34 %. The resulting equivalent cost per ton of avoided CO2 is estimated at EUR 88, EUR 109 and EUR 150 respectively.

| 5.9 | Support mechanisms have hence to be carefully considered and designed. They must be efficient and cost-effective, delivering the desired results at least cost. Some forms of renewables which are already close to market prices hardly need any support, while others require still only support for R&D measures. In the case of biomass, non-supported uses of the products from limited land areas have to be taken into account. Rise in generic (mainly fossil) energy prices gives reasons to re-evaluate the needs and levels of support. Particularly important are the effects of the EU emissions trading scheme, which as such has already caused rising electricity prices. To achieve the identical aim, double or overlapping measures have to avoided. |
| --- | --- |

5.9

Support mechanisms have hence to be carefully considered and designed. They must be efficient and cost-effective, delivering the desired results at least cost. Some forms of renewables which are already close to market prices hardly need any support, while others require still only support for R&D measures. In the case of biomass, non-supported uses of the products from limited land areas have to be taken into account. Rise in generic (mainly fossil) energy prices gives reasons to re-evaluate the needs and levels of support. Particularly important are the effects of the EU emissions trading scheme, which as such has already caused rising electricity prices. To achieve the identical aim, double or overlapping measures have to avoided.

| 5.10 | While support schemes are required for new technologies to ripen and enter the market, they cannot be indefinitely maintained. Influences on employment have to be carefully considered in order not to create jobs that will be lost when the support is ended. |
| --- | --- |

5.10

While support schemes are required for new technologies to ripen and enter the market, they cannot be indefinitely maintained. Influences on employment have to be carefully considered in order not to create jobs that will be lost when the support is ended.

| 5.11 | The EU RES-E Directive leaves the organisation of such support to Member States. This has led to an incoherent and in some cases market-distorting patchwork of support mechanisms. The result is a loss of synergies and in parts of the EU a lack of market incentives and drivers, while elsewhere arise unnecessarily high costs. Most of this could be avoided through a common European approach. The EESC addressed this problem already in its opinion on the RES-E Directive (see footnote 1). While an ideal common European solution does not yet seem to be at hand, the choice of national support schemes seems to slide towards more use of green certificates. As experiences accrue the issue has to be further studied and developed. |
| --- | --- |

5.11

The EU RES-E Directive leaves the organisation of such support to Member States. This has led to an incoherent and in some cases market-distorting patchwork of support mechanisms. The result is a loss of synergies and in parts of the EU a lack of market incentives and drivers, while elsewhere arise unnecessarily high costs. Most of this could be avoided through a common European approach. The EESC addressed this problem already in its opinion on the RES-E Directive (see footnote 1). While an ideal common European solution does not yet seem to be at hand, the choice of national support schemes seems to slide towards more use of green certificates. As experiences accrue the issue has to be further studied and developed.

| 5.12 | After the initial ‘pioneering’ phase there is a definitive need to reassess EU policies for renewable energy sources. The changing situation in the global energy markets with high and volatile prices, effects of related EU policies and measures, in particular emissions trading, and the Lisbon strategy goals have to be taken carefully into account. Focus has to be set on ensuring a steady long term development by concentrating on R&D and technology development. |
| --- | --- |

5.12

After the initial ‘pioneering’ phase there is a definitive need to reassess EU policies for renewable energy sources. The changing situation in the global energy markets with high and volatile prices, effects of related EU policies and measures, in particular emissions trading, and the Lisbon strategy goals have to be taken carefully into account. Focus has to be set on ensuring a steady long term development by concentrating on R&D and technology development.

Brussels, 15 December 2005.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  See: Promoting renewable energy: Means of action and financing instruments (OJ C 108, 30.4.2004), Nuclear Fusion (OJ C 302, 7.12.2004), The use of geothermal energy (OJ C 108, 30.4.2004).

1

Promoting renewable energy: Means of action and financing instruments

Nuclear Fusion

The use of geothermal energy

(2)  Energy is not actually consumed, but merely converted and, in the process, used. This happens through conversion processes such as coal combustion, the conversion of wind energy into electricity, and nuclear fission (conservation of energy; E = mc2). However, the terms ‘energy supply’, ‘energy production’ and ‘energy consumption’ are also used.

2

2

(3)  In some Member States (Germany) all energy use – with very few exceptions – is subject to taxation (Öko-Steuer).

3

(4)  David Pimentel and Ted. W. Patzek, Natural Resources Research Vol. 14, No 1, 2005.

4

(5)  http://europa.eu.int/comm/research/energy/pdf/cst_en.pdf.

5

(6)  EU-Commission, Directorate-General for Energy and Transport, January 2003.

6

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| 17.3.2006 | EN | Official Journal of the European Union | C 65/113 |
| --- | --- | --- | --- |

17.3.2006

EN

Official Journal of the European Union

C 65/113

---

Opinion of the European Economic and Social Committee on the ‘Green Paper: Mortgage Credit in the EU’

(COM(2005) 327 final)

(2006/C 65/21)

On 19 July 2005 the European Commission decided to consult the European Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on the Green Paper: Mortgage Credit in the EU

The Section for the Single Market, Production and Consumption, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 11 November 2005. The rapporteur was Mr Burani.

At its 422nd plenary session (meeting of 15 December 2005), the European Economic and Social Committee adopted the following opinion by 97 votes in favour with 1 abstention.

1.   Summary of the position adopted

| 1.1 | The Green Paper on mortgage credit for residential properties in the EU forms part of the policy of integrating financial services at European level. The Green Paper is currently being considered by the sectors concerned. |
| --- | --- |

1.1

The Green Paper on mortgage credit for residential properties in the EU forms part of the policy of integrating financial services at European level. The Green Paper is currently being considered by the sectors concerned.

| 1.2 | The Committee, while agreeing with the aims proposed by the Commission, takes the view that full integration will be difficult to achieve in the short term. It must be borne in mind that mortgage credit markets in the EU differ to a considerable extent and that each has characteristics of its own. |
| --- | --- |

1.2

The Committee, while agreeing with the aims proposed by the Commission, takes the view that full integration will be difficult to achieve in the short term. It must be borne in mind that mortgage credit markets in the EU differ to a considerable extent and that each has characteristics of its own.

| 1.3 | In the Green Paper the Commission raises a number of questions, which the Committee endeavours to answer. The first series of questions concerns consumer protection: on this point the EESC asks that the codes of conduct be drawn up by the associations of European financial institutions in consultation with consumer associations, checked by the national ombudsmen and registered with courts or chambers of commerce. It also proposes the provision of information (including pre-contractual information) with clear and transparent content, which would apply, perhaps even more strictly, to credit intermediaries. As regards early repayment, the EESC takes the view that the calculation should rely on formulas of financial mathematics which also take account of the actual burden borne by the provider. On the question of whether there should be a European standard covering both the method of calculation and the cost elements, the EESC maintains that a lowest common denominator could be made up of the cost of drawing up the file, the cost of setting up the mortgage, clearly identifiable administrative costs and the cost of insurance. However, it points out that the proposal to standardise mortgage contracts must not impede the supply of new products, as that would amount to a brake on innovation. The EESC is in favour of setting up mediation structures, but not arbitration structures, since the latter do not come under the scope of consumer protection. |
| --- | --- |

1.3

In the Green Paper the Commission raises a number of questions, which the Committee endeavours to answer. The first series of questions concerns consumer protection: on this point the EESC asks that the codes of conduct be drawn up by the associations of European financial institutions in consultation with consumer associations, checked by the national ombudsmen and registered with courts or chambers of commerce. It also proposes the provision of information (including pre-contractual information) with clear and transparent content, which would apply, perhaps even more strictly, to credit intermediaries. As regards early repayment, the EESC takes the view that the calculation should rely on formulas of financial mathematics which also take account of the actual burden borne by the provider. On the question of whether there should be a European standard covering both the method of calculation and the cost elements, the EESC maintains that a lowest common denominator could be made up of the cost of drawing up the file, the cost of setting up the mortgage, clearly identifiable administrative costs and the cost of insurance. However, it points out that the proposal to standardise mortgage contracts must not impede the supply of new products, as that would amount to a brake on innovation. The EESC is in favour of setting up mediation structures, but not arbitration structures, since the latter do not come under the scope of consumer protection.

| 1.4 | A second series of questions concerns legal issues. The EESC confines itself to a few comments on these. First and foremost, it points out that the rule on the jurisdiction of the consumer's country of residence limits supply considerably; moreover, it points out the need to establish clearly the language to be used in the contract, contacts and correspondence. |
| --- | --- |

1.4

A second series of questions concerns legal issues. The EESC confines itself to a few comments on these. First and foremost, it points out that the rule on the jurisdiction of the consumer's country of residence limits supply considerably; moreover, it points out the need to establish clearly the language to be used in the contract, contacts and correspondence.

| 1.5 | A third series of questions concerns mortgage collateral. The EESC takes the view that the Commission should continue its work of promoting cooperation between property owners and controllers of land registers (also drawing up an annual report on the results achieved). In general terms the EESC thinks that the Euromortgage idea deserves to be encouraged. |
| --- | --- |

1.5

A third series of questions concerns mortgage collateral. The EESC takes the view that the Commission should continue its work of promoting cooperation between property owners and controllers of land registers (also drawing up an annual report on the results achieved). In general terms the EESC thinks that the Euromortgage idea deserves to be encouraged.

| 1.6 | The last question concerns the financing of mortgage credit. On this point the EESC agrees with the idea of a pan-European financing system as proposed by the Commission, but thinks that such an objective can be achieved only in the long term and intends to clarify its position on this at a later date. |
| --- | --- |

1.6

The last question concerns the financing of mortgage credit. On this point the EESC agrees with the idea of a pan-European financing system as proposed by the Commission, but thinks that such an objective can be achieved only in the long term and intends to clarify its position on this at a later date.

2.   Background

| 2.1 | As part of its policy for the integration of financial services, the Commission is tackling the subject of residential mortgage credit in the EU, proposing to move on to practical regulatory measures should the current studies and contacts show that such measures would result in an integrated market which would be ‘more efficient and competitive for the benefit of all’. The present Green Paper is based on a study (‘The integration of the EU mortgage credit markets’) drawn up for the Commission by the ‘Forum Group on Mortgage Credit’ (FGMC), even if it does not necessarily always follow the same line. |
| --- | --- |

2.1

As part of its policy for the integration of financial services, the Commission is tackling the subject of residential mortgage credit in the EU, proposing to move on to practical regulatory measures should the current studies and contacts show that such measures would result in an integrated market which would be ‘more efficient and competitive for the benefit of all’. The present Green Paper is based on a study (‘The integration of the EU mortgage credit markets’) drawn up for the Commission by the ‘Forum Group on Mortgage Credit’ (FGMC), even if it does not necessarily always follow the same line.

| 2.2 | The responses to the Green Paper from the all the sectors concerned are expected by the end of November 2005 and will be followed by a hearing in December. The Commission will then assess what measures, if any, on its part are needed. |
| --- | --- |

2.2

The responses to the Green Paper from the all the sectors concerned are expected by the end of November 2005 and will be followed by a hearing in December. The Commission will then assess what measures, if any, on its part are needed.

3.   The Green Paper (GP): The Committee's comments

3.1   Assessing the case for Commission action (point I of the GP)

| 3.1.1 | The Commission points out that the mortgage credit market is one of the most complex financial markets, both because of the large number of players involved and because of the variety of technical forms it can take. There is also a direct relationship between the mortgage credit market and the macro-economy, in the sense that any variation in economic cycles and rates of interest influences the volume and the trend of mortgage credit. In practical terms, the growth in the volume of credit in the EU has been influenced by macro-economic factors (reduction of interest rates and rapid growth in property prices in many countries) and by structural factors (growing liberalisation and integration of the financial markets). |
| --- | --- |

3.1.1

The Commission points out that the mortgage credit market is one of the most complex financial markets, both because of the large number of players involved and because of the variety of technical forms it can take. There is also a direct relationship between the mortgage credit market and the macro-economy, in the sense that any variation in economic cycles and rates of interest influences the volume and the trend of mortgage credit. In practical terms, the growth in the volume of credit in the EU has been influenced by macro-economic factors (reduction of interest rates and rapid growth in property prices in many countries) and by structural factors (growing liberalisation and integration of the financial markets).

| 3.1.2 | Despite these common trends, the EU mortgage credit markets remain profoundly different: each has its own characteristics in terms of products, the profile of lenders, the distribution structures, the timescale of loans, taxation of property and refinancing mechanisms. These differences are the result of the differing attitudes of Member States with regard to regulation, but also of factors of a historical, economic and social nature. These factors sometimes have features which are not easy to reduce to a common denominator. The picture is further complicated by state interventions in municipal building, tax systems, prudential rules, levels of competition and risks of insolvency, which vary from one country to another. |
| --- | --- |

3.1.2

Despite these common trends, the EU mortgage credit markets remain profoundly different: each has its own characteristics in terms of products, the profile of lenders, the distribution structures, the timescale of loans, taxation of property and refinancing mechanisms. These differences are the result of the differing attitudes of Member States with regard to regulation, but also of factors of a historical, economic and social nature. These factors sometimes have features which are not easy to reduce to a common denominator. The picture is further complicated by state interventions in municipal building, tax systems, prudential rules, levels of competition and risks of insolvency, which vary from one country to another.

| 3.1.3 | Given this situation it is not surprising that markets are not very integrated, but it is necessary to take account of the fact that cross-frontier sales of property constitute barely 1 % of the overall market for residential building. The Commission takes the view that, hypothetically, the benefits of integration would be a reduction in the cost of mortgage credit, a higher level of consumer protection guaranteed by law and an increase in the number of potential users of such credit, thanks to the inclusion of those whose credit profile is low or incomplete. |
| --- | --- |

3.1.3

Given this situation it is not surprising that markets are not very integrated, but it is necessary to take account of the fact that cross-frontier sales of property constitute barely 1 % of the overall market for residential building. The Commission takes the view that, hypothetically, the benefits of integration would be a reduction in the cost of mortgage credit, a higher level of consumer protection guaranteed by law and an increase in the number of potential users of such credit, thanks to the inclusion of those whose credit profile is low or incomplete.

| 3.1.4 | The Committee agrees with the aims proposed by the Commission; however, it considers that the differences between the various markets listed by the Commission (and other differences which will be mentioned in this document) as so many and such as to suggest that a total integration will be very difficult to achieve in the short term. For the moment it will be necessary to take action in the sectors where harmonisation does not present excessive difficulties, questioning each time whether the game is worth the candle, and without having the ambition of dictating rules — or changing them — just for the satisfaction of following programmatic or ideological imperatives. |
| --- | --- |

3.1.4

The Committee agrees with the aims proposed by the Commission; however, it considers that the differences between the various markets listed by the Commission (and other differences which will be mentioned in this document) as so many and such as to suggest that a total integration will be very difficult to achieve in the short term. For the moment it will be necessary to take action in the sectors where harmonisation does not present excessive difficulties, questioning each time whether the game is worth the candle, and without having the ambition of dictating rules — or changing them — just for the satisfaction of following programmatic or ideological imperatives.

| 3.1.5 | One point in particular should be borne in mind. As mentioned above, cross-frontier purchases of property amount to only 1 % of the market and concern almost exclusively holiday homes and property in frontier areas; it does not therefore seem likely that this small market share was the main aim of the Commission, but rather the strategic objective mentioned in point 3.1.3 above. In other words, the Commission envisages an integration such as to enable any citizen of the Union to acquire a property in his own country or another, using the services of a financial intermediary in his own country, the country where the property is situated or a third country. |
| --- | --- |

3.1.5

One point in particular should be borne in mind. As mentioned above, cross-frontier purchases of property amount to only 1 % of the market and concern almost exclusively holiday homes and property in frontier areas; it does not therefore seem likely that this small market share was the main aim of the Commission, but rather the strategic objective mentioned in point 3.1.3 above. In other words, the Commission envisages an integration such as to enable any citizen of the Union to acquire a property in his own country or another, using the services of a financial intermediary in his own country, the country where the property is situated or a third country.

3.2   Consumer protection (point II of the GP)

| 3.2.1 | On information the Commission raises four questions. On the first of these, concerning codes of conduct
   (1)
  , the EESC points out that they are by definition voluntary; the problem arises with the content, which should be drawn up by the associations of European financial institutions in consultation with consumer associations, so that it either includes sanctions mechanisms or is checked by the national ombudsmen and registered with courts or chambers of commerce. Such codes should be signed by all the associates in the trade category, and the contracts and information documents should expressly mention the fact that the provider of the service has signed the code of conduct. |
| --- | --- |

3.2.1

On information the Commission raises four questions. On the first of these, concerning codes of conduct
   (1)
  , the EESC points out that they are by definition voluntary; the problem arises with the content, which should be drawn up by the associations of European financial institutions in consultation with consumer associations, so that it either includes sanctions mechanisms or is checked by the national ombudsmen and registered with courts or chambers of commerce. Such codes should be signed by all the associates in the trade category, and the contracts and information documents should expressly mention the fact that the provider of the service has signed the code of conduct.

| 3.2.2 | The second question concerns the content of the information, which is an essential element: all the aspects of the contract — legal, technical and accounting — must be clear to the consumer, but it is not easy to find a satisfactory compromise between transparency, precision and ease of comprehension. The need to explain the technical terms makes the texts longer and does not necessarily contribute to their clarity. The survey of failures to meet contractual obligations and the consequences of such failures should also form part of the information: the EESC suggests that the information on the most frequent aspects should be included in the codes of conduct in the form of a standardised text. |
| --- | --- |

3.2.2

The second question concerns the content of the information, which is an essential element: all the aspects of the contract — legal, technical and accounting — must be clear to the consumer, but it is not easy to find a satisfactory compromise between transparency, precision and ease of comprehension. The need to explain the technical terms makes the texts longer and does not necessarily contribute to their clarity. The survey of failures to meet contractual obligations and the consequences of such failures should also form part of the information: the EESC suggests that the information on the most frequent aspects should be included in the codes of conduct in the form of a standardised text.

| 3.2.3 | Third question: the points made above also apply, at least in part, to pre-contractual information; this could make possible comparisons with other offers, and thus contribute to an informed choice at national level, but at this stage is unlikely to assist the comparison with credits offered by other countries. There is also a European initiative on the subject promoted by the trade federations, which have adopted the ‘European Information Sheet’, drawn up with the help of the consumer associations. Although this initiative has been supported by most of the financial institutions, it would seem, according to some, to be put into practice with little conviction in a number of countries. The Commission is investigating the matter and could if necessary adopt coercive measures which could involve turning the agreement into a regulation. |
| --- | --- |

3.2.3

Third question: the points made above also apply, at least in part, to pre-contractual information; this could make possible comparisons with other offers, and thus contribute to an informed choice at national level, but at this stage is unlikely to assist the comparison with credits offered by other countries. There is also a European initiative on the subject promoted by the trade federations, which have adopted the ‘European Information Sheet’, drawn up with the help of the consumer associations. Although this initiative has been supported by most of the financial institutions, it would seem, according to some, to be put into practice with little conviction in a number of countries. The Commission is investigating the matter and could if necessary adopt coercive measures which could involve turning the agreement into a regulation.

| 3.2.4 | Fourth question: there is no doubt that the provision on information must be applied and, indeed, even more rigorously, to credit intermediaries (brokers and others). |
| --- | --- |

3.2.4

Fourth question: there is no doubt that the provision on information must be applied and, indeed, even more rigorously, to credit intermediaries (brokers and others).

| 3.2.5 | On advice for borrowers the Commission raises two questions. The first has long been debated: should there be an obligation for the provider to give advice on the best form of loan, timescale, price etc.? The Commission points out that advice in writing — as requested by the consumers — exposes the provider to legal risks and compensation claims. It is unlikely that a provider would be prepared to take on this burden, above all in the view of the fact that it would be difficult for him to show a posteriori that he had not been in possession of all the necessary factors for evaluation or that he had taken account of possible future eventualities. Making advice compulsory would greatly reduce the credit on offer, and it is therefore undesirable; however, it cannot be excluded that under pressure of competition certain providers or intermediaries may decide to offer this service, either free of charge or in return for payment. |
| --- | --- |

3.2.5

On advice for borrowers the Commission raises two questions. The first has long been debated: should there be an obligation for the provider to give advice on the best form of loan, timescale, price etc.? The Commission points out that advice in writing — as requested by the consumers — exposes the provider to legal risks and compensation claims. It is unlikely that a provider would be prepared to take on this burden, above all in the view of the fact that it would be difficult for him to show a posteriori that he had not been in possession of all the necessary factors for evaluation or that he had taken account of possible future eventualities. Making advice compulsory would greatly reduce the credit on offer, and it is therefore undesirable; however, it cannot be excluded that under pressure of competition certain providers or intermediaries may decide to offer this service, either free of charge or in return for payment.

| 3.2.6 | With regard to the second question, on the responsibility for any advice or information provided in writing, whether voluntarily or compulsorily, it is necessary to distinguish between

  advice and information
  ; as regards advice, the reply is in the second part of the preceding point. On the other hand, any information which is incorrect or concealed — whether deliberately or by negligence — involves the responsibility of a provider. But the scope of the information must be clearly understood: it cannot be confined to setting out the technical aspects, but must — or should — ensure that the consumer has at his disposal every other element useful for making an independent, reasoned final choice. Codes of conduct, or if necessary the civil code, should provide a guide to settling any disputes. |
| --- | --- |

3.2.6

With regard to the second question, on the responsibility for any advice or information provided in writing, whether voluntarily or compulsorily, it is necessary to distinguish between

  advice and information
  ; as regards advice, the reply is in the second part of the preceding point. On the other hand, any information which is incorrect or concealed — whether deliberately or by negligence — involves the responsibility of a provider. But the scope of the information must be clearly understood: it cannot be confined to setting out the technical aspects, but must — or should — ensure that the consumer has at his disposal every other element useful for making an independent, reasoned final choice. Codes of conduct, or if necessary the civil code, should provide a guide to settling any disputes.

| 3.2.7 | As regards early repayment the Commission raises three questions. The first revives a long-debated question: should early repayment be a legal right of the consumer or a choice for both parties? In general early repayment is requested by the consumer in the event of rate variations unfavourable to him, whether for fixed-rate loans or for variable-rate loans, such as the rate changes made in the past in some countries following high inflation. At all events, early repayment is always requested by the consumer and very rarely refused by the provider, regardless of whether it is provided for in the contract. The problem is not so much whether early repayment is possible or not, rather the problem posed by the next question. |
| --- | --- |

3.2.7

As regards early repayment the Commission raises three questions. The first revives a long-debated question: should early repayment be a legal right of the consumer or a choice for both parties? In general early repayment is requested by the consumer in the event of rate variations unfavourable to him, whether for fixed-rate loans or for variable-rate loans, such as the rate changes made in the past in some countries following high inflation. At all events, early repayment is always requested by the consumer and very rarely refused by the provider, regardless of whether it is provided for in the contract. The problem is not so much whether early repayment is possible or not, rather the problem posed by the next question.

| 3.2.8 | How should the fees for early repayment be calculated? Ways of financing mortgage credit vary from one country to another, but as a general rule a provider obtains funds by issuing bonds guaranteed by the mortgages on the property he sells on the primary or secondary market. The techniques and products, which include an entirely new one, equity release, vary considerably depending on the timescale of the loans, whether rates are fixed or variable, the payments, the techniques and the market procedures. Early repayment involves, alongside an advantage for the consumer, a burden for the provider who must — in very approximate and simplistic terms — reuse the sum received in anticipation in order to buy back the bonds which have been deprived of their guarantee. Financial mathematics provides the formulas for calculating the burden to the provider, a burden which varies according to the period remaining, the trend of rates and the situation of the market. The EESC takes the view that one response to the question would be to apply a principle of equity: alongside the benefit for the consumer it is necessary to calculate the effective burden borne by the provider as a result of early repayment. |
| --- | --- |

3.2.8

How should the fees for early repayment be calculated? Ways of financing mortgage credit vary from one country to another, but as a general rule a provider obtains funds by issuing bonds guaranteed by the mortgages on the property he sells on the primary or secondary market. The techniques and products, which include an entirely new one, equity release, vary considerably depending on the timescale of the loans, whether rates are fixed or variable, the payments, the techniques and the market procedures. Early repayment involves, alongside an advantage for the consumer, a burden for the provider who must — in very approximate and simplistic terms — reuse the sum received in anticipation in order to buy back the bonds which have been deprived of their guarantee. Financial mathematics provides the formulas for calculating the burden to the provider, a burden which varies according to the period remaining, the trend of rates and the situation of the market. The EESC takes the view that one response to the question would be to apply a principle of equity: alongside the benefit for the consumer it is necessary to calculate the effective burden borne by the provider as a result of early repayment.

| 3.2.9 | Rules for calculation should be included in the code of conduct or, better still, in each individual contract. The only standardised rules possible in this area are those of financial mathematics: it is not particularly difficult to calculate advantages and disadvantages on the basis of the period which has elapsed and the remaining period, the rates applied and the current rates. The result, purely a matter of financial mathematics, should be supplemented by the calculation of the profits or disadvantages for the financial institution deriving, in the period in question, from the reinvestment of the liquid funds acquired in advance. At all events, the payment of penalties should be excluded. |
| --- | --- |

3.2.9

Rules for calculation should be included in the code of conduct or, better still, in each individual contract. The only standardised rules possible in this area are those of financial mathematics: it is not particularly difficult to calculate advantages and disadvantages on the basis of the period which has elapsed and the remaining period, the rates applied and the current rates. The result, purely a matter of financial mathematics, should be supplemented by the calculation of the profits or disadvantages for the financial institution deriving, in the period in question, from the reinvestment of the liquid funds acquired in advance. At all events, the payment of penalties should be excluded.

| 3.2.10 | The third question, how the consumer should be informed about the possibility of early repayment, has already received a reply in the last part of the preceding point: there is no reason why the possibility of early repayment should not be included either in prior information or in ongoing information and, better still, also in the contract. |
| --- | --- |

3.2.10

The third question, how the consumer should be informed about the possibility of early repayment, has already received a reply in the last part of the preceding point: there is no reason why the possibility of early repayment should not be included either in prior information or in ongoing information and, better still, also in the contract.

| 3.2.11 | Four questions concern the annual percentage rate (APR). The first refers to a question already fully discussed in the preliminary stages leading to the adoption of the relevant directive, namely whether the purpose of an APR is to inform or allow comparison or both. The fact that after a number of years the Commission is raising the question again seems to suggest that doubts on the matter persist. The formula adopted for calculating the APR corresponds to a precise mathematical and economic logic, and was intended by the legislator to also meet criteria of information, transparency and comparability. In practice, however, a consumer who is not an expert in financial mathematics can do no more than take note of the figure communicated to him: thus the information and transparency requirements are respected only as a formality. As regards comparisons with other offers, they are possible on condition that the various proposers offer

  exactly

  the same product and have followed the same calculation methods and that the figures used for the calculations are specified in detail. |
| --- | --- |

3.2.11

Four questions concern the annual percentage rate (APR). The first refers to a question already fully discussed in the preliminary stages leading to the adoption of the relevant directive, namely whether the purpose of an APR is to inform or allow comparison or both. The fact that after a number of years the Commission is raising the question again seems to suggest that doubts on the matter persist. The formula adopted for calculating the APR corresponds to a precise mathematical and economic logic, and was intended by the legislator to also meet criteria of information, transparency and comparability. In practice, however, a consumer who is not an expert in financial mathematics can do no more than take note of the figure communicated to him: thus the information and transparency requirements are respected only as a formality. As regards comparisons with other offers, they are possible on condition that the various proposers offer

  exactly

  the same product and have followed the same calculation methods and that the figures used for the calculations are specified in detail.

| 3.2.12 | The second question, whether there should be an EU standard covering both the calculation method and the cost elements, should undoubtedly receive a positive reply in principle. In practice, however, it will not be possible to define such a standard until there are harmonised systems, exactly comparable products and standardised administrative procedures: an objective which is not easy to achieve in the short term. |
| --- | --- |

3.2.12

The second question, whether there should be an EU standard covering both the calculation method and the cost elements, should undoubtedly receive a positive reply in principle. In practice, however, it will not be possible to define such a standard until there are harmonised systems, exactly comparable products and standardised administrative procedures: an objective which is not easy to achieve in the short term.

| 3.2.13 | On the third question, what kinds of cost elements a European standard should include, the EESC takes the view that a lowest common denominator could be made up of the cost of drawing up the file, the cost of setting up the mortgage, clearly identifiable administrative costs and the cost of insurance. As an initial approximation, this should be enough for the consumer to make a comparison among the various offers; every provider, however, should clearly warn consumers against making too easy a choice based only on an APR calculated in this way. |
| --- | --- |

3.2.13

On the third question, what kinds of cost elements a European standard should include, the EESC takes the view that a lowest common denominator could be made up of the cost of drawing up the file, the cost of setting up the mortgage, clearly identifiable administrative costs and the cost of insurance. As an initial approximation, this should be enough for the consumer to make a comparison among the various offers; every provider, however, should clearly warn consumers against making too easy a choice based only on an APR calculated in this way.

| 3.2.14 | The last question, whether it is desirable for the provider to give information separately on all costs not specified in the APR, and on the presentation of the effects of the APR in concrete terms such as the cost per month or the overall cost of the loan, lends itself to two distinct replies. On the first part of the question the EESC would reply in the affirmative, partly because, among other things, the presentation of the costs not included in the APR would make it possible to lift the reservation on comparison of conditions mentioned in the preceding point. On the presentation of the effects of the APR in ‘concrete’ terms in the sense indicated by the Commission, the EESC takes the view that it is undoubtedly possible and that there are computer programmes capable of meeting this requirement — if it is indeed a requirement. The doubt arises for the reasons set out in point 3.2.11: the consumer runs the risk of being further confused if he is confronted simultaneously with a financial reimbursement plan — the one which is of real use to him — and another plan which, although correct in terms of financial mathematics, diverges from the first. |
| --- | --- |

3.2.14

The last question, whether it is desirable for the provider to give information separately on all costs not specified in the APR, and on the presentation of the effects of the APR in concrete terms such as the cost per month or the overall cost of the loan, lends itself to two distinct replies. On the first part of the question the EESC would reply in the affirmative, partly because, among other things, the presentation of the costs not included in the APR would make it possible to lift the reservation on comparison of conditions mentioned in the preceding point. On the presentation of the effects of the APR in ‘concrete’ terms in the sense indicated by the Commission, the EESC takes the view that it is undoubtedly possible and that there are computer programmes capable of meeting this requirement — if it is indeed a requirement. The doubt arises for the reasons set out in point 3.2.11: the consumer runs the risk of being further confused if he is confronted simultaneously with a financial reimbursement plan — the one which is of real use to him — and another plan which, although correct in terms of financial mathematics, diverges from the first.

| 3.2.15 | Four questions are raised by the Commission on usury rules and interest rate variation. As regards the first of these, on the implications for integration of the markets of rules against usury (existing in certain Member States), it is necessary to make a preliminary statement: in a Member State where the law lays down binding limits on interest rates, it seems that such limits have been laid down with a view to consumer credit, current account overdrafts and personnel credit, but not — in the EESC's view — mortgage credit. At all events, the problem is a delicate one: a Member State which had laid down limits could wish to take action against a provider in another country who has contravened a rule to which the provider is not subject, but which concerns a contract valid on his territory. The national rules on usury in any case constitute an obstacle to integration of the markets. |
| --- | --- |

3.2.15

Four questions are raised by the Commission on usury rules and interest rate variation. As regards the first of these, on the implications for integration of the markets of rules against usury (existing in certain Member States), it is necessary to make a preliminary statement: in a Member State where the law lays down binding limits on interest rates, it seems that such limits have been laid down with a view to consumer credit, current account overdrafts and personnel credit, but not — in the EESC's view — mortgage credit. At all events, the problem is a delicate one: a Member State which had laid down limits could wish to take action against a provider in another country who has contravened a rule to which the provider is not subject, but which concerns a contract valid on his territory. The national rules on usury in any case constitute an obstacle to integration of the markets.

| 3.2.16 | The second question concerns the possibility of examining usury rates in a broader context which is not specifically connected with mortgage credit. The EESC's reply to this question is affirmative; if a further investigation showed it to be necessary, Community legislation could usefully replace the various existing national rules. However, the EESC warns against simplistic solutions: a uniform usury rate would run the risk of not taking account of the individual characteristics of the markets. In particular, the fixing of a single rate would be pointless and should be left to the individual Member States, once the problem raised in the last part of point 3.2.15 has been solved. |
| --- | --- |

3.2.16

The second question concerns the possibility of examining usury rates in a broader context which is not specifically connected with mortgage credit. The EESC's reply to this question is affirmative; if a further investigation showed it to be necessary, Community legislation could usefully replace the various existing national rules. However, the EESC warns against simplistic solutions: a uniform usury rate would run the risk of not taking account of the individual characteristics of the markets. In particular, the fixing of a single rate would be pointless and should be left to the individual Member States, once the problem raised in the last part of point 3.2.15 has been solved.

| 3.2.17 | The third question is whether the restrictions imposed by certain Member States on the imposition of compound interest rates constitute an obstacle to market integration. The EESC's reply can only be the same as that given on usury rates in the preceding point. Moreover, the Commission should check the level of simple interest rates in countries which do not apply compound interest: should they be higher on average than those of other countries for comparable transactions, the suspicion could arise that the loss of compound interest has been compensated for by higher simple interest, following a market logic which is not transparent and has no advantages for the consumer. |
| --- | --- |

