# Official Journal C 157/28 J

| | ISSN 1725-2423 |
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| Official Journal
  of the European Union | C 157 |
| | |
| English edition | Information and Notices | Volume 4828 June 2005 |

ISSN 1725-2423

Official Journal

of the European Union

C 157

English edition

Information and Notices

Volume 4828 June 2005

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| Notice No | Contents | page |
| --- | --- | --- |
| | II   Preparatory Acts |
| | European Economic and Social Committee |
| | 413th plenary session of 15 and 16 December 2004 |
| 2005/C 157/1 | Opinion of the European Economic and Social Committee on The European Insurance Contract | 1 |
| 2005/C 157/2 | Opinion of the European Economic and Social Committee on Tourism and sport: the future challenges for Europe | 15 |
| 2005/C 157/3 | Opinion of the European Economic and Social Committee on the Communication from the Commission: Towards a European strategy for nanotechnology(COM(2004) 338 final) | 22 |
| 2005/C 157/4 | Opinion of the European Economic and Social Committee on A European highway code and vehicle register | 34 |
| 2005/C 157/5 | Opinion of the European Economic and Social Committee on the Promotion of sea transport and the recruitment and training of seafarers | 42 |
| 2005/C 157/6 | Opinion of the European Economic and Social Committee on the Draft Commission decision on the application of Article 86 of the Treaty to State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest and the Draft Commission Directive amending Directive 80/723/EEC on the transparency of financial relations between Member States and public undertakings | 48 |
| 2005/C 157/7 | Opinion of the European Economic and Social Committee on the Proposal for a Directive of the European Parliament and of the Council on the recognition of seafarers' certificates issued by the Member States and amending Directive 2001/25/EC(COM(2004) 311 final — 2004/0098 (COD)) | 53 |
| 2005/C 157/8 | Opinion of the European Economic and Social Committee on the Proposal for a Directive of the European Parliament and of the Council on harmonised river traffic information services on inland waterways in the Community(COM(2004) 392 final — 2004/0123 (COD)) | 56 |
| 2005/C 157/9 | Opinion of the European Economic and Social Committee on the Proposal for a Council Regulation establishing a Community Fisheries Control Agency and amending Regulation (EC) No. 2847/93 establishing a control system applicable to the Common Fisheries Policy(COM(2004) 289 final — 2003/0108 (CNS)) | 61 |
| 2005/C 157/0 | Opinion of the European Economic and Social Committee on the Communication from the Council, the European Parliament, the European Economic and Social Committee — The European Environment and Health Action Plan 2004-2010(COM(2004) 416 final) | 65 |
| 2005/C 157/1 | Opinion of the European Economic and Social Committee on the Proposal for a Directive of the European Parliament and of the Council introducing humane trapping standards for certain animal species(COM(2004) 532 final — 2004/0183(COD)) | 70 |
| 2005/C 157/2 | Opinion of the European Economic and Social Committee on the Proposal for a Council Directive amending Directive 87/328/EEC as regards the storage of semen of bovine animals intended for intra-Community trade(COM(2004) 563 final — 2004/0188 CNS) | 74 |
| 2005/C 157/3 | Opinion of the European Economic and Social Committee on Fostering structural change: an industrial policy for an enlarged Europe(COM(2004) 274 final) | 75 |
| 2005/C 157/4 | Opinion of the European Economic and Social Committee on the Proposal for a Directive of the European Parliament and of the Council on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation(COM(2004) 279 final — 2004/0084 (COD)) | 83 |
| 2005/C 157/5 | 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 — Study on the links between legal and illegal migration(COM(2004) 412 final) | 86 |
| 2005/C 157/6 | Opinion of the European Economic and Social Committee on the Communication from the Commission to the Council and the European Parliament on the managed entry in the EU of persons in need of international protection and the enhancement of the protection capacity of the regions of origin — Improving access to durable solutions(COM(2004) 410 final) | 92 |
| 2005/C 157/7 | Opinion of the European Economic and Social Committee on the Communication from the Commission to the Council and the European Parliament — A more efficient Common European Asylum System: The single procedure as the next step(COM(2004) 503 final — SEC(2004) 937) | 96 |
| 2005/C 157/8 | Opinion of the European Economic and Social Committee on the Proposal for a Regulation of the European Parliament and of the Council on the access to Community External Assistance(COM(2004) 313 final — 2004/0099 (COD)) | 99 |
| 2005/C 157/9 | Opinion of the European Economic and Social Committee on the Communication from the Commission to the Council and the European Parliament — accomplishing a sustainable agricultural model for Europe through the reformed cap — sugar sector reform(COM(2004) 499 final) | 102 |
| 2005/C 157/0 | Opinion of the European Economic and Social Committee on the Communication from the Commission: Science and technology, the key to Europe's future — Guidelines for future European Union policy to support research(COM(2004) 353 final) | 107 |
| 2005/C 157/1 | Opinion of the European Economic and Social Committee on the Proposal for a Directive of the European Parliament and of the Council on statutory audit of annual accounts and consolidated accounts and amending Council Directives 78/660/EEC and 83/349/EEC(COM(2004) 177 final — 2004/0065 (COD)) | 115 |
| 2005/C 157/2 | 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 on increasing the employment of older workers and delaying the exit from the labour market(COM(2004) 146 final) | 120 |
| 2005/C 157/3 | Opinion of the European Economic and Social Committee on the White Paper on the review of Regulation No. 4056/86, applying the EC competition rules to maritime transport(COM(2004) 675 final) | 130 |
| 2005/C 157/4 | Opinion of the European Economic and Social Committee on the Proposal for a Decision of the European Parliament and of the Council on establishing a multiannual Community programme on promoting safer use of the internet and new online technologies(COM(2004) 91 final — 2004/0023 (COD)) | 136 |
| 2005/C 157/5 | Opinion of the European Economic and Social Committee on Europe's accessibility by sea in the future: developments and how to anticipate them | 141 |
| 2005/C 157/6 | Opinion of the European Economic and Social Committee on the Proposal for a Council Regulation amending Regulation (EC) No. 1260/1999 laying down general provisions on the Structural Funds concerning the extension of the duration of the PEACE programme and the granting of new commitment appropriations(COM(2004) 631 final) | 147 |
| 2005/C 157/7 | Opinion of the European Economic and Social Committee on the Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No. 1059/2003 of the European Parliament and of the Council on the establishment of a common classification of territorial units for statistics (NUTS) by reason of the accession of the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia to the European Union(COM(2004) 592 final — 2004/0202 (COD)) | 149 |
| 2005/C 157/8 | Opinion of the European Economic and Social Committee on Relations between the generations | 150 |
| 2005/C 157/9 | Opinion of the European Economic and Social Committee on the Co-existence between genetically modified crops, and conventional and organic crops | 155 |
| 2005/C 157/0 | Opinion of the European Economic and Social Committee on the Communication from the Commission to the Council and the European Parliament: European action plan for organic food and farming(COM(2004) 415 final) | 167 |

Notice No

Contents

page

II   Preparatory Acts

European Economic and Social Committee

413th plenary session of 15 and 16 December 2004

th

2005/C 157/1

Opinion of the European Economic and Social Committee on The European Insurance Contract

1

2005/C 157/2

Opinion of the European Economic and Social Committee on Tourism and sport: the future challenges for Europe

15

2005/C 157/3

Opinion of the European Economic and Social Committee on the Communication from the Commission: Towards a European strategy for nanotechnology(COM(2004) 338 final)

(COM(2004) 338 final)

22

2005/C 157/4

Opinion of the European Economic and Social Committee on A European highway code and vehicle register

34

2005/C 157/5

Opinion of the European Economic and Social Committee on the Promotion of sea transport and the recruitment and training of seafarers

42

2005/C 157/6

Opinion of the European Economic and Social Committee on the Draft Commission decision on the application of Article 86 of the Treaty to State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest and the Draft Commission Directive amending Directive 80/723/EEC on the transparency of financial relations between Member States and public undertakings

48

2005/C 157/7

Opinion of the European Economic and Social Committee on the Proposal for a Directive of the European Parliament and of the Council on the recognition of seafarers' certificates issued by the Member States and amending Directive 2001/25/EC(COM(2004) 311 final — 2004/0098 (COD))

(COM(2004) 311 final — 2004/0098 (COD))

53

2005/C 157/8

Opinion of the European Economic and Social Committee on the Proposal for a Directive of the European Parliament and of the Council on harmonised river traffic information services on inland waterways in the Community(COM(2004) 392 final — 2004/0123 (COD))

(COM(2004) 392 final — 2004/0123 (COD))

56

2005/C 157/9

Opinion of the European Economic and Social Committee on the Proposal for a Council Regulation establishing a Community Fisheries Control Agency and amending Regulation (EC) No. 2847/93 establishing a control system applicable to the Common Fisheries Policy(COM(2004) 289 final — 2003/0108 (CNS))

(COM(2004) 289 final — 2003/0108 (CNS))

61

2005/C 157/0

Opinion of the European Economic and Social Committee on the Communication from the Council, the European Parliament, the European Economic and Social Committee — The European Environment and Health Action Plan 2004-2010(COM(2004) 416 final)

(COM(2004) 416 final)

65

2005/C 157/1

Opinion of the European Economic and Social Committee on the Proposal for a Directive of the European Parliament and of the Council introducing humane trapping standards for certain animal species(COM(2004) 532 final — 2004/0183(COD))

(COM(2004) 532 final — 2004/0183(COD))

70

2005/C 157/2

Opinion of the European Economic and Social Committee on the Proposal for a Council Directive amending Directive 87/328/EEC as regards the storage of semen of bovine animals intended for intra-Community trade(COM(2004) 563 final — 2004/0188 CNS)

(COM(2004) 563 final — 2004/0188 CNS)

74

2005/C 157/3

Opinion of the European Economic and Social Committee on Fostering structural change: an industrial policy for an enlarged Europe(COM(2004) 274 final)

(COM(2004) 274 final)

75

2005/C 157/4

Opinion of the European Economic and Social Committee on the Proposal for a Directive of the European Parliament and of the Council on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation(COM(2004) 279 final — 2004/0084 (COD))

(COM(2004) 279 final — 2004/0084 (COD))

83

2005/C 157/5

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 — Study on the links between legal and illegal migration(COM(2004) 412 final)

(COM(2004) 412 final)

86

2005/C 157/6

Opinion of the European Economic and Social Committee on the Communication from the Commission to the Council and the European Parliament on the managed entry in the EU of persons in need of international protection and the enhancement of the protection capacity of the regions of origin — Improving access to durable solutions(COM(2004) 410 final)

(COM(2004) 410 final)

92

2005/C 157/7

Opinion of the European Economic and Social Committee on the Communication from the Commission to the Council and the European Parliament — A more efficient Common European Asylum System: The single procedure as the next step(COM(2004) 503 final — SEC(2004) 937)

(COM(2004) 503 final — SEC(2004) 937)

96

2005/C 157/8

Opinion of the European Economic and Social Committee on the Proposal for a Regulation of the European Parliament and of the Council on the access to Community External Assistance(COM(2004) 313 final — 2004/0099 (COD))

(COM(2004) 313 final — 2004/0099 (COD))

99

2005/C 157/9

Opinion of the European Economic and Social Committee on the Communication from the Commission to the Council and the European Parliament — accomplishing a sustainable agricultural model for Europe through the reformed cap — sugar sector reform(COM(2004) 499 final)

(COM(2004) 499 final)

102

2005/C 157/0

Opinion of the European Economic and Social Committee on the Communication from the Commission: Science and technology, the key to Europe's future — Guidelines for future European Union policy to support research(COM(2004) 353 final)

(COM(2004) 353 final)

107

2005/C 157/1

Opinion of the European Economic and Social Committee on the Proposal for a Directive of the European Parliament and of the Council on statutory audit of annual accounts and consolidated accounts and amending Council Directives 78/660/EEC and 83/349/EEC(COM(2004) 177 final — 2004/0065 (COD))

(COM(2004) 177 final — 2004/0065 (COD))

115

2005/C 157/2

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 on increasing the employment of older workers and delaying the exit from the labour market(COM(2004) 146 final)

(COM(2004) 146 final)

120

2005/C 157/3

Opinion of the European Economic and Social Committee on the White Paper on the review of Regulation No. 4056/86, applying the EC competition rules to maritime transport(COM(2004) 675 final)

(COM(2004) 675 final)

130

2005/C 157/4

Opinion of the European Economic and Social Committee on the Proposal for a Decision of the European Parliament and of the Council on establishing a multiannual Community programme on promoting safer use of the internet and new online technologies(COM(2004) 91 final — 2004/0023 (COD))

(COM(2004) 91 final — 2004/0023 (COD))

136

2005/C 157/5

Opinion of the European Economic and Social Committee on Europe's accessibility by sea in the future: developments and how to anticipate them

141

2005/C 157/6

Opinion of the European Economic and Social Committee on the Proposal for a Council Regulation amending Regulation (EC) No. 1260/1999 laying down general provisions on the Structural Funds concerning the extension of the duration of the PEACE programme and the granting of new commitment appropriations(COM(2004) 631 final)

(COM(2004) 631 final)

147

2005/C 157/7

Opinion of the European Economic and Social Committee on the Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No. 1059/2003 of the European Parliament and of the Council on the establishment of a common classification of territorial units for statistics (NUTS) by reason of the accession of the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia to the European Union(COM(2004) 592 final — 2004/0202 (COD))

(COM(2004) 592 final — 2004/0202 (COD))

149

2005/C 157/8

Opinion of the European Economic and Social Committee on Relations between the generations

150

2005/C 157/9

Opinion of the European Economic and Social Committee on the Co-existence between genetically modified crops, and conventional and organic crops

155

2005/C 157/0

Opinion of the European Economic and Social Committee on the Communication from the Commission to the Council and the European Parliament: European action plan for organic food and farming(COM(2004) 415 final)

(COM(2004) 415 final)

167

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EN

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II Preparatory Acts

European Economic and Social Committee

413th plenary session of 15 and 16 December 2004

| 28.6.2005 | EN | Official Journal of the European Union | C 157/1 |
| --- | --- | --- | --- |

28.6.2005

EN

Official Journal of the European Union

C 157/1

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Opinion of the European Economic and Social Committee on ‘The European Insurance Contract’

(2005/C 157/01)

On 17 July 2003 the European Economic and Social Committee, acting under the second paragraph of Rule 29 of its Rules of Procedure, decided to draw up an opinion on ‘The European insurance contract’.

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 10 November 2004. The rapporteur was Mr Pegado Liz.

At its 413th plenary session of 15 and 16 December 2004 (meeting of 15 December), the European Economic and Social Committee adopted the following opinion by 137 votes to one, with two abstentions .