3.2.17

The third question is whether the restrictions imposed by certain Member States on the imposition of compound interest rates constitute an obstacle to market integration. The EESC's reply can only be the same as that given on usury rates in the preceding point. Moreover, the Commission should check the level of simple interest rates in countries which do not apply compound interest: should they be higher on average than those of other countries for comparable transactions, the suspicion could arise that the loss of compound interest has been compensated for by higher simple interest, following a market logic which is not transparent and has no advantages for the consumer.

| 3.2.18 | The fourth question concerns the ‘equity release’ product and asks what impact the restrictions on the imposition of compound interest can have on its development. As this is a new product, for which there is insufficient experience, the EESC refrains from taking up a position and leaves the reply to technicians with specific experience of the market. |
| --- | --- |

3.2.18

The fourth question concerns the ‘equity release’ product and asks what impact the restrictions on the imposition of compound interest can have on its development. As this is a new product, for which there is insufficient experience, the EESC refrains from taking up a position and leaves the reply to technicians with specific experience of the market.

| 3.2.19 | As regards the standardisation of credit contract terms, the Commission points out that the subject is part of the broader framework of the initiative on European contract law; standardisation could be achieved either by classical harmonisation or by way of a so-called ‘26th regime’, a legal instrument parallel to national legislation and usable, with the agreement of the parties, as an alternative to that legislation. The EESC takes the view that the first alternative is at present premature, and that the second could be a valid option only after it has been ascertained, through a thorough study of the laws and contracts of all 25 countries, that the ‘parallel’ instrument does not contravene the rules and laws of any of them. At all events, it is necessary that standardisation rules should not hinder the supply of new products and thus become a brake on innovation. But, while awaiting a solution to the various problems, it should not be difficult to reach an agreement between financial institutions, consumers and Commission on a basic draft contract which would include at least the clauses in most current use and common to all types of contract. |
| --- | --- |

3.2.19

As regards the standardisation of credit contract terms, the Commission points out that the subject is part of the broader framework of the initiative on European contract law; standardisation could be achieved either by classical harmonisation or by way of a so-called ‘26th regime’, a legal instrument parallel to national legislation and usable, with the agreement of the parties, as an alternative to that legislation. The EESC takes the view that the first alternative is at present premature, and that the second could be a valid option only after it has been ascertained, through a thorough study of the laws and contracts of all 25 countries, that the ‘parallel’ instrument does not contravene the rules and laws of any of them. At all events, it is necessary that standardisation rules should not hinder the supply of new products and thus become a brake on innovation. But, while awaiting a solution to the various problems, it should not be difficult to reach an agreement between financial institutions, consumers and Commission on a basic draft contract which would include at least the clauses in most current use and common to all types of contract.

| 3.2.20 | The last two questions concern the legal structures for the protection of consumers' rights. In every country there are structures for mediation or arbitration other than the legal channels, which are often too slow and costly to the consumer: the Commission calls in the first place for opinions on the possibility of imposing on Member States an obligation to set up specific mediation or arbitration structures for mortgage credit. The EESC is favourable in principle to mediation structures but not to arbitration structures, since the latter do not come under the scope of consumer protection. Moreover, it points out that mortgage credit law is by its very nature linked to a range of other legal or administrative rules: the code of civil procedure, succession, bankruptcy, ownership, land registry rules and tax rules. One alternative structure to that of the courts, capable of taking decisions likely to stand up to casual contestation, could be found in the need to develop structures and resources similar to those of the courts themselves. But given that certain Member States seem to be open to this possibility, they could report on this after a suitable period of experimentation, so as to provide useful lessons for possible general adoption. |
| --- | --- |

3.2.20

The last two questions concern the legal structures for the protection of consumers' rights. In every country there are structures for mediation or arbitration other than the legal channels, which are often too slow and costly to the consumer: the Commission calls in the first place for opinions on the possibility of imposing on Member States an obligation to set up specific mediation or arbitration structures for mortgage credit. The EESC is favourable in principle to mediation structures but not to arbitration structures, since the latter do not come under the scope of consumer protection. Moreover, it points out that mortgage credit law is by its very nature linked to a range of other legal or administrative rules: the code of civil procedure, succession, bankruptcy, ownership, land registry rules and tax rules. One alternative structure to that of the courts, capable of taking decisions likely to stand up to casual contestation, could be found in the need to develop structures and resources similar to those of the courts themselves. But given that certain Member States seem to be open to this possibility, they could report on this after a suitable period of experimentation, so as to provide useful lessons for possible general adoption.

| 3.2.21 | The Commission calls for suggestions on the possibility of strengthening the credibility of existing alternative redress systems, especially in the field of mortgage credit. The EESC is aware that the existing systems give reasonably good results, which could be improved in many cases by speeding up the decision-making procedures. With specific reference to mortgage credit, and in the light of the preceding point, it should be pointed out that the mediation or arbitration structures should be credible for both parties, and not just for the consumer: the high average value of every dispute requires decisions to be fair and unassailable even in legal terms to avoid a later appeal to the courts. |
| --- | --- |

3.2.21

The Commission calls for suggestions on the possibility of strengthening the credibility of existing alternative redress systems, especially in the field of mortgage credit. The EESC is aware that the existing systems give reasonably good results, which could be improved in many cases by speeding up the decision-making procedures. With specific reference to mortgage credit, and in the light of the preceding point, it should be pointed out that the mediation or arbitration structures should be credible for both parties, and not just for the consumer: the high average value of every dispute requires decisions to be fair and unassailable even in legal terms to avoid a later appeal to the courts.

3.3   Legal issues (point III of the GP)

| 3.3.1 | The Commission deems it appropriate to consider the legal aspects of mortgage credit in the light of the current review of the 1980 Rome Convention, which will be transformed into an EU regulation. The following three approaches to applicable law are currently under review:






  — | to establish specific arrangements for determining the law applicable to mortgage credit contracts: the law applicable to such credits could be aligned to the law of the country in which the property is situated; |
| --- | --- | --- |

3.3.1

The Commission deems it appropriate to consider the legal aspects of mortgage credit in the light of the current review of the 1980 Rome Convention, which will be transformed into an EU regulation. The following three approaches to applicable law are currently under review:

—

to establish specific arrangements for determining the law applicable to mortgage credit contracts: the law applicable to such credits could be aligned to the law of the country in which the property is situated;

| — | to continue ensuring compliance with the general principles of the Rome Convention, thus granting the parties concerned the freedom to choose the applicable law, provided that the mandatory rules of the consumer's country of residence are applied; |
| --- | --- |

—

to continue ensuring compliance with the general principles of the Rome Convention, thus granting the parties concerned the freedom to choose the applicable law, provided that the mandatory rules of the consumer's country of residence are applied;

| — | to ensure that the mandatory protection rules enforced in the consumer's country of residence are not applicable to mortgage contracts, provided that there is a high level of consumer protection across the European Union; |
| --- | --- |

—

to ensure that the mandatory protection rules enforced in the consumer's country of residence are not applicable to mortgage contracts, provided that there is a high level of consumer protection across the European Union;

| — | As far as the collateral (the mortgaged property) is concerned, the Commission sees no reason to depart from the well-established principle — which the EESC fully supports — which stipulates that it is the law of the country in which the property is situated that applies. |
| --- | --- |

—

As far as the collateral (the mortgaged property) is concerned, the Commission sees no reason to depart from the well-established principle — which the EESC fully supports — which stipulates that it is the law of the country in which the property is situated that applies.

| 3.3.1.1 | The three approaches outlined above warrant further discussion in a separate opinion: the subject is complex and each approach presents advantages and disadvantages. The EESC will confine itself here to some basic observations:






  a) | none of the three approaches can be applied without disadvantage to a hypothetical consumer residing in country A, a lender residing in country B and property situated in country C (which could also be situated outside the EU); |
| --- | --- | --- |

3.3.1.1

The three approaches outlined above warrant further discussion in a separate opinion: the subject is complex and each approach presents advantages and disadvantages. The EESC will confine itself here to some basic observations:

a)

none of the three approaches can be applied without disadvantage to a hypothetical consumer residing in country A, a lender residing in country B and property situated in country C (which could also be situated outside the EU);

| b) | the offer is severely restricted by the law of the consumer's country of residence — or, to put it better, the possibility for the consumer to use the services provided by a lender residing in another country: lenders are usually reluctant to draw up a contract that is subject to laws that are unknown to them, since they realise that if any controversy arises they would need to seek legal assistance abroad and use a language that is not their own; |
| --- | --- |

b)

the offer is severely restricted by the law of the consumer's country of residence — or, to put it better, the possibility for the consumer to use the services provided by a lender residing in another country: lenders are usually reluctant to draw up a contract that is subject to laws that are unknown to them, since they realise that if any controversy arises they would need to seek legal assistance abroad and use a language that is not their own;

| c) | the language that is to be used in the contract, for the purposes of contact and correspondence, must be clearly established: if the choice falls on the consumer's language, this would be a further deterrent for the lender, in addition to the one outlined in point b). |
| --- | --- |

c)

the language that is to be used in the contract, for the purposes of contact and correspondence, must be clearly established: if the choice falls on the consumer's language, this would be a further deterrent for the lender, in addition to the one outlined in point b).

| 3.3.2 | The Commission has addressed several issues on client credit-worthiness, which have previously been covered in a similar area (consumer credit), and considers that the most pressing issue is to ensure cross-border access to databases on a non-discriminatory basis. In the EESC's opinion, the
  right to access is necessary
  , but appropriate rules are needed to establish who can enjoy the right, the relevant conditions and consumer guarantees. Furthermore, the EESC would like to raise an issue that has not been previously addressed: the property buyer, whether the property being bought is a main residence or a holiday home, is often not included in any database owing to the fact that he/she had not taken out credit before; the search for accurate information will, in this case, be problematic, time-consuming and costly. |
| --- | --- |

3.3.2

The Commission has addressed several issues on client credit-worthiness, which have previously been covered in a similar area (consumer credit), and considers that the most pressing issue is to ensure cross-border access to databases on a non-discriminatory basis. In the EESC's opinion, the
  right to access is necessary
  , but appropriate rules are needed to establish who can enjoy the right, the relevant conditions and consumer guarantees. Furthermore, the EESC would like to raise an issue that has not been previously addressed: the property buyer, whether the property being bought is a main residence or a holiday home, is often not included in any database owing to the fact that he/she had not taken out credit before; the search for accurate information will, in this case, be problematic, time-consuming and costly.

| 3.3.3 | The Commission is therefore addressing the issue of property valuation by considering the merits of a single EU standard or whether steps to ensure mutual recognition of national valuation standards are required. The EESC believes that the first alternative should be rejected a priori without entering into further discussions on the topic. As to the second, the experts point out that national or even just regional standards are an utopia of which one should beware; too many variables help to create a property market whose characteristics are primarily local. Any attempt at standardisation could prove to be distorting. The EESC supports this view. |
| --- | --- |

3.3.3

The Commission is therefore addressing the issue of property valuation by considering the merits of a single EU standard or whether steps to ensure mutual recognition of national valuation standards are required. The EESC believes that the first alternative should be rejected a priori without entering into further discussions on the topic. As to the second, the experts point out that national or even just regional standards are an utopia of which one should beware; too many variables help to create a property market whose characteristics are primarily local. Any attempt at standardisation could prove to be distorting. The EESC supports this view.

| 3.3.4 | Another important issue is then discussed — the forced sale of mortgaged property. The GP notes that this area is characterised by a large number of procedures, timeframes and costs and that this would hinder cross-border lending activity. It therefore suggests a gradual approach to encourage improvements in forced sales procedures: to first gather information on the cost and duration of these procedures so that a regularly updated scoreboard could be developed. Should this prove ineffective, the GP suggests considering adopting ‘more robust’ measures. The EESC considers that the gathering of information and the development of a scoreboard would constitute a kind of moral suasion of those Member States which have relatively ineffective or cheap procedures in place; this could give lenders and consumer associations a good reason to exert pressure on their national authorities until adequate remedial measures are taken. To venture beyond this point, by threatening ‘more robust’ measures, seems unrealistic: the chances that a measure of this kind would meet with the consensus of the Member States are very slim. Moreover, the premise of invalidating entire judicial systems only to promote cross-border mortgage credit (which presently constitutes only 1.1 % of the EU total and for which — in the best hypothesis — future estimates are not more than 5 %) seems to lack a natural sense of proportion. |
| --- | --- |

3.3.4

Another important issue is then discussed — the forced sale of mortgaged property. The GP notes that this area is characterised by a large number of procedures, timeframes and costs and that this would hinder cross-border lending activity. It therefore suggests a gradual approach to encourage improvements in forced sales procedures: to first gather information on the cost and duration of these procedures so that a regularly updated scoreboard could be developed. Should this prove ineffective, the GP suggests considering adopting ‘more robust’ measures. The EESC considers that the gathering of information and the development of a scoreboard would constitute a kind of moral suasion of those Member States which have relatively ineffective or cheap procedures in place; this could give lenders and consumer associations a good reason to exert pressure on their national authorities until adequate remedial measures are taken. To venture beyond this point, by threatening ‘more robust’ measures, seems unrealistic: the chances that a measure of this kind would meet with the consensus of the Member States are very slim. Moreover, the premise of invalidating entire judicial systems only to promote cross-border mortgage credit (which presently constitutes only 1.1 % of the EU total and for which — in the best hypothesis — future estimates are not more than 5 %) seems to lack a natural sense of proportion.

| 3.3.5 | Another — still intractable — obstacle to full market integration is the taxation issue; the Commission, showing a sense of realism, has not developed any plans to harmonise this area. However, there are some other obstacles which can be removed. Several Member States have refused to make the mortgage interest payments made to foreign lenders tax deductible; in other cases, the interest received by domestic lenders is taxed net of the interest paid to finance loans, whereas foreign lenders are taxed on the

  gross

  amount of interest paid by national debtors. Both cases are in breach of the Treaties or Community legislation: the first is in breach of Articles 49 and 56 of the Treaty, as established in two judgments delivered by the Court of Justice; the Commission — with the full support of the EESC — intends to take direct action against the second. |
| --- | --- |

3.3.5

Another — still intractable — obstacle to full market integration is the taxation issue; the Commission, showing a sense of realism, has not developed any plans to harmonise this area. However, there are some other obstacles which can be removed. Several Member States have refused to make the mortgage interest payments made to foreign lenders tax deductible; in other cases, the interest received by domestic lenders is taxed net of the interest paid to finance loans, whereas foreign lenders are taxed on the

  gross

  amount of interest paid by national debtors. Both cases are in breach of the Treaties or Community legislation: the first is in breach of Articles 49 and 56 of the Treaty, as established in two judgments delivered by the Court of Justice; the Commission — with the full support of the EESC — intends to take direct action against the second.

3.4   Mortgage collateral (point IV of the GP)

| 3.4.1 | Land registry is a key element in determining property ownership rights; furthermore, there is concern that registers do not always reflect the property rights of third parties. For cross-border mortgage credit activity to work properly (including financing), the content and management of land registry must be clearly understood. The Commission has financed a pilot project (EULIS) with the aim of enhancing cooperation between property owners and controllers of land registers; this project could, among other things, be very useful for many of the new Member States. It now wonders whether it should continue to play an active role in this initiative and whether, given the use of such registers by lenders and investors, the latter might be required to contribute to and invest in such initiatives. In the EESC's opinion, the Commission should continue to play its valuable role in promoting this type of cooperation and should, furthermore, produce an annual report on the results obtained. It is however not of the opinion that joint projects should be financed by a single category of user (which is not even the main one) owing to the fact that i) it is in the interest of the state and the community to hold land registers and that ii) currently, both registration and access are subject to payment. |
| --- | --- |

3.4.1

Land registry is a key element in determining property ownership rights; furthermore, there is concern that registers do not always reflect the property rights of third parties. For cross-border mortgage credit activity to work properly (including financing), the content and management of land registry must be clearly understood. The Commission has financed a pilot project (EULIS) with the aim of enhancing cooperation between property owners and controllers of land registers; this project could, among other things, be very useful for many of the new Member States. It now wonders whether it should continue to play an active role in this initiative and whether, given the use of such registers by lenders and investors, the latter might be required to contribute to and invest in such initiatives. In the EESC's opinion, the Commission should continue to play its valuable role in promoting this type of cooperation and should, furthermore, produce an annual report on the results obtained. It is however not of the opinion that joint projects should be financed by a single category of user (which is not even the main one) owing to the fact that i) it is in the interest of the state and the community to hold land registers and that ii) currently, both registration and access are subject to payment.

| 3.4.2 | The idea of a Euromortgage is not new but it has not yet been tested on the market, not even as a pilot project. Essentially, the objective of Euromortgage would be to weaken the link between the mortgage credit and mortgage collateral: the latter would form part of an EU-wide pool of guarantees on securities issued on the market. The concept seems attractive and would reflect the idea of an integrated EU-wide property market; the EESC believes that the project deserves to be encouraged. If carried out, it would be a first step towards an integration of the markets, brought about by the market itself instead of by regulatory pressure. |
| --- | --- |

3.4.2

The idea of a Euromortgage is not new but it has not yet been tested on the market, not even as a pilot project. Essentially, the objective of Euromortgage would be to weaken the link between the mortgage credit and mortgage collateral: the latter would form part of an EU-wide pool of guarantees on securities issued on the market. The concept seems attractive and would reflect the idea of an integrated EU-wide property market; the EESC believes that the project deserves to be encouraged. If carried out, it would be a first step towards an integration of the markets, brought about by the market itself instead of by regulatory pressure.

3.5   Funding of mortgage credit (point V of the GP)

| 3.5.1 | Individual countries have different funding systems, which, however are essentially based on bonds where the mortgaged property provides the investor's security. In the sectors concerned, the idea that further integration of markets would be enhanced by the emergence of such a pan-European security market is gaining ground. While the Commission shares this view, it observes that the issue does need further exploration. In the Commission's view, the advantage of a pan-European financing system would be to increase sources of funding, enhance market liquidity and more generally allow for the diversification of risk. Furthermore, it would promote the integration of secondary markets, which is, in any case, dependent on the integration of primary markets. The EESC supports this view but shares the opinion of those that consider this a long-term objective. |
| --- | --- |

3.5.1

Individual countries have different funding systems, which, however are essentially based on bonds where the mortgaged property provides the investor's security. In the sectors concerned, the idea that further integration of markets would be enhanced by the emergence of such a pan-European security market is gaining ground. While the Commission shares this view, it observes that the issue does need further exploration. In the Commission's view, the advantage of a pan-European financing system would be to increase sources of funding, enhance market liquidity and more generally allow for the diversification of risk. Furthermore, it would promote the integration of secondary markets, which is, in any case, dependent on the integration of primary markets. The EESC supports this view but shares the opinion of those that consider this a long-term objective.

| 3.5.2 | The transferability of mortgage loans is a key consideration. The Commission plans to set up an ad hoc stakeholders working group which will be responsible for assessing the need for, and nature of, any action on funding aspects, and expresses interest in assessing whether it would be possible to promote a pan-European market in mortgage funding via market led initiatives (for example by establishing documentation and definition standards for use in cross-border funding activities). The EESC believes that it is up to market operators to react, since they are the only ones with the necessary expertise to make an informed assessment. |
| --- | --- |

3.5.2

The transferability of mortgage loans is a key consideration. The Commission plans to set up an ad hoc stakeholders working group which will be responsible for assessing the need for, and nature of, any action on funding aspects, and expresses interest in assessing whether it would be possible to promote a pan-European market in mortgage funding via market led initiatives (for example by establishing documentation and definition standards for use in cross-border funding activities). The EESC believes that it is up to market operators to react, since they are the only ones with the necessary expertise to make an informed assessment.

| 3.5.3 | The Commission's final comment raises a crucial issue for the future of markets: it asks whether mortgage lending should necessarily be restricted to credit institutions or whether, and under what conditions, it could be provided by institutions which do not take deposits or any other repayable sums and which therefore do not fall within the EU's definition of credit institutions and are consequently excluded from prudential regulation. The EESC notes initially that in order to ensure stable and strong markets, the presence of a controlling authority to monitor property markets is insufficient; all financial institutions involved, irrespective of their type, need to be effectively monitored. The consumer protection factor has triggered the creation of prudential rules, and every new proposal must be discussed in this context. |
| --- | --- |

3.5.3

The Commission's final comment raises a crucial issue for the future of markets: it asks whether mortgage lending should necessarily be restricted to credit institutions or whether, and under what conditions, it could be provided by institutions which do not take deposits or any other repayable sums and which therefore do not fall within the EU's definition of credit institutions and are consequently excluded from prudential regulation. The EESC notes initially that in order to ensure stable and strong markets, the presence of a controlling authority to monitor property markets is insufficient; all financial institutions involved, irrespective of their type, need to be effectively monitored. The consumer protection factor has triggered the creation of prudential rules, and every new proposal must be discussed in this context.

| 3.5.4 | Institutions of the type mentioned above should be
  fully

  self-financed: this is difficult to achieve and would moreover require constant monitoring to ensure that the initial conditions remain valid over time. As regards other cases, recourse to external funding — whatever the arrangement — is unavoidable. The EESC concludes that institutions of the type described by the Commission

  must

  be subject to prudential controls, regardless of whether these are imposed by banks or other agencies; secondly, a
  level playing field must be maintained and the rules applicable to credit institutions
  —
  particularly those on solvency and liquidity
  — must also apply to any of these other institutions. If the guiding principles of prudential supervision still hold true today, there should be no room for exceptions. |
| --- | --- |

3.5.4

Institutions of the type mentioned above should be
  fully

  self-financed: this is difficult to achieve and would moreover require constant monitoring to ensure that the initial conditions remain valid over time. As regards other cases, recourse to external funding — whatever the arrangement — is unavoidable. The EESC concludes that institutions of the type described by the Commission

  must

  be subject to prudential controls, regardless of whether these are imposed by banks or other agencies; secondly, a
  level playing field must be maintained and the rules applicable to credit institutions
  —
  particularly those on solvency and liquidity
  — must also apply to any of these other institutions. If the guiding principles of prudential supervision still hold true today, there should be no room for exceptions.

Brussels, 15 December 2005

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  OJ C 221 of 8 September 2005.

1

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| 17.3.2006 | EN | Official Journal of the European Union | C 65/120 |
| --- | --- | --- | --- |

17.3.2006

EN

Official Journal of the European Union

C 65/120

---

Opinion of the European Economic and Social Committee on the ‘Communication from the Commission to the Council and the European Parliament: The Hague Programme: Ten priorities for the next five years — The Partnership for European renewal in the field of Freedom, Security and Justice’

(COM(2005) 184 final)

(2006/C 65/22)

On 10 May 2005, the Commission decided to consult the European Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on the abovementioned proposal.

The Section for Employment, Social Affairs and Citizenship, which was responsible for the Committee's work on the subject, adopted its opinion on 14 November 2005. The rapporteur was Mr Pariza.

At its 422nd plenary session, held on 14 and 15 December 2005 (meeting of 15 December 2005), the European Economic and Social Committee adopted the following opinion by 98 votes to two, with seven abstentions.

1.   Introduction

| 1.1 | The European Council of 4 and 5 November 2004 adopted the second multi-annual programme for the creation of a common area of Freedom, Security and Justice in the European Union — the Hague Programme (1). The programme sets out general and specific orientations for the next five years (2005-2009) with regard to policies developing the area of Freedom, Security and Justice (AFSJ). |
| --- | --- |

1.1

The European Council of 4 and 5 November 2004 adopted the second multi-annual programme for the creation of a common area of Freedom, Security and Justice in the European Union — the Hague Programme (1). The programme sets out general and specific orientations for the next five years (2005-2009) with regard to policies developing the area of Freedom, Security and Justice (AFSJ).

| 1.2 | The European Council invited the European Commission to draw up an action plan in which the orientations set out in the Hague Programme were to be translated into concrete actions. On 10 May 2005, the European Commission published a communication entitled The Hague Programme: Ten priorities for the next five years — The Partnership for European renewal in the field of Freedom, Security and Justice
   (2), which sets out strategic objectives for the next five years and includes a timetable for the adoption of a package of policies and legislative initiatives in these areas. |
| --- | --- |

1.2

The European Council invited the European Commission to draw up an action plan in which the orientations set out in the Hague Programme were to be translated into concrete actions. On 10 May 2005, the European Commission published a communication entitled The Hague Programme: Ten priorities for the next five years — The Partnership for European renewal in the field of Freedom, Security and Justice
   (2), which sets out strategic objectives for the next five years and includes a timetable for the adoption of a package of policies and legislative initiatives in these areas.

2.   Conclusions

| 2.1 | Five years after Tampere, the objectives have not been achieved. The EU is not a common area of Freedom, Security and Justice. Although the Hague Programme is lacking ambition, its objectives are very important. |
| --- | --- |

2.1

Five years after Tampere, the objectives have not been achieved. The EU is not a common area of Freedom, Security and Justice. Although the Hague Programme is lacking ambition, its objectives are very important.

| 2.2 | The creation of a common area of Freedom, Security and Justice must strike the right balance between the three dimensions. The Hague Programme does not maintain a proper balance. Security policies should protect the values of freedom and justice. The EESC believes that the protection of basic freedoms and fundamental rights guaranteed by the European Convention on Human Rights, and the EU Charter of Fundamental Rights should form the basis of these policies. |
| --- | --- |

2.2

The creation of a common area of Freedom, Security and Justice must strike the right balance between the three dimensions. The Hague Programme does not maintain a proper balance. Security policies should protect the values of freedom and justice. The EESC believes that the protection of basic freedoms and fundamental rights guaranteed by the European Convention on Human Rights, and the EU Charter of Fundamental Rights should form the basis of these policies.

| 2.3 | The EESC believes that security policy should be effective, protecting citizens in a free and open society within a framework of justice, under the rule of law. The day that disproportionate legislation is adopted in the name of the fight against terrorism, sacrificing human rights for the sake of security, is the day we hand terrorists their first victory. European civil society should play a critical and active role in this. |
| --- | --- |

2.3

The EESC believes that security policy should be effective, protecting citizens in a free and open society within a framework of justice, under the rule of law. The day that disproportionate legislation is adopted in the name of the fight against terrorism, sacrificing human rights for the sake of security, is the day we hand terrorists their first victory. European civil society should play a critical and active role in this.

| 2.4 | The EESC wants active citizenship of the European Union to be developed. We propose a higher quality, more open, egalitarian, inclusive citizenship, without discrimination. |
| --- | --- |

2.4

The EESC wants active citizenship of the European Union to be developed. We propose a higher quality, more open, egalitarian, inclusive citizenship, without discrimination.

| 2.5 | It is essential that the European Union establish a common asylum procedure and a uniform status, based on the Geneva Convention. |
| --- | --- |

2.5

It is essential that the European Union establish a common asylum procedure and a uniform status, based on the Geneva Convention.

| 2.6 | The EU needs to draw up a common immigration policy with harmonised laws, not only to prevent illegal immigration and combat criminal networks trafficking in human beings, but also to admit legal immigrants through transparent and flexible legal procedures. |
| --- | --- |

2.6

The EU needs to draw up a common immigration policy with harmonised laws, not only to prevent illegal immigration and combat criminal networks trafficking in human beings, but also to admit legal immigrants through transparent and flexible legal procedures.

| 2.7 | Immigrants and asylum seekers should be assured of fair treatment, compliant with humanitarian law, the Charter of Fundamental Rights and anti-discrimination law. Reception and integration policies must be developed. |
| --- | --- |

2.7

Immigrants and asylum seekers should be assured of fair treatment, compliant with humanitarian law, the Charter of Fundamental Rights and anti-discrimination law. Reception and integration policies must be developed.

| 2.8 | The Hague Programme should strengthen freedom, security and justice and consolidate effectiveness, legitimacy, mutual trust, equality and proportionality; to this end, EU law and all available institutional mechanisms should be used. |
| --- | --- |

2.8

The Hague Programme should strengthen freedom, security and justice and consolidate effectiveness, legitimacy, mutual trust, equality and proportionality; to this end, EU law and all available institutional mechanisms should be used.

| 2.9 | It is essential to respond to the current judicial and institutional complexity of these policies. The persistence of this complexity at intergovernmental level (third pillar) limits the effectiveness and scope of the Community method. The draft Constitutional Treaty provides an effective and coherent response to many of the problems of cooperation in matters of freedom, security and justice. |
| --- | --- |

2.9

It is essential to respond to the current judicial and institutional complexity of these policies. The persistence of this complexity at intergovernmental level (third pillar) limits the effectiveness and scope of the Community method. The draft Constitutional Treaty provides an effective and coherent response to many of the problems of cooperation in matters of freedom, security and justice.

| 2.10 | Although the draft Constitutional Treaty contains new legal bases for the development of these policies, the current Treaty contains useful instruments which should be utilised. |
| --- | --- |

2.10

Although the draft Constitutional Treaty contains new legal bases for the development of these policies, the current Treaty contains useful instruments which should be utilised.

| 2.11 | The European Area of Justice should be founded on trust and the mutual recognition of court rulings. New legislative instruments are also needed. |
| --- | --- |

2.11

The European Area of Justice should be founded on trust and the mutual recognition of court rulings. New legislative instruments are also needed.

| 2.12 | All legislative measures relating to security should be subject to thorough and regular evaluation, as well as democratic monitoring by the European Parliament and the Court of Justice of the European Communities. Only in this way can a real common area of Freedom, Security and Justice be established. |
| --- | --- |

2.12

All legislative measures relating to security should be subject to thorough and regular evaluation, as well as democratic monitoring by the European Parliament and the Court of Justice of the European Communities. Only in this way can a real common area of Freedom, Security and Justice be established.

| 2.13 | None of the objectives set out in the Hague Programme and in the Action Plan can be achieved without sufficient funding. The European Commission has submitted proposals for three framework programmes (April 2005); the EESC is drafting opinions (3) on these. |
| --- | --- |

2.13

None of the objectives set out in the Hague Programme and in the Action Plan can be achieved without sufficient funding. The European Commission has submitted proposals for three framework programmes (April 2005); the EESC is drafting opinions (3) on these.

3.   General comments

| 3.1 | After Justice and Home Affairs were incorporated into the Community system with the entry into force of the Treaty of Amsterdam, the Tampere European Council (15 and 16 October 1999) adopted the first multi-annual programme relating to these policy areas — the Tampere Programme. |
| --- | --- |

3.1

After Justice and Home Affairs were incorporated into the Community system with the entry into force of the Treaty of Amsterdam, the Tampere European Council (15 and 16 October 1999) adopted the first multi-annual programme relating to these policy areas — the Tampere Programme.

| 3.2 | Five years later, substantial progress has been made towards the creation of a common area of Freedom, Security and Justice. According to the Council: the foundation for a common asylum and immigration policy have been laid, the harmonisation of border controls have been prepared, police cooperation has been improved, and the groundwork for judicial cooperation on the basis of the principle of mutual recognition of judicial decisions and judgements has been well advanced
   (4). |
| --- | --- |

3.2

Five years later, substantial progress has been made towards the creation of a common area of Freedom, Security and Justice. According to the Council: the foundation for a common asylum and immigration policy have been laid, the harmonisation of border controls have been prepared, police cooperation has been improved, and the groundwork for judicial cooperation on the basis of the principle of mutual recognition of judicial decisions and judgements has been well advanced
   (4).

| 3.3 | However, the European Commission's most recent biannual report or ‘scoreboard’ assessing the progress made in the first half of 2004 (5), suggests that the level of convergence achieved between the different policy areas was less than expected. |
| --- | --- |

3.3

However, the European Commission's most recent biannual report or ‘scoreboard’ assessing the progress made in the first half of 2004 (5), suggests that the level of convergence achieved between the different policy areas was less than expected.

| 3.4 | It must be realised that there are major obstacles to adopting common policies and harmonised standards on matters of freedom, security and justice: legal systems, political orientations and sometimes national interests all differ. Experience of European integration in other policy areas shows that with a strong political will among Member States and clear leadership from the Commission, it is possible to overcome these obstacles. |
| --- | --- |

3.4

It must be realised that there are major obstacles to adopting common policies and harmonised standards on matters of freedom, security and justice: legal systems, political orientations and sometimes national interests all differ. Experience of European integration in other policy areas shows that with a strong political will among Member States and clear leadership from the Commission, it is possible to overcome these obstacles.

| 3.5 | The EESC finds that, overall, too little progress has been made. Many of the specific objectives agreed upon in Tampere have not been achieved, and many of the policies adopted have been of a sub-standard quality. |
| --- | --- |

3.5

The EESC finds that, overall, too little progress has been made. Many of the specific objectives agreed upon in Tampere have not been achieved, and many of the policies adopted have been of a sub-standard quality.

| 3.6 | The Hague Programme now has the difficult task of consolidating and promoting the creation of a common area of Freedom, Security and Justice. This presents wide-ranging and complex challenges (6). |
| --- | --- |

3.6

The Hague Programme now has the difficult task of consolidating and promoting the creation of a common area of Freedom, Security and Justice. This presents wide-ranging and complex challenges (6).

| 3.7 | Unlike Tampere, the Hague Programme does not put forward any innovative policies. The unambitious scope of the programme is based on the need to more effectively implement and evaluate existing policies relating to freedom, security and justice. |
| --- | --- |

3.7

Unlike Tampere, the Hague Programme does not put forward any innovative policies. The unambitious scope of the programme is based on the need to more effectively implement and evaluate existing policies relating to freedom, security and justice.

| 3.8 | Furthermore, there are no provisions for the instruments needed to successfully overcome the obstacles that have thus far prevented greater convergence of policies. The EESC believes that due to the Hague Programme's lack of ambition, it will be impossible to establish a consistent, high quality, broad and effective legislative framework which strikes the right balance between freedom, security and justice. |
| --- | --- |

3.8

Furthermore, there are no provisions for the instruments needed to successfully overcome the obstacles that have thus far prevented greater convergence of policies. The EESC believes that due to the Hague Programme's lack of ambition, it will be impossible to establish a consistent, high quality, broad and effective legislative framework which strikes the right balance between freedom, security and justice.

| 3.9 | These obstacles continue to stem from the policies of Member States, which lack effectiveness, solidarity, transparency, mutual trust, proportionality and a balance between freedom, security and justice. |
| --- | --- |

3.9

These obstacles continue to stem from the policies of Member States, which lack effectiveness, solidarity, transparency, mutual trust, proportionality and a balance between freedom, security and justice.

| 3.10 | The EESC welcomes the fact that the European Commission has made defence of and respect for fundamental rights and citizenship the first of the ten priorities for the next five years set out in its action plan for the development of an area of Freedom, Security and Justice. |
| --- | --- |

3.10

The EESC welcomes the fact that the European Commission has made defence of and respect for fundamental rights and citizenship the first of the ten priorities for the next five years set out in its action plan for the development of an area of Freedom, Security and Justice.

| 3.11 | More positively, it should be stressed that alongside the adoption of the Hague Programme, the decision was taken to apply the co-decision procedure and qualified majority voting to all Title IV measures, which enables, at least, the removal of one of the most significant obstacles to date. However, we regret that regular immigration has been excluded from this measure. |
| --- | --- |

3.11

More positively, it should be stressed that alongside the adoption of the Hague Programme, the decision was taken to apply the co-decision procedure and qualified majority voting to all Title IV measures, which enables, at least, the removal of one of the most significant obstacles to date. However, we regret that regular immigration has been excluded from this measure.

| 3.12 | In its specific orientations, the Hague Programme confuses aspects relating to ‘security’ with aspects relating to ‘freedom’. Policies directly relating to security clearly take priority and interfere with aspects concerning freedom and justice. This is the case for instance with initiatives based on the introduction of biometrics systems and new technologies, the interoperability of databases, greater control of internal and external borders and more effectively fighting irregular immigration, all of which are paradoxically included under the heading ‘Strengthening Freedom’. |
| --- | --- |

3.12

In its specific orientations, the Hague Programme confuses aspects relating to ‘security’ with aspects relating to ‘freedom’. Policies directly relating to security clearly take priority and interfere with aspects concerning freedom and justice. This is the case for instance with initiatives based on the introduction of biometrics systems and new technologies, the interoperability of databases, greater control of internal and external borders and more effectively fighting irregular immigration, all of which are paradoxically included under the heading ‘Strengthening Freedom’.

| 3.13 | A comprehensive strengthening of freedom, security and justice must rigorously respect the need for a fair balance between the three dimensions, so as not to encroach on the fundamental values (human rights and civil liberties) and democratic principles (rule of law) shared throughout the Union. Freedom should not take second place to security. Some political proposals only repeat a past error: sacrificing freedom for the sake of improving security. History has shown us that it is open and free societies that most effectively defend security. The protection of fundamental human rights is at the heart of the values that we Europeans share today. The day that disproportionate legislation is adopted in the name of the fight against terrorism, sacrificing human rights for the sake of security, is the day we hand terrorists their first victory. It is the values of freedom that give us the strength to face terrorists. European policies should provide effective security and protection of fundamental rights and freedom. |
| --- | --- |

3.13

A comprehensive strengthening of freedom, security and justice must rigorously respect the need for a fair balance between the three dimensions, so as not to encroach on the fundamental values (human rights and civil liberties) and democratic principles (rule of law) shared throughout the Union. Freedom should not take second place to security. Some political proposals only repeat a past error: sacrificing freedom for the sake of improving security. History has shown us that it is open and free societies that most effectively defend security. The protection of fundamental human rights is at the heart of the values that we Europeans share today. The day that disproportionate legislation is adopted in the name of the fight against terrorism, sacrificing human rights for the sake of security, is the day we hand terrorists their first victory. It is the values of freedom that give us the strength to face terrorists. European policies should provide effective security and protection of fundamental rights and freedom.

| 3.14 | This imbalance between Community policies is also evident in the financial perspectives; security accounts for most of the budget (7). |
| --- | --- |

3.14

This imbalance between Community policies is also evident in the financial perspectives; security accounts for most of the budget (7).

| 3.15 | The Hague Programme should promote, strengthen and consolidate effectiveness, legitimacy, mutual trust, equality and proportionality and strike the right balance between freedom, security and justice. It is essential to overcome the current judicial and institutional complexity and give a firm guarantee that security policies are subject to adequate democratic control by the European Parliament and to judicial supervision by the European Court of Justice in Luxembourg. |
| --- | --- |

3.15

The Hague Programme should promote, strengthen and consolidate effectiveness, legitimacy, mutual trust, equality and proportionality and strike the right balance between freedom, security and justice. It is essential to overcome the current judicial and institutional complexity and give a firm guarantee that security policies are subject to adequate democratic control by the European Parliament and to judicial supervision by the European Court of Justice in Luxembourg.

| 3.16 | The promotion and strict protection of freedom is the most effective way to confront the challenges facing the European Union in the 21st century, including the terrorist threat. |
| --- | --- |

3.16

The promotion and strict protection of freedom is the most effective way to confront the challenges facing the European Union in the 21st century, including the terrorist threat.

| 3.17 | Human rights organisations and all civil society organisations have a very important part to play in developing the policies stemming from the Hague Programme. |
| --- | --- |

3.17

Human rights organisations and all civil society organisations have a very important part to play in developing the policies stemming from the Hague Programme.

| 3.18 | The EESC continues to promote a policy of working together with the social partners and civil society organisations to ensure that the development of the Hague Programme strikes the right balance in the European Union, since freedom, security and justice are in the general interest of the society, and thus of businesses, social partners and NGOS. |
| --- | --- |

3.18

The EESC continues to promote a policy of working together with the social partners and civil society organisations to ensure that the development of the Hague Programme strikes the right balance in the European Union, since freedom, security and justice are in the general interest of the society, and thus of businesses, social partners and NGOS.

| 3.19 | The period of uncertainty following the referendums in France and the Netherlands is a new challenge to progress on migration and asylum policies and all other issues addressed in the Action Plan implementing the Hague Programme. Although the draft Constitutional Treaty contains new legal bases for the development of these policies, the Treaty currently in force contains useful instruments which should be utilised. |
| --- | --- |

3.19

The period of uncertainty following the referendums in France and the Netherlands is a new challenge to progress on migration and asylum policies and all other issues addressed in the Action Plan implementing the Hague Programme. Although the draft Constitutional Treaty contains new legal bases for the development of these policies, the Treaty currently in force contains useful instruments which should be utilised.

4.   Specific comments on strengthening freedom, security and justice

4.1   Strengthening freedom

| 4.1.1 | Respect for fundamental rights and civil liberties is one of the pillars of European integration and a principal objective of the Union. The creation of a common area of Freedom, Security and Justice requires full respect for the dimension of freedom comprising, amongst other key instruments, the European Convention for the Protection of Human Rights and Fundamental Freedoms, the Charter of Fundamental Rights of the European Union and the Geneva Convention relating to the Status of Refugees. |
| --- | --- |

4.1.1

Respect for fundamental rights and civil liberties is one of the pillars of European integration and a principal objective of the Union. The creation of a common area of Freedom, Security and Justice requires full respect for the dimension of freedom comprising, amongst other key instruments, the European Convention for the Protection of Human Rights and Fundamental Freedoms, the Charter of Fundamental Rights of the European Union and the Geneva Convention relating to the Status of Refugees.

| 4.1.2 | The Hague Programme states that the European Council welcomed the extension of the mandate of the European Monitoring Centre on Racism and Xenophobia towards a Fundamental Rights Agency, to protect and promote fundamental rights. At the end of June 2005, the European Commission published a Proposal for a Regulation (8) establishing the Agency. The Agency will play a key role in the respect of freedom issues, providing Community institutions and Member States with the means to ensure respect for fundamental rights in the drawing up and implementation of Community policies. Furthermore, the Agency will be an excellent point of contact with civil society. |
| --- | --- |

4.1.2

The Hague Programme states that the European Council welcomed the extension of the mandate of the European Monitoring Centre on Racism and Xenophobia towards a Fundamental Rights Agency, to protect and promote fundamental rights. At the end of June 2005, the European Commission published a Proposal for a Regulation (8) establishing the Agency. The Agency will play a key role in the respect of freedom issues, providing Community institutions and Member States with the means to ensure respect for fundamental rights in the drawing up and implementation of Community policies. Furthermore, the Agency will be an excellent point of contact with civil society.

4.1.3   Citizenship of the Union

| 4.1.3.1 | To develop a better, more active, more open, inclusive and egalitarian European citizenship, the continuing obstacles to the exercise of established rights must be eliminated, and rights must be extended in certain respects. |
| --- | --- |

4.1.3.1

To develop a better, more active, more open, inclusive and egalitarian European citizenship, the continuing obstacles to the exercise of established rights must be eliminated, and rights must be extended in certain respects.

| 4.1.3.2 | It is still difficult to exercise some rights connected with European citizenship, such as the right to free movement within the EU or the right to vote or stand in local and European elections. Measures to eliminate these difficulties must be developed. Furthermore, in some national legislation, the anti-discrimination directives have not been properly transposed. |
| --- | --- |

4.1.3.2

It is still difficult to exercise some rights connected with European citizenship, such as the right to free movement within the EU or the right to vote or stand in local and European elections. Measures to eliminate these difficulties must be developed. Furthermore, in some national legislation, the anti-discrimination directives have not been properly transposed.

| 4.1.3.3 | Citizens of the new Member States should be accorded all the established rights for citizenship of the Union without delay. The temporary restriction on their rights is an anomaly that should be removed as soon as possible. These restrictions cause then numerous employment and social problems and, by treating them as ‘second-class citizens’, constitute unacceptable discrimination. |
| --- | --- |

4.1.3.3

Citizens of the new Member States should be accorded all the established rights for citizenship of the Union without delay. The temporary restriction on their rights is an anomaly that should be removed as soon as possible. These restrictions cause then numerous employment and social problems and, by treating them as ‘second-class citizens’, constitute unacceptable discrimination.

| 4.1.3.4 | The EESC has proposed (9) that citizenship of the Union be granted on the basis of a new criterion: that third-country nationals who are long-term, stable residents of the European Union be granted citizenship. Citizenship rights, in particular political rights in municipal elections, are fundamental to the integration of migrants. |
| --- | --- |

4.1.3.4

The EESC has proposed (9) that citizenship of the Union be granted on the basis of a new criterion: that third-country nationals who are long-term, stable residents of the European Union be granted citizenship. Citizenship rights, in particular political rights in municipal elections, are fundamental to the integration of migrants.

| 4.1.3.5 | The integration of migrants is vital to the social cohesion within Member States. Otherwise there is the risk of social exclusion and alienation of these migrants and their children and grandchildren who are born and raised within the EU. |
| --- | --- |

4.1.3.5

The integration of migrants is vital to the social cohesion within Member States. Otherwise there is the risk of social exclusion and alienation of these migrants and their children and grandchildren who are born and raised within the EU.

4.1.4   A common asylum area
   (10)

| 4.1.4.1 | The European Union has given itself five more years to achieve an objective that was already set out five years ago: to establish a common asylum procedure and a uniform status for those who are granted asylum or subsidiary protection. Five years seems long enough to achieve this objective, but it is clear that some resistance still has to be overcome for the necessary steps to be taken. Furthermore, while it is important to make progress without delay, it is just as important for this progress to be based on provisions which are consistent with the fundamental rights relating to asylum. The system of qualified majority voting in the Council and co-decision with the Parliament will raise the quality of the legislation adopted. |
| --- | --- |

4.1.4.1

The European Union has given itself five more years to achieve an objective that was already set out five years ago: to establish a common asylum procedure and a uniform status for those who are granted asylum or subsidiary protection. Five years seems long enough to achieve this objective, but it is clear that some resistance still has to be overcome for the necessary steps to be taken. Furthermore, while it is important to make progress without delay, it is just as important for this progress to be based on provisions which are consistent with the fundamental rights relating to asylum. The system of qualified majority voting in the Council and co-decision with the Parliament will raise the quality of the legislation adopted.

| 4.1.4.2 | The Action Plan provides for an evaluation in 2007 of the transposition and implementation of existing asylum-related instruments. Such an evaluation is undoubtedly becoming crucial, in light of the disparities currently appearing in the transposition and implementation of the directives in force (temporary protection; minimum standards for reception conditions; Dublin II, etc.) The evaluation should focus on the objective of ensuring that the implementation of the current instruments is consistent with the obligations stemming from international conventions on human rights and the 1951 Geneva Convention. |
| --- | --- |

4.1.4.2

The Action Plan provides for an evaluation in 2007 of the transposition and implementation of existing asylum-related instruments. Such an evaluation is undoubtedly becoming crucial, in light of the disparities currently appearing in the transposition and implementation of the directives in force (temporary protection; minimum standards for reception conditions; Dublin II, etc.) The evaluation should focus on the objective of ensuring that the implementation of the current instruments is consistent with the obligations stemming from international conventions on human rights and the 1951 Geneva Convention.

| 4.1.4.3 | With regard to the new instruments proposed, the EESC believes they represent positive steps towards the coordination of asylum practices between Member States, the development of long-term resident status for refugees, the evaluation of the implementation of the European Refugee Fund, etc. |
| --- | --- |

4.1.4.3

With regard to the new instruments proposed, the EESC believes they represent positive steps towards the coordination of asylum practices between Member States, the development of long-term resident status for refugees, the evaluation of the implementation of the European Refugee Fund, etc.

| 4.1.4.4 | However, we cannot expect asylum applications to be dealt with outside the EU. The EESC agrees that the EU should promote the improvement of humanitarian protection standards in third countries, but the internationally recognised right of people who need protection to enter the EU to submit their application for asylum should not be limited or obstructed. |
| --- | --- |

4.1.4.4

However, we cannot expect asylum applications to be dealt with outside the EU. The EESC agrees that the EU should promote the improvement of humanitarian protection standards in third countries, but the internationally recognised right of people who need protection to enter the EU to submit their application for asylum should not be limited or obstructed.

4.1.5   Legal migration and admission procedures

| 4.1.5.1 | Five years have passed since the Tampere European Council and yet the objective of giving the European Union a common immigration policy has still not been achieved. Some progress has been made — the Commission has drafted numerous political and legislative proposals, while the Parliament has adopted numerous resolutions and initiatives — but these have not been adequately discussed by the Council. The EESC has worked actively with the Commission and the Parliament, and has drawn up a number of opinions aimed at contributing to a real common policy and harmonised legislation. |
| --- | --- |

4.1.5.1

Five years have passed since the Tampere European Council and yet the objective of giving the European Union a common immigration policy has still not been achieved. Some progress has been made — the Commission has drafted numerous political and legislative proposals, while the Parliament has adopted numerous resolutions and initiatives — but these have not been adequately discussed by the Council. The EESC has worked actively with the Commission and the Parliament, and has drawn up a number of opinions aimed at contributing to a real common policy and harmonised legislation.

| 4.1.5.2 | The European Union's common immigration policy must bring benefits for all concerned:






  — | so that those who come to the EU may find opportunities and be treated fairly; |
| --- | --- | --- |

4.1.5.2

The European Union's common immigration policy must bring benefits for all concerned:

—

so that those who come to the EU may find opportunities and be treated fairly;

| — | for the European host societies; |
| --- | --- |

—

for the European host societies;

| — | and for the development of the countries of origin. |
| --- | --- |

—

and for the development of the countries of origin.

| 4.1.5.3 | In the years to come, Europeans will need new economic migrants to contribute to social and economic development (11). The demographic situation indicates that the Lisbon Strategy could fall apart if we do not change immigration policies. We need active policies for the admission of both highly skilled and less skilled workers. Although each Member State has its own needs and characteristics, all the Member State lack political and legislative instruments enabling new migrants to enter legally, maintaining the balance of labour markets. |
| --- | --- |

4.1.5.3

In the years to come, Europeans will need new economic migrants to contribute to social and economic development (11). The demographic situation indicates that the Lisbon Strategy could fall apart if we do not change immigration policies. We need active policies for the admission of both highly skilled and less skilled workers. Although each Member State has its own needs and characteristics, all the Member State lack political and legislative instruments enabling new migrants to enter legally, maintaining the balance of labour markets.

| 4.1.5.4 | It is incomprehensible that in the Council of the European Union some governments have vetoed the Commission's legislative proposals and are perpetuating the restrictive policies of old. Meanwhile, the black economy and illegal employment are growing, creating a real ‘pull factor’ for undocumented migrants. In the absence of common European legislation, the Member States are adopting new legislation with very different political agendas, adding further barriers to harmonisation. These different political agendas and legislative disparities cause confusion and uncertainty amongst citizens. |
| --- | --- |

4.1.5.4

It is incomprehensible that in the Council of the European Union some governments have vetoed the Commission's legislative proposals and are perpetuating the restrictive policies of old. Meanwhile, the black economy and illegal employment are growing, creating a real ‘pull factor’ for undocumented migrants. In the absence of common European legislation, the Member States are adopting new legislation with very different political agendas, adding further barriers to harmonisation. These different political agendas and legislative disparities cause confusion and uncertainty amongst citizens.

| 4.1.5.5 | The Council of the European Union should abandon the unanimity requirement and adopt its decisions by qualified majority and co-decision with the Parliament. This is the only way to draft good legislation. This change must take place now, before the study of new legislative proposals. The legislation adopted should have a high degree of harmonisation. European legislation that takes a minimalist approach and delegates key aspects to national law will serve to perpetuate the current problems. |
| --- | --- |

4.1.5.5

The Council of the European Union should abandon the unanimity requirement and adopt its decisions by qualified majority and co-decision with the Parliament. This is the only way to draft good legislation. This change must take place now, before the study of new legislative proposals. The legislation adopted should have a high degree of harmonisation. European legislation that takes a minimalist approach and delegates key aspects to national law will serve to perpetuate the current problems.

| 4.1.5.6 | For the new admission legislation, an overall, horizontal legislative framework is preferable to sectoral legislation (12). The proposal for a Directive on admission drawn up by the Commission and supported by the EESC, with a few changes (13), remains a good legislative proposal. Additionally, specific rules could be drawn up for sectoral issues and particular situations. If the Council of the European Union were to opt for a sectoral approach, geared only towards the admission of highly skilled migrants, it would not apply to much of migration, and would also be discriminatory. This option might be easier for the Council, but it does not respond to European needs. |
| --- | --- |

4.1.5.6

For the new admission legislation, an overall, horizontal legislative framework is preferable to sectoral legislation (12). The proposal for a Directive on admission drawn up by the Commission and supported by the EESC, with a few changes (13), remains a good legislative proposal. Additionally, specific rules could be drawn up for sectoral issues and particular situations. If the Council of the European Union were to opt for a sectoral approach, geared only towards the admission of highly skilled migrants, it would not apply to much of migration, and would also be discriminatory. This option might be easier for the Council, but it does not respond to European needs.

| 4.1.5.7 | The draft Constitutional Treaty sets the limits for common legislation, including the right of Member States to ‘determine volumes of admission’ of migrants to their country. This limit does not prevent a high degree of legislative harmonisation from being reached. Rather, it is an incentive for national management of economic migration to be dealt with using transparent procedures. The power to issue work and residence permits would belong to authorities in the Member States, within the framework of Community legislation. Thus, each Member State could decide, in cooperation with the social partners, on what kind of migrants it requires: highly skilled or less skilled, for the industrial sector, farming, construction or services, or for all of these. |
| --- | --- |

4.1.5.7

The draft Constitutional Treaty sets the limits for common legislation, including the right of Member States to ‘determine volumes of admission’ of migrants to their country. This limit does not prevent a high degree of legislative harmonisation from being reached. Rather, it is an incentive for national management of economic migration to be dealt with using transparent procedures. The power to issue work and residence permits would belong to authorities in the Member States, within the framework of Community legislation. Thus, each Member State could decide, in cooperation with the social partners, on what kind of migrants it requires: highly skilled or less skilled, for the industrial sector, farming, construction or services, or for all of these.

| 4.1.5.8 | Economic immigration is strongly linked to labour markets; it is therefore necessary to involve the social partners sufficiently in the process of drawing up and managing these policies. |
| --- | --- |

4.1.5.8

Economic immigration is strongly linked to labour markets; it is therefore necessary to involve the social partners sufficiently in the process of drawing up and managing these policies.

| 4.1.5.9 | Only when the European Union has common legislation for the admission of third-country nationals for work purposes, will there be improved cooperation between all Member States over the management of migratory flows and more transparent procedures. |
| --- | --- |

4.1.5.9

Only when the European Union has common legislation for the admission of third-country nationals for work purposes, will there be improved cooperation between all Member States over the management of migratory flows and more transparent procedures.

| 4.1.5.10 | Admission procedures should display a twofold approach: the economic needs test and a six-month to one-year temporary permit for seeking work, which each Member State would manage in cooperation with social partners. |
| --- | --- |

4.1.5.10

Admission procedures should display a twofold approach: the economic needs test and a six-month to one-year temporary permit for seeking work, which each Member State would manage in cooperation with social partners.

| 4.1.5.11 | Those who come to Europe deserve to be treated fairly. Community admission legislation should include migrants' rights. Immigration legislation should comply with the international conventions on human rights, the ILO standards and the EU Charter of Fundamental Rights. In accordance with anti-discrimination directives, migrant workers should have the same economic, labour and social rights (including social security) as Community workers. |
| --- | --- |

4.1.5.11

Those who come to Europe deserve to be treated fairly. Community admission legislation should include migrants' rights. Immigration legislation should comply with the international conventions on human rights, the ILO standards and the EU Charter of Fundamental Rights. In accordance with anti-discrimination directives, migrant workers should have the same economic, labour and social rights (including social security) as Community workers.

| 4.1.5.12 | The Directive on long-term resident status covers a wider range of rights, relating to security of status and mobility within the EU. The EESC has proposed that these people should also have citizenship rights. The Committee drew up an own-initiative opinion addressed to the Convention, proposing that EU citizenship be granted to third-country nationals residing on a stable basis or with long-term resident status. |
| --- | --- |

4.1.5.12

The Directive on long-term resident status covers a wider range of rights, relating to security of status and mobility within the EU. The EESC has proposed that these people should also have citizenship rights. The Committee drew up an own-initiative opinion addressed to the Convention, proposing that EU citizenship be granted to third-country nationals residing on a stable basis or with long-term resident status.

| 4.1.5.13 | It is essential to strengthen cooperation with countries of origin, not only to prevent illegal migration, but also so that migration can become a factor for the economic and social development of these countries. The EESC agrees with the words uttered last year in the European Parliament by the UN Secretary-General, Kofi Annan, who proposed that the international community address the issue of migration using a multilateral approach. |
| --- | --- |

4.1.5.13

It is essential to strengthen cooperation with countries of origin, not only to prevent illegal migration, but also so that migration can become a factor for the economic and social development of these countries. The EESC agrees with the words uttered last year in the European Parliament by the UN Secretary-General, Kofi Annan, who proposed that the international community address the issue of migration using a multilateral approach.

| 4.1.5.14 | The EESC drew up an own-initiative opinion (14) proposing that Member States sign the International Convention for Migrant Workers and their Families. This was adopted by the UN General Assembly in 1990 and entered into force in 2003, but has not yet been ratified by EU Member States. |
| --- | --- |

4.1.5.14

The EESC drew up an own-initiative opinion (14) proposing that Member States sign the International Convention for Migrant Workers and their Families. This was adopted by the UN General Assembly in 1990 and entered into force in 2003, but has not yet been ratified by EU Member States.

| 4.1.5.15 | The common immigration policy desired by the EESC goes further than admission legislation. It is necessary to implement a Community method of coordination to improve:






  — | the fight against the black economy and illegal employment; |
| --- | --- | --- |

4.1.5.15

The common immigration policy desired by the EESC goes further than admission legislation. It is necessary to implement a Community method of coordination to improve:

—

the fight against the black economy and illegal employment;

| — | border control and the fight against criminal networks trafficking in human beings; |
| --- | --- |

—

border control and the fight against criminal networks trafficking in human beings;

| — | integration policies, on which the EESC has drawn up various proposals. |
| --- | --- |

—

integration policies, on which the EESC has drawn up various proposals.

| 4.1.5.16 | It is a mistake to believe that migrant workers will remain in Europe as temporary guests. Some will return to their home countries voluntarily, but others will establish residence on a long-term or stable basis. In 2002, the EESC organised a conference with a view to making integration a fundamental aspect of the new European immigration policy. Numerous experts, social partners and the largest NGOs of the 25 Member States all participated in the conference. In the conference conclusions, it was proposed that the European Commission establish an integration programme. |
| --- | --- |

4.1.5.16

It is a mistake to believe that migrant workers will remain in Europe as temporary guests. Some will return to their home countries voluntarily, but others will establish residence on a long-term or stable basis. In 2002, the EESC organised a conference with a view to making integration a fundamental aspect of the new European immigration policy. Numerous experts, social partners and the largest NGOs of the 25 Member States all participated in the conference. In the conference conclusions, it was proposed that the European Commission establish an integration programme.

| 4.1.5.17 | The EESC is delighted that the European Commission has proposed a European Framework on Integration, and that objectives for integration are included in the Hague Programme. It also supports the inclusion of a large budget for integration policies in the 2007-2013 financial perspective. |
| --- | --- |

4.1.5.17

The EESC is delighted that the European Commission has proposed a European Framework on Integration, and that objectives for integration are included in the Hague Programme. It also supports the inclusion of a large budget for integration policies in the 2007-2013 financial perspective.

| 4.1.5.18 | Integration (15) is a two-way process between the host society and immigrants. But it is governments, local and regional authorities and the European Union who have the political and budgetary instruments. |
| --- | --- |

4.1.5.18

Integration (15) is a two-way process between the host society and immigrants. But it is governments, local and regional authorities and the European Union who have the political and budgetary instruments.

| 4.1.5.19 | An integration programme should include, inter alia:






  — | initial welcome: information and advice, teaching of language and customs; |
| --- | --- | --- |

4.1.5.19

An integration programme should include, inter alia:

—

initial welcome: information and advice, teaching of language and customs;

| — | integration into the labour market with equal treatment. The role of the social partners here is crucial, and therefore the European social partners have been called upon to incorporate this issue into the social dialogue agenda; |
| --- | --- |

—

integration into the labour market with equal treatment. The role of the social partners here is crucial, and therefore the European social partners have been called upon to incorporate this issue into the social dialogue agenda;

| — | access to education without discrimination; |
| --- | --- |

—

access to education without discrimination;

| — | integration in cities, avoiding impoverished, segregationist urban ghettoes. Local and regional authorities must make new political commitments; |
| --- | --- |

—

integration in cities, avoiding impoverished, segregationist urban ghettoes. Local and regional authorities must make new political commitments;

| — | access to healthcare and other public services with equal treatment; |
| --- | --- |

—

access to healthcare and other public services with equal treatment;

| — | the new European society is multicultural; cultural identity should not be used for segregationist or xenophobic purposes. |
| --- | --- |

—

the new European society is multicultural; cultural identity should not be used for segregationist or xenophobic purposes.

| 4.1.5.20 | The anti-discrimination directives that have been adopted are excellent judicial instruments, but do not solve all the problems. Active policies and new commitments must be made by civil society in order to promote social attitudes that support integration. The EESC will continue to encourage dialogue between civil society organisations; to this end and in the months ahead, we will draw up a new own-initiative opinion promoting new commitments to integration by local and regional authorities. |
| --- | --- |

4.1.5.20

The anti-discrimination directives that have been adopted are excellent judicial instruments, but do not solve all the problems. Active policies and new commitments must be made by civil society in order to promote social attitudes that support integration. The EESC will continue to encourage dialogue between civil society organisations; to this end and in the months ahead, we will draw up a new own-initiative opinion promoting new commitments to integration by local and regional authorities.

4.1.6   The fight against illegal immigration

| 4.1.6.1 | The Hague Programme addresses the fight against irregular immigration in the section on border checks. The EESC has expressed its approval of the establishment of the Border Management Agency (16), the creation in the medium-term of a European system of border guards and improved coordination of national border authorities. The objective must be two-fold: greater effectiveness both in the fight against criminal networks smuggling and trafficking in human beings, and in providing the humanitarian attention and fair treatment that people deserve. |
| --- | --- |

4.1.6.1

The Hague Programme addresses the fight against irregular immigration in the section on border checks. The EESC has expressed its approval of the establishment of the Border Management Agency (16), the creation in the medium-term of a European system of border guards and improved coordination of national border authorities. The objective must be two-fold: greater effectiveness both in the fight against criminal networks smuggling and trafficking in human beings, and in providing the humanitarian attention and fair treatment that people deserve.

| 4.1.6.2 | The EESC fully supports the instruments established by the European Union to combat the smuggling and trafficking of human beings, particularly the Council Directive defining the facilitation of illegal immigration (17), the Framework Decision on combating trafficking in human beings (18) and the Directive on the issue of residence permits for those victims cooperating with the judicial authorities (19). While the EESC has criticised certain aspects of these instruments, it has supported their comprehensive approach. |
| --- | --- |

4.1.6.2

The EESC fully supports the instruments established by the European Union to combat the smuggling and trafficking of human beings, particularly the Council Directive defining the facilitation of illegal immigration (17), the Framework Decision on combating trafficking in human beings (18) and the Directive on the issue of residence permits for those victims cooperating with the judicial authorities (19). While the EESC has criticised certain aspects of these instruments, it has supported their comprehensive approach.

| 4.1.6.3 | However, to prevent illegal immigration, action in other areas is needed. It is essential that migrants are offered legal, transparent and flexible admission procedures. We must also fight the black economy and illegal employment, putting an end to the exploitative working conditions often suffered by many illegal immigrants. |
| --- | --- |

4.1.6.3

However, to prevent illegal immigration, action in other areas is needed. It is essential that migrants are offered legal, transparent and flexible admission procedures. We must also fight the black economy and illegal employment, putting an end to the exploitative working conditions often suffered by many illegal immigrants.

| 4.1.6.4 | It is also necessary for the prevention of illegal immigration and the fight against trafficking in human beings that cooperation with neighbouring and transit countries is improved. |
| --- | --- |

4.1.6.4

It is also necessary for the prevention of illegal immigration and the fight against trafficking in human beings that cooperation with neighbouring and transit countries is improved.