1.   Introduction and grounds

| 1.1 | The fundamental principles regulating the drawing up and validity of insurance contracts vary in the different legal systems of the EU's Member States, despite the fact that they have common origins and very similar structures. |
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1.1

The fundamental principles regulating the drawing up and validity of insurance contracts vary in the different legal systems of the EU's Member States, despite the fact that they have common origins and very similar structures.

| 1.2 | Given that this is a key component in the operation of the single market because of the additional security it brings to commercial relations between insurance industry professionals and consumers, the differences in legislation covering essential aspects of insurance contracts in the various national legal systems are likely to create barriers to the completion of the single market and cause additional difficulties for the cross-border marketing of this financial instrument. |
| --- | --- |

1.2

Given that this is a key component in the operation of the single market because of the additional security it brings to commercial relations between insurance industry professionals and consumers, the differences in legislation covering essential aspects of insurance contracts in the various national legal systems are likely to create barriers to the completion of the single market and cause additional difficulties for the cross-border marketing of this financial instrument.

| 1.3 | The present own-initiative opinion therefore aims to alert the competent national and Community bodies to the need and advisability of:






  — | cataloguing the issues and problems for consumers and for the completion and the smooth operation of the single market caused by the current diversity in the legislation defining and regulating insurance contracts; |
| --- | --- | --- |

1.3

The present own-initiative opinion therefore aims to alert the competent national and Community bodies to the need and advisability of:

—

cataloguing the issues and problems for consumers and for the completion and the smooth operation of the single market caused by the current diversity in the legislation defining and regulating insurance contracts;

| — | identifying common principles in the different national systems governing insurance contracts and areas which could — from a technical and legal point of view — be harmonised; |
| --- | --- |

—

identifying common principles in the different national systems governing insurance contracts and areas which could — from a technical and legal point of view — be harmonised;

| — | considering possible solutions and proposing models, formulas or instruments which might need to be adopted in order to secure more suitable Community-level legislation to govern insurance contracts. |
| --- | --- |

—

considering possible solutions and proposing models, formulas or instruments which might need to be adopted in order to secure more suitable Community-level legislation to govern insurance contracts.

| 1.4 | From the start of the preparatory work for this own-initiative opinion, it was deemed essential to secure the cooperation and involvement of members of the ‘Restatement of European Insurance Contract Law’ Group, headed and coordinated by Fritz Reichert-Facilides, Prof. Emeritus of Law at Innsbruck University; this group comprises eminent lawyers and specialists in insurance law from 15 European countries. |
| --- | --- |

1.4

From the start of the preparatory work for this own-initiative opinion, it was deemed essential to secure the cooperation and involvement of members of the ‘Restatement of European Insurance Contract Law’ Group, headed and coordinated by Fritz Reichert-Facilides, Prof. Emeritus of Law at Innsbruck University; this group comprises eminent lawyers and specialists in insurance law from 15 European countries.

| 1.4.1 | Consequently, there was considerable satisfaction at Prof. Reichert-Facilides' immediately acceptance of our invitation to act as expert for the rapporteur. To this end, he immediately put together an initial contribution (Position Paper I). |
| --- | --- |

1.4.1

Consequently, there was considerable satisfaction at Prof. Reichert-Facilides' immediately acceptance of our invitation to act as expert for the rapporteur. To this end, he immediately put together an initial contribution (Position Paper I).

| 1.4.2 | While Prof. Reichert-Facilides was in the process of drafting this opinion, he unexpectedly passed away. |
| --- | --- |

1.4.2

While Prof. Reichert-Facilides was in the process of drafting this opinion, he unexpectedly passed away.

| 1.4.3 | His life-long interest in and considerable academic work on the subject of insurance, together with his draft ‘Restatement’, amply justify this reference here and a special mention of thanks for his remarkable commitment, in tribute to his memory. |
| --- | --- |

1.4.3

His life-long interest in and considerable academic work on the subject of insurance, together with his draft ‘Restatement’, amply justify this reference here and a special mention of thanks for his remarkable commitment, in tribute to his memory.

| 1.4.4 | This fully explains and warrants the quotation here of a substantial part of his ‘Position Paper I’; this paper was prepared as an introduction to the work leading up to this opinion, and must have been one of the last pieces he wrote.






  ‘1. | The diversity of European insurance contract laws constitutes a serious impediment to a Single Insurance Market. This has been the Group's judgment from the beginning. It is moreover clearly emphasised by the EESC itself; thus in its Own-Initiative Opinion “Consumers in the insurance market” of 29 January 1998 (OJ C 95 of 30 March 1998, p. 72; cf. there, e.g., nos. 1.6. and 2.1.9. par. 2). In the meantime, the Commission itself seems to have converted to this insight (see Communication from the Commission to the European Parliament and the Council of 12 February 2003: A more coherent European Contract Law — An Action Plan, COM(2003) 68 final, OJ C 63 of 15 March 2003, p. 1; cited in the following as Action Plan; cf. there, e.g., nos. 27, 47/48, 74). |
| --- | --- | --- |

1.4.4

This fully explains and warrants the quotation here of a substantial part of his ‘Position Paper I’; this paper was prepared as an introduction to the work leading up to this opinion, and must have been one of the last pieces he wrote.

‘1.

The diversity of European insurance contract laws constitutes a serious impediment to a Single Insurance Market. This has been the Group's judgment from the beginning. It is moreover clearly emphasised by the EESC itself; thus in its Own-Initiative Opinion “Consumers in the insurance market” of 29 January 1998 (OJ C 95 of 30 March 1998, p. 72; cf. there, e.g., nos. 1.6. and 2.1.9. par. 2). In the meantime, the Commission itself seems to have converted to this insight (see Communication from the Commission to the European Parliament and the Council of 12 February 2003: A more coherent European Contract Law — An Action Plan, COM(2003) 68 final, OJ C 63 of 15 March 2003, p. 1; cited in the following as Action Plan; cf. there, e.g., nos. 27, 47/48, 74).

| 2. | A harmonisation of laws in general and, of course, also of insurance contract laws, can only be done on the basis of solid comparative law research. The goal of our Group's work is a restatement solution. What is meant by “restatement”? The word is derived from “to restate”, which is defined as “to express again or convincingly.” In the legal sphere, “Restatement” is a technical term specific to the United States. It describes — as is well known “in the profession” — a condensed body of legal rules, derived from different but, in substance, similar sources, systematised and unified in the sense of a “best solution”. The work is done on a private, not legislative basis, by the American Law Institute. The similarities in meaning of the sources stem, in the U.S., from the Common Law basis of the (different) private laws of the various States. In European insurance laws, comparably, similarities in substance are due to their subject: “insurance”. This subject produces, as a result of its very nature, similar regulatory needs. Guidelines for finding a “best solution” for insurance contract law might be these. Firstly, due consideration must be given to the essential task of all insurance contract law: to provide a legal framework for effective risk bearing on the part of the insurer and thus to guarantee the good functioning of insurance business itself. Secondly, it is essential that the conflicting interests of the parties are carefully balanced. As to this aspect, due recognition must be given to the modern trend to grant a relatively high degree of protection to the policyholder. |
| --- | --- |

2.

A harmonisation of laws in general and, of course, also of insurance contract laws, can only be done on the basis of solid comparative law research. The goal of our Group's work is a restatement solution. What is meant by “restatement”? The word is derived from “to restate”, which is defined as “to express again or convincingly.” In the legal sphere, “Restatement” is a technical term specific to the United States. It describes — as is well known “in the profession” — a condensed body of legal rules, derived from different but, in substance, similar sources, systematised and unified in the sense of a “best solution”. The work is done on a private, not legislative basis, by the American Law Institute. The similarities in meaning of the sources stem, in the U.S., from the Common Law basis of the (different) private laws of the various States. In European insurance laws, comparably, similarities in substance are due to their subject: “insurance”. This subject produces, as a result of its very nature, similar regulatory needs. Guidelines for finding a “best solution” for insurance contract law might be these. Firstly, due consideration must be given to the essential task of all insurance contract law: to provide a legal framework for effective risk bearing on the part of the insurer and thus to guarantee the good functioning of insurance business itself. Secondly, it is essential that the conflicting interests of the parties are carefully balanced. As to this aspect, due recognition must be given to the modern trend to grant a relatively high degree of protection to the policyholder.

| 3. | The Restatement as envisaged by our Group concentrates on mandatory rules (resp. semi-mandatory ones, for the benefit of the policyholder's side). Why that? It must be kept in mind that the “living law” of insurance contracts is primarily not found in statutes but in standard contract terms. Respecting this means not only acknowledging realities but also devoting oneself to the principle of freedom of contract. On the other hand, there remains the essential task for the legislator to limit this freedom. This has to be done for reasons of public policy and for those of protecting the policyholder (or such third persons for whose benefit the insurance is taken out). Particular attention has to be paid to contract clauses which may lead to a loss of insurance protection. The technical means to provide these aims is — throughout all European legal orders — the legislative creation of (semi)mandatory insurance contract law provisions. — The problems arising insofar in view of a Single Market are indicated by the Action Plan in these words: “... Member States have developed rules which may or may not be included in an insurance contract. To the extent that these rules differ they might affect the products which are offered across borders.” And indeed: Real promotion of an internal insurance market requires harmonisation/unification of those limitations of insurance contract freedom, — with the consequence that all (standard) contracts abiding by such uniform norms may be offered, competingly, throughout all European countries and thus provide for an undivided market situation. This is exactly the goal which the work of the Project is heading at. |
| --- | --- |

3.

The Restatement as envisaged by our Group concentrates on mandatory rules (resp. semi-mandatory ones, for the benefit of the policyholder's side). Why that? It must be kept in mind that the “living law” of insurance contracts is primarily not found in statutes but in standard contract terms. Respecting this means not only acknowledging realities but also devoting oneself to the principle of freedom of contract. On the other hand, there remains the essential task for the legislator to limit this freedom. This has to be done for reasons of public policy and for those of protecting the policyholder (or such third persons for whose benefit the insurance is taken out). Particular attention has to be paid to contract clauses which may lead to a loss of insurance protection. The technical means to provide these aims is — throughout all European legal orders — the legislative creation of (semi)mandatory insurance contract law provisions. — The problems arising insofar in view of a Single Market are indicated by the Action Plan in these words: “... Member States have developed rules which may or may not be included in an insurance contract. To the extent that these rules differ they might affect the products which are offered across borders.” And indeed: Real promotion of an internal insurance market requires harmonisation/unification of those limitations of insurance contract freedom, — with the consequence that all (standard) contracts abiding by such uniform norms may be offered, competingly, throughout all European countries and thus provide for an undivided market situation. This is exactly the goal which the work of the Project is heading at.

| 4. | The work's comparative law preparation (as indicated supra sub no.2) is strived for, as far as our Project Group is concerned, by its mere composition. Experts of 16 legal orders of insurance contract (within and outside the EU) are included. |
| --- | --- |

4.

The work's comparative law preparation (as indicated supra sub no.2) is strived for, as far as our Project Group is concerned, by its mere composition. Experts of 16 legal orders of insurance contract (within and outside the EU) are included.

| 5. | The question poses itself whether the Restatement should substitute the existing national rules or provide for an additional (at the time being: 16th) model especially for transformer contracts. The problem is put forth by the Action Plan which opens discussion for a so-called Optional Instrument. The issue shall presently not be further dealt with. |
| --- | --- |

5.

The question poses itself whether the Restatement should substitute the existing national rules or provide for an additional (at the time being: 16th) model especially for transformer contracts. The problem is put forth by the Action Plan which opens discussion for a so-called Optional Instrument. The issue shall presently not be further dealt with.

| 6. | Comparative work in insurance contract law must be done with close attention towards general contract law. The Project Group is bound to that by especially constantly observing and considering the so-called Lando/Beale principles. Moreover, it cooperates closely with the “Study Group on a European Civil Code” (Professors von Bar and Beale). Within this organisation, the Group is entrusted with the responsibility especially for insurance contract law’. |
| --- | --- |

6.

Comparative work in insurance contract law must be done with close attention towards general contract law. The Project Group is bound to that by especially constantly observing and considering the so-called Lando/Beale principles. Moreover, it cooperates closely with the “Study Group on a European Civil Code” (Professors von Bar and Beale). Within this organisation, the Group is entrusted with the responsibility especially for insurance contract law’.

| 1.5 | Various meetings have been held in preparation for this opinion, with representatives from the European Commission involved in the insurance sector and completion of the single market, the CEA (The European Federation of National Insurance Associations) and BEUC (the European Consumers' Organisation); this has allowed us to collect ideas, reactions and suggestions regarding the subject in hand. |
| --- | --- |

1.5

Various meetings have been held in preparation for this opinion, with representatives from the European Commission involved in the insurance sector and completion of the single market, the CEA (The European Federation of National Insurance Associations) and BEUC (the European Consumers' Organisation); this has allowed us to collect ideas, reactions and suggestions regarding the subject in hand.

| 1.6 | It was also decided to put together a questionnaire, to be addressed to a wide range of national and Community bodies — both public and private — representing the principal stakeholders. At the same time a hearing will be held with the main representatives of the interest groups involved (insurers, manufacturing companies and other professionals and consumers), together with legal experts and academics from different backgrounds and legal systems. |
| --- | --- |

1.6

It was also decided to put together a questionnaire, to be addressed to a wide range of national and Community bodies — both public and private — representing the principal stakeholders. At the same time a hearing will be held with the main representatives of the interest groups involved (insurers, manufacturing companies and other professionals and consumers), together with legal experts and academics from different backgrounds and legal systems.

| 1.7 | This opinion outlines the main thrust of the replies to the questionnaire, together with the reactions and suggestions from the hearing held on 16 April 2004. |
| --- | --- |

1.7

This opinion outlines the main thrust of the replies to the questionnaire, together with the reactions and suggestions from the hearing held on 16 April 2004.

2.   Some precedents

| 2.1 | This is not a new issue for the EESC. The European Economic and Social Committee has already issued an opinion on ‘Consumers in the insurance market’ (1); this drew attention to the ‘Proposal for a Council Directive on the coordination of laws, regulations and administrative provisions relating to insurance contracts’ (2), which sought above all to harmonise some of the basic rules and regulations pertaining to insurance contract law; the Committee opinion also deplored that fact that hitherto the Commission had not taken another look at this issue, ‘even though it is the prevailing opinion among both insurance operators and consumer organisations that a whole series of obstacles hampering completion of the single market in this field can be traced back to the absence of Community legislation on insurance contracts (a minimum level of harmonisation of substantive law)’ (3). |
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2.1

This is not a new issue for the EESC. The European Economic and Social Committee has already issued an opinion on ‘Consumers in the insurance market’ (1); this drew attention to the ‘Proposal for a Council Directive on the coordination of laws, regulations and administrative provisions relating to insurance contracts’ (2), which sought above all to harmonise some of the basic rules and regulations pertaining to insurance contract law; the Committee opinion also deplored that fact that hitherto the Commission had not taken another look at this issue, ‘even though it is the prevailing opinion among both insurance operators and consumer organisations that a whole series of obstacles hampering completion of the single market in this field can be traced back to the absence of Community legislation on insurance contracts (a minimum level of harmonisation of substantive law)’ (3).

| 2.1.1 | Further on in the opinion, the Committee highlighted the first of a number of acknowledged general obstacles to the effective implementation of the single insurance market as being ‘the total lack of harmonisation at the level of substantive law, in other words, a minimum level of regulation on insurance contract law in the European Union’ (4). |
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2.1.1

Further on in the opinion, the Committee highlighted the first of a number of acknowledged general obstacles to the effective implementation of the single insurance market as being ‘the total lack of harmonisation at the level of substantive law, in other words, a minimum level of regulation on insurance contract law in the European Union’ (4).

| 2.1.2 | Moreover, the Committee drew attention to the fact that ‘there is no legal framework at Community level defining rules for a minimum level of transparency in insurance contracts in general, including non-life insurance or, more specifically, describing unfair general contractual clauses in insurance, or even laying down general principles of good faith or contract balance in the field of insurance’
   (5). |
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2.1.2

Moreover, the Committee drew attention to the fact that ‘there is no legal framework at Community level defining rules for a minimum level of transparency in insurance contracts in general, including non-life insurance or, more specifically, describing unfair general contractual clauses in insurance, or even laying down general principles of good faith or contract balance in the field of insurance’
   (5).

| 2.1.3 | It pointed out more specifically that: ‘the different ways in which each Member State has regulated these questions — or, alternatively, the lack of regulation — leaves an entire market, where competition is far from perfect and those acting for one side tend to work together to the detriment of the other, to its own devices. This means that a huge number of different solutions exist to what are identical situations within the single market, particularly with regard to cross-border transactions, which are becoming ever simpler with the arrival of the information society’
   (6). |
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2.1.3

It pointed out more specifically that: ‘the different ways in which each Member State has regulated these questions — or, alternatively, the lack of regulation — leaves an entire market, where competition is far from perfect and those acting for one side tend to work together to the detriment of the other, to its own devices. This means that a huge number of different solutions exist to what are identical situations within the single market, particularly with regard to cross-border transactions, which are becoming ever simpler with the arrival of the information society’
   (6).

| 2.1.4 | After analysing the areas which it felt could be and ought to be harmonised, the Opinion concluded by alerting the Commission and the Member States to ‘the advisability of re-examining the Commission's 1979 draft Directive on the coordination of laws, regulations and administrative provisions relating to insurance contracts in the light of the principle of subsidiarity’ (7); the Committee urged the Commission to spare no effort in defining Community-level common minimum requirements for insurance contracts (draft directive) (8). |
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2.1.4

After analysing the areas which it felt could be and ought to be harmonised, the Opinion concluded by alerting the Commission and the Member States to ‘the advisability of re-examining the Commission's 1979 draft Directive on the coordination of laws, regulations and administrative provisions relating to insurance contracts in the light of the principle of subsidiarity’ (7); the Committee urged the Commission to spare no effort in defining Community-level common minimum requirements for insurance contracts (draft directive) (8).

| 2.2 | Moreover, consumer organisations and insurance professionals' associations have long been pointing to the need for further harmonisation of legislation on insurance contracts. |
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2.2

Moreover, consumer organisations and insurance professionals' associations have long been pointing to the need for further harmonisation of legislation on insurance contracts.

| 2.2.1 | As early as 1986, the European Consumer Law Group was drawing attention to the need for ‘some harmonisation of the laws on insurance contracts in the Community’, and pinpointed the aspects of insurance contractual relations which it felt ought to be harmonised (9). |
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2.2.1

As early as 1986, the European Consumer Law Group was drawing attention to the need for ‘some harmonisation of the laws on insurance contracts in the Community’, and pinpointed the aspects of insurance contractual relations which it felt ought to be harmonised (9).

| 2.2.2 | The BEUC, for its part, has since at least 1994 been pointing out the advisability of setting up a ‘basic legal framework’ to deal with key aspects of insurance contracts which might constitute ‘a common minimum legal basis’. |
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2.2.2

The BEUC, for its part, has since at least 1994 been pointing out the advisability of setting up a ‘basic legal framework’ to deal with key aspects of insurance contracts which might constitute ‘a common minimum legal basis’.

| 2.2.3 | A similar view was expressed in December 1998 by a variety of organisations representing consumers. |
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2.2.3

A similar view was expressed in December 1998 by a variety of organisations representing consumers.

| 2.2.4 | The European Federation of National Insurance Associations (CEA), in its recent comments on the Commission's Communication on a more coherent European contract law, firstly emphasised that the Commission was right to suggest that ‘the diversity of national regulations governing insurance contracts concluded with consumers acts as a brake on the development of cross-border transactions in the insurance sector’, and then pointed out that ‘concerning the so-called “harmonised”acquis communautaire, the number and complexity of provisions contained in the various texts covered by contract law in the insurance sector pose real problems’. |
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2.2.4

The European Federation of National Insurance Associations (CEA), in its recent comments on the Commission's Communication on a more coherent European contract law, firstly emphasised that the Commission was right to suggest that ‘the diversity of national regulations governing insurance contracts concluded with consumers acts as a brake on the development of cross-border transactions in the insurance sector’, and then pointed out that ‘concerning the so-called “harmonised”acquis communautaire, the number and complexity of provisions contained in the various texts covered by contract law in the insurance sector pose real problems’.

| 2.2.4.1 | After listing a whole series of situations where there was a pointless overlap of identical or unjustifiably different provisions in the various community texts applicable, it concluded by expressing its support for ‘this proposal to improve the acquis communautaire’ provided there was a proper prior cost/benefit analysis and full consultation with interested parties, focusing on barriers to the single market (10). |
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2.2.4.1

After listing a whole series of situations where there was a pointless overlap of identical or unjustifiably different provisions in the various community texts applicable, it concluded by expressing its support for ‘this proposal to improve the acquis communautaire’ provided there was a proper prior cost/benefit analysis and full consultation with interested parties, focusing on barriers to the single market (10).

| 2.3 | For its part, the Commission, in its Communications on ‘European Contract Law’ (11) and ‘A more coherent European Contract Law — An Action Plan’ (12) has highlighted in this connection that, according to several of the bodies consulted, insurance contracts represent one area in the sphere of financial services which raises more problems because of the ‘diversity of national regulations’ in application. For this reason, consideration should be given to the possibility that ‘further convergence of such measures may be needed in order to balance the need for greater uniformity of national rules with the need to maintain product innovation and choice’, and even to making this a priority in ‘a follow-up action to the Better Regulation Action Plan’ (13). |
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2.3

For its part, the Commission, in its Communications on ‘European Contract Law’ (11) and ‘A more coherent European Contract Law — An Action Plan’ (12) has highlighted in this connection that, according to several of the bodies consulted, insurance contracts represent one area in the sphere of financial services which raises more problems because of the ‘diversity of national regulations’ in application. For this reason, consideration should be given to the possibility that ‘further convergence of such measures may be needed in order to balance the need for greater uniformity of national rules with the need to maintain product innovation and choice’, and even to making this a priority in ‘a follow-up action to the Better Regulation Action Plan’ (13).

| 2.4 | Lastly, the European Parliament, in its Resolution on the Commission's Communication on the above-mentioned Action Plan, regretting ‘the lack of early action to produce optional instruments in certain sectors, such as consumer transactions and insurance, where substantial benefits could accrue both to assist the good functioning of the internal market and to increase intra-Community transactions and trade,’ considers that ‘in order to facilitate cross-border trade within the internal market, it should be an early priority to proceed with the establishment of an optional instrument in certain sectors, particularly those of consumer contracts and insurance contracts, and therefore calls on the Commission as a matter of priority, whilst having regard to a high level of consumer protection and the integration of the appropriate mandatory provisions, to produce an opt-in instrument in the areas of consumer contracts and contracts of insurance’ (14). |
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2.4

Lastly, the European Parliament, in its Resolution on the Commission's Communication on the above-mentioned Action Plan, regretting ‘the lack of early action to produce optional instruments in certain sectors, such as consumer transactions and insurance, where substantial benefits could accrue both to assist the good functioning of the internal market and to increase intra-Community transactions and trade,’ considers that ‘in order to facilitate cross-border trade within the internal market, it should be an early priority to proceed with the establishment of an optional instrument in certain sectors, particularly those of consumer contracts and insurance contracts, and therefore calls on the Commission as a matter of priority, whilst having regard to a high level of consumer protection and the integration of the appropriate mandatory provisions, to produce an opt-in instrument in the areas of consumer contracts and contracts of insurance’ (14).

3.   Replies to the questionnaire and the hearing of 16 April 2004

| 3.1 | The questionnaire, which was sent in good time to a number of bodies, elicited a total of 27 replies from both national regulatory authorities in several countries and representatives of insurance companies, industry, trade and consumers. |
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3.1

The questionnaire, which was sent in good time to a number of bodies, elicited a total of 27 replies from both national regulatory authorities in several countries and representatives of insurance companies, industry, trade and consumers.

| 3.1.1 | Replies were received from Austria, Belgium, Finland, France, Germany, Liechtenstein, Lithuania, Malta, Norway, Poland, Slovakia, Slovenia and Sweden. |
| --- | --- |

3.1.1

Replies were received from Austria, Belgium, Finland, France, Germany, Liechtenstein, Lithuania, Malta, Norway, Poland, Slovakia, Slovenia and Sweden.

| 3.1.2 | The members of the Restatement of European Insurance Contract Law Project Group sent a single joint reply. |
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3.1.2

The members of the Restatement of European Insurance Contract Law Project Group sent a single joint reply.

| 3.2 | A clear and unequivocal majority felt that:






  a) | the lack of mandatory rules of insurance law constitutes a barrier to cross-border provision of insurance services, and numerous instances of this are cited; |
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3.2

A clear and unequivocal majority felt that:

a)

the lack of mandatory rules of insurance law constitutes a barrier to cross-border provision of insurance services, and numerous instances of this are cited;

| b) | this situation prevents customers seeking insurance from obtaining coverage from foreign insurers, with innumerable examples being given; |
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b)

this situation prevents customers seeking insurance from obtaining coverage from foreign insurers, with innumerable examples being given;

| c) | this fact is an obstacle to insurance intermediaries providing their services across borders, and a number of examples are quoted; |
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c)

this fact is an obstacle to insurance intermediaries providing their services across borders, and a number of examples are quoted;

| d) | harmonisation of mandatory rules of insurance contract law would help insurers, customers and insurance intermediaries to increase cross-border insurance transactions; |
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d)

harmonisation of mandatory rules of insurance contract law would help insurers, customers and insurance intermediaries to increase cross-border insurance transactions;

| e) | the Commission Directive of 1979-80 is still a good basis for discussion of this matter, if reformulated in new terms and according to different parameters, for which some respondents gave examples and suggestions. |
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e)

the Commission Directive of 1979-80 is still a good basis for discussion of this matter, if reformulated in new terms and according to different parameters, for which some respondents gave examples and suggestions.

| 3.3 | The hearing was attended by 46 representatives of 36 institutions from 17 countries. |
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3.3

The hearing was attended by 46 representatives of 36 institutions from 17 countries.

| 3.4 | The general thrust of the replies to the questionnaire, together with the discussions during the hearing, point to an overall consensus, which may be summarised as follows: |
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3.4

The general thrust of the replies to the questionnaire, together with the discussions during the hearing, point to an overall consensus, which may be summarised as follows:

| 3.4.1 | There are striking differences between national legal arrangements where the regulation of insurance contracts is concerned; |
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3.4.1

There are striking differences between national legal arrangements where the regulation of insurance contracts is concerned;

| 3.4.2 | There is a significant lack of harmonisation regarding insurance law at EU level, with repercussions for the completion of the internal market in this field; |
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3.4.2

There is a significant lack of harmonisation regarding insurance law at EU level, with repercussions for the completion of the internal market in this field;

| 3.4.3 | A degree of harmonisation is desirable/necessary, especially for small and medium-sized insurers (individual consumers and SMEs), in order to avoid inequalities and discrimination (mass risk); |
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3.4.3

A degree of harmonisation is desirable/necessary, especially for small and medium-sized insurers (individual consumers and SMEs), in order to avoid inequalities and discrimination (mass risk);

| 3.4.4 | A step-by-step approach should be taken to harmonising insurance contract law and excessive rigidity should be avoided, since harmonisation is not an end in itself but rather a means of achieving the single market and as such, should comply with the principles of necessity and proportionality; |
| --- | --- |

3.4.4

A step-by-step approach should be taken to harmonising insurance contract law and excessive rigidity should be avoided, since harmonisation is not an end in itself but rather a means of achieving the single market and as such, should comply with the principles of necessity and proportionality;

| 3.4.5 | The primary objective of harmonisation must be:






  — | mandatory rules |
| --- | --- | --- |

3.4.5

The primary objective of harmonisation must be:

—

mandatory rules

| — | the general part of insurance contract law. |
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—

the general part of insurance contract law.

| 3.4.6 | The form of the model contract resulting from harmonisation could be ‘optional’, but all its terms and components must be mandatory for the parties as soon as it is adopted. |
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3.4.6

The form of the model contract resulting from harmonisation could be ‘optional’, but all its terms and components must be mandatory for the parties as soon as it is adopted.

| 3.4.7 | The Community instrument employed to adopt the model should be a regulation, in order to ensure complete harmonisation. |
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3.4.7

The Community instrument employed to adopt the model should be a regulation, in order to ensure complete harmonisation.

| 3.4.8 | The proposals contained in the Commission's 1979-80 directive, as amended to reflect the suggestions of the EP and the EESC, could provide a starting-point for drafting the regulation, but they need to be thoroughly overhauled in the light of intervening developments in insurance law. |
| --- | --- |

3.4.8

The proposals contained in the Commission's 1979-80 directive, as amended to reflect the suggestions of the EP and the EESC, could provide a starting-point for drafting the regulation, but they need to be thoroughly overhauled in the light of intervening developments in insurance law.

| 3.4.9 | Harmonisation, as outlined above, could stimulate cross-border insurance and contribute to the further development of the single market in this field. |
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3.4.9

Harmonisation, as outlined above, could stimulate cross-border insurance and contribute to the further development of the single market in this field.

| 3.4.10 | Treaty Article 95 could provide the legal basis for such an initiative. |
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3.4.10

Treaty Article 95 could provide the legal basis for such an initiative.

| 3.5 | Some respondents and participants added that: |
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3.5

Some respondents and participants added that:

| 3.5.1 | Harmonisation should be ‘optional’ and limited to the definition of fundamental concepts. |
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3.5.1

Harmonisation should be ‘optional’ and limited to the definition of fundamental concepts.

| 3.5.2 | Harmonisation should apply only to cross-border contracts and only to natural persons. |
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3.5.2

Harmonisation should apply only to cross-border contracts and only to natural persons.

| 3.5.3 | Harmonisation is not a panacea for the underdevelopment of the single market in insurance. |
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3.5.3

Harmonisation is not a panacea for the underdevelopment of the single market in insurance.

| 3.5.4 | Particular attention must be given to mutual insurance and welfare and social security bodies on account of their specific features. |
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3.5.4

Particular attention must be given to mutual insurance and welfare and social security bodies on account of their specific features.

4.   The need for a Community-level initiative

4.1   The internal market and insurance

4.1.1   General observations on the relationship of the internal market and insurance

| 4.1.1.1 | The European internal market comprises an area without internal borders allowing the free movement of goods, persons, services and capital (Art. 14 (2) EC-Treaty). ‘Insurance’ falls within the scope of the freedom to provide services (Art. (49 — 55) EC-Treaty) or the right of establishment depending on the circumstances of the case. Insurers providing their services across borders or establishing themselves in another Member State bring national insurance products into competition with their own policies. |
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4.1.1.1

The European internal market comprises an area without internal borders allowing the free movement of goods, persons, services and capital (Art. 14 (2) EC-Treaty). ‘Insurance’ falls within the scope of the freedom to provide services (Art. (49 — 55) EC-Treaty) or the right of establishment depending on the circumstances of the case. Insurers providing their services across borders or establishing themselves in another Member State bring national insurance products into competition with their own policies.

| 4.1.1.2 | As a result, the variety of choices to potential policyholders becomes larger. Ideally, positive selection by customers seeking insurance should be the ‘invisible’ hand steering the internal insurance market. |
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4.1.1.2

As a result, the variety of choices to potential policyholders becomes larger. Ideally, positive selection by customers seeking insurance should be the ‘invisible’ hand steering the internal insurance market.

| 4.1.1.3 | Further freedoms are affected by insurance matters: the free transfer of premiums and insurance proceeds is guaranteed (see Art. 56 EC-Treaty). Furthermore, policyholders making use of their freedom under Article 18 of the EC Treaty should not face adverse effects on their policies when changing their habitual residence from one jurisdiction to another. |
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4.1.1.3

Further freedoms are affected by insurance matters: the free transfer of premiums and insurance proceeds is guaranteed (see Art. 56 EC-Treaty). Furthermore, policyholders making use of their freedom under Article 18 of the EC Treaty should not face adverse effects on their policies when changing their habitual residence from one jurisdiction to another.

4.1.2   Status of insurance law harmonisation and insurance contract law

| 4.1.2.1 | This wide range of relations between insurance (law) and the freedoms of the EC Treaty have led the EC to harmonise important sectors of insurance law for the (proper) functioning of the internal market. Legislation on insurance supervision is substantially harmonised throughout the EC and the EEA by means of the so called ‘three generations’ of directives in the field of insurance. |
| --- | --- |

4.1.2.1

This wide range of relations between insurance (law) and the freedoms of the EC Treaty have led the EC to harmonise important sectors of insurance law for the (proper) functioning of the internal market. Legislation on insurance supervision is substantially harmonised throughout the EC and the EEA by means of the so called ‘three generations’ of directives in the field of insurance.

| 4.1.2.2 | On the basis of these achievements a system of single licensing and home country control has been introduced — as it was already envisaged by the ECJ in its decision of 4 December 1986 (15). In the field of insurance contract law, harmonisation is more or less restricted to issues of private international and international procedural law (16). |
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4.1.2.2

On the basis of these achievements a system of single licensing and home country control has been introduced — as it was already envisaged by the ECJ in its decision of 4 December 1986 (15). In the field of insurance contract law, harmonisation is more or less restricted to issues of private international and international procedural law (16).

| 4.1.2.3 | Substantive insurance contract law has only been harmonised in specific sectors and within those sectors only on specific issues. There is, for example, a considerable body of harmonised law in the field of motor vehicle liability insurance (17). Common rules are also known in the field of legal expenses insurance (18). |
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4.1.2.3

Substantive insurance contract law has only been harmonised in specific sectors and within those sectors only on specific issues. There is, for example, a considerable body of harmonised law in the field of motor vehicle liability insurance (17). Common rules are also known in the field of legal expenses insurance (18).

| 4.1.2.4 | However, the vast majority of rules of substantive insurance contract law, i.e. the general part providing for rules applicable to all branches of insurance, is still subject to national legislation. This observation inevitably raises the question of whether or not harmonisation of insurance contract law is required in order to allow a proper functioning of the internal insurance market. The answer must be in the affirmative if divergences in national insurance contract laws form a barrier to the internal market. |
| --- | --- |

4.1.2.4

However, the vast majority of rules of substantive insurance contract law, i.e. the general part providing for rules applicable to all branches of insurance, is still subject to national legislation. This observation inevitably raises the question of whether or not harmonisation of insurance contract law is required in order to allow a proper functioning of the internal insurance market. The answer must be in the affirmative if divergences in national insurance contract laws form a barrier to the internal market.