4.2   Strengthening security

| 4.2.1 | The Hague Programme states that ‘the security of the European Union and its Member States has acquired a new urgency’ in the light of the attacks in the USA (11 September 2001) and Spain (11 March 2004). The Programme proposes a coordinated action that is more effective faced with common cross-border problems, particularly in the field of security. |
| --- | --- |

4.2.1

The Hague Programme states that ‘the security of the European Union and its Member States has acquired a new urgency’ in the light of the attacks in the USA (11 September 2001) and Spain (11 March 2004). The Programme proposes a coordinated action that is more effective faced with common cross-border problems, particularly in the field of security.

| 4.2.2 | The European Security Strategy of 12 December 2003 (20), which set out the role and responsibility of the EU within the new global security situation, identified terrorism as one of this century's main threats. The Strategy also emphasised the permanent link between internal and external aspects of security, in a Europe with common external borders and the free movement of people without internal borders. |
| --- | --- |

4.2.2

The European Security Strategy of 12 December 2003 (20), which set out the role and responsibility of the EU within the new global security situation, identified terrorism as one of this century's main threats. The Strategy also emphasised the permanent link between internal and external aspects of security, in a Europe with common external borders and the free movement of people without internal borders.

| 4.2.3 | Terrorism attacks the very pillars of democracy and the rule of law: citizens' human rights and civil liberties — including the right to life. In reality, concerted action by the EU is vital. To ensure the full exercise of freedoms and rights, the European Union should guarantee a high level of security. According to Article 29 of the TEU, the Union should ‘provide citizens with a high level of safety within an area of freedom, security and justice’. No Member State can combat the phenomenon of ‘terrorism’ on its own. European cooperation and coordination against crime and cross-border organised crime must be strengthened through the establishment of a common strategy. |
| --- | --- |

4.2.3

Terrorism attacks the very pillars of democracy and the rule of law: citizens' human rights and civil liberties — including the right to life. In reality, concerted action by the EU is vital. To ensure the full exercise of freedoms and rights, the European Union should guarantee a high level of security. According to Article 29 of the TEU, the Union should ‘provide citizens with a high level of safety within an area of freedom, security and justice’. No Member State can combat the phenomenon of ‘terrorism’ on its own. European cooperation and coordination against crime and cross-border organised crime must be strengthened through the establishment of a common strategy.

| 4.2.4 | The attacks of July 2005 in London have once more highlighted one of the biggest challenges of our times: how to prevent and combat terrorism effectively, whilst fully respecting fundamental rights and civil liberties and strengthening democracy and the rule of law. |
| --- | --- |

4.2.4

The attacks of July 2005 in London have once more highlighted one of the biggest challenges of our times: how to prevent and combat terrorism effectively, whilst fully respecting fundamental rights and civil liberties and strengthening democracy and the rule of law.

| 4.2.5 | On 13 July 2005 in an extraordinary session, the Council of the European Union adopted the Declaration on the European Union's response to the London bombings, in which it stressed the need to accelerate the implementation of the EU Action Plan on Combating Terrorism, adopted on 21 September 2001. Many of the legislative initiatives proposed in this Declaration have been criticised by the European Parliament, NGOs and civil society. These criticisms stem from doubts over its compatibility with the principles of legitimacy, proportionality and effectiveness (21). |
| --- | --- |

4.2.5

On 13 July 2005 in an extraordinary session, the Council of the European Union adopted the Declaration on the European Union's response to the London bombings, in which it stressed the need to accelerate the implementation of the EU Action Plan on Combating Terrorism, adopted on 21 September 2001. Many of the legislative initiatives proposed in this Declaration have been criticised by the European Parliament, NGOs and civil society. These criticisms stem from doubts over its compatibility with the principles of legitimacy, proportionality and effectiveness (21).

| 4.2.6 | There are many factors contributing to the ineffectiveness of a common European Security Strategy: the ineffectual judicial framework underlying the development of these policies; the exclusion of the European Parliament and the European Court of Justice; the complexity of the roots, causes and modes of operation of international terrorism and organised crime; some Member States' lack of willingness to recognise and study specifics; the absence of a common European/international definition of what constitutes terrorism; the lack of mutual trust between law enforcement and judicial authorities of Member States. |
| --- | --- |

4.2.6

There are many factors contributing to the ineffectiveness of a common European Security Strategy: the ineffectual judicial framework underlying the development of these policies; the exclusion of the European Parliament and the European Court of Justice; the complexity of the roots, causes and modes of operation of international terrorism and organised crime; some Member States' lack of willingness to recognise and study specifics; the absence of a common European/international definition of what constitutes terrorism; the lack of mutual trust between law enforcement and judicial authorities of Member States.

| 4.2.7 | The implementation of security policies that do not strike a proper balance with respect for human rights is an error which weakens the effectiveness of the fight against terrorism. |
| --- | --- |

4.2.7

The implementation of security policies that do not strike a proper balance with respect for human rights is an error which weakens the effectiveness of the fight against terrorism.

| 4.2.8 | One of the biggest weaknesses of European cooperation in the field of security is the fact that these policies remain outside the Community framework and are drawn up mainly according to the intergovernmental method (the third pillar of the EU). The role of the European Union is therefore very limited. This has had a series of adverse consequences, such as a lack of both efficiency (mainly due to the unanimity requirement) and transparency in the decision-making process, and the exclusion of the European Parliament and the European Court of Justice. With regard to the Court of Justice's jurisdiction in the third pillar, Member States would have to accept this in a declaration to that effect (22). |
| --- | --- |

4.2.8

One of the biggest weaknesses of European cooperation in the field of security is the fact that these policies remain outside the Community framework and are drawn up mainly according to the intergovernmental method (the third pillar of the EU). The role of the European Union is therefore very limited. This has had a series of adverse consequences, such as a lack of both efficiency (mainly due to the unanimity requirement) and transparency in the decision-making process, and the exclusion of the European Parliament and the European Court of Justice. With regard to the Court of Justice's jurisdiction in the third pillar, Member States would have to accept this in a declaration to that effect (22).

| 4.2.9 | A clear example of the fact that the dimensions of ‘freedom, security and justice’ continue to be developed within a purely governmental ambit is the Treaty of Prüm (Schengen III) of 27 May 2005, on stepping up cross-border cooperation, particularly in the fight against terrorism, cross-border crime and illegal immigration. This treaty was negotiated and adopted exclusively by seven Member States (23). The decision-making process was not transparent, despite the importance of the policies and themes being addressed (24). |
| --- | --- |

4.2.9

A clear example of the fact that the dimensions of ‘freedom, security and justice’ continue to be developed within a purely governmental ambit is the Treaty of Prüm (Schengen III) of 27 May 2005, on stepping up cross-border cooperation, particularly in the fight against terrorism, cross-border crime and illegal immigration. This treaty was negotiated and adopted exclusively by seven Member States (23). The decision-making process was not transparent, despite the importance of the policies and themes being addressed (24).

| 4.2.10 | This type of solely intergovernmental cooperation weakens the European project and the entire common area of Freedom, Security and Justice, leading to ‘less Europe’. It is necessary to promote and ensure ‘more Europe’ in these policy areas through the use of the Community method and the appropriate institutional framework. Community arrangements provide a more integrated, effective, comprehensive and consistent approach and system with which to meet the challenges of our time. |
| --- | --- |

4.2.10

This type of solely intergovernmental cooperation weakens the European project and the entire common area of Freedom, Security and Justice, leading to ‘less Europe’. It is necessary to promote and ensure ‘more Europe’ in these policy areas through the use of the Community method and the appropriate institutional framework. Community arrangements provide a more integrated, effective, comprehensive and consistent approach and system with which to meet the challenges of our time.

| 4.2.11 | Involving the European Parliament in the decision-making process and giving the European Court of Justice general jurisdiction over these policies is vital to respecting democratic values and the rule of law. There is a need for parliamentary and judicial monitoring of all legislative acts relating to security adopted and proposed under the third pillar of the EU, as well as the activities and operations of European agencies (Europol, Eurojust, the European Police College — CEPOL, the EU Police Chiefs Task Force, the European Border Agency, etc.). |
| --- | --- |

4.2.11

Involving the European Parliament in the decision-making process and giving the European Court of Justice general jurisdiction over these policies is vital to respecting democratic values and the rule of law. There is a need for parliamentary and judicial monitoring of all legislative acts relating to security adopted and proposed under the third pillar of the EU, as well as the activities and operations of European agencies (Europol, Eurojust, the European Police College — CEPOL, the EU Police Chiefs Task Force, the European Border Agency, etc.).

| 4.2.12 | Security is the Hague Programme's central concern and constitutes the main strategic objective for the next five years in the AFSJ. Security has been incorporated into the Programme's sections on freedom and justice. Thus the following have been erroneously included under the heading ‘Strengthening freedom’: the fight against illegal immigration, biometrics and information systems (development and synergy of databases), the policy of repatriation and readmission, improved border control, visa policies, etc. |
| --- | --- |

4.2.12

Security is the Hague Programme's central concern and constitutes the main strategic objective for the next five years in the AFSJ. Security has been incorporated into the Programme's sections on freedom and justice. Thus the following have been erroneously included under the heading ‘Strengthening freedom’: the fight against illegal immigration, biometrics and information systems (development and synergy of databases), the policy of repatriation and readmission, improved border control, visa policies, etc.

| 4.2.13 | Furthermore, the Hague Programme prioritises the need to implement and assess the measures already in place relating to freedom, security and justice more effectively and appropriately (25). Before framing and promoting any policy relating to one of these three fields, a study should be carried out on the effectiveness, proportionality and legitimacy of these measures, i.e. high-quality legislation is needed. |
| --- | --- |

4.2.13

Furthermore, the Hague Programme prioritises the need to implement and assess the measures already in place relating to freedom, security and justice more effectively and appropriately (25). Before framing and promoting any policy relating to one of these three fields, a study should be carried out on the effectiveness, proportionality and legitimacy of these measures, i.e. high-quality legislation is needed.

| 4.2.14 | A clear and coherent legislative framework for the full protection of personal information and judicial and parliamentary monitoring is necessary. The European Commission's proposal to allow their departments to check systematically, regularly and thoroughly (through an impact assessment) compliance with the Charter of Fundamental Rights in their legislative proposals is very positive (26). However, this should also be carried out for the final version of the measures adopted by the Council. The balance between respect for the right to privacy, protection of information (freedom) — Article 8 of the Convention for the Protection of Human Rights and Fundamental Freedoms and Directive 95/46/EC (27) for example — and security when sharing information between law enforcement authorities and other security services should be respected at all stages of decision-making and practical implementation. |
| --- | --- |

4.2.14

A clear and coherent legislative framework for the full protection of personal information and judicial and parliamentary monitoring is necessary. The European Commission's proposal to allow their departments to check systematically, regularly and thoroughly (through an impact assessment) compliance with the Charter of Fundamental Rights in their legislative proposals is very positive (26). However, this should also be carried out for the final version of the measures adopted by the Council. The balance between respect for the right to privacy, protection of information (freedom) — Article 8 of the Convention for the Protection of Human Rights and Fundamental Freedoms and Directive 95/46/EC (27) for example — and security when sharing information between law enforcement authorities and other security services should be respected at all stages of decision-making and practical implementation.

| 4.2.15 | Extending the remit of the European Union Agency for Fundamental Rights to include the third pillar of the EU (Title VI of the TEU) would be a key element in maintaining a proper balance between freedom, security and justice in the policies developed by the Union (28). |
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4.2.15

Extending the remit of the European Union Agency for Fundamental Rights to include the third pillar of the EU (Title VI of the TEU) would be a key element in maintaining a proper balance between freedom, security and justice in the policies developed by the Union (28).

| 4.2.16 | The Hague Programme accords great importance to a series of measures relating to terrorism, mainly aimed at strengthening the exchange of information about threats to internal and external security between the intelligence and security services of the Member States; the fight against the financing of terrorism; the strategic analysis of the terrorist threat by the intelligence and security services and Europol; protection of critical infrastructures and consequence management. |
| --- | --- |

4.2.16

The Hague Programme accords great importance to a series of measures relating to terrorism, mainly aimed at strengthening the exchange of information about threats to internal and external security between the intelligence and security services of the Member States; the fight against the financing of terrorism; the strategic analysis of the terrorist threat by the intelligence and security services and Europol; protection of critical infrastructures and consequence management.

| 4.2.17 | One of the most innovative proposals made in the Hague Programme, in the section on ‘Strengthening security’, is the principle of availability of information. This principle marks a new approach to improving the cross-border exchange of law enforcement information in the EU, based on enabling a law enforcement officer of one Member State to obtain from another Member State all the information he needs to carry out his investigation (29). The exact content, the real impact, the scope and the conditions of use of this revolutionary principle are not yet clear. For it to work, a high level of trust between the law enforcement authorities of the respective Member States will be needed. The lack of such trust has been one of the biggest obstacles to European cooperation thus far. Cooperation between the European Union agencies, institutions and actors dealing with freedom, security and justice must be strengthened. Furthermore, judicial monitoring of the operations and activities stemming from the principle of availability should be ensured. The EESC supports the European Commission proposal on the protection of personal data processed in the framework of police and judicial cooperation in criminal matters (30). |
| --- | --- |

4.2.17

One of the most innovative proposals made in the Hague Programme, in the section on ‘Strengthening security’, is the principle of availability of information. This principle marks a new approach to improving the cross-border exchange of law enforcement information in the EU, based on enabling a law enforcement officer of one Member State to obtain from another Member State all the information he needs to carry out his investigation (29). The exact content, the real impact, the scope and the conditions of use of this revolutionary principle are not yet clear. For it to work, a high level of trust between the law enforcement authorities of the respective Member States will be needed. The lack of such trust has been one of the biggest obstacles to European cooperation thus far. Cooperation between the European Union agencies, institutions and actors dealing with freedom, security and justice must be strengthened. Furthermore, judicial monitoring of the operations and activities stemming from the principle of availability should be ensured. The EESC supports the European Commission proposal on the protection of personal data processed in the framework of police and judicial cooperation in criminal matters (30).

| 4.2.18 | The EESC calls for appropriate cooperation between European agencies in matters of freedom, security and justice. The Hague Programme calls for stronger practical cooperation and coordination at a national level between law enforcement, judicial and customs authorities as well as between these authorities and Europol. Member States need to promote Europol as a European agency and enable it to play a decisive role, together with Eurojust, in the fight against organised crime and terrorism. It is unacceptable that the Protocols amending the Europol Convention have still not been ratified or implemented by all Member States. This is especially urgent if Europol is to receive the support and resources needed to function effectively as a cornerstone of European law enforcement cooperation. Before redefining Europol's remit, the Member States must be convinced of its benefits and the need to cooperate with it fully. Furthermore, the Programme indicates that from 1 January 2006, Europol will replace its annual European Union crime situation reports with ‘threat assessments’ on serious forms of organised crime. This increase in the practical relevance of the role played by Europol should be accompanied by a comprehensive democratic assessment of its activities. The European Parliament and the national parliaments, along with the European Court of Justice, should play a central role in the democratic supervision and judicial monitoring of its activities. |
| --- | --- |

4.2.18

The EESC calls for appropriate cooperation between European agencies in matters of freedom, security and justice. The Hague Programme calls for stronger practical cooperation and coordination at a national level between law enforcement, judicial and customs authorities as well as between these authorities and Europol. Member States need to promote Europol as a European agency and enable it to play a decisive role, together with Eurojust, in the fight against organised crime and terrorism. It is unacceptable that the Protocols amending the Europol Convention have still not been ratified or implemented by all Member States. This is especially urgent if Europol is to receive the support and resources needed to function effectively as a cornerstone of European law enforcement cooperation. Before redefining Europol's remit, the Member States must be convinced of its benefits and the need to cooperate with it fully. Furthermore, the Programme indicates that from 1 January 2006, Europol will replace its annual European Union crime situation reports with ‘threat assessments’ on serious forms of organised crime. This increase in the practical relevance of the role played by Europol should be accompanied by a comprehensive democratic assessment of its activities. The European Parliament and the national parliaments, along with the European Court of Justice, should play a central role in the democratic supervision and judicial monitoring of its activities.

| 4.2.19 | Another series of issues that have taken clear priority within the political agenda are those relating to biometrics and information systems. The incompatibility of the majority of these measures with the principles of legitimacy, proportionality and effectiveness has been regularly criticised by the European Parliament's Committee on Civil Liberties, Justice and Home Affairs (31) and by human rights organisations. The lack of adequate safeguards and effective means of legal redress reinforces these arguments. Despite the criticisms of these instruments, the Declaration on the European Union's response to the London bombings, adopted on 13 July 2005 in an extraordinary session, has highlighted the need to adopt them urgently (32). |
| --- | --- |

4.2.19

Another series of issues that have taken clear priority within the political agenda are those relating to biometrics and information systems. The incompatibility of the majority of these measures with the principles of legitimacy, proportionality and effectiveness has been regularly criticised by the European Parliament's Committee on Civil Liberties, Justice and Home Affairs (31) and by human rights organisations. The lack of adequate safeguards and effective means of legal redress reinforces these arguments. Despite the criticisms of these instruments, the Declaration on the European Union's response to the London bombings, adopted on 13 July 2005 in an extraordinary session, has highlighted the need to adopt them urgently (32).

| 4.2.20 | The Hague Programme makes setting up arrangements for the assessment of existing policies a clear priority. Before adopting these initiatives it is necessary to carry out a detailed and independent study of their effectiveness, added value, proportionality and legitimacy (compliance with human rights and civil liberties). The fight against terrorism is no justification for drafting a policy that could cause irreparable damage to the protection of freedom and democracy, and consequently lead to more insecurity for all. |
| --- | --- |

4.2.20

The Hague Programme makes setting up arrangements for the assessment of existing policies a clear priority. Before adopting these initiatives it is necessary to carry out a detailed and independent study of their effectiveness, added value, proportionality and legitimacy (compliance with human rights and civil liberties). The fight against terrorism is no justification for drafting a policy that could cause irreparable damage to the protection of freedom and democracy, and consequently lead to more insecurity for all.

| 4.2.21 | Regarding measures to combat the financing of terrorism and money laundering by criminal organisations, what is needed is a more focused approach and the transposition of the legislative acts which facilitate more effective monitoring of suspicious financial flows that could be funding criminal activities, particularly as part of the fight against money laundering (33). |
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4.2.21

Regarding measures to combat the financing of terrorism and money laundering by criminal organisations, what is needed is a more focused approach and the transposition of the legislative acts which facilitate more effective monitoring of suspicious financial flows that could be funding criminal activities, particularly as part of the fight against money laundering (33).

| 4.2.22 | The European Commission recently proposed a code of good practice for preventing the use of NGOs to finance criminal organisations. The EESC is pleased that the Commission has launched a consultation process with civil society and NGOs on this topic, but is concerned by the disturbing link drawn by the Commission between NGOs and terrorism, since it creates confusion and leads to unfair preconceptions. NGOs and organised civil society play a central role in the fight against terrorism and organised crime (34). |
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4.2.22

The European Commission recently proposed a code of good practice for preventing the use of NGOs to finance criminal organisations. The EESC is pleased that the Commission has launched a consultation process with civil society and NGOs on this topic, but is concerned by the disturbing link drawn by the Commission between NGOs and terrorism, since it creates confusion and leads to unfair preconceptions. NGOs and organised civil society play a central role in the fight against terrorism and organised crime (34).

| 4.2.23 | In accordance with and as an essential complement to the European Security Strategy, and in line with the priority given to the development of a coherent external dimension to the security policy, the Hague Programme sets out the development of integrated and coordinated EU crisis-management arrangements for crises with cross-border effects, to be implemented by 1 July 2006. These arrangements should include the assessment Member States' capabilities, stockpiling, training, joint exercises and operational plans for civilian crisis management. By the end of 2005, the European Commission will submit a Decision creating a secure general rapid alert system (ARGUS) and a Commission Crisis Centre to coordinate existing alert systems, as well as a Proposal creating a Critical Infrastructure Warning Information Network. |
| --- | --- |

4.2.23

In accordance with and as an essential complement to the European Security Strategy, and in line with the priority given to the development of a coherent external dimension to the security policy, the Hague Programme sets out the development of integrated and coordinated EU crisis-management arrangements for crises with cross-border effects, to be implemented by 1 July 2006. These arrangements should include the assessment Member States' capabilities, stockpiling, training, joint exercises and operational plans for civilian crisis management. By the end of 2005, the European Commission will submit a Decision creating a secure general rapid alert system (ARGUS) and a Commission Crisis Centre to coordinate existing alert systems, as well as a Proposal creating a Critical Infrastructure Warning Information Network.

| 4.2.24 | The EESC believes that the EU needs a new, efficient, effective, legitimate and proportional approach to the Common Security Strategy. Different forms of terrorism require different solutions and instruments tailored to the nature of the crime. |
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4.2.24

The EESC believes that the EU needs a new, efficient, effective, legitimate and proportional approach to the Common Security Strategy. Different forms of terrorism require different solutions and instruments tailored to the nature of the crime.

| 4.2.25 | Furthermore, we need to study the many roots of the violent radicalisation of vulnerable groups, and terrorist recruitment methods in order to prevent their proliferation. This should go hand in hand with promotion of and political commitment to an ongoing and open dialogue between religions and cultures, combating intolerance, racism, xenophobia and violent extremism. |
| --- | --- |

4.2.25

Furthermore, we need to study the many roots of the violent radicalisation of vulnerable groups, and terrorist recruitment methods in order to prevent their proliferation. This should go hand in hand with promotion of and political commitment to an ongoing and open dialogue between religions and cultures, combating intolerance, racism, xenophobia and violent extremism.

| 4.2.26 | The Commission should study the possibility of including terrorism in those crimes which come under the jurisdiction of the International Criminal Court. |
| --- | --- |

4.2.26

The Commission should study the possibility of including terrorism in those crimes which come under the jurisdiction of the International Criminal Court.

4.3   Strengthening justice

| 4.3.1 | In line with the philosophy put forward in the Conclusions of the Tampere European Council in 1999, the Hague Programme gives priority to creating a common European Area of Justice founded on the principle of mutual recognition of judicial decisions and access to justice. |
| --- | --- |

4.3.1

In line with the philosophy put forward in the Conclusions of the Tampere European Council in 1999, the Hague Programme gives priority to creating a common European Area of Justice founded on the principle of mutual recognition of judicial decisions and access to justice.

| 4.3.2 | In a number of areas (35), it has become evident that the development of mutual trust between the different judicial authorities and systems is necessary. It is one of the major preconditions for more far-reaching judicial cooperation in criminal and civil matters. Judicial authorities and all bodies involved in legal proceedings should consider the decisions of other Member States' authorities as equivalent to their own. Neither judicial competence and quality, nor the right to a fair trial, should be questioned. However, a lack of trust, the differences between Member States' legal systems in both criminal and civil matters, and the lack of a full and reciprocal knowledge of each others' systems still obstructs the development of a cross-border approach in these policies and the strengthening of judicial cooperation at a European level. |
| --- | --- |

4.3.2

In a number of areas (35), it has become evident that the development of mutual trust between the different judicial authorities and systems is necessary. It is one of the major preconditions for more far-reaching judicial cooperation in criminal and civil matters. Judicial authorities and all bodies involved in legal proceedings should consider the decisions of other Member States' authorities as equivalent to their own. Neither judicial competence and quality, nor the right to a fair trial, should be questioned. However, a lack of trust, the differences between Member States' legal systems in both criminal and civil matters, and the lack of a full and reciprocal knowledge of each others' systems still obstructs the development of a cross-border approach in these policies and the strengthening of judicial cooperation at a European level.

| 4.3.3 | The Hague Programme proposes the creation of a ‘European judicial culture’ based on the inherent diversity of national legal systems and traditions. Furthermore, the programme calls for greater efforts to facilitate both access to justice and judicial cooperation. In addition, mutual trust (36) should be based on the certainty that all European citizens have access to a high quality judicial system (37). |
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4.3.3

The Hague Programme proposes the creation of a ‘European judicial culture’ based on the inherent diversity of national legal systems and traditions. Furthermore, the programme calls for greater efforts to facilitate both access to justice and judicial cooperation. In addition, mutual trust (36) should be based on the certainty that all European citizens have access to a high quality judicial system (37).

| 4.3.4 | The spirit of the Hague Programme is generally less ambitious than the multi-annual programme set out in Tampere. Instead of offering numerous new measures and legal proposals, priority is given to establishing a system of objective and impartial evaluation and implementing existing measures in the field of justice, while respecting the independence of the judiciary. |
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4.3.4

The spirit of the Hague Programme is generally less ambitious than the multi-annual programme set out in Tampere. Instead of offering numerous new measures and legal proposals, priority is given to establishing a system of objective and impartial evaluation and implementing existing measures in the field of justice, while respecting the independence of the judiciary.

| 4.3.5 | In addition to the lack of mutual trust between the Member States' judicial authorities, another of the most significant obstacles to judicial cooperation in criminal matters is the fact that this comes under the third pillar of the EU, and therefore falls outside Community jurisdiction (Community method). Hence, the EU's role is somewhat limited. This has had a series of negative effects, such as a lack of efficiency and transparency, the exclusion of the European Parliament from the legislative process; in addition, the European Court of Justice does not have overall jurisdiction. Under the third pillar, Member States must accept the jurisdiction of the Court to give a ruling on the interpretation and validity of the policies developed, through a declaration to this effect. |
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4.3.5

In addition to the lack of mutual trust between the Member States' judicial authorities, another of the most significant obstacles to judicial cooperation in criminal matters is the fact that this comes under the third pillar of the EU, and therefore falls outside Community jurisdiction (Community method). Hence, the EU's role is somewhat limited. This has had a series of negative effects, such as a lack of efficiency and transparency, the exclusion of the European Parliament from the legislative process; in addition, the European Court of Justice does not have overall jurisdiction. Under the third pillar, Member States must accept the jurisdiction of the Court to give a ruling on the interpretation and validity of the policies developed, through a declaration to this effect.

| 4.3.6 | With regard to judicial cooperation in criminal matters, priority has clearly been given to measures aimed at enforcing this principle (security) at the expense of all protection of minimum procedural rights at a European level (freedom). A good example of this imbalance between freedom and security is the European arrest warrant, which represents the first step, within the field of criminal law, towards developing the principle of mutual recognition of judicial decisions (38). Despite the direct impact of this ‘Euro-warrant’, three years after its adoption there is still no parallel legislative framework protecting the procedural rights of suspects and defendants in criminal proceedings in the EU. |
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4.3.6

With regard to judicial cooperation in criminal matters, priority has clearly been given to measures aimed at enforcing this principle (security) at the expense of all protection of minimum procedural rights at a European level (freedom). A good example of this imbalance between freedom and security is the European arrest warrant, which represents the first step, within the field of criminal law, towards developing the principle of mutual recognition of judicial decisions (38). Despite the direct impact of this ‘Euro-warrant’, three years after its adoption there is still no parallel legislative framework protecting the procedural rights of suspects and defendants in criminal proceedings in the EU.

| 4.3.7 | In view of the existence of this legislative gap, in April 2004 the European Commission submitted a Proposal for a Council Framework Decision on certain procedural rights in criminal proceedings throughout the European Union (2004/328). The Decision provides for common minimum standards as regards procedural rights applying in all proceedings throughout the EU aiming to establish the guilt or innocence of a person suspected of having committed a criminal offence or to decide on the outcome following a guilty plea in respect of a criminal charge. This also includes any appeal resulting from these proceedings (39). Although many criticisms may be levelled regarding the limitations that this Decision imposes on procedural rights, its adoption would strengthen mutual trust and the protection of citizens' fundamental rights, including their right to a fair trial. The obstacles to achieving a political agreement within the Council are proving immense. It is unacceptable that Member States' representatives have not come to an agreement on this initiative (40). However, special care should be taken not to regard the urgent need to reach an agreement as justification for reducing still further the level of protection afforded suspects and defendants in legal proceedings in criminal matters as part of the package of rights set out in the proposal. |
| --- | --- |

4.3.7

In view of the existence of this legislative gap, in April 2004 the European Commission submitted a Proposal for a Council Framework Decision on certain procedural rights in criminal proceedings throughout the European Union (2004/328). The Decision provides for common minimum standards as regards procedural rights applying in all proceedings throughout the EU aiming to establish the guilt or innocence of a person suspected of having committed a criminal offence or to decide on the outcome following a guilty plea in respect of a criminal charge. This also includes any appeal resulting from these proceedings (39). Although many criticisms may be levelled regarding the limitations that this Decision imposes on procedural rights, its adoption would strengthen mutual trust and the protection of citizens' fundamental rights, including their right to a fair trial. The obstacles to achieving a political agreement within the Council are proving immense. It is unacceptable that Member States' representatives have not come to an agreement on this initiative (40). However, special care should be taken not to regard the urgent need to reach an agreement as justification for reducing still further the level of protection afforded suspects and defendants in legal proceedings in criminal matters as part of the package of rights set out in the proposal.

| 4.3.8 | The European arrest warrant is also a good example of the lack of mutual trust and the judicial complexity that often plagues the EU at a time of judicial cooperation in criminal and civil matters. While the Framework Decision has been undergoing the arduous process of transposition in the majority of Member States, the acts transposing the Euro-warrant into national law have been challenged before the constitutional courts in Germany and Poland due to its alleged incompatibility with their respective constitutional provisions. The Constitutional Court of the Federal Republic of Germany (Bundesverfassungsgericht) finally declared in its judgement of 18 July 2005 (41) that the law transposing the Euro-warrant into the German legal system was void because it infringed upon German constitutional guarantees since there is no possibility of challenging the judicial decision that grants extradition. |
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4.3.8

The European arrest warrant is also a good example of the lack of mutual trust and the judicial complexity that often plagues the EU at a time of judicial cooperation in criminal and civil matters. While the Framework Decision has been undergoing the arduous process of transposition in the majority of Member States, the acts transposing the Euro-warrant into national law have been challenged before the constitutional courts in Germany and Poland due to its alleged incompatibility with their respective constitutional provisions. The Constitutional Court of the Federal Republic of Germany (Bundesverfassungsgericht) finally declared in its judgement of 18 July 2005 (41) that the law transposing the Euro-warrant into the German legal system was void because it infringed upon German constitutional guarantees since there is no possibility of challenging the judicial decision that grants extradition.

| 4.3.9 | The European Commission's Proposal for a Council Framework Decision on the European Evidence Warrant also forms part of the complex puzzle that constitutes a system for judicial cooperation in the EU (42). The objective of this Decision would be to replace current mutual assistance arrangements with the principle of mutual recognition. The initiative provides for the possibility of issuing a ‘European Warrant’ with a view to obtaining objects, documents and data for use in criminal judicial proceedings. This Proposal has been openly criticised and labelled premature, due to the absence of a parallel legislative framework offering effective legal protection of fundamental rights. |
| --- | --- |

4.3.9

The European Commission's Proposal for a Council Framework Decision on the European Evidence Warrant also forms part of the complex puzzle that constitutes a system for judicial cooperation in the EU (42). The objective of this Decision would be to replace current mutual assistance arrangements with the principle of mutual recognition. The initiative provides for the possibility of issuing a ‘European Warrant’ with a view to obtaining objects, documents and data for use in criminal judicial proceedings. This Proposal has been openly criticised and labelled premature, due to the absence of a parallel legislative framework offering effective legal protection of fundamental rights.

| 4.3.10 | The lack of ambition displayed by the Hague Programme with regard to the justice dimension could be remedied through the recognition of the European Court of Justice's general jurisdiction over these political areas that are such sensitive issues for Member States. The Court of Justice has generally taken an innovative and proactive position on the interpretation and development of European policies. With specific regard to law enforcement and judicial cooperation in criminal matters, we should point to one of the Court's most recent and significant judgements — the Pupino case C-105/03 of 16 June 2005 (43). |
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4.3.10

The lack of ambition displayed by the Hague Programme with regard to the justice dimension could be remedied through the recognition of the European Court of Justice's general jurisdiction over these political areas that are such sensitive issues for Member States. The Court of Justice has generally taken an innovative and proactive position on the interpretation and development of European policies. With specific regard to law enforcement and judicial cooperation in criminal matters, we should point to one of the Court's most recent and significant judgements — the Pupino case C-105/03 of 16 June 2005 (43).

| 4.3.11 | With regard to judicial cooperation in civil matters, the Hague Programme reiterates the importance of borders between countries no longer constituting an obstacle to the settlement of civil law matters or to the bringing of court proceedings and the enforcement of decisions in civil matters. It is necessary to eliminate legal and judicial obstacles in litigation in civil and family matters with cross-border implications, to ensure the protection and exercise of citizens' rights. The Programme encourages the continuation of work on the conflict of laws regarding non-contractual obligations (Rome II) and contractual obligations (Rome I), a European payment order and instruments concerning alternative dispute resolution and concerning small claims. |
| --- | --- |

4.3.11

With regard to judicial cooperation in civil matters, the Hague Programme reiterates the importance of borders between countries no longer constituting an obstacle to the settlement of civil law matters or to the bringing of court proceedings and the enforcement of decisions in civil matters. It is necessary to eliminate legal and judicial obstacles in litigation in civil and family matters with cross-border implications, to ensure the protection and exercise of citizens' rights. The Programme encourages the continuation of work on the conflict of laws regarding non-contractual obligations (Rome II) and contractual obligations (Rome I), a European payment order and instruments concerning alternative dispute resolution and concerning small claims.

| 4.3.12 | Strengthening and reinforcing cooperation through mutual recognition of procedural rights and family and inheritance law also features in the priorities for the next five years. However, this is an area where the diversity of legal traditions and cultures hinders real and solid progress towards a common area of justice. Therefore, it is of particular importance to study in detail the different measures that could promote mutual trust and the idea of a common legal culture in the EU (44). |
| --- | --- |

4.3.12

Strengthening and reinforcing cooperation through mutual recognition of procedural rights and family and inheritance law also features in the priorities for the next five years. However, this is an area where the diversity of legal traditions and cultures hinders real and solid progress towards a common area of justice. Therefore, it is of particular importance to study in detail the different measures that could promote mutual trust and the idea of a common legal culture in the EU (44).

| 4.3.13 | The Hague Programme states that ‘the effective combating of cross-border organised and other serious crime and terrorism requires the cooperation and coordination of investigations and, where possible, concentrated prosecutions by Eurojust, in cooperation with Europol’. The Council should adopt the European law on Eurojust, taking account of all tasks referred to the body. The relationship (cooperation) between Eurojust and Europol should also be clarified. |
| --- | --- |

4.3.13

The Hague Programme states that ‘the effective combating of cross-border organised and other serious crime and terrorism requires the cooperation and coordination of investigations and, where possible, concentrated prosecutions by Eurojust, in cooperation with Europol’. The Council should adopt the European law on Eurojust, taking account of all tasks referred to the body. The relationship (cooperation) between Eurojust and Europol should also be clarified.

Brussels, 15 December 2005.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

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(1)  The Hague Programme: strengthening freedom, security and justice in the European Union, Council, OJ C 53 of 3.3.2005.

1

(2)  Communication from the Commission to the Council and the European Parliament: The Hague Programme: Ten priorities for the next five years – The Partnership for European renewal in the field of Freedom, Security and Justice COM(2005) 184 final, Brussels, 10.5.2005.

2

(3)  See opinions SOC/210211212 (rapporteurs: Ms King, Ms Le Nouail Marlière, Mr Cabra de Luna).

3

(4)  The Hague Programme, op.cit. Introduction.

4

(5)  Communication from the Commission to the Council and the European Parliament - Area of Freedom, Security and Justice: Assessment of the Tampere programme and future orientations COM(2004) 401 final, Brussels, 2.6.2004.

5

(6)  Denmark, Ireland and the United Kingdom negotiated special protocols to the Treaty of Amsterdam, allowing them an opt-out from the policies adopted under Title IV of the EC Treaty.

6

(7)  See opinions SOC/210-211-212 (rapporteurs: Ms King, Ms Le Nouail Marlière, Mr Cabra de Luna).

7

(8)  See the Commission Communication COM(2005) 280 final, on which the EESC is drawing up an opinion (SOC/216).

8

(9)  See opinion on Access to European Union citizenship, in OJ C 208 of 03/09/2003 (rapporteur: Mr Pariza Castaños).

9

(10)  See the EESC opinions on asylum (drawn up since Tampere).

10

(11)  See the opinion on the Commission Communication on Immigration, integration and employment (COM(2003) 336 final) in OJ C 80 of 30/03/2004 (rapporteur: Mr Pariza Castaños).

11

(12)  See opinion on the Green paper on an EU approach to managing economic migration (COM(2004) 811 final). OJ C 286 of 17.11.2005 (rapporteur: Mr Pariza Castaños).