4.2   Insurance contract law as a barrier to the functioning of the internal insurance market

4.2.1   Present situation: an incomplete internal insurance market

| 4.2.1.1 | There is empirical data indicating that the measures taken by the EC so far (19) have substantially enhanced but have not yet completed the functioning of the internal insurance market (20). This holds true for example for the freedom to provide services in the field of mass risk insurance which is guaranteed by Article 49 et seq. of the EC Treaty and envisaged by the directives on insurance law but — in reality — not substantially used by either the insurance industry or customers. |
| --- | --- |

4.2.1.1

There is empirical data indicating that the measures taken by the EC so far (19) have substantially enhanced but have not yet completed the functioning of the internal insurance market (20). This holds true for example for the freedom to provide services in the field of mass risk insurance which is guaranteed by Article 49 et seq. of the EC Treaty and envisaged by the directives on insurance law but — in reality — not substantially used by either the insurance industry or customers.

4.2.2   General background of today's situation

| 4.2.2.1 | The present situation described above may be explained by looking at its general legal background. A key factor is the fact that insurance is frequently called a ‘legal product’. This means that the product sold by an insurance company is the insurance contract itself shaped by party autonomy and the (mandatory) law applicable to the contract. |
| --- | --- |

4.2.2.1

The present situation described above may be explained by looking at its general legal background. A key factor is the fact that insurance is frequently called a ‘legal product’. This means that the product sold by an insurance company is the insurance contract itself shaped by party autonomy and the (mandatory) law applicable to the contract.

| 4.2.2.2 | Certainly there is no need to worry about the proper functioning of the internal market as far as there is party autonomy in the field of insurance contract law allowing parties to shape insurance products in line with their mutual preferences. |
| --- | --- |

4.2.2.2

Certainly there is no need to worry about the proper functioning of the internal market as far as there is party autonomy in the field of insurance contract law allowing parties to shape insurance products in line with their mutual preferences.

| 4.2.2.3 | However, insurance is to a large extent governed by mandatory rules (21). Some of these rules are at the same time internationally mandatory. |
| --- | --- |

4.2.2.3

However, insurance is to a large extent governed by mandatory rules (21). Some of these rules are at the same time internationally mandatory.

| 4.2.2.4 | In effect the product of a particular insurer is to a considerable degree shaped by the law applicable to the insurance contract. This is why differences in national insurance laws may form a barrier to the internal market. The action plan of the Commission on a more coherent European contract law openly acknowledges this fact (22). This will be explained below by looking at the perspective of the insurer (point 4.2.3), the policyholder (point 4.2.4) and the insurance intermediaries (point 4.2.5). |
| --- | --- |

4.2.2.4

In effect the product of a particular insurer is to a considerable degree shaped by the law applicable to the insurance contract. This is why differences in national insurance laws may form a barrier to the internal market. The action plan of the Commission on a more coherent European contract law openly acknowledges this fact (22). This will be explained below by looking at the perspective of the insurer (point 4.2.3), the policyholder (point 4.2.4) and the insurance intermediaries (point 4.2.5).

4.2.3   The perspective of the insurer

| 4.2.3.1 | Insurers are the producers of insurance coverage. The design of their policies is based on a risk calculation which takes into consideration the legal environment in which a policy is sold. An insurer who is able to sell a product under one and the same legal order throughout the Community may pool risks covered in the EC without distortions stemming from differences in national insurance laws. As a result differences of insurance law would not form a barrier to the freedoms of the insurer. |
| --- | --- |

4.2.3.1

Insurers are the producers of insurance coverage. The design of their policies is based on a risk calculation which takes into consideration the legal environment in which a policy is sold. An insurer who is able to sell a product under one and the same legal order throughout the Community may pool risks covered in the EC without distortions stemming from differences in national insurance laws. As a result differences of insurance law would not form a barrier to the freedoms of the insurer.

| 4.2.3.2 | On the contrary, if the law applicable to a policy changes depending on where the policy is sold, the differing legal environment in each Member State will influence the risk calculation and therefore affect the functioning of the ‘law of large numbers’ on which the business of insurance is based. |
| --- | --- |

4.2.3.2

On the contrary, if the law applicable to a policy changes depending on where the policy is sold, the differing legal environment in each Member State will influence the risk calculation and therefore affect the functioning of the ‘law of large numbers’ on which the business of insurance is based.

| 4.2.3.3 | As a result, insurers selling their services across borders would have to submit their policies to different design and calculations depending on the law applicable. This would form a severe barrier to the functioning of the internal market. |
| --- | --- |

4.2.3.3

As a result, insurers selling their services across borders would have to submit their policies to different design and calculations depending on the law applicable. This would form a severe barrier to the functioning of the internal market.

| 4.2.3.4 | A short look at the Community's rules on private international law in the insurance sector shows that an insurer is in fact forced to adjust policies to the legal environment of the Member State where they are sold. According to Article 7 (1) (a) and (h) of the Second Non-Life Insurance Directive (23) it is the law of the Member State in which the risk is situated and according to Article 32 (1) (1) of the Directive on Life Assurance (24) the Member State of the commitment which applies to the insurance contract. The place where the risk is situated or the place of the commitment is in most cases determined by the habitual residence of the policyholder (25). |
| --- | --- |

4.2.3.4

A short look at the Community's rules on private international law in the insurance sector shows that an insurer is in fact forced to adjust policies to the legal environment of the Member State where they are sold. According to Article 7 (1) (a) and (h) of the Second Non-Life Insurance Directive (23) it is the law of the Member State in which the risk is situated and according to Article 32 (1) (1) of the Directive on Life Assurance (24) the Member State of the commitment which applies to the insurance contract. The place where the risk is situated or the place of the commitment is in most cases determined by the habitual residence of the policyholder (25).

| 4.2.3.5 | The insurer may avoid this result by choosing the law applicable to the insurance contract (most likely the law of its own seat) by way of agreement with the policyholder. However, this option is substantially limited by the rules of private international law in the directives on insurance. In non-life insurance the directives grant free choice of law only for insurance contracts covering large risks (26). Member States — i.e. the Member State where the risk is situated — are granted discretion to expand the scope of party autonomy (27). In all other cases the directives grant party autonomy only to a limited degree (28) and thereby do not avoid the described problems of insurers selling their insurance contracts across borders. In the field of life assurance the Member State of the commitment may grant party autonomy (29). Otherwise parties only enjoy a very limited choice of law (30). |
| --- | --- |

4.2.3.5

The insurer may avoid this result by choosing the law applicable to the insurance contract (most likely the law of its own seat) by way of agreement with the policyholder. However, this option is substantially limited by the rules of private international law in the directives on insurance. In non-life insurance the directives grant free choice of law only for insurance contracts covering large risks (26). Member States — i.e. the Member State where the risk is situated — are granted discretion to expand the scope of party autonomy (27). In all other cases the directives grant party autonomy only to a limited degree (28) and thereby do not avoid the described problems of insurers selling their insurance contracts across borders. In the field of life assurance the Member State of the commitment may grant party autonomy (29). Otherwise parties only enjoy a very limited choice of law (30).

| 4.2.3.6 | These observations on the situation of European international insurance contract law clearly show that in the insurance of mass risks the insurer has to adapt its product in most cases to the legal environment of the habitual residence of the policyholder. (31) This burden is further increased by the fact that the policyholder may change the place of habitual residence after the conclusion of the contract (32). |
| --- | --- |

4.2.3.6

These observations on the situation of European international insurance contract law clearly show that in the insurance of mass risks the insurer has to adapt its product in most cases to the legal environment of the habitual residence of the policyholder. (31) This burden is further increased by the fact that the policyholder may change the place of habitual residence after the conclusion of the contract (32).

| 4.2.3.7 | The only exception in European international insurance contract law is the insurance of large risks in non-life insurance. Here insurer and policyholder may choose the law applicable. However, even in cases of large risk insurances a court of the Member State in which the policyholder has its residence (holding jurisdiction under Article 9 1) b) of the Brussels I Regulation (33)) may impose its mandatory rules (34). |
| --- | --- |

4.2.3.7

The only exception in European international insurance contract law is the insurance of large risks in non-life insurance. Here insurer and policyholder may choose the law applicable. However, even in cases of large risk insurances a court of the Member State in which the policyholder has its residence (holding jurisdiction under Article 9 1) b) of the Brussels I Regulation (33)) may impose its mandatory rules (34).

| 4.2.3.8 | It follows that insurers will be very hesitant to provide cross border services at least when it comes to the insurance of mass risks. It may be argued that a shift in the private international legal regime could solve the issue. Indeed, it would seem that the above-mentioned barriers would disappear if parties enjoyed free choice of law and — in the absence of such a choice — the law applicable was determined by the place of establishment of the insurer. However, such a shift in private international law would substantially jeopardise basic notions of policyholder and consumer protection in private international law: it would grant free choice of law in the insurance sector even in business-to-consumer situations in which a consumer would be protected by Article 5 of the Rome Convention in other sectors. At the same time it would not fully solve the problem: courts of the Member State in which the policyholder has his or her residence would still apply their own internationally mandatory rules. Above all policyholders would be very hesitant to shop abroad knowing that they would lose the protection of their home law and would be submitted to unknown foreign insurance law (35). |
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4.2.3.8

It follows that insurers will be very hesitant to provide cross border services at least when it comes to the insurance of mass risks. It may be argued that a shift in the private international legal regime could solve the issue. Indeed, it would seem that the above-mentioned barriers would disappear if parties enjoyed free choice of law and — in the absence of such a choice — the law applicable was determined by the place of establishment of the insurer. However, such a shift in private international law would substantially jeopardise basic notions of policyholder and consumer protection in private international law: it would grant free choice of law in the insurance sector even in business-to-consumer situations in which a consumer would be protected by Article 5 of the Rome Convention in other sectors. At the same time it would not fully solve the problem: courts of the Member State in which the policyholder has his or her residence would still apply their own internationally mandatory rules. Above all policyholders would be very hesitant to shop abroad knowing that they would lose the protection of their home law and would be submitted to unknown foreign insurance law (35).

4.2.4   The perspective of the policyholder

| 4.2.4.1 | Under the current private international legal regime policyholders may be very open to ask for foreign insurance coverage. Knowing that they will (in most cases) be protected by the law of the Member State of their residency, they will be open to cross-border acquisition of insurance. However, policyholders will not be able to acquire foreign products even if they want them: the applicability of their home country's law always changes the acquired policies into contracts more or less determined by the law of their own home country. And if they nevertheless want to buy foreign insurance products they will face foreign insurers that are very hesitant to grant such coverage. |
| --- | --- |

4.2.4.1

Under the current private international legal regime policyholders may be very open to ask for foreign insurance coverage. Knowing that they will (in most cases) be protected by the law of the Member State of their residency, they will be open to cross-border acquisition of insurance. However, policyholders will not be able to acquire foreign products even if they want them: the applicability of their home country's law always changes the acquired policies into contracts more or less determined by the law of their own home country. And if they nevertheless want to buy foreign insurance products they will face foreign insurers that are very hesitant to grant such coverage.

| 4.2.4.2 | As shown this hesitation could probably be avoided by a shift in the rules of international insurance contract law (36). However, such a change in private international law would replace the hesitation of the insurer to grant coverage by an at least equally strong hesitation on the part of the policyholder to seek foreign coverage. Consequently, an internal insurance market cannot be expected to form itself. |
| --- | --- |

4.2.4.2

As shown this hesitation could probably be avoided by a shift in the rules of international insurance contract law (36). However, such a change in private international law would replace the hesitation of the insurer to grant coverage by an at least equally strong hesitation on the part of the policyholder to seek foreign coverage. Consequently, an internal insurance market cannot be expected to form itself.

| 4.2.4.3 | Another aspect has to be added. Within the internal market a policyholder enjoys free movement (see i.p. Article 18 of the EC Treaty). However, a change of place of habitual residence may have adverse effects on the policyholder's insurance situation. First of all, the courts of the Member State a policyholder moves into may impose new internationally mandatory rules that influence the insurance policy acquired at the former place of residence. Secondly, the laws on mandatory insurance may require a coverage different to the one the policyholder has acquired in the former place of residence. Thirdly, a policyholder may want to have risks situated in different Member States covered under one single insurance policy. |
| --- | --- |

4.2.4.3

Another aspect has to be added. Within the internal market a policyholder enjoys free movement (see i.p. Article 18 of the EC Treaty). However, a change of place of habitual residence may have adverse effects on the policyholder's insurance situation. First of all, the courts of the Member State a policyholder moves into may impose new internationally mandatory rules that influence the insurance policy acquired at the former place of residence. Secondly, the laws on mandatory insurance may require a coverage different to the one the policyholder has acquired in the former place of residence. Thirdly, a policyholder may want to have risks situated in different Member States covered under one single insurance policy.

| 4.2.4.4 | The current legal situation does not fully allow such Euro-policies, instead so called ‘umbrella contracts’ are formed which are in effect as many contracts as there are Member States concerned. What is missing therefore is the possibility of a portable policy for what has been described as the ‘Euromobile’ policyholder (37) who lives and works in different parts of the EC during his or her lifetime. |
| --- | --- |

4.2.4.4

The current legal situation does not fully allow such Euro-policies, instead so called ‘umbrella contracts’ are formed which are in effect as many contracts as there are Member States concerned. What is missing therefore is the possibility of a portable policy for what has been described as the ‘Euromobile’ policyholder (37) who lives and works in different parts of the EC during his or her lifetime.

4.2.5   The perspective of insurance intermediaries

| 4.2.5.1 | Intermediaries play a major role in distributing insurance contracts. They form a key element in the establishment of an internal insurance market. This is particularly true for insurance brokers. By using their freedom to provide services — guaranteed by Articles 49–55 of the EC Treaty and enforced by the Directive on insurance intermediaries (38) — intermediaries substantially contribute to the creation and the functioning of the internal insurance market. In the field of mass risk insurance especially it is more likely to be a broker that will try to place a risk in a foreign insurance market than the customer himself. |
| --- | --- |

4.2.5.1

Intermediaries play a major role in distributing insurance contracts. They form a key element in the establishment of an internal insurance market. This is particularly true for insurance brokers. By using their freedom to provide services — guaranteed by Articles 49–55 of the EC Treaty and enforced by the Directive on insurance intermediaries (38) — intermediaries substantially contribute to the creation and the functioning of the internal insurance market. In the field of mass risk insurance especially it is more likely to be a broker that will try to place a risk in a foreign insurance market than the customer himself.

| 4.2.5.2 | However, any data on a foreign insurance market and its products is not likely to have significant meaning to a broker lacking knowledge of local law. Since products found in a foreign insurance market are designed with a view to local law the broker may not assume that contents and price of the policy will remain the same in the legal environment of its (foreign) customer. Brokers cannot therefore avail themselves easily of foreign insurance markets for placing mass risks but have to negotiate contracts individually. This is likely to cause prohibitive transaction costs and thereby prevent the functioning of the internal insurance market. |
| --- | --- |

4.2.5.2

However, any data on a foreign insurance market and its products is not likely to have significant meaning to a broker lacking knowledge of local law. Since products found in a foreign insurance market are designed with a view to local law the broker may not assume that contents and price of the policy will remain the same in the legal environment of its (foreign) customer. Brokers cannot therefore avail themselves easily of foreign insurance markets for placing mass risks but have to negotiate contracts individually. This is likely to cause prohibitive transaction costs and thereby prevent the functioning of the internal insurance market.

4.2.6   Similar concerns for insurance marketed through branch offices

| 4.2.6.1 | It is quite frequently mentioned that insurance by its very nature requires some geographical closeness of the insurer to the customer. In the future this observation may show that cross-border sales will not be as frequent in the insurance sector as in other businesses (e.g. the sale of books via internet etc.). For reasons of customer relations, insurers might prefer to operate in other Member States through branch offices or daughter companies. |
| --- | --- |

4.2.6.1

It is quite frequently mentioned that insurance by its very nature requires some geographical closeness of the insurer to the customer. In the future this observation may show that cross-border sales will not be as frequent in the insurance sector as in other businesses (e.g. the sale of books via internet etc.). For reasons of customer relations, insurers might prefer to operate in other Member States through branch offices or daughter companies.

| 4.2.6.2 | Representatives of such a view do not argue against harmonisation of insurance contract law in principle. Rather, they try to show that the impact will be limited to a certain share of insurance contracts that will actually be marketed across borders or to customers that are in fact mobile and switch their place of residence between different Member States. |
| --- | --- |

4.2.6.2

Representatives of such a view do not argue against harmonisation of insurance contract law in principle. Rather, they try to show that the impact will be limited to a certain share of insurance contracts that will actually be marketed across borders or to customers that are in fact mobile and switch their place of residence between different Member States.

| 4.2.6.3 | The actual impact, however, will be more substantial. If insurance contracts are sold in other Member States through branch offices (‘establishments’) or even a through a daughter company, the same problems for customers, intermediaries, and insurers appear. Insurers have to adapt their products to local conditions including the local legal environment. As a result they have to redesign their products. Therefore, a policy designed in one Member State cannot be sold in another Member State through a branch office without substantial modifications due to a different (legal) environment. Intermediaries and customers face the problem that they will simply not find foreign insurance products in their markets. |
| --- | --- |

4.2.6.3

The actual impact, however, will be more substantial. If insurance contracts are sold in other Member States through branch offices (‘establishments’) or even a through a daughter company, the same problems for customers, intermediaries, and insurers appear. Insurers have to adapt their products to local conditions including the local legal environment. As a result they have to redesign their products. Therefore, a policy designed in one Member State cannot be sold in another Member State through a branch office without substantial modifications due to a different (legal) environment. Intermediaries and customers face the problem that they will simply not find foreign insurance products in their markets.

| 4.2.6.4 | Harmonisation of insurance contract laws would substantially reduce the costs of product design in the internal market. Insurers establishing themselves in another Member State could restrict themselves to providing the customer with advice through their agents, claims settlement through their competent regional offices etc. Even if insurers operated through daughter companies, insurance groups could share the effort and costs of product design. |
| --- | --- |

4.2.6.4

Harmonisation of insurance contract laws would substantially reduce the costs of product design in the internal market. Insurers establishing themselves in another Member State could restrict themselves to providing the customer with advice through their agents, claims settlement through their competent regional offices etc. Even if insurers operated through daughter companies, insurance groups could share the effort and costs of product design.

| 4.2.6.5 | As a result, customers would effectively profit from the internal market. In an internal market based on harmonised insurance contract law, innovations in the insurance sector could more easily cross borders. European customers would enjoy access to insurance products of foreign design. |
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4.2.6.5

As a result, customers would effectively profit from the internal market. In an internal market based on harmonised insurance contract law, innovations in the insurance sector could more easily cross borders. European customers would enjoy access to insurance products of foreign design.

4.3   Harmonisation of insurance contract law and EU enlargement

| 4.3.1 | On 1 May 2004, 10 new Member States joined the EC, eight of which are countries in transition. Their insurance laws had to be brought in line with the acquis communautaire as a prerequisite for joining the EC (39). As a prerequisite for the functioning of the insurance markets in these countries, modern legislation on insurance contract law is indispensable. While some new countries have enacted modern legislation, others still need to take action. |
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4.3.1

On 1 May 2004, 10 new Member States joined the EC, eight of which are countries in transition. Their insurance laws had to be brought in line with the acquis communautaire as a prerequisite for joining the EC (39). As a prerequisite for the functioning of the insurance markets in these countries, modern legislation on insurance contract law is indispensable. While some new countries have enacted modern legislation, others still need to take action.

| 4.3.2 | Harmonisation of insurance contract law would therefore appear to serve the interests of an enlarged internal market for insurance by helping the new Member States to modernise their laws and avoid new disparities between national systems. It would be helpful for the EC Commission to notify the respective countries as soon as possible when it plans to harmonise insurance contract law. |
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4.3.2

Harmonisation of insurance contract law would therefore appear to serve the interests of an enlarged internal market for insurance by helping the new Member States to modernise their laws and avoid new disparities between national systems. It would be helpful for the EC Commission to notify the respective countries as soon as possible when it plans to harmonise insurance contract law.

5.   The Commission's 1979 proposal for a directive

| 5.1 | As mentioned above, the Commission presented an initial proposal for a directive in 1979, aimed at coordinating the laws, regulations and administrative provisions relating to insurance contracts (40). This proposal was drafted in the wake of the General Programme for the elimination of restrictions on the freedom to provide services, which — in matters pertaining to direct insurance — provided for the coordination of legal and administrative instruments governing insurance contracts ‘to the extent that their disparity [resulted] in prejudice to policyholders and third parties’ (41). |
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5.1

As mentioned above, the Commission presented an initial proposal for a directive in 1979, aimed at coordinating the laws, regulations and administrative provisions relating to insurance contracts (40). This proposal was drafted in the wake of the General Programme for the elimination of restrictions on the freedom to provide services, which — in matters pertaining to direct insurance — provided for the coordination of legal and administrative instruments governing insurance contracts ‘to the extent that their disparity [resulted] in prejudice to policyholders and third parties’ (41).

| 5.2 | The proposal deemed the coordination required by the Directives in force at that time to be inadequate; it also felt that it was not enough for the Treaty to ban discriminatory treatment regarding the provision of services, if the company concerned was not established in the Member State where the service was provided. |
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5.2

The proposal deemed the coordination required by the Directives in force at that time to be inadequate; it also felt that it was not enough for the Treaty to ban discriminatory treatment regarding the provision of services, if the company concerned was not established in the Member State where the service was provided.

| 5.2.1 | To this end, it felt that it would be suitable to regulate ‘certain general questions relating in particular to the existence of cover depending on the payment of the premium, the duration of the contract, and the position of insured persons who are not policyholders’, as well as the ‘consequences resulting firstly from the conduct of the policyholder at the time of the conclusion and in the course of the contract concerning the declaration of the risk and of the claim, and secondly his attitude with regard to the measures to be taken in the event of a claim’. |
| --- | --- |

5.2.1

To this end, it felt that it would be suitable to regulate ‘certain general questions relating in particular to the existence of cover depending on the payment of the premium, the duration of the contract, and the position of insured persons who are not policyholders’, as well as the ‘consequences resulting firstly from the conduct of the policyholder at the time of the conclusion and in the course of the contract concerning the declaration of the risk and of the claim, and secondly his attitude with regard to the measures to be taken in the event of a claim’.

| 5.2.2 | The proposal also considered that ‘Member States may be authorised to adopt different solutions only where this is expressly provided for in the text of the Directive’; any other approach would call into question the aims pursued by the proposal. This would thus have been an important step towards full harmonisation in this area (42). |
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5.2.2

The proposal also considered that ‘Member States may be authorised to adopt different solutions only where this is expressly provided for in the text of the Directive’; any other approach would call into question the aims pursued by the proposal. This would thus have been an important step towards full harmonisation in this area (42).

| 5.3 | The Committee, in its unanimously approved opinion on this proposal (43), made the following key points:






  a) | the Commission had limited its approach to the coordination of points it deemed to be essential, although the Committee felt that other aspects would also have to be harmonised subsequently; |
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5.3

The Committee, in its unanimously approved opinion on this proposal (43), made the following key points:

a)

the Commission had limited its approach to the coordination of points it deemed to be essential, although the Committee felt that other aspects would also have to be harmonised subsequently;

| b) | the Committee regretted that the Directive failed to draw any distinction between mass risks and commercial, industrial and other risks; |
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b)

the Committee regretted that the Directive failed to draw any distinction between mass risks and commercial, industrial and other risks;

| c) | it suggested that sickness insurance also be excluded from the scope of the Directive; |
| --- | --- |

c)

it suggested that sickness insurance also be excluded from the scope of the Directive;

| d) | it regretted the fact that the Directive did not cover policies subscribed by insurers established in a Member State, but covering risks situated in non-Member States or policies subscribed by policyholders domiciled outside the Community; |
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d)

it regretted the fact that the Directive did not cover policies subscribed by insurers established in a Member State, but covering risks situated in non-Member States or policies subscribed by policyholders domiciled outside the Community;

| e) | the Committee called for specific rules to be drawn up to provide adequate protection for policyholders, be they individuals or small businesses, particularly to cover:






  1) | a cooling-off period and the right of withdrawal; |
| --- | --- | --- |

e)

the Committee called for specific rules to be drawn up to provide adequate protection for policyholders, be they individuals or small businesses, particularly to cover:

1)

a cooling-off period and the right of withdrawal;

| 2) | unfair clauses; |
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2)

unfair clauses;

| 3) | express mention of exclusions and deadlines; |
| --- | --- |

3)

express mention of exclusions and deadlines;

| 4) | adequate information prior to a contract's conclusion. |
| --- | --- |

4)

adequate information prior to a contract's conclusion.

| f) | it called for the right of recourse of injured third parties to be covered by an ad hoc directive or dealt with in the next phase of coordination. |
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f)

it called for the right of recourse of injured third parties to be covered by an ad hoc directive or dealt with in the next phase of coordination.

| 5.4 | The Committee then carried out a critical analysis of each one of the articles in the proposal; its comments in that connection are still worth taking into consideration in any new initiative in this sphere. |
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5.4

The Committee then carried out a critical analysis of each one of the articles in the proposal; its comments in that connection are still worth taking into consideration in any new initiative in this sphere.

| 5.5 | The European Parliament also issued its views on this proposal (44) at the time. Amongst other things, it considered that ‘harmonisation would guarantee a similar standard of protection to policyholders whatever the choice of law’. |
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5.5

The European Parliament also issued its views on this proposal (44) at the time. Amongst other things, it considered that ‘harmonisation would guarantee a similar standard of protection to policyholders whatever the choice of law’.

| 5.5.1 | In particular, the Parliament proposed a number of amendments, especially regarding: the scope of the Directive (dispensing with exclusions); the key elements of insurance contracts; obligation on the policyholder to make declarations regarding certain circumstances; the consequences of this for maintaining the insurance contract, in relation to either the initial circumstances or changes while the contract is in force; the proof to be provided by the policyholder should a claim arise; and the conditions under which a contract may be terminated. |
| --- | --- |

5.5.1

In particular, the Parliament proposed a number of amendments, especially regarding: the scope of the Directive (dispensing with exclusions); the key elements of insurance contracts; obligation on the policyholder to make declarations regarding certain circumstances; the consequences of this for maintaining the insurance contract, in relation to either the initial circumstances or changes while the contract is in force; the proof to be provided by the policyholder should a claim arise; and the conditions under which a contract may be terminated.

| 5.5.2 | The intention behind the Parliament's comments is clearly to stress ‘there should be an equitable balance between the interests of insurer and insured’. |
| --- | --- |

5.5.2

The intention behind the Parliament's comments is clearly to stress ‘there should be an equitable balance between the interests of insurer and insured’.

| 5.6 | Following these comments, the Commission had the opportunity to draft a new, amended proposal (45) which took on board the various suggestions and proposals made by the Committee and the Parliament. Here for the first time, it drew attention to the fact that ‘the coordination of laws relating to insurance contracts would facilitate the provision of services in a Member States by those providing them in another Member State’. This was one of the first mentions of the aim of achieving a single market in financial services (46). |
| --- | --- |

5.6

Following these comments, the Commission had the opportunity to draft a new, amended proposal (45) which took on board the various suggestions and proposals made by the Committee and the Parliament. Here for the first time, it drew attention to the fact that ‘the coordination of laws relating to insurance contracts would facilitate the provision of services in a Member States by those providing them in another Member State’. This was one of the first mentions of the aim of achieving a single market in financial services (46).

| 5.6.1 | This Commission proposal for a directive was set to enter into force on 1 July 1983. However, it was not adopted in the end, due a lack of political will on the part of Member States. |
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5.6.1

This Commission proposal for a directive was set to enter into force on 1 July 1983. However, it was not adopted in the end, due a lack of political will on the part of Member States.

5.7   What is the present day relevance of the Commission's 1979/1980 proposal?

| 5.7.1 | Replies to the questionnaire sent out in this connection and the public hearing held on 16 April 2004 have indicated a general consensus that this proposal, albeit dating from twenty years ago, should be given serious consideration as a still-valid contribution to, and a good starting point for, a new initiative in this area. |
| --- | --- |

5.7.1

Replies to the questionnaire sent out in this connection and the public hearing held on 16 April 2004 have indicated a general consensus that this proposal, albeit dating from twenty years ago, should be given serious consideration as a still-valid contribution to, and a good starting point for, a new initiative in this area.

| 5.7.2 | Nevertheless, it has also been pointed out that current requirements for harmonising insurance contracts go far beyond the 1980 proposal, and the rules to be proposed must be the result of a debate on an in-depth study of comparative law. |
| --- | --- |

5.7.2

Nevertheless, it has also been pointed out that current requirements for harmonising insurance contracts go far beyond the 1980 proposal, and the rules to be proposed must be the result of a debate on an in-depth study of comparative law.

6.   Forms of harmonisation

6.1   Finding best solutions by using a comparative legal method

| 6.1.1 | Any attempt to harmonise European insurance contract law should be preceded by preparatory comparative law work. Such work is well under way on an academic level. In fact, a comparative work has already been completed in the area of general contract law with the presentation of the Principles of European Contract Law. In the field of insurance contract law, a substantial body of results from comparative legal research work has been and will be published (47). In 1999 the late Professor Reichert-Facilides founded a Project Group, ‘Restatement of European Insurance Contract Law’. The members of this group are experts in the field of insurance law and represent various legal orders (within and outside the EC). |
| --- | --- |

6.1.1

Any attempt to harmonise European insurance contract law should be preceded by preparatory comparative law work. Such work is well under way on an academic level. In fact, a comparative work has already been completed in the area of general contract law with the presentation of the Principles of European Contract Law. In the field of insurance contract law, a substantial body of results from comparative legal research work has been and will be published (47). In 1999 the late Professor Reichert-Facilides founded a Project Group, ‘Restatement of European Insurance Contract Law’. The members of this group are experts in the field of insurance law and represent various legal orders (within and outside the EC).

| 6.1.2 | Guidelines for finding a ‘best solution’ for insurance contract law might be the following: Firstly, due consideration must be given to the essential task of all insurance contract law — to provide a legal framework for effective risk bearing on the part of the insurer and thus to guarantee the proper functioning of insurance business itself. Secondly, it is essential that the conflicting interests of the parties are carefully balanced. With regard to this aspect, due recognition must be given to the modern trend to grant a relatively high degree of protection to the policyholder. |
| --- | --- |

6.1.2

Guidelines for finding a ‘best solution’ for insurance contract law might be the following: Firstly, due consideration must be given to the essential task of all insurance contract law — to provide a legal framework for effective risk bearing on the part of the insurer and thus to guarantee the proper functioning of insurance business itself. Secondly, it is essential that the conflicting interests of the parties are carefully balanced. With regard to this aspect, due recognition must be given to the modern trend to grant a relatively high degree of protection to the policyholder.

| 6.1.3 | On the basis of these observations efforts to improve the internal insurance market should focus on mandatory rules. These rules are an indispensable framework for the autonomous contracting of the parties and at the same time form a barrier to the internal insurance market as long as they are not harmonised. As a result, regulatory needs in the field of insurance are compatible with the harmonisation requirements of an internal insurance market. |
| --- | --- |

6.1.3

On the basis of these observations efforts to improve the internal insurance market should focus on mandatory rules. These rules are an indispensable framework for the autonomous contracting of the parties and at the same time form a barrier to the internal insurance market as long as they are not harmonised. As a result, regulatory needs in the field of insurance are compatible with the harmonisation requirements of an internal insurance market.

6.2   Harmonisation measures must afford a high level of policyholder protection

| 6.2.1 | Insurance contract laws — at least their semi-mandatory provisions — aim at protecting the weaker party and may be called consumer laws from a functional point of view. However, traditionally policyholder protection is of broader scope than general consumer law: together with private customers small businesses are protected when taking insurance. |
| --- | --- |

6.2.1

Insurance contract laws — at least their semi-mandatory provisions — aim at protecting the weaker party and may be called consumer laws from a functional point of view. However, traditionally policyholder protection is of broader scope than general consumer law: together with private customers small businesses are protected when taking insurance.

| 6.2.2 | When harmonising European consumer law the EC is bound to afford consumers a high level of protection (see e.g. Article 95 (3) of the EC Treaty). This concept is also applied to legislative acts based on other articles of the EC Treaty granting the EC legislative authority (in the field of insurance law, usually Article 47 (2) in connection with Article 55 of the EC Treaty). As a result, a measure harmonising insurance contract law would provide for a high level of policyholder protection. |
| --- | --- |

6.2.2

When harmonising European consumer law the EC is bound to afford consumers a high level of protection (see e.g. Article 95 (3) of the EC Treaty). This concept is also applied to legislative acts based on other articles of the EC Treaty granting the EC legislative authority (in the field of insurance law, usually Article 47 (2) in connection with Article 55 of the EC Treaty). As a result, a measure harmonising insurance contract law would provide for a high level of policyholder protection.