12

(13)  See the EESC Opinion on the Directive on the conditions of entry and residence (COM(2001) 386 final in OJ C 80 of 3.4.2002) (rapporteur: Mr Pariza Castaños).

13

(14)  See the EESC Opinion on the International Convention on Migrants, OJ C 302, 7.12.2004 (rapporteur: Mr Pariza Castaños).

14

(15)  See the opinions on Immigration, integration and the role of civil society organisations in OJ C 125 of 27.5.2002 (rapporteur: Mr Pariza Castaños) and Immigration, integration and employment in OJ C 80 of 30.3.2004 (rapporteur: Mr Pariza Castaños).

15

(16)  See opinion on the Agency in OJ C 108 of 30.4.2004 (rapporteur: Mr Pariza Castaños).

16

(17)  Council Directive 2002/90/EC of 28 November 2002.

17

(18)  Council Framework Decision of 19 July 2002.

18

(19)  Directive 2004/81/EC of 29 April 2004.

19

(20)  See A Secure Europe in a Better World: European Security Strategy, Brussels, 1 December 2003, Javier Solana, EU High Representative for the Common Foreign and Security Policy.

20

A Secure Europe in a Better World: European Security Strategy

(21)  Amongst others, the proposal of the French Republic, Ireland, the Kingdom of Sweden and the United Kingdom for a Draft Framework Decision on the retention of data processed and stored in connection with the provision of publicly available electronic communications services or data on public communications networks for the purpose of prevention, investigation, detection and prosecution of crime and criminal offences including terrorism (8958/2004 of 28 April 2004) for the detection, investigation and prosecution of criminal offences, 2004/8958 of 28 April 2004. The European Commission has presented a parallel proposal for a Directive on the retention of data processed in connection with the provision of public electronic communication services (COM(2005) 438 final, 21.9.2005), which offers more assurances than the intergovernmental proposal and guarantees the involvement of the European Parliament.

21

(22)  See Article 35 of the TEU. To date, only the following 14 Member States have accepted the Court of Justice's jurisdiction in matters relating to the third pillar of the EU: Germany, Austria, Belgium, Greece, Luxembourg, the Netherlands, Sweden, Finland, Spain, Portugal, Italy, France, the Czech Republic and Hungary.

22

(23)  Belgium, Germany, Spain, France, Luxembourg, the Netherlands and Austria.

23

(24)  Inter alia: measures to prevent terrorist attacks, DNA databases, the use of air marshals, cross-border assistance in connection with major events, crises, disasters and serious accidents, and assistance with repatriation of illegal immigrants.

24

Inter alia

(25)  Council Decision establishing a European Judicial Network in civil and commercial matters, 2001/470/EC, 28 May 2001, OJ L 174, 27/6/2001.

25

(26)  Communication from the Commission, Compliance with the Charter of Fundamental Rights in Commission legislative proposals - Methodology for systematic and rigorous monitoring, COM(2005) 172 final of 27.04.2005.

26

(27)  Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data, OJ L 281 of 23 October 1995.

27

(28)  Proposal for a Council decision empowering the European Union Agency for Fundamental Rights to pursue its activities in areas referred to in Title VI of the Treaty on European Union, COM(2005) 280 final, 30 June 2005, 2005/0125/CNS.

28

(29)  On 12 October 2005, the European Commission submitted a Proposal for a Council Framework Decision on the exchange of information under the principle of availability. COM(2005) 490 final, 12.10.2005.

29

(30)  Council Framework Decision on the protection of personal data processed in the framework of police and judicial cooperation in criminal matters, COM(2005) 475, 4.10.2005.

30

(31)  Report on the initiative by the French Republic, Ireland, the Kingdom of Sweden and the United Kingdom for a Draft Framework Decision on the retention of data processed and stored in connection with the provision of publicly available electronic communications services or data on public communications networks for the purpose of prevention, investigation, detection and prosecution of crime and criminal offences including terrorism (8958/2004 – C6-0198/2004 – 2004/0813(CNS), Committee on Civil Liberties, Justice and Home Affairs, European Parliament, Rapporteur: Alexander Nuno Alvaro, 31.5.2005.

31

(32)  These proposals, which constitute a development of the Schengen acquis, include: the improvement of interoperability and synergy between the databases created by the second generation Schengen Information System (SIS II), the Visa Information System (VIS) and EURODAC; the integration of biometric identifiers in travel documents, visas, residence permits and information systems; the retention of data processed in connection with the provision of public electronic communication services for the detection, investigation and prosecution of terrorist offences; the use of Air Passengers' Data (PNR) for aviation security by the USA, Canada and Australia; the mutual consultation of DNA and fingerprint databases, etc.

32

(33)  EESC Opinion on the Proposal for a Directive on the prevention of the use of the financial system for the purpose of money laundering, including terrorist financing, COM(2004) 448 final. OJ C 267 of 27.10.2005 (rapporteur: Mr Simpson).

33

(34)  See the opinion of the Section for Employment, Social Affairs and Citizenship on the
  Proposal for a Council Decision establishing the specific Programme Prevention, Preparedness and Consequence Management of Terrorism, for the Period 2007-2013. General Programme Security and Safeguarding Liberties
  SOC (212), Rapporteur Mr Cabra de Luna, Brussels, 14 December 2005.

34

Proposal for a Council Decision establishing the specific Programme Prevention, Preparedness and Consequence Management of Terrorism, for the Period 2007-2013. General Programme Security and Safeguarding Liberties

(35)  See Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code (OJ L 302 19.10.1992 pp. 1-50).

35

(36)  The Hague Programme, op. cit. 1, paragraph 3.2. Confidence-building and mutual trust.

36

(37)  In the Action Plan implementing the Programme, the European Commission states that ‘the Union must envisage not only rules on jurisdiction, recognition and conflict of laws, but also measures which build confidence and mutual trust among Member States, creating minimum procedural standards and ensuring high standards of quality of justice systems, in particular as regards fairness and respect for the rights of defence’.

37

the Union must envisage not only rules on jurisdiction, recognition and conflict of laws, but also measures which build confidence and mutual trust among Member States, creating minimum procedural standards and ensuring high standards of quality of justice systems, in particular as regards fairness and respect for the rights of defence’

(38)  Council Framework Decision on the European arrest warrant and the surrender procedures between Member States, of 13 June 2002, 2002/584/JHA, OJ L 190, 18.7.2002, p. 1.

38

(39)  Proposal for a Council Framework Decision on certain procedural rights in criminal proceedings throughout the European Union COM(2004) 328 final, 28.4.2004.

39

(40)  The Proposal includes the following rights: access to legal advice, access to free interpretation and translation, ensuring that persons who are not capable of understanding or following the proceedings receive appropriate attention, the right to communicate with consular authorities in the case of foreign suspects and notifying suspected persons of their rights (by giving them a written ‘Letter of Rights’), Articles 2-16 of the Proposal.

40

(41)  Judgement of 18 July 2005, 2 BvR 2236/04, Bundesverfassungsgericht.

41

(42)  Proposal for a Council Framework Decision on the European Evidence Warrant for obtaining objects, documents and data for use in proceedings in criminal matters COM/2003/0688 final, 14 November 2003, CNS 2003/0270.

42

(43)  The reference for a preliminary ruling concerned the interpretation of various articles of the Framework Decision 2001/220/JHA of 15 March 2001 on the standing of victims in criminal proceedings. The judgement was presented in the context of criminal proceedings against Mrs Pupino, a nursery school teacher in Italy, charged with inflicting injuries on pupils aged less than five years. The Pupino judgement represents a revolutionary step in the construction of an area of Freedom, Security and Justice, since it is the first time that the Court of Justice has recognised openly the direct effect of Framework Decisions and that the binding character of such Decisions places on national courts an obligation to interpret national law in conformity with Community law. Furthermore, the Court stated that ‘It would be difficult for the Union to carry out its task effectively if the principle of loyal cooperation, requiring in particular that Member States take all appropriate measures, whether general or particular, to ensure fulfilment of their obligations under European Union law, were not also binding in the area of police and judicial cooperation in criminal matters, which is moreover entirely based on cooperation between the Member States’. The relationship between (and compatibility of) this judgement by the Court of Justice and the judgement by the German Constitutional Court annulling the legislation transposing the European arrest warrant is open to interpretation.

43

It would be difficult for the Union to carry out its task effectively if the principle of loyal cooperation, requiring in particular that Member States take all appropriate measures, whether general or particular, to ensure fulfilment of their obligations under European Union law, were not also binding in the area of police and judicial cooperation in criminal matters, which is moreover entirely based on cooperation between the Member States

(44)  Opinion of the European Economic and Social Committee on the ‘Proposal for a Council Decision establishing a European Judicial Network in civil and commercial matters’ (OJ C 139, 11 May 2001) and Opinion of the European Economic and Social Committee on the ‘Initiative of the Federal Republic of Germany with a view to adopting a Council Regulation on cooperation between the courts of the Member States in the taking of evidence in civil and commercial matters’ (OJ C 139, 11 May 2001).

44

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| 17.3.2006 | EN | Official Journal of the European Union | C 65/131 |
| --- | --- | --- | --- |

17.3.2006

EN

Official Journal of the European Union

C 65/131

---

Opinion of the European Economic and Social Committee on the

| — | ‘Proposal for a Regulation of the Council amending Regulation (EC) No 40/94 as regards the term of office of the President of the Office for Harmonisation in the Internal Market’ |
| --- | --- |

—

‘Proposal for a Regulation of the Council amending Regulation (EC) No 40/94 as regards the term of office of the President of the Office for Harmonisation in the Internal Market’

| — | ‘Proposal for a Regulation of the Council amending Regulation (EC) No 2100/94 as regards the term of office of the President of the Community Plant Variety Office’ |
| --- | --- |

—

‘Proposal for a Regulation of the Council amending Regulation (EC) No 2100/94 as regards the term of office of the President of the Community Plant Variety Office’

| — | ‘Proposal for a Regulation of the Council amending Regulation (EC) No 2007/2004 as regards the term of office of the Executive Director and the Deputy Executive Director of the European Agency for the Management of Operational Cooperation at the External Borders of the Member States of the European Union’ |
| --- | --- |

—

‘Proposal for a Regulation of the Council amending Regulation (EC) No 2007/2004 as regards the term of office of the Executive Director and the Deputy Executive Director of the European Agency for the Management of Operational Cooperation at the External Borders of the Member States of the European Union’

| — | ‘Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No 2062/94 establishing a European Agency for Health and Safety at Work as regards the Director's term of office’ |
| --- | --- |

—

‘Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No 2062/94 establishing a European Agency for Health and Safety at Work as regards the Director's term of office’

| — | ‘Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No 1406/2002 establishing a European Maritime Safety Agency as regards the Executive Director's term of office’ |
| --- | --- |

—

‘Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No 1406/2002 establishing a European Maritime Safety Agency as regards the Executive Director's term of office’

| — | ‘Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No 1592/2002 as regards the term of office of the Executive Director and the Directors of the European Aviation Safety Agency’ |
| --- | --- |

—

‘Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No 1592/2002 as regards the term of office of the Executive Director and the Directors of the European Aviation Safety Agency’

| — | ‘Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No 881/2004 establishing a European Railway Agency as regards the term of office of the Executive Director’ |
| --- | --- |

—

‘Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No 881/2004 establishing a European Railway Agency as regards the term of office of the Executive Director’

| — | ‘Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No 1035/97 establishing a European Monitoring Centre on Racism and Xenophobia as regards the Director's term of office’ |
| --- | --- |

—

‘Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No 1035/97 establishing a European Monitoring Centre on Racism and Xenophobia as regards the Director's term of office’

| — | ‘Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EEC) No 1210/90 on the establishment of the European Environment Agency and the European Environment Information and Observation Network as regards the term of office of the Executive Director’ |
| --- | --- |

—

‘Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EEC) No 1210/90 on the establishment of the European Environment Agency and the European Environment Information and Observation Network as regards the term of office of the Executive Director’

| — | ‘Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EEC) No 337/75 establishing a European Centre for the Development of Vocational Training as regards the Director's term of office’ |
| --- | --- |

—

‘Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EEC) No 337/75 establishing a European Centre for the Development of Vocational Training as regards the Director's term of office’

| — | ‘Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EEC) No 1365/75 on the creation of a European Foundation for the improvement of living and working conditions as regards the term of office of the director and deputy director’ |
| --- | --- |

—

‘Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EEC) No 1365/75 on the creation of a European Foundation for the improvement of living and working conditions as regards the term of office of the director and deputy director’

| — | ‘Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EEC) No 1360/90 establishing a European Training Foundation as regards the Director's term of office’ |
| --- | --- |

—

‘Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EEC) No 1360/90 establishing a European Training Foundation as regards the Director's term of office’

| — | ‘Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EEC) No 302/93 on the establishment of a European Monitoring Centre for Drugs and Drug Addiction as regards the Director's term of office’ |
| --- | --- |

—

‘Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EEC) No 302/93 on the establishment of a European Monitoring Centre for Drugs and Drug Addiction as regards the Director's term of office’

| — | ‘Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No 178/2002 as regards the term of office of the Executive Director of the European Food Safety Authority’ |
| --- | --- |

—

‘Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No 178/2002 as regards the term of office of the Executive Director of the European Food Safety Authority’

| — | ‘Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No 851/2004 establishing a European Centre for disease prevention and control as regards the Director's term of office’ |
| --- | --- |

—

‘Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No 851/2004 establishing a European Centre for disease prevention and control as regards the Director's term of office’

| — | ‘Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No 726/2004 as regards the term of office of the Executive Director of the European Medicines Agency’ |
| --- | --- |

—

‘Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No 726/2004 as regards the term of office of the Executive Director of the European Medicines Agency’

(COM((2005) 190 final — 2005/0077(CNS) — 2005/0078(CNS) — 2005/0089(CNS) — 2005/0085(COD) — 2005/0086(COD) — 2005/0087(COD) — 2005/0088(COD) — 2005/0080(CNS) — 2005/0072(COD) — 2005/0073(COD) — 2005/0074(COD) — 2005/0075(COD) — 2005/0076(COD) — 2005/0081(COD) — 2005/0082(COD) — 2005/0083(COD))

(2006/C 65/23)

On 17 June 2005, the Council decided to consult the European Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on the abovementioned proposals.

On 12 July 2005, the Committee Bureau instructed the Section for Employment, Social Affairs and Citizenship to prepare the Committee's work on the subject.

The European Economic and Social Committee appointed Ms Cser as rapporteur-general at its 422nd plenary session, held on 14 and 15 December 2005 (meeting of 15 December 2005) and adopted the following opinion by 93 votes with 2 abstentions.

1.   Summary of the proposal for a regulation

| 1.1 | The European Commission has submitted proposals for regulations harmonising procedures for appointing directors and deputy directors of agencies, amending inter alia Council Regulation (EC) 2007/2004.
  The proposals contain changes to some of the provisions of the regulations establishing 18 agencies, with regard to the appointment of their directors and deputy directors.
  There are no amendments to Council Regulation 2667/2000/EC establishing a European Agency for Reconstruction or Regulation 460/2004/EC of the European Parliament and of the Council establishing a European Network and Information Security Agency on the grounds that these agencies have only been established for a limited period and that the relevant regulations do not provide for extending the terms of office of their directors or deputy directors.
  The proposed regulations establishing a European Chemicals Agency and a Community Fisheries Control Agency have not yet been adopted; amendments harmonising their provisions are planned. |
| --- | --- |

1.1

The European Commission has submitted proposals for regulations harmonising procedures for appointing directors and deputy directors of agencies, amending inter alia Council Regulation (EC) 2007/2004.

The proposals contain changes to some of the provisions of the regulations establishing 18 agencies, with regard to the appointment of their directors and deputy directors.

There are no amendments to Council Regulation 2667/2000/EC establishing a European Agency for Reconstruction or Regulation 460/2004/EC of the European Parliament and of the Council establishing a European Network and Information Security Agency on the grounds that these agencies have only been established for a limited period and that the relevant regulations do not provide for extending the terms of office of their directors or deputy directors.

The proposed regulations establishing a European Chemicals Agency and a Community Fisheries Control Agency have not yet been adopted; amendments harmonising their provisions are planned.

| 1.2 | The proposals amend existing regulations establishing 18 agencies; identical amendments to the preamble of each regulation are proposed.
  The unified proposal for amendment stipulates that agencies should be headed by a director appointed on the basis of a proposal from the Commission for a five-year period which, on a proposal from the Commission and after evaluation, may be extended once for a period of not more than five years.
  In the evaluation the Commission assesses the results achieved in the first term of office and the way in which they were achieved, together with the agency's duties and requirements in the coming years. |
| --- | --- |

1.2

The proposals amend existing regulations establishing 18 agencies; identical amendments to the preamble of each regulation are proposed.

The unified proposal for amendment stipulates that agencies should be headed by a director appointed on the basis of a proposal from the Commission for a five-year period which, on a proposal from the Commission and after evaluation, may be extended once for a period of not more than five years.

In the evaluation the Commission assesses the results achieved in the first term of office and the way in which they were achieved, together with the agency's duties and requirements in the coming years.

2.   General comments

| 2.1 | The EESC welcomes the drafting by the European Commission of a proposal to align currently inconsistent provisions in Council regulations for the appointment of executive directors and deputy directors to the 18 agencies, and for extension of their term of office. |
| --- | --- |

2.1

The EESC welcomes the drafting by the European Commission of a proposal to align currently inconsistent provisions in Council regulations for the appointment of executive directors and deputy directors to the 18 agencies, and for extension of their term of office.

| 2.2 | The EESC appreciates and supports the Commission's aim of harmonising procedures in that European Community rules will become clearer and more manageable as a result. The activities of the European agencies will also become clearer, and their management by the Commission will be made simpler and more uniform.
  Clarity and simplicity could also benefit the executive directors of agencies and their deputies, in that the tasks and competences of the agencies in various fields will become clearer. There is inconsistency in the concepts and terms used by the various regulations establishing individual agencies referring to the appointment of executive directors, directors and deputy directors, and also to the renewal, extension or continuation of their terms of office; there is also inconsistency with regard to varying durations of terms of office, all of which gives rise to confusion in applying the rules on legal status in connection with appointments and terms of office. |
| --- | --- |

2.2

The EESC appreciates and supports the Commission's aim of harmonising procedures in that European Community rules will become clearer and more manageable as a result. The activities of the European agencies will also become clearer, and their management by the Commission will be made simpler and more uniform.

Clarity and simplicity could also benefit the executive directors of agencies and their deputies, in that the tasks and competences of the agencies in various fields will become clearer. There is inconsistency in the concepts and terms used by the various regulations establishing individual agencies referring to the appointment of executive directors, directors and deputy directors, and also to the renewal, extension or continuation of their terms of office; there is also inconsistency with regard to varying durations of terms of office, all of which gives rise to confusion in applying the rules on legal status in connection with appointments and terms of office.

3.   Specific comments

| 3.1 | The EESC endorses the aim of the proposals, but points out that Council Regulation (EEC) No 1360/90 of 7 May 1990 establishing a European Training Foundation also needs to be amended. Article 7(1) of the Regulation states that ‘the director of the Foundation shall be appointed by the governing board, on a proposal from the Commission, for a term of office of five years, which shall be renewable’.
  The Commission's proposals for regulations amending existing regulations, however, consistently use the term ‘extend’ instead of ‘renew’. |
| --- | --- |

3.1

The EESC endorses the aim of the proposals, but points out that Council Regulation (EEC) No 1360/90 of 7 May 1990 establishing a European Training Foundation also needs to be amended. Article 7(1) of the Regulation states that ‘the director of the Foundation shall be appointed by the governing board, on a proposal from the Commission, for a term of office of five years, which shall be renewable’.

The Commission's proposals for regulations amending existing regulations, however, consistently use the term ‘extend’ instead of ‘renew’.

| 3.2 | The EESC regrets that the Commission, in its explanatory referendum, incorrectly refers to Articles 223 and 225 of the EC Treaty on the appointment of judges, whereas the relevant Articles are actually 223 and 224. |
| --- | --- |

3.2

The EESC regrets that the Commission, in its explanatory referendum, incorrectly refers to Articles 223 and 225 of the EC Treaty on the appointment of judges, whereas the relevant Articles are actually 223 and 224.

| 3.3 | The EESC is unable to understand why Council Regulation (EC) No 2667/2000, which set the term of office of the executive director of the European Agency for Reconstruction at 30 months, and Council Regulation 2068/2004, which extended the Agency's mandate by 30 months to 31 December 2006, are inconsistent with the stated objectives of harmonisation. |
| --- | --- |

3.3

The EESC is unable to understand why Council Regulation (EC) No 2667/2000, which set the term of office of the executive director of the European Agency for Reconstruction at 30 months, and Council Regulation 2068/2004, which extended the Agency's mandate by 30 months to 31 December 2006, are inconsistent with the stated objectives of harmonisation.

| 3.4 | In view of the Commission's concern with harmonisation, the EESC is unable to understand why there is inconsistency in the terms used to refer to management posts.
  The EESC draws the Commission's attention to the fact that it is unrealistic and unacceptable to establish such an important and costly agency as the European Network and Information Security Agency for a period of only five years. It is likely that the mandate of this agency will be extended on a similar basis to that of the other agencies originally established for a fixed period, and therefore work is already needed to prepare the requisite amendment.
  The objectives and remit of the European Network and Information Security Agency set out in Regulation (EC) No 460/2004 of the European Parliament and of the Council of 10 March 2004 are in themselves good reason for the EESC's recommendation. |
| --- | --- |

3.4

In view of the Commission's concern with harmonisation, the EESC is unable to understand why there is inconsistency in the terms used to refer to management posts.

The EESC draws the Commission's attention to the fact that it is unrealistic and unacceptable to establish such an important and costly agency as the European Network and Information Security Agency for a period of only five years. It is likely that the mandate of this agency will be extended on a similar basis to that of the other agencies originally established for a fixed period, and therefore work is already needed to prepare the requisite amendment.

The objectives and remit of the European Network and Information Security Agency set out in Regulation (EC) No 460/2004 of the European Parliament and of the Council of 10 March 2004 are in themselves good reason for the EESC's recommendation.

| 3.5 | The EESC endorses the Commission's objectives of harmonisation, clarity and simplification. However, it is unable to understand why the Commission does not take into consideration Article 27(77) in Chapter 1 (Recruitment) of Title III (Career of Officials) of the Staff Regulations of officials of the European Communities:
  ‘Recruitment shall be directed to securing for the institution the services of officials of the highest standard of ability, efficiency and integrity, recruited on the broadest possible geographical basis from among nationals of Member States of the Communities’.
  The Commission's proposed amendment is in serious breach of this requirement in that it dispenses with the competition procedure envisaged by the EC Treaty due to budgetary considerations. In the explanatory memorandum, the Commission makes a conscious decision not to follow the competition procedure on the grounds of expedience.
  The EESC cannot accept any sidestepping of the requirements laid down in the EC Treaty and the Staff Regulations, since it would very probably exclude citizens of the ten new Member States from being appointed as directors, deputy directors or executive directors of agencies.
  The EESC does not think that the competent authorities should be allowed to choose between extension of a term of office or initiating a new recruitment procedure.
  In the Committee's view, it is important to boost public confidence in EU institutions. However, efforts to do so will be seriously jeopardised if citizens of the ten new Member States feel that management positions in EU bodies are effectively barred to them.
  Only one of the 20 European agencies has a director from one of the ten new Member States.
  The EESC recommends that the Commission, taking into consideration the above observations and European Community rules on equal opportunities, carefully review its proposals amending the existing regulations. |
| --- | --- |

3.5

The EESC endorses the Commission's objectives of harmonisation, clarity and simplification. However, it is unable to understand why the Commission does not take into consideration Article 27(77) in Chapter 1 (Recruitment) of Title III (Career of Officials) of the Staff Regulations of officials of the European Communities:

‘Recruitment shall be directed to securing for the institution the services of officials of the highest standard of ability, efficiency and integrity, recruited on the broadest possible geographical basis from among nationals of Member States of the Communities’.

The Commission's proposed amendment is in serious breach of this requirement in that it dispenses with the competition procedure envisaged by the EC Treaty due to budgetary considerations. In the explanatory memorandum, the Commission makes a conscious decision not to follow the competition procedure on the grounds of expedience.

The EESC cannot accept any sidestepping of the requirements laid down in the EC Treaty and the Staff Regulations, since it would very probably exclude citizens of the ten new Member States from being appointed as directors, deputy directors or executive directors of agencies.

The EESC does not think that the competent authorities should be allowed to choose between extension of a term of office or initiating a new recruitment procedure.

In the Committee's view, it is important to boost public confidence in EU institutions. However, efforts to do so will be seriously jeopardised if citizens of the ten new Member States feel that management positions in EU bodies are effectively barred to them.

Only one of the 20 European agencies has a director from one of the ten new Member States.

The EESC recommends that the Commission, taking into consideration the above observations and European Community rules on equal opportunities, carefully review its proposals amending the existing regulations.

Brussels, 15 December 2005.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

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| 17.3.2006 | EN | Official Journal of the European Union | C 65/134 |
| --- | --- | --- | --- |

17.3.2006

EN

Official Journal of the European Union

C 65/134

---

Opinion of the European Economic and Social Committee on the ‘Green Paper on Financial Services Policy (2005-2010)’

(COM(2005) 177 final)

(2006/C 65/24)

On 3 May 2005 the European Commission decided to consult the European Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on the Green Paper on Financial Services Policy (2005-2010).

The Section for Single Market, Production and Consumption, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 20 October 2005. The rapporteur was Mr Ravoet.

At its 422nd plenary session, held on 14 and 15 December 2005 (meeting of 15 December), the European Economic and Social Committee adopted the following opinion by 115 votes with 1 abstention.

1.   Background

| 1.1 | The European Commission's Green Paper on financial services policy launches ideas to further integrate EU financial markets. It focuses primarily on implementing existing rules agreed under the Financial Services Action Plan (FSAP) and on cooperation, rather than on proposing new laws. It explores ways of improving cross-border access to retail financial services and asset management. |
| --- | --- |

1.1

The European Commission's Green Paper on financial services policy launches ideas to further integrate EU financial markets. It focuses primarily on implementing existing rules agreed under the Financial Services Action Plan (FSAP) and on cooperation, rather than on proposing new laws. It explores ways of improving cross-border access to retail financial services and asset management.

| 1.2 | The Green Paper emphasizes the short-term need to complete unfinished business and finalise legislation currently under negotiation in the European Parliament and the Council. It also stresses that existing legislation must be implemented effectively, in three phases: effective transposition of EU rules into national law; more rigorous enforcement by supervisory authorities; and continuous ex-post evaluation. At all stages of any future regulatory process, the Commission has stated that it will apply the rigorous ‘better regulation’ approach, with thorough impact assessment and extensive consultation. |
| --- | --- |

1.2

The Green Paper emphasizes the short-term need to complete unfinished business and finalise legislation currently under negotiation in the European Parliament and the Council. It also stresses that existing legislation must be implemented effectively, in three phases: effective transposition of EU rules into national law; more rigorous enforcement by supervisory authorities; and continuous ex-post evaluation. At all stages of any future regulatory process, the Commission has stated that it will apply the rigorous ‘better regulation’ approach, with thorough impact assessment and extensive consultation.

| 1.3 | In a few areas, the Commission may propose new initiatives. Separate Green Papers on asset management and mortgage credit were published in July 2005. |
| --- | --- |

1.3

In a few areas, the Commission may propose new initiatives. Separate Green Papers on asset management and mortgage credit were published in July 2005.

| 1.4 | The Commission notes that the EU retail financial services market remains fragmented. It has therefore undertaken to examine, among other things, ways to make cross-border use of bank accounts more consumer friendly and to break down barriers so that customers can shop around across the EU for the best savings plans, mortgages, insurance and pensions, with clear information to facilitate product comparison. |
| --- | --- |

1.4

The Commission notes that the EU retail financial services market remains fragmented. It has therefore undertaken to examine, among other things, ways to make cross-border use of bank accounts more consumer friendly and to break down barriers so that customers can shop around across the EU for the best savings plans, mortgages, insurance and pensions, with clear information to facilitate product comparison.

| 1.5 | Other issues covered in the Green Paper include ensuring that supervisory practices and standards converge across Europe, encouraging cross-border investment and taking advantage of the EU's strategic opportunity to influence the regulatory parameters of the emerging global financial market. The Commission proposes strengthening financial relations with the US, Japan and China. |
| --- | --- |

1.5

Other issues covered in the Green Paper include ensuring that supervisory practices and standards converge across Europe, encouraging cross-border investment and taking advantage of the EU's strategic opportunity to influence the regulatory parameters of the emerging global financial market. The Commission proposes strengthening financial relations with the US, Japan and China.

2.   General observations

| 2.1 | The European Economic and Social Committee (EESC) welcomes the opportunity to offer its opinion on the European Commission's priorities for financial services policy from 2005 to 2010. As we move into a post-FSAP environment, it is right for the Commission to take stock of what has been achieved and what its future priorities should be. |
| --- | --- |

2.1

The European Economic and Social Committee (EESC) welcomes the opportunity to offer its opinion on the European Commission's priorities for financial services policy from 2005 to 2010. As we move into a post-FSAP environment, it is right for the Commission to take stock of what has been achieved and what its future priorities should be.

| 2.2 | The Commission rightly considers the FSAP to have been one of the successes of the first phase of the Lisbon strategy. During the strategy's crucial second and final phase through to 2010, it will be more essential than ever to ensure that financial services policy promotes the achievement of the Lisbon goals of growth and jobs. |
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2.2

The Commission rightly considers the FSAP to have been one of the successes of the first phase of the Lisbon strategy. During the strategy's crucial second and final phase through to 2010, it will be more essential than ever to ensure that financial services policy promotes the achievement of the Lisbon goals of growth and jobs.

| 2.3 | The EESC thus supports the Commission's aim of encouraging depth, liquidity and dynamism in financial markets so as to enable capital and financial services to be channelled efficiently to all parts of the economy. A stable, integrated and competitive financial sector, in which consumers have a high level of confidence inculcated through effective consumer protection measures, is a necessary condition for the EU economy to thrive. |
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2.3

The EESC thus supports the Commission's aim of encouraging depth, liquidity and dynamism in financial markets so as to enable capital and financial services to be channelled efficiently to all parts of the economy. A stable, integrated and competitive financial sector, in which consumers have a high level of confidence inculcated through effective consumer protection measures, is a necessary condition for the EU economy to thrive.

| 2.4 | The EESC also endorses the Commission's proposal to refocus its efforts over the next five years and to concentrate on bringing to fruition the initiatives taken so far. At this stage, past initiatives should be monitored and evaluated, and any new initiatives should be introduced with caution and due consideration of the consumer angle. A cost/benefit analysis should automatically become an integral part of new legislation; legislation that must be drafted sufficiently clearly to avoid subsequent ‘gold plating’ by the Member States. |
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2.4

The EESC also endorses the Commission's proposal to refocus its efforts over the next five years and to concentrate on bringing to fruition the initiatives taken so far. At this stage, past initiatives should be monitored and evaluated, and any new initiatives should be introduced with caution and due consideration of the consumer angle. A cost/benefit analysis should automatically become an integral part of new legislation; legislation that must be drafted sufficiently clearly to avoid subsequent ‘gold plating’ by the Member States.

3.   Specific observations

| 3.1 | The EESC congratulates the Commission for the high quality of the proposals contained in the Green Paper and broadly supports most of the proposals it sets out. This EESC opinion on the Green Paper thus seeks to underline those areas considered to be of particular importance for EU organised civil society while at the same time asking the Commission for more specific details on its planned proposals on a number of key issues. |
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3.1

The EESC congratulates the Commission for the high quality of the proposals contained in the Green Paper and broadly supports most of the proposals it sets out. This EESC opinion on the Green Paper thus seeks to underline those areas considered to be of particular importance for EU organised civil society while at the same time asking the Commission for more specific details on its planned proposals on a number of key issues.