6.3   Minimum standards or full harmonisation?

| 6.3.1 | The analysis of current problems with the internal insurance market clearly indicates that full harmonisation of insurance contract law is required. Minimum harmonisation would allow Member States to apply a higher standard of protection, as allowed under European law, and thereby create new barriers to the internal insurance market. |
| --- | --- |

6.3.1

The analysis of current problems with the internal insurance market clearly indicates that full harmonisation of insurance contract law is required. Minimum harmonisation would allow Member States to apply a higher standard of protection, as allowed under European law, and thereby create new barriers to the internal insurance market.

| 6.3.2 | Minimum standards would not be a detriment to the functioning of the internal market, if the current regime of private international law was replaced by rules leading to the application of the law of the state in which the insurer is established. In this way, every insurer would produce its product under its own national law (affording at least a European minimum standard of protection) and be able to sell the product on the basis of the application of a law of the ‘home country’ in all other Member States. The policyholder could rely on obtaining minimum standards of protection in spite of being subject to foreign law. |
| --- | --- |

6.3.2

Minimum standards would not be a detriment to the functioning of the internal market, if the current regime of private international law was replaced by rules leading to the application of the law of the state in which the insurer is established. In this way, every insurer would produce its product under its own national law (affording at least a European minimum standard of protection) and be able to sell the product on the basis of the application of a law of the ‘home country’ in all other Member States. The policyholder could rely on obtaining minimum standards of protection in spite of being subject to foreign law.

| 6.3.3 | However, such a shift in the private international law regime is neither likely nor desirable. First of all, such a change would deprive consumers of insurance services of the consumer protection provided by Article 5 of the Rome Convention, which protects the ‘passive’ consumer even in areas where substantive consumer law is harmonised. Secondly, mandatory rules of the law of the residence of the policyholder would be imposed by courts; barriers to the functioning of the internal market would therefore always remain. Thirdly, it has to be mentioned that according to the Regulation on Jurisdiction and Recognition and Enforcement of Judgements an insurer can sue its policyholder only in the courts of the policyholder's residence (see Article 12 (1)) with very few exceptions) and a policyholder is very likely to choose the same forum according to Article 9 (1) b) for its own actions. |
| --- | --- |

6.3.3

However, such a shift in the private international law regime is neither likely nor desirable. First of all, such a change would deprive consumers of insurance services of the consumer protection provided by Article 5 of the Rome Convention, which protects the ‘passive’ consumer even in areas where substantive consumer law is harmonised. Secondly, mandatory rules of the law of the residence of the policyholder would be imposed by courts; barriers to the functioning of the internal market would therefore always remain. Thirdly, it has to be mentioned that according to the Regulation on Jurisdiction and Recognition and Enforcement of Judgements an insurer can sue its policyholder only in the courts of the policyholder's residence (see Article 12 (1)) with very few exceptions) and a policyholder is very likely to choose the same forum according to Article 9 (1) b) for its own actions.

| 6.3.4 | Therefore, a shift in the private international law regime would create a situation where the courts holding jurisdiction would in most cases have to apply foreign law. This would make litigation in insurance matters more burdensome and costly even if insurance law itself were to be harmonised. Therefore this approach cannot be recommended. The private international law regime should in principle stay as it is and insurance contract law should be fully harmonised. This statement, however, does not deny the possibility of improving the current private international legal regime; e.g. as long as insurance contract law is not harmonised, a ‘Euromobile’ citizen could be allowed to choose between the law of the place of his residence and the law of his nationality. |
| --- | --- |

6.3.4

Therefore, a shift in the private international law regime would create a situation where the courts holding jurisdiction would in most cases have to apply foreign law. This would make litigation in insurance matters more burdensome and costly even if insurance law itself were to be harmonised. Therefore this approach cannot be recommended. The private international law regime should in principle stay as it is and insurance contract law should be fully harmonised. This statement, however, does not deny the possibility of improving the current private international legal regime; e.g. as long as insurance contract law is not harmonised, a ‘Euromobile’ citizen could be allowed to choose between the law of the place of his residence and the law of his nationality.

6.4   Does the internal insurance market need harmonisation of general contract law?

| 6.4.1 | Insurance contract law is systematically embedded into general contract law. This observation raises the question of whether insurance contract law harmonisation can only achieve its goals if all the law of contracts (or at least its general part) is harmonised or may be achieved independently. The latter appears to be true. |
| --- | --- |

6.4.1

Insurance contract law is systematically embedded into general contract law. This observation raises the question of whether insurance contract law harmonisation can only achieve its goals if all the law of contracts (or at least its general part) is harmonised or may be achieved independently. The latter appears to be true.

| 6.4.2 | As mentioned above, it is the mandatory rules that form a hindrance to the internal insurance market and should therefore be subject to harmonisation. Contract law in general, however, is by its very nature non-mandatory. Some mandatory rules exist. These rules do not appear to be so fundamentally different within the legal orders of the Member States that non-harmonisation would disturb the functioning of the internal insurance market and neither do they have a predominant influence on the insurance product as such. |
| --- | --- |

6.4.2

As mentioned above, it is the mandatory rules that form a hindrance to the internal insurance market and should therefore be subject to harmonisation. Contract law in general, however, is by its very nature non-mandatory. Some mandatory rules exist. These rules do not appear to be so fundamentally different within the legal orders of the Member States that non-harmonisation would disturb the functioning of the internal insurance market and neither do they have a predominant influence on the insurance product as such.

| 6.4.3 | Exceptions might be observed. However, such exceptions can be dealt with within the harmonisation of the insurance sector. One example of such rules is in fact already dealt with by the directive on unfair contract terms in consumer contracts (48), which also applies to consumer insurance policies (49). An insurance contract act at a European level would only have to have the scope of its application extended to all mass risks in order to satisfy the internal insurance market. |
| --- | --- |

6.4.3

Exceptions might be observed. However, such exceptions can be dealt with within the harmonisation of the insurance sector. One example of such rules is in fact already dealt with by the directive on unfair contract terms in consumer contracts (48), which also applies to consumer insurance policies (49). An insurance contract act at a European level would only have to have the scope of its application extended to all mass risks in order to satisfy the internal insurance market.

| 6.4.4 | These arguments do not intend to argue against harmonisation of contract law in general. They leave this question to the sole discretion of the EC institutions. In fact, harmonisation of general contract law would make the task of harmonising insurance contract law easier. The arguments presented only try to demonstrate that harmonisation of insurance contract law can reach its goals on its own. |
| --- | --- |

6.4.4

These arguments do not intend to argue against harmonisation of contract law in general. They leave this question to the sole discretion of the EC institutions. In fact, harmonisation of general contract law would make the task of harmonising insurance contract law easier. The arguments presented only try to demonstrate that harmonisation of insurance contract law can reach its goals on its own.

6.5   Establishment of an optional instrument or harmonisation of national insurance contract laws?

6.5.1   The difference between harmonisation of national laws and an optional instrument

| 6.5.1.1 | The action plan for a more coherent European Contract Law has highlighted the possibility of introducing an optional instrument instead of harmonisation or unification of national contract laws. The main difference between the two approaches lies in the fact that an optional instrument would leave national contract laws untouched whenever the parties to a contract do not either opt in or opt out of the instrument, depending on whether this instrument used an opt in or opt out approach. In this way parallel legal orders (the European and the national ones) are created and parties are allowed to choose between these regimes. |
| --- | --- |

6.5.1.1

The action plan for a more coherent European Contract Law has highlighted the possibility of introducing an optional instrument instead of harmonisation or unification of national contract laws. The main difference between the two approaches lies in the fact that an optional instrument would leave national contract laws untouched whenever the parties to a contract do not either opt in or opt out of the instrument, depending on whether this instrument used an opt in or opt out approach. In this way parallel legal orders (the European and the national ones) are created and parties are allowed to choose between these regimes.

| 6.5.1.2 | On the contrary, harmonisation or unification of national contract laws would replace traditional concepts of national contract law by a European solution. Parties would not have the choice of opting for their national or the European model. |
| --- | --- |

6.5.1.2

On the contrary, harmonisation or unification of national contract laws would replace traditional concepts of national contract law by a European solution. Parties would not have the choice of opting for their national or the European model.

6.5.2   Advantages and disadvantages of the two approaches

| 6.5.2.1 | From the perspective of the internal insurance market both solutions share an obvious advantage: they do remove legal barriers to the marketing of policies across Europe and make it possible for a policyholder to move freely within the Community without adverse effects of differences in insurance contract law on his policy. This is why either one of these approaches is preferable to today's situation and the choice between them is ultimately a matter of policy not of principle. |
| --- | --- |

6.5.2.1

From the perspective of the internal insurance market both solutions share an obvious advantage: they do remove legal barriers to the marketing of policies across Europe and make it possible for a policyholder to move freely within the Community without adverse effects of differences in insurance contract law on his policy. This is why either one of these approaches is preferable to today's situation and the choice between them is ultimately a matter of policy not of principle.

| 6.5.2.2 | Harmonisation of national insurance contract law could prove more burdensome than the enactment of an optional instrument. Since it would lead to a replacement of national ‘traditions’ by a European solution, the national legal elite (practitioners as well as academics) might be hesitant to follow a call for harmonisation. |
| --- | --- |

6.5.2.2

Harmonisation of national insurance contract law could prove more burdensome than the enactment of an optional instrument. Since it would lead to a replacement of national ‘traditions’ by a European solution, the national legal elite (practitioners as well as academics) might be hesitant to follow a call for harmonisation.

| 6.5.2.3 | An ambivalent factor is the correlation between the intensity of the interference with national law and the speediness of reaching results for the internal market. Since an optional instrument would not abolish national laws, it may be viewed as a soft approach and therefore appear to be more readily acceptable to the markets. On the other hand there is the fear that an optional instrument could make the actors of the single market (e.g. insurance companies and brokers) reluctant to take the lead, with every actor waiting for the other to go ahead and trying to profit from the (negative) experiences of their competitors. Or would the optional instrument be seen as a window of opportunity everybody wanted to open first, i.e. through Internet insurance selling? Certainly, harmonisation would lead to immediate results because no actor could avoid its application. On the other hand, the intervention might be felt as very, or even too, strong. |
| --- | --- |

6.5.2.3

An ambivalent factor is the correlation between the intensity of the interference with national law and the speediness of reaching results for the internal market. Since an optional instrument would not abolish national laws, it may be viewed as a soft approach and therefore appear to be more readily acceptable to the markets. On the other hand there is the fear that an optional instrument could make the actors of the single market (e.g. insurance companies and brokers) reluctant to take the lead, with every actor waiting for the other to go ahead and trying to profit from the (negative) experiences of their competitors. Or would the optional instrument be seen as a window of opportunity everybody wanted to open first, i.e. through Internet insurance selling? Certainly, harmonisation would lead to immediate results because no actor could avoid its application. On the other hand, the intervention might be felt as very, or even too, strong.

| 6.5.2.4 | A technical concern about an optional instrument relates to the fact that it cannot fully replace harmonisation. This can easily be demonstrated by looking at motor vehicle liability insurance. Harmonisation of the law of motor vehicle liability insurance is of major importance to the essential mobility of EC citizens because it affords indispensable protection to victims of accidents. It is obvious that the protection of the victim must not depend on the choice of the parties to an insurance contract in favour of a European instrument. An optional instrument could therefore not replace harmonisation of national motor vehicle liability insurance law. |
| --- | --- |

6.5.2.4

A technical concern about an optional instrument relates to the fact that it cannot fully replace harmonisation. This can easily be demonstrated by looking at motor vehicle liability insurance. Harmonisation of the law of motor vehicle liability insurance is of major importance to the essential mobility of EC citizens because it affords indispensable protection to victims of accidents. It is obvious that the protection of the victim must not depend on the choice of the parties to an insurance contract in favour of a European instrument. An optional instrument could therefore not replace harmonisation of national motor vehicle liability insurance law.

| 6.5.2.5 | Finally, the question is put forward of whether an optional instrument would achieve efficient results in an area like insurance law which is characterised by an imbalance between the parties. Would parties make an efficient choice or would the choice be made unilaterally by the insurers through opt in and opt out clauses in their general terms of insurance? |
| --- | --- |

6.5.2.5

Finally, the question is put forward of whether an optional instrument would achieve efficient results in an area like insurance law which is characterised by an imbalance between the parties. Would parties make an efficient choice or would the choice be made unilaterally by the insurers through opt in and opt out clauses in their general terms of insurance?

| 6.5.2.6 | Whether the goal of a European Insurance Contract Act is achieved through harmonisation of national laws or through the establishment of an optional instrument is not a primary concern. The question does, however, need careful consideration. |
| --- | --- |

6.5.2.6

Whether the goal of a European Insurance Contract Act is achieved through harmonisation of national laws or through the establishment of an optional instrument is not a primary concern. The question does, however, need careful consideration.

6.6   Elaboration of EU-wide general terms of insurance?

| 6.6.1 | Finally it might be asked whether harmonisation of laws may be replaced by the elaboration of EU-wide general terms of insurance. Indeed, the concerns about insurers who have to take into consideration every single law of each Member State would be reduced (though not entirely laid to rest) if this effort was taken collectively and with the support of the EC institutions. |
| --- | --- |

6.6.1

Finally it might be asked whether harmonisation of laws may be replaced by the elaboration of EU-wide general terms of insurance. Indeed, the concerns about insurers who have to take into consideration every single law of each Member State would be reduced (though not entirely laid to rest) if this effort was taken collectively and with the support of the EC institutions.

| 6.6.2 | Nevertheless, the approach cannot be welcomed. First of all, EU-wide general terms can take into consideration differences of national law but still require separate risk calculation and may be of disadvantage to a mobile citizen in the EU. |
| --- | --- |

6.6.2

Nevertheless, the approach cannot be welcomed. First of all, EU-wide general terms can take into consideration differences of national law but still require separate risk calculation and may be of disadvantage to a mobile citizen in the EU.

| 6.6.3 | Moreover the approach would lead to the establishment of model terms having adverse effects on competition in insurance markets. It should be remembered that one of the major steps in creating a single insurance market was the abolition of any right of Member States to systematically control the general terms of insurance before they are introduced in the market. (50) Such control leads to a lack of diversity of insurance products, a reduced choice for the customers and thereby reduced competition. The elaboration of EU-wide general terms of insurance structurally bears a similar risk. |
| --- | --- |

6.6.3

Moreover the approach would lead to the establishment of model terms having adverse effects on competition in insurance markets. It should be remembered that one of the major steps in creating a single insurance market was the abolition of any right of Member States to systematically control the general terms of insurance before they are introduced in the market. (50) Such control leads to a lack of diversity of insurance products, a reduced choice for the customers and thereby reduced competition. The elaboration of EU-wide general terms of insurance structurally bears a similar risk.

7.   Areas of harmonisation

| 7.1 | It has been shown above that it is the mandatory rules of insurance contract law which have to be harmonised. A further question is whether all areas of insurance contract law or only particular ones need to be harmonised. |
| --- | --- |

7.1

It has been shown above that it is the mandatory rules of insurance contract law which have to be harmonised. A further question is whether all areas of insurance contract law or only particular ones need to be harmonised.

| 7.2 | Insurance law is commonly divided into a general part, containing rules that apply to all insurance contracts, and the law of specific branches of insurance. The question arises of whether the internal insurance market would require harmonisation of the general rules, the specific rules for particular branches or both. |
| --- | --- |

7.2

Insurance law is commonly divided into a general part, containing rules that apply to all insurance contracts, and the law of specific branches of insurance. The question arises of whether the internal insurance market would require harmonisation of the general rules, the specific rules for particular branches or both.

| 7.3 | In theory, both are needed: general rules as well as branch-specific rules of insurance law affect the product and thereby impede the functioning of the internal insurance market, e.g. rules on promissory warranties, which can be found regularly in the general part, are of influence on the ratio of risk and premium as much as specific rules on, e.g., life assurance regulating this specific insurance. Therefore, harmonisation should in principle not distinguish between the two sets of rules. |
| --- | --- |

7.3

In theory, both are needed: general rules as well as branch-specific rules of insurance law affect the product and thereby impede the functioning of the internal insurance market, e.g. rules on promissory warranties, which can be found regularly in the general part, are of influence on the ratio of risk and premium as much as specific rules on, e.g., life assurance regulating this specific insurance. Therefore, harmonisation should in principle not distinguish between the two sets of rules.

| 7.4 | Harmonisation might however be achieved in several steps. If so, a list of priorities has to be drawn up. Here it would seem appropriate to harmonise the general part first. Many branches of insurance are not subject to specific and mandatory (51) rules but only to general rules under current national insurance contract law regimes. Therefore, what is most urgent is the harmonisation of the general rules of insurance contract law in as far as they are mandatory. This harmonisation would immediately allow the creation of an internal insurance market in all branches not covered by specific and mandatory legal rules. Once this task has been achieved, however, regulated branches, such as life and health insurance, should also be covered. |
| --- | --- |

7.4

Harmonisation might however be achieved in several steps. If so, a list of priorities has to be drawn up. Here it would seem appropriate to harmonise the general part first. Many branches of insurance are not subject to specific and mandatory (51) rules but only to general rules under current national insurance contract law regimes. Therefore, what is most urgent is the harmonisation of the general rules of insurance contract law in as far as they are mandatory. This harmonisation would immediately allow the creation of an internal insurance market in all branches not covered by specific and mandatory legal rules. Once this task has been achieved, however, regulated branches, such as life and health insurance, should also be covered.

| 7.5 | The kind of rules which could be harmonised in this first stage could be as follows:






  a) | pre-contractual duties, mainly information; |
| --- | --- | --- |

7.5

The kind of rules which could be harmonised in this first stage could be as follows:

a)

pre-contractual duties, mainly information;

| b) | formation of the contract; |
| --- | --- |

b)

formation of the contract;

| c) | insurance policy, nature, effects and formal requirements; |
| --- | --- |

c)

insurance policy, nature, effects and formal requirements;

| d) | duration of the contract, renewal an termination; |
| --- | --- |

d)

duration of the contract, renewal an termination;

| e) | insurance intermediaries; |
| --- | --- |

e)

insurance intermediaries;

| f) | aggravation of risk; |
| --- | --- |

f)

aggravation of risk;

| g) | insurance premium; |
| --- | --- |

g)

insurance premium;

| h) | insured event; |
| --- | --- |

h)

insured event;

| i) | insurance on account of third party. |
| --- | --- |

i)

insurance on account of third party.

8.   Conclusions and recommendations

| 8.1 | Insurance today represents an essential service in trade relations between professionals and between them and consumers. |
| --- | --- |

8.1

Insurance today represents an essential service in trade relations between professionals and between them and consumers.

| 8.2 | Some of the fundamental principles governing the conclusion and validity of insurance contracts in general differ between the national legal systems of the EU Member States. |
| --- | --- |

8.2

Some of the fundamental principles governing the conclusion and validity of insurance contracts in general differ between the national legal systems of the EU Member States.

| 8.3 | This state of affairs constitutes a barrier to the cross-border marketing of this financial instrument and, in consequence, hampers completion of the internal market in this area. |
| --- | --- |

8.3

This state of affairs constitutes a barrier to the cross-border marketing of this financial instrument and, in consequence, hampers completion of the internal market in this area.

| 8.4 | A degree of harmonisation of the mandatory rules of what is known as the ‘general part’ of insurance law could contribute decisively to removing an entire series of obstacles and difficulties facing insurance companies, insurance intermediaries, insured persons and policyholders, whether professionals or individual customers, in carrying out cross-border insurance transactions. |
| --- | --- |

8.4

A degree of harmonisation of the mandatory rules of what is known as the ‘general part’ of insurance law could contribute decisively to removing an entire series of obstacles and difficulties facing insurance companies, insurance intermediaries, insured persons and policyholders, whether professionals or individual customers, in carrying out cross-border insurance transactions.

| 8.5 | This point of view is shared unanimously by all the interested parties who were consulted or who spoke at the hearing on this subject. |
| --- | --- |

8.5

This point of view is shared unanimously by all the interested parties who were consulted or who spoke at the hearing on this subject.

| 8.6 | It is felt that a gradual approach to harmonisation should be taken, aiming initially at the possible adoption of an optional model insurance contract all of whose terms and components, however, would be mandatory. |
| --- | --- |

8.6

It is felt that a gradual approach to harmonisation should be taken, aiming initially at the possible adoption of an optional model insurance contract all of whose terms and components, however, would be mandatory.

| 8.7 | The preparations must take account of the proposals made in the Commission's 1979-80 directive, in the light of the comments and analyses made by the interested parties, civil society representatives and Member State regulatory bodies, and paying due attention to the changes the sector has undergone in the meantime. |
| --- | --- |

8.7

The preparations must take account of the proposals made in the Commission's 1979-80 directive, in the light of the comments and analyses made by the interested parties, civil society representatives and Member State regulatory bodies, and paying due attention to the changes the sector has undergone in the meantime.

| 8.8 | The Community instrument to be used should be a regulation, taking Treaty Article 95 as the legal basis. |
| --- | --- |

8.8

The Community instrument to be used should be a regulation, taking Treaty Article 95 as the legal basis.

| 8.9 | On the basis of the comments made in the present opinion, the EESC urges the Commission to reopen this dossier and begin examining comparative law and national practices in the area of insurance contracts, in order to confirm that it is necessary, advisable and possible to continue with efforts to harmonise insurance contract law at Community level. |
| --- | --- |

8.9

On the basis of the comments made in the present opinion, the EESC urges the Commission to reopen this dossier and begin examining comparative law and national practices in the area of insurance contracts, in order to confirm that it is necessary, advisable and possible to continue with efforts to harmonise insurance contract law at Community level.

| 8.10 | Such efforts must take account of what has already been achieved by academic researchers in this field. |
| --- | --- |

8.10

Such efforts must take account of what has already been achieved by academic researchers in this field.

| 8.11 | The EESC recommends to the Commission that such work be made known and submitted for public discussion by means in particular of a green paper, the essential base for preparing what is considered to be the most appropriate Community instrument. |
| --- | --- |

8.11

The EESC recommends to the Commission that such work be made known and submitted for public discussion by means in particular of a green paper, the essential base for preparing what is considered to be the most appropriate Community instrument.

| 8.12 | The EESC is aware that only with a clear political willingness on the part of the Member States to promote the initiative to harmonise insurance contract law, can this major contribution to the completion of the internal market in financial services be realised. |
| --- | --- |

8.12

The EESC is aware that only with a clear political willingness on the part of the Member States to promote the initiative to harmonise insurance contract law, can this major contribution to the completion of the internal market in financial services be realised.

| 8.13 | The EESC calls upon the European Parliament to join in this initiative and to give it the appropriate degree of priority on its political agenda by restating its support for the objective of harmonising mandatory rules of the general part of insurance contract law. |
| --- | --- |

8.13

The EESC calls upon the European Parliament to join in this initiative and to give it the appropriate degree of priority on its political agenda by restating its support for the objective of harmonising mandatory rules of the general part of insurance contract law.

Brussels, 15 December 2004.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  Rapporteur: Mr Manuel Ataíde Ferreira (OJ C 95 of 30.3.98).

1

(2)  COM(79) 355 final, in OJ C 190, of 28.7.79, amended by COM(80) 854 final, in OJ C 355 of 31.12.80: the EESC and EP opinions are to be found in, OJ C 146 of 16.6.80 and C 265 of 13.10.80 respectively. These texts will be examined in point 5 of this opinion.

2

(3)  See footnote 1, point 2.1.9.

3

(4)  See footnote 1, point 2.3.1.1.1.

4

(5)  See footnote 1, point 3.4.

5

(6)  See footnote 1, point 3.6.1.

6

(7)  See footnote 1, point 4.3.6.

7

(8)  It was considered that the directive should include the following aspects:

8

| ‘– | minimum pre-contract information; |
| --- | --- |

‘–

| – | a list of key terms and their meanings; |
| --- | --- |

–

| – | a list of typical unfair terms in insurance contracts; |
| --- | --- |

–

| – | the minimum compulsory content of any insurance contract; |
| --- | --- |

–

| – | all the contractual obligations common to any insurance contract; |
| --- | --- |

–

| – | the basic principles and rules of any insurance contract;, |
| --- | --- |

–

| – | a provisional compensation scheme for third party liability insurance; |
| --- | --- |

–

| – | compulsory link between premiums and the value of risks, in particular by means of automatic depreciation of insured objects in line with their age and a corresponding reduction in premiums; |
| --- | --- |

–

| – | establishment of harmonised minimum cooling-off periods within which consumers may withdraw from a contract; |
| --- | --- |

–

| – | requirement for policies to be legible and understandable and for the general and special conditions to be made available during the pre-contract stage and before signature. |
| --- | --- |

–

See footnote 1, point 4.5. This line has been taken up again and reiterated in various EESC opinion, such as in the recent opinion on the Proposal for a Directive of the European Parliament and of the Council amending Council Directives 72/166/EEC, 84/5/EEC, 88/357/EEC, 90/232/EEC and Directive 2000/26/EC on insurance against civil liability in respect of the use of motor vehicles, for which the Rapporteur was Mr Levaux (point 4.3.) OJ C 95, of 23.4.2003.’

(9)  ‘ECLG-Consumer Insurance’, in Journal of Consumer Policy (1986), pp. 205-228

9

‘ECLG-Consumer Insurance’

(10)  CEA note of 4 June 2003.

10

(11)  COM(2001) 398 final of 11.7.2001 (OJ C 255 of 13.9.2001)

11

(12)  COM(2003) 68 final of 12.2.2003

12

(13)  Action Plan – point 74. Also see points 27, 47 and 48 of the same document

13

(14)  Doc. A5-0256/2003, adopted at the EP session on 2.9.2003, points 11and 14.

14

(15)  ECJ of 4 Dec. 1986 ECR 1986, 3755 (Commission / Germany).

15

(16)  International procedural law: Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters; OJ 2001 No. L 12/1 (latest amendment OJ 2002 No. L 225/13), Art. 8 - 14; private international law: Convention on the Law Applicable to Contractual Obligations of 19 June 1980, OJ 1980 No. L 166, i.p. Art. 1 par. 3, 4; Directives' law: Second Council Directive 88/357/EEC of 22 June 1988 on the coordination of laws, regulations and administrative provisions relating to direct insurance other than life assurance and laying down provisions to facilitate the effective exercise of freedom to provide services and amending Directive 73/239/EEC; OJ 1988 No. L 172/1 (latest amendment OJ 1992 No. L 228/1), i.p. Art. 2 lit c, d; art. 3, 5, 7 and 8; Council Directive 92/49/EEC of 18 June 1992 on the coordination of laws, regulations and administrative provisions relating to direct insurance other than life assurance and amending Directives 73/239/EEC and 88/357/EEC (third non-life insurance Directive); OJ 1992 No. L 228/1 (latest amendment OJ 2003 No. L 35/1), i.p. Art. 1 lit. a, b; Art. 27, 28, 30, 31; Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002 concerning life assurance; OJ 2002 No. L 345/1; i.p. Art. 32, 33; as to the private international law of the directives see Reichert-Facilides/d'Oliveira (eds.), International Insurance Contract Law in the EC, Deventer 1993; Reichert-Facilides (Hg.), Aspekte des internationalen Versicherungsvertragsrechts im EWR, Tübingen 1994.

16

Reichert-Facilides/d'Oliveira

Reichert-Facilides

(17)  Council Directive 72/166/EEC of 24 April 1972 on the approximation of the laws of Member States relating to insurance against civil liability in respect of the use of motor vehicles, and to the enforcement of the obligation to insure against such liability; OJ 1972 No. L 103/1 (latest amendment OJ 1984 No. L 8/17); Second Council Directive 84/5/EEC of 30 December 1983 on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles; OJ 1984 No. L 8/17 (latest amendment OJ 1990 No. L 129/33); Third Council Directive 90/232/EEC of 14 May 1990 on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles; OJ 1990 No. L 129/33; Directive 2000/26/EC of the European Parliament and of the Council of 16 May 2000 on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles and amending Council Directives 73/239/EEC and 88/357/EEC (Fourth motor insurance Directive); OJ 2000 No. L 181/65; a fifth directive was proposed by the Commission on 7 June 2002, COM (2002) 244 final = OJ 2002 No. C 227 E/387.

17

(18)  Council Directive 87/344/EEC of 22 June 1987 on the coordination of laws, regulations and administrative provisions relating to legal expenses insurance; OJ 1987 No. L 185/77.

18

(19)  Mentioned sub 4.1.2.

19

(20)  See Eurostat.

20

(21)  Such rules can be called absolutely mandatory whenever parties may not deviate therefrom by way of agreement. They may be called semi-mandatory whenever parties may (only) agree on terms more favourable to the customer than the legal rules.

21

(22)  OJ 2003 No. C 63/1 (9 sub no. 47, 48: ‘The same problems occur particularly with insurance contracts’.

22

(23)  Full quotation see supra, note 20.

23

(24)  Full quotation see supra, note 20.

24

(25)  See Art. 2 lit. d Second Non-Life Insurance Directive; art. 1 par. 1 lit. g) Directive on Life Assurance.

25

(26)  Art. 7 par. 1 lit. f Second Non-Life Insurance Directive (as amended by Art. 27 Third Non-Life Insurance Directive; as to the definition of large risks see Art. 5 (d) (i) First Non-Life Insurance Directive.

26

(27)  See Art. 7 par. 1 lit a and d Second Non-Life Insurance Directive.

27

(28)  See Art. 7 par. 1 lit b, c, e

28

(29)  See Art. 32 par. 1 sent. 2 Directive on Life Assurance.

29

(30)  See Art. 32 par. 2 Directive on Life Assurance.

30

(31)  See the action plan of the EC Commission OJ 2003 No. 63/1 (9 sub 48: ‘The wording of a single policy that could be marketed on the same terms in different European markets has proved impossible in practice’).

31

(32)  Even though such change would not affect the law applicable in general, (internationally) mandatory rules at the place of the new habitual residence may be imposed by the courts of this Member State: By virtue of Art. 9 1) b) Regulation on Jurisdiction and Recognition and Enforcement of Judgements the policyholder is entitled to bring an action against the insurer in the Member State of its (new) residence. The courts of this Member State may impose mandatory rules according to Art. 7 2) 2) Second Non-Life Insurance Directive and Art. 32 4) 1 Directive on Life Assurance (mandatory rules of the lex fori).

32

(33)  See supra note 20.

33

(34)  This result may be avoided by the insurer by installing a jurisdiction clause admissible under Art. 13). 5) in connection with Art. 14 (i.e. no. 5) Regulation on Jurisdiction and Recognition and Enforcement of Judgements and granting exclusive jurisdiction to the courts of the Member State where the insurer is seated. Overall the perspective of the insurer is much more promising when it comes to the insurance of large risks.

34

(35)  See infra sub 4.2.4.

35

(36)  See supra 4.2.3.

36

(37)  Basedow, Die Gesetzgebung zum Versicherungsvertrag zwischen europäischer Integration und Verbraucherpolitik, in: Reichert-Facilides/Schyder (Hg.), Versicherungsrecht in Europa – Kernperspektiven am Ende des 20. Jahrhunderts, ZSR 2000 (Beiheft 34) 13 – 30 (page 20).

37

(38)  Directive 2002/92/EC of the European Parliament and of the Council of 9 December 2002 on insurance mediation; OJ L 9 of 15.1.2003, p. 3.

38

(39)  See Heiss, ‘Expanding the Insurance Acquis to Accession Candidates: From the Europe Agreements to Full Membership’, in: Heiss (ed.), ‘An Internal Insurance Market in an Enlarged European Union’, Karlsruhe, 2002, 11 – 22.

39

(40)  COM(79) 355 final of 10 July 1979, 190/2 of 28 July 1979

40

(41)  OJ of 15.1.1962, Tit. V, Ca).