3.2   Key political orientation of the Green Paper

| 3.2.1 | The EESC agrees with the overall objectives of Commission policy over the next five years and with the proposed key political orientation. |
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3.2.1

The EESC agrees with the overall objectives of Commission policy over the next five years and with the proposed key political orientation.

| 3.2.2 | The EESC supports the European Commission's overall aim of creating an open and economically efficient European financial market governed by adequate supervisory rules that guarantee a sufficiently high level of consumer protection. The Commission must be mindful that consumer protection and consumer confidence go hand in hand. Therefore, while we feel that the Commission's objectives are moving towards the right balance between recognising the role of employers and employees, or financial institutions and consumers, in organised civil society, the central role of an effective consumer protection policy should also be acknowledged. Competent and sufficient personnel has a key role to play in creating consumer confidence and in providing consumer education. |
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3.2.2

The EESC supports the European Commission's overall aim of creating an open and economically efficient European financial market governed by adequate supervisory rules that guarantee a sufficiently high level of consumer protection. The Commission must be mindful that consumer protection and consumer confidence go hand in hand. Therefore, while we feel that the Commission's objectives are moving towards the right balance between recognising the role of employers and employees, or financial institutions and consumers, in organised civil society, the central role of an effective consumer protection policy should also be acknowledged. Competent and sufficient personnel has a key role to play in creating consumer confidence and in providing consumer education.

| 3.2.3 | The EESC shares the Commission's view that the watchwords of cross-border competition, market access, enhanced transparency, market integrity, financial stability, international competitiveness of the EU financial sector and efficiency are still valid today. However, the Commission should also recognise that consumer needs must be considered too as a determining criterion for any initiative it proposes. Consumer confidence in financial services would be a good yardstick by which the Commission could measure how successful it has been in meeting consumers' demands. |
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3.2.3

The EESC shares the Commission's view that the watchwords of cross-border competition, market access, enhanced transparency, market integrity, financial stability, international competitiveness of the EU financial sector and efficiency are still valid today. However, the Commission should also recognise that consumer needs must be considered too as a determining criterion for any initiative it proposes. Consumer confidence in financial services would be a good yardstick by which the Commission could measure how successful it has been in meeting consumers' demands.

| 3.2.4 | Small and medium-sized enterprises (SMEs) are economic catalysts whose needs should be at the heart of EU policymaking. The EESC strongly supports the notion that a climate which encourages entrepreneurship, supported by a well-functioning risk capital market, is essential for promoting new and innovative firms, thereby raising productivity and the sustainable rate of economic growth in the EU. The EU's financial services policy has improved the legal environment for capital-raising by SMEs, for example through the Prospectus Directive (1). Non-regulatory initiatives may also be appropriate. |
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3.2.4

Small and medium-sized enterprises (SMEs) are economic catalysts whose needs should be at the heart of EU policymaking. The EESC strongly supports the notion that a climate which encourages entrepreneurship, supported by a well-functioning risk capital market, is essential for promoting new and innovative firms, thereby raising productivity and the sustainable rate of economic growth in the EU. The EU's financial services policy has improved the legal environment for capital-raising by SMEs, for example through the Prospectus Directive (1). Non-regulatory initiatives may also be appropriate.

| 3.2.5 | Given the EESC's commitment to the EU's global competitiveness and competition, we agree with the Commission that the ‘better regulation’ approach must be rigorously applied to all its initiatives. However, the EESC would strongly advocate that a number of factors be taken into account before the ‘better regulation’ approach is pursued. Firstly, the EESC would expect impact studies to be carried out by independent and competent organisations. There should be no overemphasis on financial services integration per se without taking consumers' interests into account: both sides of the coin have to be considered. Social and employment aspects must be included into all assessments. Extensive consultation before the impact studies are finalised and a balanced, evidence-based approach are needed. It must also be borne in mind that consumer groups usually have more limited resources than the industry. For instance, participating in Forum Groups for specific retail products might put serious strain on consumer organisations' staff resources. |
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3.2.5

Given the EESC's commitment to the EU's global competitiveness and competition, we agree with the Commission that the ‘better regulation’ approach must be rigorously applied to all its initiatives. However, the EESC would strongly advocate that a number of factors be taken into account before the ‘better regulation’ approach is pursued. Firstly, the EESC would expect impact studies to be carried out by independent and competent organisations. There should be no overemphasis on financial services integration per se without taking consumers' interests into account: both sides of the coin have to be considered. Social and employment aspects must be included into all assessments. Extensive consultation before the impact studies are finalised and a balanced, evidence-based approach are needed. It must also be borne in mind that consumer groups usually have more limited resources than the industry. For instance, participating in Forum Groups for specific retail products might put serious strain on consumer organisations' staff resources.

| 3.2.6 | The EESC considers the stated evidence-based policymaking approach to be the right one, provided it gives due consideration to the consumer dimension. It also asks the Commission to state explicitly that this commitment not only applies to the legislation emanating from DG Internal Market and Services, but also to that proposed by the other directorates-general. The EESC would also strongly support the Commission in calling for the European Parliament and, in our view, the Council in particular, to apply the same ‘better regulation’ principles as outlined above, as a safeguard against Commission proposals emerging from the co-decision negotiations as overly complex versions of the original Commission text. Finally the EESC notes that the ‘better regulation’ approach also needs to be applied by the Level 3 committees (2) and the global standard setters (3). |
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3.2.6

The EESC considers the stated evidence-based policymaking approach to be the right one, provided it gives due consideration to the consumer dimension. It also asks the Commission to state explicitly that this commitment not only applies to the legislation emanating from DG Internal Market and Services, but also to that proposed by the other directorates-general. The EESC would also strongly support the Commission in calling for the European Parliament and, in our view, the Council in particular, to apply the same ‘better regulation’ principles as outlined above, as a safeguard against Commission proposals emerging from the co-decision negotiations as overly complex versions of the original Commission text. Finally the EESC notes that the ‘better regulation’ approach also needs to be applied by the Level 3 committees (2) and the global standard setters (3).

| 3.2.7 | The EESC notes that unless proposed regulations and standards undergo a competitiveness test, the prospects of the EU ever meeting the Lisbon objectives will be much diminished. This would undermine the EU's global competitiveness, its financial stability and its ability to create jobs. The EESC considers this too great an opportunity to be missed. At the same time as testing the competitiveness of new initiatives, the Commission must also test its ability to deal with issues that consumers and providers might face in the market. |
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3.2.7

The EESC notes that unless proposed regulations and standards undergo a competitiveness test, the prospects of the EU ever meeting the Lisbon objectives will be much diminished. This would undermine the EU's global competitiveness, its financial stability and its ability to create jobs. The EESC considers this too great an opportunity to be missed. At the same time as testing the competitiveness of new initiatives, the Commission must also test its ability to deal with issues that consumers and providers might face in the market.

| 3.2.8 | The EESC is pleased to see that the Commission is willing to make greater use of all its competition powers to ensure that the broad FSAP objectives of furthering integration are not hindered by anti-competitive behaviour. However, it would call on the Commission to provide legal certainty, for example through the creation of a ‘safe harbour’, regarding the conditions under which self-regulation is not deemed to breach competition law. |
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3.2.8

The EESC is pleased to see that the Commission is willing to make greater use of all its competition powers to ensure that the broad FSAP objectives of furthering integration are not hindered by anti-competitive behaviour. However, it would call on the Commission to provide legal certainty, for example through the creation of a ‘safe harbour’, regarding the conditions under which self-regulation is not deemed to breach competition law.

| 3.2.9 | The EESC supports the continued use of the Lamfalussy approach. Thus, at Level 2 of the Lamfalussy process, the EESC calls on the EU institutions to come to an (inter-institutional) agreement to put the European Parliament in the same position as co-legislator as it would have had under Article I-36 of the Constitutional Treaty. Among other things, this will prevent the sunset clauses from taking effect from April 2007 (as would be the case in the Market Abuse Directive) (4). |
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3.2.9

The EESC supports the continued use of the Lamfalussy approach. Thus, at Level 2 of the Lamfalussy process, the EESC calls on the EU institutions to come to an (inter-institutional) agreement to put the European Parliament in the same position as co-legislator as it would have had under Article I-36 of the Constitutional Treaty. Among other things, this will prevent the sunset clauses from taking effect from April 2007 (as would be the case in the Market Abuse Directive) (4).

| 3.2.10 | However, while the Commission may well claim that ‘European decision-making and regulatory structures have become more rational and efficient as a result of the Lamfalussy process,’ questions have been raised as to the efficiency and speed of that process. Lawmaking may not be faster and more efficient since the consultation required for the implementing measures impacts on the time it takes to agree the final package. It is, therefore, up to all sides to strike the right balance between sufficient consultation on the one hand, and expediency on the other. Moreover, the EESC hesitates to express its support for applying the Lamfalussy process to retail financial services issues if Member States' discretionary powers in the field of consumer protection would thereby be called into question. |
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3.2.10

However, while the Commission may well claim that ‘European decision-making and regulatory structures have become more rational and efficient as a result of the Lamfalussy process,’ questions have been raised as to the efficiency and speed of that process. Lawmaking may not be faster and more efficient since the consultation required for the implementing measures impacts on the time it takes to agree the final package. It is, therefore, up to all sides to strike the right balance between sufficient consultation on the one hand, and expediency on the other. Moreover, the EESC hesitates to express its support for applying the Lamfalussy process to retail financial services issues if Member States' discretionary powers in the field of consumer protection would thereby be called into question.

3.3   Better regulation, transposition, enforcement and continuous evaluation

| 3.3.1 | The EESC agrees in principle with the priority measures identified by the Commission. It is now equally important for the Commission to state explicitly how it will seek to turn its well-intended language on better regulation into practical and tangible steps to meet its own objectives. It is especially important for the Commission to communicate these ideas clearly so that its stakeholders have a very real picture of how the Commission intends to deliver on its objectives and how its stakeholders can become involved in the process. |
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3.3.1

The EESC agrees in principle with the priority measures identified by the Commission. It is now equally important for the Commission to state explicitly how it will seek to turn its well-intended language on better regulation into practical and tangible steps to meet its own objectives. It is especially important for the Commission to communicate these ideas clearly so that its stakeholders have a very real picture of how the Commission intends to deliver on its objectives and how its stakeholders can become involved in the process.

| 3.3.2 | The EU needs the most effective strategy to stimulate growth and create jobs in a way that benefits society as a whole. Excessively burdensome and inappropriate legislation only serves to stymie economic growth and job creation. The EESC thus notes with interest the proposed evaluation of whether existing directives and regulations are delivering the expected economic benefits. It welcomes the Commission's commitment to modify or repeal those measures that clearly fail to pass such a test and looks forward to words consistently being turned into action. Nonetheless, the EESC feels that consumer interests need to be given high priority in any such assessment. Account must therefore be taken not only of economic benefits as such, but specifically of economic benefits to consumers, including any potential harm they may suffer. |
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3.3.2

The EU needs the most effective strategy to stimulate growth and create jobs in a way that benefits society as a whole. Excessively burdensome and inappropriate legislation only serves to stymie economic growth and job creation. The EESC thus notes with interest the proposed evaluation of whether existing directives and regulations are delivering the expected economic benefits. It welcomes the Commission's commitment to modify or repeal those measures that clearly fail to pass such a test and looks forward to words consistently being turned into action. Nonetheless, the EESC feels that consumer interests need to be given high priority in any such assessment. Account must therefore be taken not only of economic benefits as such, but specifically of economic benefits to consumers, including any potential harm they may suffer.

| 3.3.3 | The EESC welcomes the Commission's strong emphasis on the proper transposition, implementation and enforcement of the FSAP measures and considers this a sine qua non for successful delivery of the FSAP's intended objectives. The EESC notes however that the buy-in of the Member States and of the Lamfalussy Level 3 committees is essential to the process as without their unconditional and unequivocal commitment nothing will be achieved, however well intentioned and determined the Commission may be. |
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3.3.3

The EESC welcomes the Commission's strong emphasis on the proper transposition, implementation and enforcement of the FSAP measures and considers this a sine qua non for successful delivery of the FSAP's intended objectives. The EESC notes however that the buy-in of the Member States and of the Lamfalussy Level 3 committees is essential to the process as without their unconditional and unequivocal commitment nothing will be achieved, however well intentioned and determined the Commission may be.

| 3.3.4 | The EESC therefore urges the Commission to keep the momentum going and maintain the commitment of the heads of state or government, the ECOFIN members and the Level 3 committees, as it is important that they take ownership of the single market. Moreover, the EESC feels that in the current mood of reflection on the role and destiny of the European Union, the Commission must urge Member States to communicate clearly to their citizens the purpose of decisions taken at European level, and the reasoning behind them. Importantly, society should be made aware of how it could and should be involved in European policymaking in general, and in building the single market in particular. |
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3.3.4

The EESC therefore urges the Commission to keep the momentum going and maintain the commitment of the heads of state or government, the ECOFIN members and the Level 3 committees, as it is important that they take ownership of the single market. Moreover, the EESC feels that in the current mood of reflection on the role and destiny of the European Union, the Commission must urge Member States to communicate clearly to their citizens the purpose of decisions taken at European level, and the reasoning behind them. Importantly, society should be made aware of how it could and should be involved in European policymaking in general, and in building the single market in particular.

| 3.3.5 | In order to facilitate the global competitiveness and financial stability which the single market is designed to create, the EESC particularly endorses the Commission's recommendation 6 (5). In relation to what is commonly referred to as ‘gold-plating’, this recommendation states that Member States should ‘refrain from adding to national implementation legislation conditions or requirements that are not necessary to transpose the Directive concerned, where such conditions or requirements may hinder attainment of the objectives pursued by the Directive’. |
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3.3.5

In order to facilitate the global competitiveness and financial stability which the single market is designed to create, the EESC particularly endorses the Commission's recommendation 6 (5). In relation to what is commonly referred to as ‘gold-plating’, this recommendation states that Member States should ‘refrain from adding to national implementation legislation conditions or requirements that are not necessary to transpose the Directive concerned, where such conditions or requirements may hinder attainment of the objectives pursued by the Directive’.

| 3.3.6 | That said, the EESC encourages the Commission to make sure that the language used in the EU legislation is sufficiently clear. Indeed, the EESC notes that what is sometimes described as ‘gold-plating’ might simply be an attempt by Member States to clarify EU texts, thereby saving a burden on business rather than imposing one. Either way, whether it is a case of EU Member States seeking ‘super equivalency’ with EU legislation or an attempt to clarify EU legal texts, a burden does accrue. Since such burdens often have a disproportionately large impact on SMEs, the Commission must be mindful to ensure that entrepreneurs and innovators in society are not stifled by bureaucracy and legislation. |
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3.3.6

That said, the EESC encourages the Commission to make sure that the language used in the EU legislation is sufficiently clear. Indeed, the EESC notes that what is sometimes described as ‘gold-plating’ might simply be an attempt by Member States to clarify EU texts, thereby saving a burden on business rather than imposing one. Either way, whether it is a case of EU Member States seeking ‘super equivalency’ with EU legislation or an attempt to clarify EU legal texts, a burden does accrue. Since such burdens often have a disproportionately large impact on SMEs, the Commission must be mindful to ensure that entrepreneurs and innovators in society are not stifled by bureaucracy and legislation.

| 3.3.7 | Moreover, the single market must not increase consumer risk by removing existing, national-level protection. National consumer protection rules and regulations grew up to address issues relevant to national markets, and should not therefore necessarily be viewed as barriers to an internal market. The EESC is not convinced that current national consumer protection provisions ordinarily distort competition and innovation as such or restrict the development of a cross-border market. It is not enough to assume that the removal of perceived barriers will necessarily result in a functioning and effective cross-border consumer market. Nonetheless, Member States must be mindful not to introduce additional consumer protection measures with the result that their respective local markets are in some way protected from competition from other European markets. The EESC considers full harmonisation of key retail banking elements (such as pre-contractual information, Annual Percentage Rate of Charge, etc.), i.e. ‘targeted full harmonisation’, as the most effective means of creating a genuine European internal market for retail banking services while at the same time providing an adequate level of consumer protection. |
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3.3.7

Moreover, the single market must not increase consumer risk by removing existing, national-level protection. National consumer protection rules and regulations grew up to address issues relevant to national markets, and should not therefore necessarily be viewed as barriers to an internal market. The EESC is not convinced that current national consumer protection provisions ordinarily distort competition and innovation as such or restrict the development of a cross-border market. It is not enough to assume that the removal of perceived barriers will necessarily result in a functioning and effective cross-border consumer market. Nonetheless, Member States must be mindful not to introduce additional consumer protection measures with the result that their respective local markets are in some way protected from competition from other European markets. The EESC considers full harmonisation of key retail banking elements (such as pre-contractual information, Annual Percentage Rate of Charge, etc.), i.e. ‘targeted full harmonisation’, as the most effective means of creating a genuine European internal market for retail banking services while at the same time providing an adequate level of consumer protection.

3.4   Consolidation of financial services legislation over the 2005-2010 period

3.4.1   Finish remaining measures

| 3.4.1.1 | It is logical that existing initiatives should be completed and consolidated before embarking on new undertakings. The EESC thus agrees with the Commission that the overriding priority for the next 12 months must be to complete the remaining elements of the FSAP. This means completing negotiations in the European Parliament and Council, finalising the implementing measures that are in the pipeline at the Commission and, subject to a conclusive and thorough impact assessment, submitting a framework Directive for securities clearing and settlement. |
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3.4.1.1

It is logical that existing initiatives should be completed and consolidated before embarking on new undertakings. The EESC thus agrees with the Commission that the overriding priority for the next 12 months must be to complete the remaining elements of the FSAP. This means completing negotiations in the European Parliament and Council, finalising the implementing measures that are in the pipeline at the Commission and, subject to a conclusive and thorough impact assessment, submitting a framework Directive for securities clearing and settlement.

3.4.2   Efficient and effective supervision

| 3.4.2.1 | While the EESC welcomes an evolutionary approach as recommended by the Commission, it strongly feels that the Green Paper has missed an opportunity to set out clear and ambitious policy objectives on banking supervision. We believe it is essential to outline the critical path, i.e. to show how the many separate but interrelated issues are to be dealt with in the coming years. The EESC hopes therefore to see more concrete proposals set out in the White Paper. Proposals put forward for banking supervision should also read across to the insurance sector. |
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3.4.2.1

While the EESC welcomes an evolutionary approach as recommended by the Commission, it strongly feels that the Green Paper has missed an opportunity to set out clear and ambitious policy objectives on banking supervision. We believe it is essential to outline the critical path, i.e. to show how the many separate but interrelated issues are to be dealt with in the coming years. The EESC hopes therefore to see more concrete proposals set out in the White Paper. Proposals put forward for banking supervision should also read across to the insurance sector.

| 3.4.2.2 | In a bid to foster a proper culture of consumer protection, where the most vulnerable consumers are afforded more protection than experienced investors, thereby enabling the EU to compete globally and to generate growth, the EESC has identified a number of issues that need to be addressed in a way that gives prime importance to consumer interests:






  — | the elimination of duplicative supervision; |
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3.4.2.2

In a bid to foster a proper culture of consumer protection, where the most vulnerable consumers are afforded more protection than experienced investors, thereby enabling the EU to compete globally and to generate growth, the EESC has identified a number of issues that need to be addressed in a way that gives prime importance to consumer interests:

—

the elimination of duplicative supervision;

| — | the elimination of inconsistencies between directives and obsolete exceptions to the home-country principle; |
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the elimination of inconsistencies between directives and obsolete exceptions to the home-country principle;

| — | a review of the safety nets and possible examination of supervisory models; |
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a review of the safety nets and possible examination of supervisory models;

| — | supervisory convergence around best practice standards; |
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supervisory convergence around best practice standards;

| — | cooperation between Level 3 committees (CESR, CEBS and CEIOPS); |
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—

cooperation between Level 3 committees (CESR, CEBS and CEIOPS);

| — | cooperation between all stakeholders. |
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—

cooperation between all stakeholders.

| 3.4.2.3 | In line with its opinion (6) of 9 March 2005 on the proposed Capital Requirements Directive the EESC welcomes the Commission's acknowledgement that consolidated supervision is a legitimate demand from industry. Assuming that consolidated supervision in no way encroaches on Member States' ability to react if operators breach the rules to the detriment of consumers active in their market, the EESC believes that such supervision would provide an appropriate degree of consumer protection while keeping any duplication of regulatory requirements to a minimum. This would in turn enhance the efficiency of the EU financial sector. However, the EESC feels that the Commission paper is not clear on whether supervisory convergence is needed before consolidated supervision can be delivered. The EESC believes that the objective and eventual implementation of consolidated supervision should, within a short space of time, act as a catalyst for supervisory convergence. |
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3.4.2.3

In line with its opinion (6) of 9 March 2005 on the proposed Capital Requirements Directive the EESC welcomes the Commission's acknowledgement that consolidated supervision is a legitimate demand from industry. Assuming that consolidated supervision in no way encroaches on Member States' ability to react if operators breach the rules to the detriment of consumers active in their market, the EESC believes that such supervision would provide an appropriate degree of consumer protection while keeping any duplication of regulatory requirements to a minimum. This would in turn enhance the efficiency of the EU financial sector. However, the EESC feels that the Commission paper is not clear on whether supervisory convergence is needed before consolidated supervision can be delivered. The EESC believes that the objective and eventual implementation of consolidated supervision should, within a short space of time, act as a catalyst for supervisory convergence.

3.4.3   Enabling cross-border investment and competition

| 3.4.3.1 | Removing unjustified barriers to consolidation will indeed bring economic benefits. These economic benefits will translate into increased dynamism in the European economy, which will mean an EU that can better create jobs and raise the standards of living for its citizens. The EESC therefore supports the Commission's objective of eliminating or reducing unjustified barriers to cross-border transactions, such as consolidation through mergers and acquisitions (M&A). In recent years, cross-border activity has grown significantly, yet we have seen a relatively low level of M&A in EU banking, although a number of such transactions have been completed in recent months or are in the pipeline. The reason lies partly in structural obstacles within the European banking market, many of which cannot be justified on grounds of enhancing customer value or financial stability, and could be removed or alleviated by policy action. A restructuring of the industry will lead to great changes for all parties involved — employees, companies and customers. An overall strategy is needed on how to tackle the effects of change. |
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3.4.3.1

Removing unjustified barriers to consolidation will indeed bring economic benefits. These economic benefits will translate into increased dynamism in the European economy, which will mean an EU that can better create jobs and raise the standards of living for its citizens. The EESC therefore supports the Commission's objective of eliminating or reducing unjustified barriers to cross-border transactions, such as consolidation through mergers and acquisitions (M&A). In recent years, cross-border activity has grown significantly, yet we have seen a relatively low level of M&A in EU banking, although a number of such transactions have been completed in recent months or are in the pipeline. The reason lies partly in structural obstacles within the European banking market, many of which cannot be justified on grounds of enhancing customer value or financial stability, and could be removed or alleviated by policy action. A restructuring of the industry will lead to great changes for all parties involved — employees, companies and customers. An overall strategy is needed on how to tackle the effects of change.

| 3.4.3.2 | The EESC agrees with the view expressed in the Green Paper that consolidation is not an end in itself, but a means to achieve economies of scale and scope. These in turn enable banks to offer their customers, whether individuals, SMEs or larger players, a wider range of services at a better price. It should also be noted that consolidation and realising synergies does not automatically imply a reduction in staff numbers across a merged banking group; in fact the opposite is often true. Therefore, the EESC considers this to be an important factor for employment since the financial sector is already an important employer in Europe. Banks will not take on the costs and risks associated with M&A unless they see that these economic benefits, or synergies, are achievable. In this context, the EESC looks forward to the up-coming European Commission study of barriers to cross-border M&A in Europe. |
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3.4.3.2

The EESC agrees with the view expressed in the Green Paper that consolidation is not an end in itself, but a means to achieve economies of scale and scope. These in turn enable banks to offer their customers, whether individuals, SMEs or larger players, a wider range of services at a better price. It should also be noted that consolidation and realising synergies does not automatically imply a reduction in staff numbers across a merged banking group; in fact the opposite is often true. Therefore, the EESC considers this to be an important factor for employment since the financial sector is already an important employer in Europe. Banks will not take on the costs and risks associated with M&A unless they see that these economic benefits, or synergies, are achievable. In this context, the EESC looks forward to the up-coming European Commission study of barriers to cross-border M&A in Europe.

| 3.4.3.3 | It is logical therefore that the EESC should call on the Commission to publish a ‘roadmap’ of intended measures in this area with specific reference to a timeframe within which these measures will be addressed. |
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3.4.3.3

It is logical therefore that the EESC should call on the Commission to publish a ‘roadmap’ of intended measures in this area with specific reference to a timeframe within which these measures will be addressed.

3.4.4   The external dimension

| 3.4.4.1 | The EESC broadly endorses this section and fully agrees with the Commission that the EU's financial sector must be competitive in global markets. The EESC thus welcomes in particular the Commission's initiatives to deepen the EU-US financial markets dialogue, to strengthen financial relations with Japan, China and India and to widen the agendas of the above-mentioned dialogue. The EESC feels that this is of crucial importance, not least given the increasingly prominent role played by China and India in the global economy. |
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3.4.4.1

The EESC broadly endorses this section and fully agrees with the Commission that the EU's financial sector must be competitive in global markets. The EESC thus welcomes in particular the Commission's initiatives to deepen the EU-US financial markets dialogue, to strengthen financial relations with Japan, China and India and to widen the agendas of the above-mentioned dialogue. The EESC feels that this is of crucial importance, not least given the increasingly prominent role played by China and India in the global economy.

| 3.4.4.2 | The globalisation of capital markets and financial services and the absence of truly international decision-making bodies have resulted in global standard setters playing a very important role in policymaking. The EESC believes that the EU does not sufficiently speak with one voice in some of these fora. In some cases, this may affect the EU's ability to influence these standards and may thus run counter to European interests. |
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3.4.4.2

The globalisation of capital markets and financial services and the absence of truly international decision-making bodies have resulted in global standard setters playing a very important role in policymaking. The EESC believes that the EU does not sufficiently speak with one voice in some of these fora. In some cases, this may affect the EU's ability to influence these standards and may thus run counter to European interests.

| 3.4.4.3 | Given the different nature and role of these fora, ad-hoc solutions should be preferred over a one-size-fits-all approach whilst ensuring that Europe speaks with one strong single voice in international standard setting. The EESC highlights that the objective in this arena is to arrive at single global standards, especially appropriate in accounting, where Europe's views are well represented and not to develop separate European standards that are at odds with the global norm. This approach would not only ensure that Europe's financial services industry and its consumers have a single strong voice on the global stage but would help to create a global level playing field with all the economic advantages that this development would imply. |
| --- | --- |

3.4.4.3

Given the different nature and role of these fora, ad-hoc solutions should be preferred over a one-size-fits-all approach whilst ensuring that Europe speaks with one strong single voice in international standard setting. The EESC highlights that the objective in this arena is to arrive at single global standards, especially appropriate in accounting, where Europe's views are well represented and not to develop separate European standards that are at odds with the global norm. This approach would not only ensure that Europe's financial services industry and its consumers have a single strong voice on the global stage but would help to create a global level playing field with all the economic advantages that this development would imply.

3.5   Possible, targeted new initiatives

| 3.5.1 | With regard to possible, targeted new initiatives, the EESC would draw particular attention to those in the field of retail financial services, as it is convinced that the quality of choice matters as much as — if not more — to consumers than the quantity of choice. The ESSC therefore feels that adaptation to local markets is a key issue for retail service providers, irrespective of the method of distribution adopted. |
| --- | --- |

3.5.1

With regard to possible, targeted new initiatives, the EESC would draw particular attention to those in the field of retail financial services, as it is convinced that the quality of choice matters as much as — if not more — to consumers than the quantity of choice. The ESSC therefore feels that adaptation to local markets is a key issue for retail service providers, irrespective of the method of distribution adopted.

| 3.5.2 | With regard to the recommendations produced by the Forum Group on mortgage credit, the EESC is persuaded that instead of harmonising mortgage products, a competition-based approach would be more appropriate since this would lead to a better choice as well as to a better quality of product. The EESC also recognises the sound preparatory work undertaken by the Commission to review current legislation governing the asset management industry. As for whether this work should give rise to concrete initiatives on mortgage credit and/or asset management in 2006, following consultations by the Commission earlier this year, the EESC feels there is a need for a meaningful impact assessment beforehand, including a cost/benefit analysis. |
| --- | --- |

3.5.2

With regard to the recommendations produced by the Forum Group on mortgage credit, the EESC is persuaded that instead of harmonising mortgage products, a competition-based approach would be more appropriate since this would lead to a better choice as well as to a better quality of product. The EESC also recognises the sound preparatory work undertaken by the Commission to review current legislation governing the asset management industry. As for whether this work should give rise to concrete initiatives on mortgage credit and/or asset management in 2006, following consultations by the Commission earlier this year, the EESC feels there is a need for a meaningful impact assessment beforehand, including a cost/benefit analysis.

| 3.5.3 | The EESC remains to be convinced about merits of a so-called 26th regime, especially for consumers. It agrees with the Commission that the benefits of such 26th regime remain to be proven and that it will be difficult to agree on optional European standards designed only for certain products. Consumers may also be confused by national information norms and regulations and those that apply elsewhere. A 26th regime is likely to be as complicated to establish as common European civil law, including procedural law, court layout etc. Nevertheless, the idea of the 26th regime is challenging and worthy of exploration. |
| --- | --- |

3.5.3

The EESC remains to be convinced about merits of a so-called 26th regime, especially for consumers. It agrees with the Commission that the benefits of such 26th regime remain to be proven and that it will be difficult to agree on optional European standards designed only for certain products. Consumers may also be confused by national information norms and regulations and those that apply elsewhere. A 26th regime is likely to be as complicated to establish as common European civil law, including procedural law, court layout etc. Nevertheless, the idea of the 26th regime is challenging and worthy of exploration.

| 3.5.4 | What is clear, however, is that any additional, alternative or optional regime should not lead to or result in straight-jacketing providers into product standardisation as this would be detrimental to the competitive and innovative capacity of the financial services industry to meet the evolving needs of its customers. |
| --- | --- |

3.5.4

What is clear, however, is that any additional, alternative or optional regime should not lead to or result in straight-jacketing providers into product standardisation as this would be detrimental to the competitive and innovative capacity of the financial services industry to meet the evolving needs of its customers.

| 3.5.5 | Given the ongoing debate, therefore, the EESC would welcome any further clarification that the Commission can bring to the better understanding of the 26th regime. The EESC welcomes the feasibility study that has been announced. |
| --- | --- |

3.5.5

Given the ongoing debate, therefore, the EESC would welcome any further clarification that the Commission can bring to the better understanding of the 26th regime. The EESC welcomes the feasibility study that has been announced.

| 3.5.6 | The greater use of Forum Groups is on the whole positive. However, as noted earlier, the establishment of Forum Groups for specific retail products could place a significant strain on consumer organisations' resources. |
| --- | --- |

3.5.6

The greater use of Forum Groups is on the whole positive. However, as noted earlier, the establishment of Forum Groups for specific retail products could place a significant strain on consumer organisations' resources.

3.5.7   Areas of possible future action

| 3.5.7.1 | The EESC is pleased that the European Commission is willing to codify and possibly simplify the existing rules on information requirements. It would, however, argue the case more strongly for simplification rather than codification. The EESC takes the reference to simplification as an indication of the Commission's intention to improve the quality as opposed to the quantity of the information provided to consumers. To enhance quality requirements, the EESC would ask the Commission to look into the current legal requirements (both at EU and national level) in order to streamline the relevant information obligations and standardise information provision (even by way of codification) bearing in mind the medium chosen by the consumer. |
| --- | --- |

3.5.7.1

The EESC is pleased that the European Commission is willing to codify and possibly simplify the existing rules on information requirements. It would, however, argue the case more strongly for simplification rather than codification. The EESC takes the reference to simplification as an indication of the Commission's intention to improve the quality as opposed to the quantity of the information provided to consumers. To enhance quality requirements, the EESC would ask the Commission to look into the current legal requirements (both at EU and national level) in order to streamline the relevant information obligations and standardise information provision (even by way of codification) bearing in mind the medium chosen by the consumer.

| 3.5.7.2 | The EESC considers that consumers could benefit from better standards of essential information, in the shape, for instance, of understandable, structured, comparable data on all crucial aspects of a contract. A high level of consumer protection must thereby be guaranteed in order to ensure that the information is adequate and informative and secures the appropriate legal protection. |
| --- | --- |

3.5.7.2

The EESC considers that consumers could benefit from better standards of essential information, in the shape, for instance, of understandable, structured, comparable data on all crucial aspects of a contract. A high level of consumer protection must thereby be guaranteed in order to ensure that the information is adequate and informative and secures the appropriate legal protection.

| 3.5.7.3 | As for financial mediation and the relations of financial institutions and consumers with intermediaries, the EESC notes, in the first place, that financial intermediation is subject to varying degrees of regulation at EU level. The Insurance Mediation Directive (7) and the Markets in Financial Instruments Directive (MiFID) (8) set out different concepts and levels of regulation for the intermediation of financial services and products. Greater coherence and convergence in this area should be encouraged, but the EESC believes that the MiFID regime, as the more comprehensive approach, should be given time to prove its efficiency before any fresh conclusions are drawn as to the potential need for further regulation in the area of credit mediation. |
| --- | --- |

3.5.7.3

As for financial mediation and the relations of financial institutions and consumers with intermediaries, the EESC notes, in the first place, that financial intermediation is subject to varying degrees of regulation at EU level. The Insurance Mediation Directive (7) and the Markets in Financial Instruments Directive (MiFID) (8) set out different concepts and levels of regulation for the intermediation of financial services and products. Greater coherence and convergence in this area should be encouraged, but the EESC believes that the MiFID regime, as the more comprehensive approach, should be given time to prove its efficiency before any fresh conclusions are drawn as to the potential need for further regulation in the area of credit mediation.

| 3.5.7.4 | Given the need for further alignment of rules on conduct of business and sales advice, consideration could be given to establishing a level playing field for all providers of financial services to retail customers whilst taking different national conditions into account. It would, however, be more beneficial to secure the convergence or harmonisation of domestic marketing and distribution rules than to launch new initiatives on conduct-of-business rules. |
| --- | --- |

3.5.7.4

Given the need for further alignment of rules on conduct of business and sales advice, consideration could be given to establishing a level playing field for all providers of financial services to retail customers whilst taking different national conditions into account. It would, however, be more beneficial to secure the convergence or harmonisation of domestic marketing and distribution rules than to launch new initiatives on conduct-of-business rules.

| 3.5.7.5 | As for the role of professional and independent advice, the Committee feels that a clear distinction should be made between (i) providing advice as a separate, paid-for service at the request of the client and (ii) providing information that the consumer needs to be able to make a conscious choice. |
| --- | --- |

3.5.7.5

As for the role of professional and independent advice, the Committee feels that a clear distinction should be made between (i) providing advice as a separate, paid-for service at the request of the client and (ii) providing information that the consumer needs to be able to make a conscious choice.

| 3.5.7.6 | Above all else, it is of the utmost importance to have clear rules and standards for financial intermediaries, who play a key role in the field of investment products in particular, but also in loan intermediation as well. Intermediaries also need to prove they have a solid knowledge of their trade and products. Brokers and independent agents should be liable for giving clients appropriate, fair and reliable advice. Arrangements must also be in place to resolve disputes rapidly and effectively. The expertise needs to be specific — i.e. it could be split up into sections: savings, investment, insurances, mortgages/credits. Dealing with these issues would also be in line with developments at national level. |
| --- | --- |

3.5.7.6

Above all else, it is of the utmost importance to have clear rules and standards for financial intermediaries, who play a key role in the field of investment products in particular, but also in loan intermediation as well. Intermediaries also need to prove they have a solid knowledge of their trade and products. Brokers and independent agents should be liable for giving clients appropriate, fair and reliable advice. Arrangements must also be in place to resolve disputes rapidly and effectively. The expertise needs to be specific — i.e. it could be split up into sections: savings, investment, insurances, mortgages/credits. Dealing with these issues would also be in line with developments at national level.

| 3.5.7.7 | The EESC notes with interest the Commission's desire to examine in more detail the perceived obstacles to opening bank accounts cross-border and issues regarding the handling, portability, transferability and closure of bank accounts. On these latter points, the influence of existing electronic and IT systems must not be overlooked. |
| --- | --- |

3.5.7.7

The EESC notes with interest the Commission's desire to examine in more detail the perceived obstacles to opening bank accounts cross-border and issues regarding the handling, portability, transferability and closure of bank accounts. On these latter points, the influence of existing electronic and IT systems must not be overlooked.

| 3.5.7.8 | The EESC strongly feels that Commission's Green Paper should have explicitly tackled tax issues. Since the adoption of the 6th VAT Directive (9) and particularly over the last decade, the lack of neutrality of the VAT treatment of financial services and the lack of legal certainty under the current system have become increasingly problematic. |
| --- | --- |

3.5.7.8

The EESC strongly feels that Commission's Green Paper should have explicitly tackled tax issues. Since the adoption of the 6th VAT Directive (9) and particularly over the last decade, the lack of neutrality of the VAT treatment of financial services and the lack of legal certainty under the current system have become increasingly problematic.

| 3.5.7.9 | In its report on the state of financial integration in the EU, the Expert Group on Banking (10) points out that ‘a less punitive application of VAT on outsourcing is a key condition for a further integration of functions in centres of excellence that will provide services to different parts of EU banking groups’. It should now be officially recognised that the current VAT system for financial services prevents efficient implementation of a single European market. The Commission's post-FSAP agenda should be the framework for such an official statement. The EESC therefore urges the Commission to set out its forward agenda in this area. |
| --- | --- |

3.5.7.9

In its report on the state of financial integration in the EU, the Expert Group on Banking (10) points out that ‘a less punitive application of VAT on outsourcing is a key condition for a further integration of functions in centres of excellence that will provide services to different parts of EU banking groups’. It should now be officially recognised that the current VAT system for financial services prevents efficient implementation of a single European market. The Commission's post-FSAP agenda should be the framework for such an official statement. The EESC therefore urges the Commission to set out its forward agenda in this area.

| 3.5.7.10 | Finally, the EESC would stress that consumers can handle financial products more effectively if they receive more professional and independent, high-quality advice. Consumers should get the best possible advice on products and services that are best suited to their needs and (financial) circumstances. However, consumers cannot completely shirk the responsibility that choice brings with it (whether in relation to product features or the expert providing advice on those features). Consumer should also be equipped to make a conscious choice and to understand the consequences of that choice. |
| --- | --- |

3.5.7.10

Finally, the EESC would stress that consumers can handle financial products more effectively if they receive more professional and independent, high-quality advice. Consumers should get the best possible advice on products and services that are best suited to their needs and (financial) circumstances. However, consumers cannot completely shirk the responsibility that choice brings with it (whether in relation to product features or the expert providing advice on those features). Consumer should also be equipped to make a conscious choice and to understand the consequences of that choice.

| 3.5.7.11 | The EESC thus supports the principle of consumer education and of raising standards of financial literacy across the EU. In particular, the EESC considers that the notion of risk and return must be a key theme of investor education. It also advocates intermediaries' obligation to provide appropriate, fair and reliable advice. This is all the more necessary as workers will increasingly have to make their own arrangements for much of their retirement income. Consumers must be given sufficient information empowering them to compare different products and make informed choices from a range of competing products and across a range of risk profiles. |
| --- | --- |

3.5.7.11

The EESC thus supports the principle of consumer education and of raising standards of financial literacy across the EU. In particular, the EESC considers that the notion of risk and return must be a key theme of investor education. It also advocates intermediaries' obligation to provide appropriate, fair and reliable advice. This is all the more necessary as workers will increasingly have to make their own arrangements for much of their retirement income. Consumers must be given sufficient information empowering them to compare different products and make informed choices from a range of competing products and across a range of risk profiles.

4.   Conclusion

| 4.1 | The EESC feels that this stocktaking exercise of what has been achieved and what still remains to be done in the field of financial services is an opportunity for the EU to make substantial progress towards invigorating Europe's economy, reducing red tape, creating jobs and boosting not just prosperity but also confidence in the financial system for all Europeans. In other words, it is an opportunity to make real progress towards meeting the objectives the EU set itself in the Lisbon Agenda. |
| --- | --- |

4.1

The EESC feels that this stocktaking exercise of what has been achieved and what still remains to be done in the field of financial services is an opportunity for the EU to make substantial progress towards invigorating Europe's economy, reducing red tape, creating jobs and boosting not just prosperity but also confidence in the financial system for all Europeans. In other words, it is an opportunity to make real progress towards meeting the objectives the EU set itself in the Lisbon Agenda.

| 4.2 | In financial services, the EU can take significant steps towards meeting the Lisbon goals by tackling a number of key issues. The EESC feels that these issues include:






  — | rigorously applying a better regulation framework to all new and existing legislation; |
| --- | --- | --- |

4.2

In financial services, the EU can take significant steps towards meeting the Lisbon goals by tackling a number of key issues. The EESC feels that these issues include:

—

rigorously applying a better regulation framework to all new and existing legislation;

| — | measuring consumers' confidence by their readiness to buy into a given proposal; |
| --- | --- |

—

measuring consumers' confidence by their readiness to buy into a given proposal;

| — | having the EU institutions and Member States work together to transpose and implement legislation on time and in the spirit in which it was conceived; |
| --- | --- |

—

having the EU institutions and Member States work together to transpose and implement legislation on time and in the spirit in which it was conceived;

| — | focusing on completing remaining FSAP measures applying targeted fully harmonised measures where appropriate; |
| --- | --- |

—

focusing on completing remaining FSAP measures applying targeted fully harmonised measures where appropriate;

| — | working towards removing the obstacles to the optimal supervisory framework for Europe: consolidated supervision; |
| --- | --- |

—

working towards removing the obstacles to the optimal supervisory framework for Europe: consolidated supervision;

| — | removing the unjustifiable impediments to increased M&A activity in Europe, especially in the banking sector; and |
| --- | --- |

—

removing the unjustifiable impediments to increased M&A activity in Europe, especially in the banking sector; and

| — | recognising that, for consumers, quality is as — if not more — important than quantity of products on the market. |
| --- | --- |

—

recognising that, for consumers, quality is as — if not more — important than quantity of products on the market.

| 4.3 | The external dimension of the EU's financial services policy over the next five years is also of paramount importance for its long-term global competitiveness. Hence, the EESC vigorously backs efforts to strengthen and deepen regulatory dialogue with the EU's global competitors, such as the United States, Japan, China and India. |
| --- | --- |

4.3

The external dimension of the EU's financial services policy over the next five years is also of paramount importance for its long-term global competitiveness. Hence, the EESC vigorously backs efforts to strengthen and deepen regulatory dialogue with the EU's global competitors, such as the United States, Japan, China and India.

| 4.4 | Reflection on the future priorities for financial services in 2005 gives organised civil society as a whole an opportunity to participate in efforts to achieve the Lisbon objectives. There is too much at stake here both for Europe's economy and, importantly, for the consumers of the services provided by that economy, to let this opportunity slip away. |
| --- | --- |

4.4

Reflection on the future priorities for financial services in 2005 gives organised civil society as a whole an opportunity to participate in efforts to achieve the Lisbon objectives. There is too much at stake here both for Europe's economy and, importantly, for the consumers of the services provided by that economy, to let this opportunity slip away.

Brussels, 15 December 2005.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  Directive 2003/71/EC, OJ L 345, 31.12.2003.

1

(2)  Level 3 committees refer to the Committee of European Securities Regulators (CESR), the Committee of European Banking Supervisors (CEBS) and the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) established under the Lamfalussy process.

2

(3)  Such as the Basel Committee on Banking Supervision (BCBS), the International Organisation of Securities Committees (IOSCO), the OECD's Financial Action Task Force on money laundering (FATF) and the International Accounting Standards Board (IASB).

3

(4)  Directive 2003/6/EC, OJ L 96, 12. 4.2003.

4

(5)  SEC(2004) 918.

5

(6)  OJ C 234, 22.9.2005.

6

(7)  Directive 2002/92/EC, OJ L 9, 15.1.2004.

7

(8)  Directive 2004/39/EC, OJ L 145, 30.4.2004.

8

(9)  Sixth Council Directive 77/388/EEC, OJ L 145, 13.6.1977.

9

(10)  ‘Financial Services Action Plan: Progress and Prospects’, Expert Group on Banking, Final Report, May 2004.

10

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| 17.3.2006 | EN | Official Journal of the European Union | C 65/141 |
| --- | --- | --- | --- |

17.3.2006

EN

Official Journal of the European Union

C 65/141

---

Opinion of the European Economic and Social Committee on ‘Hygiene rules and artisanal food processors’

(2006/C 65/25)

On 9/10 February 2005, the European Economic and Social Committee decided to draw up an opinion, under Article 29(2) of its Rules of Procedure, on ‘Hygiene rules and artisanal food processors’.

The Section for Agriculture, Rural Development and the Environment, which was responsible for preparing the Committee's work on this subject, adopted its opinion on 9 November 2005. The rapporteur was Mr Ribbe.

At its 422nd plenary session, held on 14 and 15 December 2005 (meeting of 15 December), the European Economic and Social Committee adopted the following opinion by 98 votes to one, with five abstentions.

1.   Introduction

| 1.1 | The new food-hygiene legislation (1), which came into force on 20 May 2004, seeks to ensure a high level of consumer-protection as regards the safety of food products by pursuing an integrated approach covering the whole of the food chain (‘from farm gate to plate’). The application of uniform principles is also designed to ensure the smooth operation of the internal market. |
| --- | --- |

1.1

The new food-hygiene legislation (1), which came into force on 20 May 2004, seeks to ensure a high level of consumer-protection as regards the safety of food products by pursuing an integrated approach covering the whole of the food chain (‘from farm gate to plate’). The application of uniform principles is also designed to ensure the smooth operation of the internal market.

| 1.2 | The key principle underlying the new legislation is that food business operators have to assume full responsibility for ensuring their products pose no health hazard. This is to be ensured by means of the observance of fundamental, specific hygiene standards and the application of the principles of risk analysis systems (HACCP (2)). |
| --- | --- |

1.2

The key principle underlying the new legislation is that food business operators have to assume full responsibility for ensuring their products pose no health hazard. This is to be ensured by means of the observance of fundamental, specific hygiene standards and the application of the principles of risk analysis systems (HACCP (2)).

| 1.3 | The new food hygiene legislation comprises several regulations:






  — | Regulation (EC) 178/2002 laying down the general principles and requirements of food law (the ‘basic Regulation’), |
| --- | --- | --- |

1.3

The new food hygiene legislation comprises several regulations:

—

Regulation (EC) 178/2002 laying down the general principles and requirements of food law (the ‘basic Regulation’),

| — | Regulation (EC) 852/2004 on food hygiene, |
| --- | --- |

—

Regulation (EC) 852/2004 on food hygiene,

| — | Regulation (EC) 853/2004 setting out specific food hygiene rules in respect of food products of animal origin, |
| --- | --- |

—

Regulation (EC) 853/2004 setting out specific food hygiene rules in respect of food products of animal origin,

| — | Regulation (EC) 854/2004 laying down specific rules for the organisation of official controls on products of animal origin intended for human consumption, |
| --- | --- |

—

Regulation (EC) 854/2004 laying down specific rules for the organisation of official controls on products of animal origin intended for human consumption,

| — | Regulation (EC) 882/2004 on official controls performed to ensure the verification of compliance with feed and food law, and |
| --- | --- |

—

Regulation (EC) 882/2004 on official controls performed to ensure the verification of compliance with feed and food law, and

| — | the Regulation on microbiological criteria (available in draft form). |
| --- | --- |

—

the Regulation on microbiological criteria (available in draft form).

| 1.4 | In order to ensure that Regulations (EC) 852/2004 and 853/2004 are applied as uniformly as possible, the following guidance documents have been drawn up by the Directorate-General for Health and Consumer Protection (SANCO). They are in the nature of recommendations and are addressed to the food businesses themselves and to the local authorities:






  — | Guidance document on the implementation of certain provisions of Regulation (EC) No. 852/2004, SANCO/1513/2005 rev. 1 of 8 September 2005. |
| --- | --- | --- |

1.4

In order to ensure that Regulations (EC) 852/2004 and 853/2004 are applied as uniformly as possible, the following guidance documents have been drawn up by the Directorate-General for Health and Consumer Protection (SANCO). They are in the nature of recommendations and are addressed to the food businesses themselves and to the local authorities:

—

Guidance document on the implementation of certain provisions of Regulation (EC) No. 852/2004, SANCO/1513/2005 rev. 1 of 8 September 2005.

| — | Guidance document on the implementation of certain provisions of Regulation (EC) No. 853/2004, SANCO/1514/2005 (rev. 1) of 8 September 2005. |
| --- | --- |

—

Guidance document on the implementation of certain provisions of Regulation (EC) No. 853/2004, SANCO/1514/2005 (rev. 1) of 8 September 2005.

| — | Guidance document on the facilitation of the implementation of the HACCP principles in food businesses, SANCO/1955/2005 of 30 August 2005. |
| --- | --- |

—

Guidance document on the facilitation of the implementation of the HACCP principles in food businesses, SANCO/1955/2005 of 30 August 2005.

| 1.5 | As part of the EU legislative procedure, the European Economic and Social Committee (EESC) inter alia issued opinions (3) on 28/29 March 2001 on Regulations 852/2004, 853/2004 and 854/2004, which were adopted in 2004. In its opinions, the EESC expressly endorsed the new Regulations and their underlying principles. |
| --- | --- |

1.5

As part of the EU legislative procedure, the European Economic and Social Committee (EESC) inter alia issued opinions (3) on 28/29 March 2001 on Regulations 852/2004, 853/2004 and 854/2004, which were adopted in 2004. In its opinions, the EESC expressly endorsed the new Regulations and their underlying principles.

| 1.6 | In drawing up this own-initiative opinion, the EESC is seeking to set in train an appraisal to determine whether the new food hygiene rules make the best possible contribution — from the standpoint of the coherence of the objectives and measures — towards promoting the politically-desirable goal of sustainable development in rural areas. Small, artisanal and/or traditional processing businesses are of particular importance for the economic development of these areas. Frequent experience shows, however, that in the last few years there has been a sharp decline in structures of this kind, especially in the areas of meat and milk processing and marketing. It has often been suggested by those affected and by the competent authorities that high EU hygiene requirements are responsible for this structural change. |
| --- | --- |

1.6

In drawing up this own-initiative opinion, the EESC is seeking to set in train an appraisal to determine whether the new food hygiene rules make the best possible contribution — from the standpoint of the coherence of the objectives and measures — towards promoting the politically-desirable goal of sustainable development in rural areas. Small, artisanal and/or traditional processing businesses are of particular importance for the economic development of these areas. Frequent experience shows, however, that in the last few years there has been a sharp decline in structures of this kind, especially in the areas of meat and milk processing and marketing. It has often been suggested by those affected and by the competent authorities that high EU hygiene requirements are responsible for this structural change.

| 1.7 | In the light of this, it needs to be established whether the EU is in fact directly or indirectly responsible for structural change prompted by hygiene requirements. This of course in no way calls into question the essential objective, that of preventing risks to human health. What does need to be asked, however, is whether differentiated requirements are needed, and whether the necessary flexibility exists in seeking to achieve all the objectives set by the EU (hygiene and creation and safeguarding of jobs). |
| --- | --- |

1.7

In the light of this, it needs to be established whether the EU is in fact directly or indirectly responsible for structural change prompted by hygiene requirements. This of course in no way calls into question the essential objective, that of preventing risks to human health. What does need to be asked, however, is whether differentiated requirements are needed, and whether the necessary flexibility exists in seeking to achieve all the objectives set by the EU (hygiene and creation and safeguarding of jobs).

| 1.8 | This opinion will examine the new food hygiene provisions to determine whether:






  a) | the hygiene rules will serve to hamper or promote the activities of small food business using primarily artisanal and/or traditional processing procedures; |
| --- | --- | --- |

1.8

This opinion will examine the new food hygiene provisions to determine whether:

a)

the hygiene rules will serve to hamper or promote the activities of small food business using primarily artisanal and/or traditional processing procedures;

| b) | the way in which the flexibility provisions are implemented by the respective national authorities may give rise to competitive disadvantages in the case of artisanal products or small food businesses. |
| --- | --- |

b)

the way in which the flexibility provisions are implemented by the respective national authorities may give rise to competitive disadvantages in the case of artisanal products or small food businesses.

| 1.9 | As the specific hygiene rules set out in Regulations 853/2004 and 854/2004 cover exclusively food products of animal origin, the appraisal will focus on the impact on food businesses dealing in these products. Processors of products of plant origin (e.g. bakers, cake makers etc) and other animal products (e.g. fish), which are also covered by the new hygiene rules (Regulation 852/2004), are thus not considered. |
| --- | --- |

1.9

As the specific hygiene rules set out in Regulations 853/2004 and 854/2004 cover exclusively food products of animal origin, the appraisal will focus on the impact on food businesses dealing in these products. Processors of products of plant origin (e.g. bakers, cake makers etc) and other animal products (e.g. fish), which are also covered by the new hygiene rules (Regulation 852/2004), are thus not considered.

| 1.10 | With this opinion the EESC is seeking to stimulate a debate on food safety standards and the related issue of sustainable development in rural areas. In this context, the Committee takes the view that the goals of consumer protection, the maintenance of cultural diversity, the safeguarding of fair competition and the maintenance and increase in the number of jobs in rural areas are objectives of equal importance which need to be reconciled with each other. |
| --- | --- |

1.10

With this opinion the EESC is seeking to stimulate a debate on food safety standards and the related issue of sustainable development in rural areas. In this context, the Committee takes the view that the goals of consumer protection, the maintenance of cultural diversity, the safeguarding of fair competition and the maintenance and increase in the number of jobs in rural areas are objectives of equal importance which need to be reconciled with each other.

2.   Contents of the Regulations

| 2.1 | Regulation (EC) 178/2002 lays down the general principles and requirements of food law, including food safety procedures, with a view to improving both the operation of the internal market and the free movement of food products and animal feed. Furthermore, the alignment at EU level of food law concepts, principles and procedures, which hitherto were still, to a large extent, marked by a national approach, should ensure a high level of consumer protection. |
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2.1

Regulation (EC) 178/2002 lays down the general principles and requirements of food law, including food safety procedures, with a view to improving both the operation of the internal market and the free movement of food products and animal feed. Furthermore, the alignment at EU level of food law concepts, principles and procedures, which hitherto were still, to a large extent, marked by a national approach, should ensure a high level of consumer protection.

| 2.2 | Regulation (EC) 852/2004 on food hygiene gives concrete expression to the objectives of Regulation 178/2002 and sets out basic rules governing the hygienic production of all food products. This Regulation applies to all stages of the production, processing and marketing of food products. It also covers primary agricultural production. In contrast to ‘food businesses’, primary agricultural producers are (still) not obliged to apply procedures based on HACCP principles but they have to comply with the principles set out in Annex I. All food businesses do, however, have to be registered and comply with the general food hygiene rules of Annex II of the Regulation. The procedures for the registration of businesses will be laid down by the national authorities on the basis of Article 31 of Regulation 882/2004. |
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2.2

Regulation (EC) 852/2004 on food hygiene gives concrete expression to the objectives of Regulation 178/2002 and sets out basic rules governing the hygienic production of all food products. This Regulation applies to all stages of the production, processing and marketing of food products. It also covers primary agricultural production. In contrast to ‘food businesses’, primary agricultural producers are (still) not obliged to apply procedures based on HACCP principles but they have to comply with the principles set out in Annex I. All food businesses do, however, have to be registered and comply with the general food hygiene rules of Annex II of the Regulation. The procedures for the registration of businesses will be laid down by the national authorities on the basis of Article 31 of Regulation 882/2004.

| 2.3 | All food businesses have to comply with the following hygiene rules:






  — | compliance with microbiological criteria in respect of food products; |
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2.3

All food businesses have to comply with the following hygiene rules:

—

compliance with microbiological criteria in respect of food products;

| — | compliance with procedures which are necessary in order to achieve the objectives of the Regulation; |
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—

compliance with procedures which are necessary in order to achieve the objectives of the Regulation;

| — | compliance with temperature-control requirements for food products; |
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—

compliance with temperature-control requirements for food products;

| — | maintenance of the cold chain; |
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—

maintenance of the cold chain;

| — | sampling and analyses. |
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—

sampling and analyses.

| 2.4 | The following are not covered by the Regulation:






  — | primary production for domestic use and domestic processing for private consumption; |
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2.4

The following are not covered by the Regulation:

—

primary production for domestic use and domestic processing for private consumption;

| — | the direct supply, by the producer, of small quantities of primary products or meat from poultry and lagomorphs (e.g. rabbits), slaughtered on the farm, to the final consumer or to local retail establishments. |
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—

the direct supply, by the producer, of small quantities of primary products or meat from poultry and lagomorphs (e.g. rabbits), slaughtered on the farm, to the final consumer or to local retail establishments.

| 2.5 | The new food hygiene legislation does not set out detailed rules in respect of the criteria listed in point 2.3 above (e.g. type of microbiological criteria, scale of sampling and type of analyses). A draft separate Regulation on microbiological criteria for food products, on the basis of Article 4 of Regulation (EC) 852/2004, already exists, however. |
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2.5

The new food hygiene legislation does not set out detailed rules in respect of the criteria listed in point 2.3 above (e.g. type of microbiological criteria, scale of sampling and type of analyses). A draft separate Regulation on microbiological criteria for food products, on the basis of Article 4 of Regulation (EC) 852/2004, already exists, however.

| 2.6 | In view of the fact that food products of animal origin may give rise to a number of special risks, two specific regulations have been introduced covering these products, namely:






  — | Regulation (EC) 853/2004 setting out specific food hygiene rules in respect of food products of animal origin; and |
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2.6

In view of the fact that food products of animal origin may give rise to a number of special risks, two specific regulations have been introduced covering these products, namely:

—

Regulation (EC) 853/2004 setting out specific food hygiene rules in respect of food products of animal origin; and

| — | Regulation (EC) 854/2004 laying down specific rules for the organisation of official controls on products of animal origin intended for human consumption. |
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—

Regulation (EC) 854/2004 laying down specific rules for the organisation of official controls on products of animal origin intended for human consumption.

| 2.7 | Food businesses working with food products of animal origin must:






  — | obtain approval. The procedures for the approval of businesses will be laid down by the national authorities on the basis of Article 31 of Regulation 882/2004; |
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2.7

Food businesses working with food products of animal origin must:

—

obtain approval. The procedures for the approval of businesses will be laid down by the national authorities on the basis of Article 31 of Regulation 882/2004;

| — | comply with specific hygiene rules laid down in the annexes to Regulation 853/2004 covering inter alia, the transport of animals, slaughtering procedures, the cutting-up and processing of meat (red meat, poultry and game meat), the production of raw milk and processing of milk etc., as well as eggs, egg products, fish and fisheries products, mussels and other sea food; |
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—

comply with specific hygiene rules laid down in the annexes to Regulation 853/2004 covering inter alia, the transport of animals, slaughtering procedures, the cutting-up and processing of meat (red meat, poultry and game meat), the production of raw milk and processing of milk etc., as well as eggs, egg products, fish and fisheries products, mussels and other sea food;

| — | small food businesses handling products of animal origin must also obtain approval. In point 4.2 of its guidance document SANCO 1514/2005 rev. 1 the Commission makes it clear that the approval requirements should not place any additional burdens on businesses. |
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—

small food businesses handling products of animal origin must also obtain approval. In point 4.2 of its guidance document SANCO 1514/2005 rev. 1 the Commission makes it clear that the approval requirements should not place any additional burdens on businesses.

| 2.8 | Products and procedures not covered by Regulation 853/2004. In addition, the following products and procedures are not covered by the Regulation:






  — | the direct supply, by the producer, of small quantities of primary products or meat from poultry and lagomorphs (e.g. rabbits), slaughtered on the farm, to the final consumer or to local retail establishments; |
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2.8

Products and procedures not covered by Regulation 853/2004. In addition, the following products and procedures are not covered by the Regulation:

—

the direct supply, by the producer, of small quantities of primary products or meat from poultry and lagomorphs (e.g. rabbits), slaughtered on the farm, to the final consumer or to local retail establishments;

| — | subject to certain conditions, retail traders (Art. 1(5)(a). |
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—

subject to certain conditions, retail traders (Art. 1(5)(a).

| 2.9 | Point 3.5 of SANCO guidance document 1514/2005 rev. 1 states that the retail trade shall be excluded from the scope of Regulation 853/2004 and fall within the scope of Regulation 852/2004 only when it means (a) direct marketing or (b) small-scale, regional and limited supply of products of animal origin to other institutions. It is left to the Member States to lay down general rules for the retail trade. |
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2.9

Point 3.5 of SANCO guidance document 1514/2005 rev. 1 states that the retail trade shall be excluded from the scope of Regulation 853/2004 and fall within the scope of Regulation 852/2004 only when it means (a) direct marketing or (b) small-scale, regional and limited supply of products of animal origin to other institutions. It is left to the Member States to lay down general rules for the retail trade.

| 2.10 | The new food hygiene legislation attaches particular importance to flexibility:






  a) | setting of targets rather than prescribing specific detailed rules. In comparison to the legal provisions applicable hitherto, the new regulations — especially Regulation 853/2004 which lays down specific hygiene requirements — set out far fewer detailed provisions, for example with regard to the building requirements to be met by slaughterhouses and meat-cutting plants; |
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2.10

The new food hygiene legislation attaches particular importance to flexibility:

a)

setting of targets rather than prescribing specific detailed rules. In comparison to the legal provisions applicable hitherto, the new regulations — especially Regulation 853/2004 which lays down specific hygiene requirements — set out far fewer detailed provisions, for example with regard to the building requirements to be met by slaughterhouses and meat-cutting plants;

| b) | authorisation for the adoption of national rules (Regulations 852/2004 (Art. 13), 853/2004 (Art. 10) and 854/2004 (Art. 17)) with a view to adapting the requirements set out in the regulations in order (a) to make it possible to use traditional methods at all stages in the production, processing and marketing of food products or (b) to take account of the needs of food businesses in regions affected by difficult geographical situations. |
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b)

authorisation for the adoption of national rules (Regulations 852/2004 (Art. 13), 853/2004 (Art. 10) and 854/2004 (Art. 17)) with a view to adapting the requirements set out in the regulations in order (a) to make it possible to use traditional methods at all stages in the production, processing and marketing of food products or (b) to take account of the needs of food businesses in regions affected by difficult geographical situations.

| c) | authorisation for the adoption of national rules for direct marketing (see points 2.4 and 2.8) and the retail trade (see points 2.8 and 2.9). |
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c)

authorisation for the adoption of national rules for direct marketing (see points 2.4 and 2.8) and the retail trade (see points 2.8 and 2.9).

3.   Small food businesses and the development of rural areas

Terms and Definitions

| 3.1 | Many EU Member States continue to have a broad range of food businesses. The processing of agricultural raw materials and the production of food products can take place in a variety of enterprises: large businesses organised on an industrial scale and geared towards the international markets; small food businesses geared to a greater extent (but not exclusively!) to supplying regional markets; and micro-enterprises. Micro-enterprises can readily be linked to agricultural enterprises, from both an organisational and spatial standpoint. |
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3.1

Many EU Member States continue to have a broad range of food businesses. The processing of agricultural raw materials and the production of food products can take place in a variety of enterprises: large businesses organised on an industrial scale and geared towards the international markets; small food businesses geared to a greater extent (but not exclusively!) to supplying regional markets; and micro-enterprises. Micro-enterprises can readily be linked to agricultural enterprises, from both an organisational and spatial standpoint.

| 3.2 | The structure of food businesses and the volume of processing which they carry out are generally linked to specific production processes. The range of such production processes is broad, extending from industrial-scale/mass production processes to artisanal and traditional processes. The transitions between the respective levels of production are not clearly defined. |
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3.2

The structure of food businesses and the volume of processing which they carry out are generally linked to specific production processes. The range of such production processes is broad, extending from industrial-scale/mass production processes to artisanal and traditional processes. The transitions between the respective levels of production are not clearly defined.

| 3.3 | The text set out below will focus mainly on small food businesses and micro-enterprises which employ, to a greater extent, artisanal and/or traditional production processes. |
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3.3

The text set out below will focus mainly on small food businesses and micro-enterprises which employ, to a greater extent, artisanal and/or traditional production processes.

| 3.4 | A second area of emphasis will comprise food businesses engaged in processing meat products (including meat from poultry and other small animals) and milk; meat and milk are important sectors in respect of added value for agricultural products in many EU Member States and specific hygiene rules have been laid down covering these sectors (see also point 1.9). These rules apply, specifically and above all, to regional slaughterhouses, butchers carrying out their own slaughtering and processing operations, regional dairies, small-scale commercial cheese dairies, farm-based cheese dairies and Alpine dairies. |
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3.4

A second area of emphasis will comprise food businesses engaged in processing meat products (including meat from poultry and other small animals) and milk; meat and milk are important sectors in respect of added value for agricultural products in many EU Member States and specific hygiene rules have been laid down covering these sectors (see also point 1.9). These rules apply, specifically and above all, to regional slaughterhouses, butchers carrying out their own slaughtering and processing operations, regional dairies, small-scale commercial cheese dairies, farm-based cheese dairies and Alpine dairies.

Small food businesses, rural areas, employment and product quality

| 3.5 | There is a majority of small food businesses in most EU Member States and they therefore play an important role in providing employment. Small businesses include artisanal businesses. These are often located in inner city areas and provide a high degree of product and cultural diversity and often — a factor which should not be overlooked — provide jobs for ethnic minorities. Particular attention should, however, be paid to food businesses which are engaged in the production and processing stages and are also closely linked, to a greater or lesser extent, to agricultural primary producers or commodity producers. Many of these businesses are based in rural areas. In some cases they play an important part in safeguarding and creating employment, especially in rural and often structurally weak areas. |
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3.5

There is a majority of small food businesses in most EU Member States and they therefore play an important role in providing employment. Small businesses include artisanal businesses. These are often located in inner city areas and provide a high degree of product and cultural diversity and often — a factor which should not be overlooked — provide jobs for ethnic minorities. Particular attention should, however, be paid to food businesses which are engaged in the production and processing stages and are also closely linked, to a greater or lesser extent, to agricultural primary producers or commodity producers. Many of these businesses are based in rural areas. In some cases they play an important part in safeguarding and creating employment, especially in rural and often structurally weak areas.

| 3.5.1 | Examples: In Europe there are more than 150 000 independent butchers, with about one million employees. In Germany alone there are at present approximately 18 000 butchery businesses (or 29 000 butcher's shops, including branches) providing employment for approximately 168 000 people. 15 % of those businesses continued to carry out their own slaughtering, whilst 10 % of the businesses had their own livestock slaughtered in slaughterhouses. Other centres of the butchery business are Spain, with some 35 400 independent butchers (including branches) and some 70 000 employees, and France, with just under 35 000 butchers and over 55 000 employees. |
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3.5.1

Examples: In Europe there are more than 150 000 independent butchers, with about one million employees. In Germany alone there are at present approximately 18 000 butchery businesses (or 29 000 butcher's shops, including branches) providing employment for approximately 168 000 people. 15 % of those businesses continued to carry out their own slaughtering, whilst 10 % of the businesses had their own livestock slaughtered in slaughterhouses. Other centres of the butchery business are Spain, with some 35 400 independent butchers (including branches) and some 70 000 employees, and France, with just under 35 000 butchers and over 55 000 employees.

| 3.5.2 | In the last few years there has been a trend towards buying meat in large supermarkets and discount stores. The EESC stresses, however, the importance of small-scale businesses, which cannot be measured purely in terms of sales figures (4). |
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3.5.2

In the last few years there has been a trend towards buying meat in large supermarkets and discount stores. The EESC stresses, however, the importance of small-scale businesses, which cannot be measured purely in terms of sales figures (4).

| 3.5.3 | There are a large number of small firms in the dairy sector too. Thus, in Germany, as a result of the expansion of organic milk production, over 500 new farm-based cheese dairies have been set up in the last few years, thereby generating some 1 500 new jobs. This figure is bolstered by the new jobs which have been created in organic dairies and commercial organic cheese dairies. Unfortunately no European data are available on this. |
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3.5.3

There are a large number of small firms in the dairy sector too. Thus, in Germany, as a result of the expansion of organic milk production, over 500 new farm-based cheese dairies have been set up in the last few years, thereby generating some 1 500 new jobs. This figure is bolstered by the new jobs which have been created in organic dairies and commercial organic cheese dairies. Unfortunately no European data are available on this.

| 3.6 | In the context of Agenda 2000, both the European Commission and EU Member States stressed the need not only to enhance the competitiveness of EU agriculture on the world market but also to focus on quality. With this aim in view, the multifunctional character of agriculture (also known as the ‘European agricultural model’) is to be maintained and promoted. This expression implies that this is a form of agriculture which, inter alia, supplies high-quality products thereby safeguarding jobs and creating new jobs. This strategy of increasing added value in rural areas is indissolubly linked to the maintenance and further development of the downstream sector of food processing. Protected designations of origin also contribute to this quality policy. |
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3.6

In the context of Agenda 2000, both the European Commission and EU Member States stressed the need not only to enhance the competitiveness of EU agriculture on the world market but also to focus on quality. With this aim in view, the multifunctional character of agriculture (also known as the ‘European agricultural model’) is to be maintained and promoted. This expression implies that this is a form of agriculture which, inter alia, supplies high-quality products thereby safeguarding jobs and creating new jobs. This strategy of increasing added value in rural areas is indissolubly linked to the maintenance and further development of the downstream sector of food processing. Protected designations of origin also contribute to this quality policy.

| 3.7 | The EU policy on food quality is to be implemented, in future, inter alia, by means of the European Agricultural Fund for Rural Development (EAFRD) Regulation (‘Diversification Axis’) and by means of the action programme for organic farming. |
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3.7

The EU policy on food quality is to be implemented, in future, inter alia, by means of the European Agricultural Fund for Rural Development (EAFRD) Regulation (‘Diversification Axis’) and by means of the action programme for organic farming.

| 3.8 | Small food businesses, and in particular, small artisanal food processors, are of strategic importance in connection with this quality policy. These small food businesses are the very businesses which can help to promote diversity by, for example, providing consumers with a high level of product diversity. Growing demand in this sector points to the fact that consumers are increasingly valuing such diversity and underlines the fact that traditional artisanal production methods are indissolubly linked to high product quality. These production methods are also part of our cultural heritage. These food businesses have, for decades, demonstrated that they are able to produce products which are safe. |
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3.8

Small food businesses, and in particular, small artisanal food processors, are of strategic importance in connection with this quality policy. These small food businesses are the very businesses which can help to promote diversity by, for example, providing consumers with a high level of product diversity. Growing demand in this sector points to the fact that consumers are increasingly valuing such diversity and underlines the fact that traditional artisanal production methods are indissolubly linked to high product quality. These production methods are also part of our cultural heritage. These food businesses have, for decades, demonstrated that they are able to produce products which are safe.

Different risks require different concepts of safety

| 3.9 | The EESC is therefore pleased to note that, compared with the existing rules, the new regulations make provision for a higher level of flexibility. The adoption of a flexible approach offers new opportunities to small food businesses operating in the field of artisanal and traditional food processing. The new uniform approval procedure will in future make it possible for them to participate in cross-border trade. But these opportunities must also be exploited by the Member States. |
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3.9

The EESC is therefore pleased to note that, compared with the existing rules, the new regulations make provision for a higher level of flexibility. The adoption of a flexible approach offers new opportunities to small food businesses operating in the field of artisanal and traditional food processing. The new uniform approval procedure will in future make it possible for them to participate in cross-border trade. But these opportunities must also be exploited by the Member States.

| 3.10 | This flexibility does, however, also involve risks for small food businesses. Businesses which were previously only registered must now meet the higher standards of the approval procedure. Furthermore, some specific hygiene measures set out in Regulation 853/2004 lay down requirements which are clearly more demanding than those applying hitherto. This applies in particular to the related microbial control requirements. |
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3.10

This flexibility does, however, also involve risks for small food businesses. Businesses which were previously only registered must now meet the higher standards of the approval procedure. Furthermore, some specific hygiene measures set out in Regulation 853/2004 lay down requirements which are clearly more demanding than those applying hitherto. This applies in particular to the related microbial control requirements.

| 3.11 | The laying down of hygiene objectives rather than rigid requirements and the related flexibility clauses make it possible to tailor the shaping of the HACCP concept (in line with Regulation 852/2004) and the approval procedures to the specific risks posed by various kinds of business and their production processes. |
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3.11

The laying down of hygiene objectives rather than rigid requirements and the related flexibility clauses make it possible to tailor the shaping of the HACCP concept (in line with Regulation 852/2004) and the approval procedures to the specific risks posed by various kinds of business and their production processes.

| 3.12 | This flexibility is of key importance for maintaining a diverse range of food businesses in Europe, as hygiene risks and the corresponding hygiene requirements are in some cases closely linked with the respective specific production, processing and distribution systems. Small, artisanal food businesses having a mainly local and regional distribution network present, to a certain extent, food safety risks of a different order than those which arise in the case of large food businesses organised on an industrial scale and having national and international distribution networks. It is thus clear that, in the case of large food businesses employing many workers, having high production volumes and limited areas of responsibility, traceability and quality-management systems, batch-marking and sophisticated spatial planning arrangements and input-related microbiological analyses do make sense. In the case of small food businesses, in which responsibility rests with a small number of workers and which are frequently not involved in intra-Community trade, simple concepts are usually sufficient, such as sample checks on cold temperatures or cooking temperatures, or visual inspection (cooked sausages). Traditional and proven checks have their place here. More stringent technical or organisational requirements do not result in improved hygiene but may be costly and time-consuming. |
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3.12

This flexibility is of key importance for maintaining a diverse range of food businesses in Europe, as hygiene risks and the corresponding hygiene requirements are in some cases closely linked with the respective specific production, processing and distribution systems. Small, artisanal food businesses having a mainly local and regional distribution network present, to a certain extent, food safety risks of a different order than those which arise in the case of large food businesses organised on an industrial scale and having national and international distribution networks. It is thus clear that, in the case of large food businesses employing many workers, having high production volumes and limited areas of responsibility, traceability and quality-management systems, batch-marking and sophisticated spatial planning arrangements and input-related microbiological analyses do make sense. In the case of small food businesses, in which responsibility rests with a small number of workers and which are frequently not involved in intra-Community trade, simple concepts are usually sufficient, such as sample checks on cold temperatures or cooking temperatures, or visual inspection (cooked sausages). Traditional and proven checks have their place here. More stringent technical or organisational requirements do not result in improved hygiene but may be costly and time-consuming.

| 3.13 | One example of the transfer of measures, which in the industrial context are both effective and necessary, to the craft domain is the requirement of Directive 64/433/EC for the use of. sterilisers. In the case of processing line slaughter, where the line typically moves at high speed, there is no time to sterilise knives, if for instance they cut into an abscess. A steriliser at every workplace in the cutting area enables workers to take new, sterile knives without stopping the line. The work of independent butchers is different. A single animal is cut by one person. There is always enough time to take a new, sterile knife, if required. And to this end it is sufficient to ensure that there is an adequate supply of knives sterilised the previous evening. A steriliser at each workplace is not needed. The revision of SANCO paper No 1514 of 8 September 2005 is a reaction to this objection raised by the EESC; point 5.3 states that in small abattoirs a sufficient number of knives, disinfected before slaughter, will suffice. |
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3.13

One example of the transfer of measures, which in the industrial context are both effective and necessary, to the craft domain is the requirement of Directive 64/433/EC for the use of. sterilisers. In the case of processing line slaughter, where the line typically moves at high speed, there is no time to sterilise knives, if for instance they cut into an abscess. A steriliser at every workplace in the cutting area enables workers to take new, sterile knives without stopping the line. The work of independent butchers is different. A single animal is cut by one person. There is always enough time to take a new, sterile knife, if required. And to this end it is sufficient to ensure that there is an adequate supply of knives sterilised the previous evening. A steriliser at each workplace is not needed. The revision of SANCO paper No 1514 of 8 September 2005 is a reaction to this objection raised by the EESC; point 5.3 states that in small abattoirs a sufficient number of knives, disinfected before slaughter, will suffice.

| 3.14 | In other words, if hygiene standards and safety requirements are based predominantly on the risks inherent in present-day mainstream production techniques, i.e. industrial-scale processing and global-level trade and then applied to artisanal structures, there is always a danger that products produced using artisanal and traditional procedures will be placed at a competitive disadvantage. Such products will then be denied access to the market, partly directly and partly indirectly (by virtue of increased costs). |
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3.14

In other words, if hygiene standards and safety requirements are based predominantly on the risks inherent in present-day mainstream production techniques, i.e. industrial-scale processing and global-level trade and then applied to artisanal structures, there is always a danger that products produced using artisanal and traditional procedures will be placed at a competitive disadvantage. Such products will then be denied access to the market, partly directly and partly indirectly (by virtue of increased costs).

| 3.15 | A request is made in the paragraphs below for concepts of hygiene to be geared to specific procedures and structures; this call is not made only in order to ensure equal opportunities as regards market access. The objective is rather, and in particular, to maintain and promote innovation in rural areas. By way of example, one of the most important innovations of the last few decades was the development and expansion of organic agriculture. In the absence of both the existing and the newly secured freedom, the revival of the exploitation of traditional food processing procedures could not have taken place. In future, too, there is therefore a need to continue to provide freedom for regional specialities, artisanal and traditional procedures, special forms of processing, special qualities of product and special means of marketing and at the same time to guarantee the consumer a uniform and high level of food safety. |
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3.15

A request is made in the paragraphs below for concepts of hygiene to be geared to specific procedures and structures; this call is not made only in order to ensure equal opportunities as regards market access. The objective is rather, and in particular, to maintain and promote innovation in rural areas. By way of example, one of the most important innovations of the last few decades was the development and expansion of organic agriculture. In the absence of both the existing and the newly secured freedom, the revival of the exploitation of traditional food processing procedures could not have taken place. In future, too, there is therefore a need to continue to provide freedom for regional specialities, artisanal and traditional procedures, special forms of processing, special qualities of product and special means of marketing and at the same time to guarantee the consumer a uniform and high level of food safety.

4.   Possible opportunities and obstacles for small artisanal food businesses operating in the meat and milk sectors as a result of the new food hygiene laws

Regulation 852/2004

| 4.1 | Some Member States had taken advantage of the possibility provided for under the ‘old’ legislation to make a distinction between ‘registered’ and ‘authorised’ enterprises operating in the meat- and milk- processing sectors. ‘Registered’ enterprises were not allowed to take part in intra-Community trade, without this ban having to be justified on grounds of differing hygiene standards. Point 3.4 of SANCO guidance document 1513/2005 rev. 1 of 8 September 2005 specifically calls on the Member States to allow direct marketers, who are excluded from the scope of Regulations 852/2004 and 853/2004, to engage in cross-border trade in border areas. Thus businesses in border areas are being offered new market opportunities. |
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4.1

Some Member States had taken advantage of the possibility provided for under the ‘old’ legislation to make a distinction between ‘registered’ and ‘authorised’ enterprises operating in the meat- and milk- processing sectors. ‘Registered’ enterprises were not allowed to take part in intra-Community trade, without this ban having to be justified on grounds of differing hygiene standards. Point 3.4 of SANCO guidance document 1513/2005 rev. 1 of 8 September 2005 specifically calls on the Member States to allow direct marketers, who are excluded from the scope of Regulations 852/2004 and 853/2004, to engage in cross-border trade in border areas. Thus businesses in border areas are being offered new market opportunities.

| 4.2 | Regulation 852/2004 calls for the application of the concept of Hazard Analysis and Critical Control Point (HACCP) to food safety procedures. The mandatory introduction of the HACCP concept is to be welcomed; bringing about maximum product safety on the basis of a small number of controls — which are as effective as possible — carried out at the correct points is an approach which chimes with artisanal tradition. SANCO guidance document 1555/2005 of 30 August 2005 puts forward guidelines for adapting the HACCP concepts to different types of enterprise. Corresponding guidelines for good hygiene practice have been drawn up in the individual Member States. These can facilitate the application of HACCP in small food businesses, as the carrying-out of own risk analyses can in some cases be dispensed with. |
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4.2

Regulation 852/2004 calls for the application of the concept of Hazard Analysis and Critical Control Point (HACCP) to food safety procedures. The mandatory introduction of the HACCP concept is to be welcomed; bringing about maximum product safety on the basis of a small number of controls — which are as effective as possible — carried out at the correct points is an approach which chimes with artisanal tradition. SANCO guidance document 1555/2005 of 30 August 2005 puts forward guidelines for adapting the HACCP concepts to different types of enterprise. Corresponding guidelines for good hygiene practice have been drawn up in the individual Member States. These can facilitate the application of HACCP in small food businesses, as the carrying-out of own risk analyses can in some cases be dispensed with.

| 4.3 | Whether or not HACCP principles will thus prove beneficial to artisanal food businesses, too, will depend upon the way in which national HACCP guidelines are framed. If too much importance is attached to documentation and extensive checklists, the use of this instrument can easily force costs upwards without raising safety standards. |
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4.3

Whether or not HACCP principles will thus prove beneficial to artisanal food businesses, too, will depend upon the way in which national HACCP guidelines are framed. If too much importance is attached to documentation and extensive checklists, the use of this instrument can easily force costs upwards without raising safety standards.

| 4.4 | The HACCP concept involves carrying out microbiological controls; the criteria and scope of these controls have yet to be determined (Article 4). The form of the new regulation on microbiological criteria will have a decisive influence on the costs involved in cases where enterprises carry out their own controls. This regulation will play a part in determining whether or not small food businesses can operate competitively in future since such enterprises have to distribute the costs over much smaller volumes of processed products and sales than is the case with large food businesses. The proposed rule whereby, in the case of smaller abattoirs, cutting plants or butchery enterprises, the frequency of checks on minced meat can be adjusted in line with the volume of production is to be welcomed. All other enterprises must take weekly samples. |
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4.4

The HACCP concept involves carrying out microbiological controls; the criteria and scope of these controls have yet to be determined (Article 4). The form of the new regulation on microbiological criteria will have a decisive influence on the costs involved in cases where enterprises carry out their own controls. This regulation will play a part in determining whether or not small food businesses can operate competitively in future since such enterprises have to distribute the costs over much smaller volumes of processed products and sales than is the case with large food businesses. The proposed rule whereby, in the case of smaller abattoirs, cutting plants or butchery enterprises, the frequency of checks on minced meat can be adjusted in line with the volume of production is to be welcomed. All other enterprises must take weekly samples.

Regulation 853/2004: Risks involved in adopting a flexible approach, as demonstrated by the example of milk processing:

| 4.5 | As a result of the adoption of a flexible approach, considerable discretionary powers will be given not only to Member States themselves but also, and in particular, to regional veterinary authorities responsible for approving food businesses. There are already at the present time considerable differences in the application of hygiene rules, in particular in those areas classified by veterinary officers as areas of risk, such as: the artisanal slaughtering of poultry; farm-based cheese dairies; and the production of raw milk products. |
| --- | --- |

4.5

As a result of the adoption of a flexible approach, considerable discretionary powers will be given not only to Member States themselves but also, and in particular, to regional veterinary authorities responsible for approving food businesses. There are already at the present time considerable differences in the application of hygiene rules, in particular in those areas classified by veterinary officers as areas of risk, such as: the artisanal slaughtering of poultry; farm-based cheese dairies; and the production of raw milk products.

| 4.6 | In many EU Member States the processing of milk for cheese production is an important source of farm incomes. Experience in Poland before and after accession has shown that veterinary authorities initially banned the establishment of farm-based cheese dairies, allegedly in order to comply with ‘EU requirements’. They were unsure how to deal with the ‘new’ ideas and wanted to ‘play it safe’, on the assumption that what does not exist cannot cause (hygiene) problems. Clearly however, it is not the EU but national and regional authorities which carry the responsibility for such decisions. |
| --- | --- |

4.6

In many EU Member States the processing of milk for cheese production is an important source of farm incomes. Experience in Poland before and after accession has shown that veterinary authorities initially banned the establishment of farm-based cheese dairies, allegedly in order to comply with ‘EU requirements’. They were unsure how to deal with the ‘new’ ideas and wanted to ‘play it safe’, on the assumption that what does not exist cannot cause (hygiene) problems. Clearly however, it is not the EU but national and regional authorities which carry the responsibility for such decisions.

| 4.7 | Many detailed provisions set out in the old EU legislation covering the processing of milk will now disappear. The new regulation offers small and artisanal food businesses, in particular, new opportunities. They can secure recognition of ‘alternative procedures’. These are not, however, specifically defined in the Regulation. |
| --- | --- |

4.7

Many detailed provisions set out in the old EU legislation covering the processing of milk will now disappear. The new regulation offers small and artisanal food businesses, in particular, new opportunities. They can secure recognition of ‘alternative procedures’. These are not, however, specifically defined in the Regulation.

| 4.8 | There is therefore a fully justified fear that some Member States are applying a much ‘stricter’ interpretation of the regulations and one which is more unfavourable to small food business, than was intended by the EU. |
| --- | --- |

4.8

There is therefore a fully justified fear that some Member States are applying a much ‘stricter’ interpretation of the regulations and one which is more unfavourable to small food business, than was intended by the EU.

| 4.9 | Example 1: In Germany the initial drafts have been prepared for a general administrative regulation (approval procedure in accordance with Article 31 of Regulation 882/2004). This requires — as in the past — type approval for the approval of pasteurisation facilities and sterilisation centrifuges. Businesses using other equipment or procedures would bear the burden of proof and the cost of having their own inspections carried out. |
| --- | --- |

4.9

Example 1: In Germany the initial drafts have been prepared for a general administrative regulation (approval procedure in accordance with Article 31 of Regulation 882/2004). This requires — as in the past — type approval for the approval of pasteurisation facilities and sterilisation centrifuges. Businesses using other equipment or procedures would bear the burden of proof and the cost of having their own inspections carried out.

| 4.10 | Example 2: In eastern European Member States like the Czech Republic, Poland, Slovenia and the Baltic States processes took place when adapting national laws to the acquis communautaire similar to those noted in the new German Länder after reunification. Not only did economic problems lead to massive structural change and corresponding job losses in dairies and abattoirs, but the interests of large-scale processors, which wanted to see increased use of their plants, often influenced the approval process. |
| --- | --- |

4.10

Example 2: In eastern European Member States like the Czech Republic, Poland, Slovenia and the Baltic States processes took place when adapting national laws to the acquis communautaire similar to those noted in the new German Länder after reunification. Not only did economic problems lead to massive structural change and corresponding job losses in dairies and abattoirs, but the interests of large-scale processors, which wanted to see increased use of their plants, often influenced the approval process.

| 4.11 | The EU is therefore called upon to pay attention to the question of maintaining fair competition in the individual Member States by ensuring that the scope for interpretation granted in respect of traditional and regional quality products can also utilised by the authorities to the benefit of local, small food businesses. |
| --- | --- |

4.11

The EU is therefore called upon to pay attention to the question of maintaining fair competition in the individual Member States by ensuring that the scope for interpretation granted in respect of traditional and regional quality products can also utilised by the authorities to the benefit of local, small food businesses.

Regulation 853/2004: Obstacles facing small food businesses operating in the meat sector

| 4.12 | Regulation 853/2004 contains a number of clearly-defined conditions which go far beyond the conditions hitherto applicable to small food businesses operating in the meat sector; these conditions will also have a detrimental effect on the trend as regards costs and will thus have a damaging impact on small food businesses. The most important of these conditions are as follows: |
| --- | --- |

4.12

Regulation 853/2004 contains a number of clearly-defined conditions which go far beyond the conditions hitherto applicable to small food businesses operating in the meat sector; these conditions will also have a detrimental effect on the trend as regards costs and will thus have a damaging impact on small food businesses. The most important of these conditions are as follows:

| 4.13 | Under the new Regulation, all slaughtering enterprises have to provide waiting pens
   (5). This requirement would also apply to butchers, even if in small abattoirs the animals are not held for long and if overall they only slaughter a small number of animals each week. This rule in principle makes it necessary for small businesses to carry out a considerable investment without bringing any recognisable hygiene benefits. It is therefore welcome that the revised version of the SANCO/1514/2005 guidance document picks up on this problem. Point 5.2 stresses that small abattoirs are not to be obliged to maintain sophisticated or extensive infrastructures or feeding and watering facilities. |
| --- | --- |

4.13

Under the new Regulation, all slaughtering enterprises have to provide waiting pens
   (5). This requirement would also apply to butchers, even if in small abattoirs the animals are not held for long and if overall they only slaughter a small number of animals each week. This rule in principle makes it necessary for small businesses to carry out a considerable investment without bringing any recognisable hygiene benefits. It is therefore welcome that the revised version of the SANCO/1514/2005 guidance document picks up on this problem. Point 5.2 stresses that small abattoirs are not to be obliged to maintain sophisticated or extensive infrastructures or feeding and watering facilities.

| 4.14 | Separate rooms must be made available for slaughtering and meat cutting. If these operations are not carried out at the same time, the same room could be used for both these activities without jeopardising safety status. Moreover, if this is the case, the premises will have time to dry. This will improve their hygiene status. It will also reduce the investment required of small businesses. Exemption from the second room requirement where there is a sufficient gap between slaughter and meat cutting, and provided the premises are cleaned appropriately, should therefore be included in a revised version of the guidelines. |
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4.14

Separate rooms must be made available for slaughtering and meat cutting. If these operations are not carried out at the same time, the same room could be used for both these activities without jeopardising safety status. Moreover, if this is the case, the premises will have time to dry. This will improve their hygiene status. It will also reduce the investment required of small businesses. Exemption from the second room requirement where there is a sufficient gap between slaughter and meat cutting, and provided the premises are cleaned appropriately, should therefore be included in a revised version of the guidelines.

| 4.15 | A new requirement has been introduced whereby, in future, small artisanal enterprises, too, which hitherto had the status of ‘registered enterprise’ must now maintain a temperature of 12°C in meat-cutting rooms or else introduce alternative procedures. Quite apart from the fact that working at 12oC poses problems, this will give rise to additional investment and refrigeration costs for small businesses. It would be quite sufficient to require that the meat to be cut be removed from the refrigeration room in portions. |
| --- | --- |

4.15

A new requirement has been introduced whereby, in future, small artisanal enterprises, too, which hitherto had the status of ‘registered enterprise’ must now maintain a temperature of 12°C in meat-cutting rooms or else introduce alternative procedures. Quite apart from the fact that working at 12oC poses problems, this will give rise to additional investment and refrigeration costs for small businesses. It would be quite sufficient to require that the meat to be cut be removed from the refrigeration room in portions.

| 4.16 | The new temperature and inspection provisions in respect of minced meat set out in Regulation (EC) 853/2004 are particularly problematic as minced meat is a product of major economic importance, also in the case of micro-enterprises and small meat-processing enterprises. In Germany at least, these businesses have in the past been classified ‘merely’ as ‘registered enterprises’ and they have therefore had to comply with the national rules on minced meat, which prescribe a temperature of 4°C. As, in future, there will only be EU-authorised enterprises, artisanal meat-processing enterprises will also have to comply with the strict temperature requirements (2°C) set out in the new Regulation (6). As long as businesses are producing fresh minced meat and selling it only on the day of production (as the old rules required) there is no hygiene advantage to be derived from lower temperatures. As old plant cannot simply be adapted to lower temperatures and moreover defrosting systems will be required, businesses will have to invest in new refrigeration equipment. Another feature of the new regulation which poses problems for the competitiveness of artisanal businesses is the fact that it allows the mincing of frozen meat. This will only encourage more price dumping. |
| --- | --- |

4.16

The new temperature and inspection provisions in respect of minced meat set out in Regulation (EC) 853/2004 are particularly problematic as minced meat is a product of major economic importance, also in the case of micro-enterprises and small meat-processing enterprises. In Germany at least, these businesses have in the past been classified ‘merely’ as ‘registered enterprises’ and they have therefore had to comply with the national rules on minced meat, which prescribe a temperature of 4°C. As, in future, there will only be EU-authorised enterprises, artisanal meat-processing enterprises will also have to comply with the strict temperature requirements (2°C) set out in the new Regulation (6). As long as businesses are producing fresh minced meat and selling it only on the day of production (as the old rules required) there is no hygiene advantage to be derived from lower temperatures. As old plant cannot simply be adapted to lower temperatures and moreover defrosting systems will be required, businesses will have to invest in new refrigeration equipment. Another feature of the new regulation which poses problems for the competitiveness of artisanal businesses is the fact that it allows the mincing of frozen meat. This will only encourage more price dumping.

| 4.17 | A further new requirement is that artisanal meat enterprises will be obliged to carry out microbiological inspections of minced meat even if these enterprises sell or flash-freeze the minced meat on the very day of production (7). This results in a considerable cost burden without any recognisable advantage as regards food hygiene. The required frequency of checks is still open. The draft regulation merely states that small businesses will be exempted from the requirement for weekly checks (see points 4.18 — 4.20 below). |
| --- | --- |

4.17

A further new requirement is that artisanal meat enterprises will be obliged to carry out microbiological inspections of minced meat even if these enterprises sell or flash-freeze the minced meat on the very day of production (7). This results in a considerable cost burden without any recognisable advantage as regards food hygiene. The required frequency of checks is still open. The draft regulation merely states that small businesses will be exempted from the requirement for weekly checks (see points 4.18 — 4.20 below).

Regulation on microbiological criteria

| 4.18 | The regulation on microbiological standards is currently being drawn up; the form taken by this regulation will be of particular importance to the future competitiveness of small food businesses. There needs to be a sensible correlation between the degree and scope of sampling and the level of production of the enterprises concerned and there is a need to ensure that this sampling is statistically meaningful. |
| --- | --- |

4.18

The regulation on microbiological standards is currently being drawn up; the form taken by this regulation will be of particular importance to the future competitiveness of small food businesses. There needs to be a sensible correlation between the degree and scope of sampling and the level of production of the enterprises concerned and there is a need to ensure that this sampling is statistically meaningful.

| 4.19 | In the past abattoirs were required to carry out annual microbiological inspections of carcasses for microbial load and spoiling agents (enterobacteriaceae) and to carry out appropriate inspections of equipment, walls etc ten times a year. The planned increased in the required frequency of inspections will impose significant additional costs on small businesses (for minced meat see point 4.16). |
| --- | --- |

4.19

In the past abattoirs were required to carry out annual microbiological inspections of carcasses for microbial load and spoiling agents (enterobacteriaceae) and to carry out appropriate inspections of equipment, walls etc ten times a year. The planned increased in the required frequency of inspections will impose significant additional costs on small businesses (for minced meat see point 4.16).

| 4.20 | A further factor to be borne in mind is that the small volumes of production give rise not only to statistical problems but also to problems in respect of the quantities which have to be taken away for testing. This factor has been highlighted by the ‘Conféderation Générale de l'Alimentation en Détail (CGAG)’, the French trade organisation representing retail food traders. The CGAD points out that, if the planned rate of testing were to be maintained, this would result in a situation whereby, in particular cases, there would be no more products left to be offered for sale, quite apart from the costs involved. |
| --- | --- |

4.20

A further factor to be borne in mind is that the small volumes of production give rise not only to statistical problems but also to problems in respect of the quantities which have to be taken away for testing. This factor has been highlighted by the ‘Conféderation Générale de l'Alimentation en Détail (CGAG)’, the French trade organisation representing retail food traders. The CGAD points out that, if the planned rate of testing were to be maintained, this would result in a situation whereby, in particular cases, there would be no more products left to be offered for sale, quite apart from the costs involved.

5.   Conclusions

| 5.1 | The EESC welcomes the flexibility of the new regulations. They offer new opportunities to traditional and/or artisanal and regional food businesses. |
| --- | --- |

5.1

The EESC welcomes the flexibility of the new regulations. They offer new opportunities to traditional and/or artisanal and regional food businesses.

| 5.2 | The EESC points out, however, that the degree of leeway allowed by the proposals carries a degree of risk for artisanal food businesses, as both national governments and local authorities may be able to interpret the rules in a way which is disadvantageous to these firms. Experience with the implementation of EU directives suggests that this may happen. It should be left up to the firms themselves to decide how they achieve the hygiene objectives. This is also stressed in point 4 of the SANCO 1513/2005/rev. 1 guidance document of 8 September 2005. The Commission must therefore ensure that the guidelines are appropriately publicised in the Member States. |
| --- | --- |

5.2

The EESC points out, however, that the degree of leeway allowed by the proposals carries a degree of risk for artisanal food businesses, as both national governments and local authorities may be able to interpret the rules in a way which is disadvantageous to these firms. Experience with the implementation of EU directives suggests that this may happen. It should be left up to the firms themselves to decide how they achieve the hygiene objectives. This is also stressed in point 4 of the SANCO 1513/2005/rev. 1 guidance document of 8 September 2005. The Commission must therefore ensure that the guidelines are appropriately publicised in the Member States.

| 5.3 | The EESC sees a need to amend specific aspects of the regulations: |
| --- | --- |

5.3

The EESC sees a need to amend specific aspects of the regulations:

| 5.3.1 | Artisanal individual slaughter should be recognised as a traditional process. This applies to all national amendments based on Article 13(4) of Regulation (EC) 852/2004, Article 10(4) of Regulation (EC) 853/2004 and Article 17(4) of Regulation (EC) 854/2004. |
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5.3.1

Artisanal individual slaughter should be recognised as a traditional process. This applies to all national amendments based on Article 13(4) of Regulation (EC) 852/2004, Article 10(4) of Regulation (EC) 853/2004 and Article 17(4) of Regulation (EC) 854/2004.

| 5.3.2 | The facilities used by the retail trade for the preparation and/or cutting of large quantities of food of animal origin destined for other retailers should, without exception, be included in the scope of Regulation 853/2004 (8). |
| --- | --- |

5.3.2

The facilities used by the retail trade for the preparation and/or cutting of large quantities of food of animal origin destined for other retailers should, without exception, be included in the scope of Regulation 853/2004 (8).

| 5.3.3 | With regard to buildings (Annex III to Regulation (EC) 853/2004), account should be taken of the recommendations of SANCO 1514, point 5.2, that craft enterprises which do their own slaughtering should not necessarily have to provide waiting pens and that only simple feeding and watering facilities need be provided. |
| --- | --- |

5.3.3

With regard to buildings (Annex III to Regulation (EC) 853/2004), account should be taken of the recommendations of SANCO 1514, point 5.2, that craft enterprises which do their own slaughtering should not necessarily have to provide waiting pens and that only simple feeding and watering facilities need be provided.

| 5.3.4 | The requirement for an additional room (Chapter II, paragraph 2(c)) should be waived if there is a clear separation in time of slaughter and cutting. |
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5.3.4

The requirement for an additional room (Chapter II, paragraph 2(c)) should be waived if there is a clear separation in time of slaughter and cutting.

| 5.3.5 | Requirements for the temperature of cutting rooms should be waived if the meat, as in artisanal enterprises, is removed from the cold store and cut in portions. |
| --- | --- |

5.3.5

Requirements for the temperature of cutting rooms should be waived if the meat, as in artisanal enterprises, is removed from the cold store and cut in portions.

| 5.3.6 | In the case of artisanal meat processors, the requirement for minced meat to be chilled to 2°C (Section V, Chapter III, paragraph 2(c)) should be dropped, and instead the old German requirement for registered enterprises (4°C provided that produce is fresh and that it is sold only on the day of production) used. Moreover, the frequency of microbiological inspections of minced meat in businesses which produce only small quantities and which either flash-freeze or sell it on the day of production should be geared to the quantity of minced meat actually produced (Regulation (EC) 852/2004, Chapter II, Article 4(3)(a)). |
| --- | --- |

5.3.6

In the case of artisanal meat processors, the requirement for minced meat to be chilled to 2°C (Section V, Chapter III, paragraph 2(c)) should be dropped, and instead the old German requirement for registered enterprises (4°C provided that produce is fresh and that it is sold only on the day of production) used. Moreover, the frequency of microbiological inspections of minced meat in businesses which produce only small quantities and which either flash-freeze or sell it on the day of production should be geared to the quantity of minced meat actually produced (Regulation (EC) 852/2004, Chapter II, Article 4(3)(a)).

| 5.3.7 | The EESC also proposes that a comparative study be drawn up in order to 1) analyse the implementation of the regulation in various Member States which differ in relation to the structure of their artisanal food businesses, and 2) draw up proposals for improving the competitive position of artisanal food businesses. The availability to small food businesses of initial and further training facilities should in particular also be looked into. The systems for publicising Commission guidelines should also be looked at to ensure that small businesses are sufficiently informed about the degree of flexibility available to them. |
| --- | --- |

5.3.7

The EESC also proposes that a comparative study be drawn up in order to 1) analyse the implementation of the regulation in various Member States which differ in relation to the structure of their artisanal food businesses, and 2) draw up proposals for improving the competitive position of artisanal food businesses. The availability to small food businesses of initial and further training facilities should in particular also be looked into. The systems for publicising Commission guidelines should also be looked at to ensure that small businesses are sufficiently informed about the degree of flexibility available to them.

Brussels, 15 December 2005

The president

of the European Economic and Social Committee

Anne-Marie SIGMUND

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(1)  OJ L 226 of 25.6.2004.

1

(2)  Hazard Analysis and Critical Control Points.

2

(3)  OJ C 155 of 29.5.2001, p. 39.

3

(4)  In Germany butchers still account for 45 % of turnover in meat products by value. Measured in terms of weight, the proportion is slightly lower, as butchers' prices are slightly higher as a result of higher raw material and wage costs, among other factors.

4

(5)  Annex III, Section I, Chapter II, points 1(a) and 2(c).

5

(6)  Annex III, Section V, Chapter III, point 2c.

6

(7)  Regulation (EC) 852/2004, Chapter II, Article 4(3)(a).

7

(8)  See also EESC Opinion of 28 March 2001 (OJ C155, p. 39).

8

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