41

(42)  The text indicated that, inter alia, the following areas would be harmonised:

42

| a) | the formal structure of the insurance policy; |
| --- | --- |

a)

the formal structure of the insurance policy;

| b) | the right to a declaration of guarantee when the contract is concluded, together with the minimum formal requirements pertaining to this; |
| --- | --- |

b)

the right to a declaration of guarantee when the contract is concluded, together with the minimum formal requirements pertaining to this;

| c) | the language in which the contract is concluded; |
| --- | --- |

c)

the language in which the contract is concluded;

| d) | the rules covering the insured person's declarations when the contract is concluded, concerning circumstances which may influence the insurer's assessment and acceptance of the risk, and the consequences should the insured person fail to, or deliberately not, do so; |
| --- | --- |

d)

the rules covering the insured person's declarations when the contract is concluded, concerning circumstances which may influence the insurer's assessment and acceptance of the risk, and the consequences should the insured person fail to, or deliberately not, do so;

| e) | the rules covering the insured person's declarations after the contract has been concluded regarding facts or circumstances which may result in an increase in the risk, together with the consequences of failing to fulfil the obligation to do so; |
| --- | --- |

e)

the rules covering the insured person's declarations after the contract has been concluded regarding facts or circumstances which may result in an increase in the risk, together with the consequences of failing to fulfil the obligation to do so;

| f) | the rules regarding the burden of proof where there has been failure to fulfil the abovementioned obligations; |
| --- | --- |

f)

the rules regarding the burden of proof where there has been failure to fulfil the abovementioned obligations;

| g) | the rules governing premiums in the event of a decrease in the risk; |
| --- | --- |

g)

the rules governing premiums in the event of a decrease in the risk;

| h) | the consequences of failure to pay an insurance premium or a part thereof; |
| --- | --- |

h)

the consequences of failure to pay an insurance premium or a part thereof;

| i) | the obligations of the policyholder should a claim arise; |
| --- | --- |

i)

the obligations of the policyholder should a claim arise;

| j) | the rules on terminating the insurance contract; and |
| --- | --- |

j)

the rules on terminating the insurance contract; and

| k) | the possibility of derogation from the provisions of the directive for the parties to the contract, where this would be more favourable to the policyholder, insured person or injured third party. |
| --- | --- |

k)

the possibility of derogation from the provisions of the directive for the parties to the contract, where this would be more favourable to the policyholder, insured person or injured third party.

The proposed Directive would apply to all direct insurance other than life assurance, excepting that relating to:

| a) | railway rolling stock; |
| --- | --- |

a)

railway rolling stock;

| b) | aircraft; |
| --- | --- |

b)

aircraft;

| c) | sea, lake and river and canal vessels; |
| --- | --- |

c)

sea, lake and river and canal vessels;

| d) | goods in transit; |
| --- | --- |

d)

goods in transit;

| e) | liability for aircraft and for sea, lake and river and canal vessels; |
| --- | --- |

e)

liability for aircraft and for sea, lake and river and canal vessels;

| f ) | credit and suretyship, paying attention to the particular features inherent to these branches of insurance. |
| --- | --- |

f )

credit and suretyship, paying attention to the particular features inherent to these branches of insurance.

(43)  Rapporteur: De Bruyn, OJ C 146 of 16.6.1980

43

(44)  OJ C 265 of 13.10.1980

44

(45)  COM(80) 854 final of 15.12.1980 – OJ C 355 of 31.12.1980

45

(46)  In particular, the Commission's new proposal referred to:

46

| a) | exclusion of sickness insurance, as suggested by the Committee; |
| --- | --- |

a)

exclusion of sickness insurance, as suggested by the Committee;

| b) | greater details of the procedures for terminating a contract, attaching too much importance to the possibility of retaining amended contracts, rather than quite simply revoking them; and |
| --- | --- |

b)

greater details of the procedures for terminating a contract, attaching too much importance to the possibility of retaining amended contracts, rather than quite simply revoking them; and

| c) | better wording of the rules on the burden of proof. |
| --- | --- |

c)

better wording of the rules on the burden of proof.

(47)  See Basedow/Fock (ed.), Europäisches Versicherungsvertragsrecht, Tübingen, Volumes I and II 2002, Volume III 2003; Reichert-Facilides (ed.), Insurance Contracts, in: International Encyclopedia of Comparative Law (forthcoming).

47

Basedow/Fock

Reichert-Facilides

(48)  Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts; OJ 1993 No. L 95/29.

48

(49)  A particular list on unfair clauses specific to the insurance sector could be inserted if necessary; see the ESC own-initiative Opinion on Consumers in the insurance market (CES 116/98 from 29.1.98) and the Study coordinated by the Centre de Droit de la Consommation from the University of Montpellier, on behalf of the Commission (Contract AO-2600/93/009263) on unfair clauses in certain branches of insurance and similarly to what as been proposed very recently by the Commission for consumer credit (COM(2002) 443 final).

49

(50)  See Art. 29 Third Directive on Non-Life Insurance; Art. 34 Directive on Life Assurance.

50

(51)  Many provisions on specific branches that can be found in national statutes on insurance contract law are non-mandatory and therefore in itself no obstacle to the internal market.

51

---

| 28.6.2005 | EN | Official Journal of the European Union | C 157/15 |
| --- | --- | --- | --- |

28.6.2005

EN

Official Journal of the European Union

C 157/15

---

Opinion of the European Economic and Social Committee on ‘Tourism and sport: the future challenges for Europe’

(2005/C 157/02)

On 29 January 2004, the European Economic and Social Committee, in accordance with Rule 29(2) of its Rules of Procedure, decided to draw up an opinion on ‘Tourism and sport: the future challenges for Europe’.

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 10 November 2004. The rapporteur was Mr Pesci.

At its 413th plenary session (meeting of 15 December 2004), the European Economic and Social Committee adopted the following opinion by 144 votes to 1 with 2 abstentions.

Preface

The development of people, towns and communities is enhanced by the exchange and sharing of positive values based on respect for others and encouraging mutual understanding, tolerance, hospitality and mutual willingness to exchange experience gained and plans for the future.

In an increasingly fast-moving society characterised by far-reaching social, geopolitical and technological change, in which material progress must be matched, at least, by the development of values, it would appear essential to seize all opportunities, both large and small, to reinforce and disseminate these values.

The tourism and sport sectors are natural vehicles for reinforcing and disseminating values. They are social and cultural activities in their own right as well as economic activities, and are closely linked, sharing a number of basic values — intellectual curiosity, openness to change and learning and the principle of a level playing field.

Tourism and sport can also contribute to the achievement of the objectives of the Lisbon strategy, which seeks to make Europe the most competitive knowledge-based economy in the world by 2010. Indeed, the increasing economic impact of these sectors is a driving force for the economies of the EU countries.

The adoption of the draft Constitutional Treaty, which, for the first time, recognises tourism as falling within the EU's jurisdiction, should make this contribution even more important. The EESC sees this as an initial, fundamental step towards a European development, support and coordination policy for tourism and welcomes the inclusion in the aforementioned constitutional text of the article on sport.

1.   Introduction

| 1.1 | Tourism and sport are two sectors which are going to make an increasingly significant contribution to Europe's economic prosperity and social well-being in the future. Their key role is universally recognised throughout the world. |
| --- | --- |

1.1

Tourism and sport are two sectors which are going to make an increasingly significant contribution to Europe's economic prosperity and social well-being in the future. Their key role is universally recognised throughout the world.

| 1.2 | States and communities are increasingly viewing them as key channels for disseminating positive values and messages and for developing economies which are socially and environmentally sustainable. |
| --- | --- |

1.2

States and communities are increasingly viewing them as key channels for disseminating positive values and messages and for developing economies which are socially and environmentally sustainable.

| 1.3 | Sport has always attracted great crowds of people who share a common passion, inducing them to travel constantly in order to watch sporting events, both large and small. |
| --- | --- |

1.3

Sport has always attracted great crowds of people who share a common passion, inducing them to travel constantly in order to watch sporting events, both large and small.

| 1.4 | Today, tourism offers a whole range of sporting attractions which, particularly in recent years, have met with great success, sometimes helping to revive areas which are in partial or sharp decline (1). |
| --- | --- |

1.4

Today, tourism offers a whole range of sporting attractions which, particularly in recent years, have met with great success, sometimes helping to revive areas which are in partial or sharp decline (1).

| 1.5 | Some sports destinations have thus become tourist destinations and vice versa, with the two becoming increasingly interlinked and each finding in the other new opportunities for providing services and growth. |
| --- | --- |

1.5

Some sports destinations have thus become tourist destinations and vice versa, with the two becoming increasingly interlinked and each finding in the other new opportunities for providing services and growth.

| 1.6 | This has made individual destinations more attractive not just to young (and not so young) people but also to people with disabilities, who can, at last, derive greater, hitherto-unknown enjoyment from sport-related holidays. |
| --- | --- |

1.6

This has made individual destinations more attractive not just to young (and not so young) people but also to people with disabilities, who can, at last, derive greater, hitherto-unknown enjoyment from sport-related holidays.

| 1.7 | Four hundred and eleven million people visited Europe in 2002, representing over 5 % of GDP and bringing Europe's share of the world tourism market to approximately 58 %. However, the WTO (World Tourism Organisation) estimates that Europe's share of the world tourism market will fall to 46 % by 2020, despite the fact that the number of tourists will almost double, because of competition from new competitors. |
| --- | --- |

1.7

Four hundred and eleven million people visited Europe in 2002, representing over 5 % of GDP and bringing Europe's share of the world tourism market to approximately 58 %. However, the WTO (World Tourism Organisation) estimates that Europe's share of the world tourism market will fall to 46 % by 2020, despite the fact that the number of tourists will almost double, because of competition from new competitors.

| 1.8 | In the context of this opinion, the EESC supported a public hearing in Rome on Tourism and sport: the future challenges for Europe, which saw the participation of leading Italian and European representatives of the tourism and sports sector and the heads of the tourism and sport units of the European Commission. The dialogue which took place was valuable, yielding many suggestions and points for reflection (2). |
| --- | --- |

1.8

In the context of this opinion, the EESC supported a public hearing in Rome on Tourism and sport: the future challenges for Europe, which saw the participation of leading Italian and European representatives of the tourism and sports sector and the heads of the tourism and sport units of the European Commission. The dialogue which took place was valuable, yielding many suggestions and points for reflection (2).

| 1.9 | On the basis of the Rome public hearing and in view of the fact that, this year, the WTO World Tourism Day (27 September 2004) has been devoted to the theme of Sport and tourism: two living forces for mutual understanding, culture and the development of society, the EESC has outlined some points for a debate on a future, more integrated policy of analysis and action in both sectors. |
| --- | --- |

1.9

On the basis of the Rome public hearing and in view of the fact that, this year, the WTO World Tourism Day (27 September 2004) has been devoted to the theme of Sport and tourism: two living forces for mutual understanding, culture and the development of society, the EESC has outlined some points for a debate on a future, more integrated policy of analysis and action in both sectors.

| 1.10 | Europe, which has already hosted the European Football Championships in Portugal and the XXVIII Olympic Games and the Paralympic Games in Greece during 2004, is to host a series of world sporting events over the next five years, and the impact of this in terms of tourist and economic flows will be huge, providing all Europe's tourist destinations with a unique opportunity as international visitors travel across the continent. |
| --- | --- |

1.10

Europe, which has already hosted the European Football Championships in Portugal and the XXVIII Olympic Games and the Paralympic Games in Greece during 2004, is to host a series of world sporting events over the next five years, and the impact of this in terms of tourist and economic flows will be huge, providing all Europe's tourist destinations with a unique opportunity as international visitors travel across the continent.

2.   Tourism and sport: the future challenges for Europe

| 2.1 | In the coming years, therefore, the world's media will be focusing on Europe for long periods at a time. The European Union will be at the centre of media attention on all these occasions (3), on different channels and at different levels. Europe will therefore be discussed, at least in high places, in political and socio-cultural terms, in terms of tourism and, of course, of sport. |
| --- | --- |

2.1

In the coming years, therefore, the world's media will be focusing on Europe for long periods at a time. The European Union will be at the centre of media attention on all these occasions (3), on different channels and at different levels. Europe will therefore be discussed, at least in high places, in political and socio-cultural terms, in terms of tourism and, of course, of sport.

| 2.2 | This period of major sporting events must therefore be regarded by European society not just as an economic opportunity but first and foremost as an opportunity for reflection and for dissemination of cultural and social values with a view to growth and sustainable development. |
| --- | --- |

2.2

This period of major sporting events must therefore be regarded by European society not just as an economic opportunity but first and foremost as an opportunity for reflection and for dissemination of cultural and social values with a view to growth and sustainable development.

| 2.3 | Clearly, these events provide huge scope for developing and implementing training and education measures for the people of the Member States and the wider world. Particular consideration must be given to young people and to those least integrated into the fabric of society, such as people with disabilities. |
| --- | --- |

2.3

Clearly, these events provide huge scope for developing and implementing training and education measures for the people of the Member States and the wider world. Particular consideration must be given to young people and to those least integrated into the fabric of society, such as people with disabilities.

| 2.4 | As regards the competitiveness of the tourism sector, the coming years, with this wealth of major world sporting events, could be a great opportunity for Europe, which will thus be able to develop and exploit market choices focusing on high-quality reception facilities and the provision of sustainable services. |
| --- | --- |

2.4

As regards the competitiveness of the tourism sector, the coming years, with this wealth of major world sporting events, could be a great opportunity for Europe, which will thus be able to develop and exploit market choices focusing on high-quality reception facilities and the provision of sustainable services.

| 2.5 | The European Union is now made up of 25 states, with all the benefits that this brings for the 450 million inhabitants of the new Community. There will therefore be a greater number of accessible destinations, people wishing to travel, and athletes and events to incorporate as quickly as possible into Europe's programmes and circuits. |
| --- | --- |

2.5

The European Union is now made up of 25 states, with all the benefits that this brings for the 450 million inhabitants of the new Community. There will therefore be a greater number of accessible destinations, people wishing to travel, and athletes and events to incorporate as quickly as possible into Europe's programmes and circuits.

3.   Tourism and sport: a twin strategy for Europe

| 3.1 | Tourism is an industry which fosters peace, encouraging integration between peoples and thus facilitating peaceful co-existence characterised by tolerance and mutual respect. |
| --- | --- |

3.1

Tourism is an industry which fosters peace, encouraging integration between peoples and thus facilitating peaceful co-existence characterised by tolerance and mutual respect.

| 3.2 | Tourism has proved that it can help to enhance the standard of living of millions of people throughout the world, encouraging fairer and more inclusive economic development. |
| --- | --- |

3.2

Tourism has proved that it can help to enhance the standard of living of millions of people throughout the world, encouraging fairer and more inclusive economic development.

| 3.3 | Its impact on employment is considerable. There are over two million businesses operating in the sector in Europe employing over 8 million people, not counting auxiliary staff. |
| --- | --- |

3.3

Its impact on employment is considerable. There are over two million businesses operating in the sector in Europe employing over 8 million people, not counting auxiliary staff.

| 3.4 | Indeed, tourism is cross-sectoral in nature and has a greater capacity to generate employment than other kinds of production. |
| --- | --- |

3.4

Indeed, tourism is cross-sectoral in nature and has a greater capacity to generate employment than other kinds of production.

| 3.5 | However, it is also a sector which suffers more from economic downturns, international crises and seasonal factors, which means that its contribution to long-term employment is limited, although it has consistently displayed a certain capacity to resist overall, thanks to the variety of products it offers, whose diversity offsets the effects of structural and contingent problems and allows the sector to absorb them. |
| --- | --- |

3.5

However, it is also a sector which suffers more from economic downturns, international crises and seasonal factors, which means that its contribution to long-term employment is limited, although it has consistently displayed a certain capacity to resist overall, thanks to the variety of products it offers, whose diversity offsets the effects of structural and contingent problems and allows the sector to absorb them.

| 3.6 | In the coming years, the challenge will be to create and preserve a socially and economically stable framework throughout the 25-member Europe, eliminating all forms of social exclusion. Tourism, sport and culture must be made practically accessible for all to enjoy, with concessions provided for the most disadvantaged social groups. |
| --- | --- |

3.6

In the coming years, the challenge will be to create and preserve a socially and economically stable framework throughout the 25-member Europe, eliminating all forms of social exclusion. Tourism, sport and culture must be made practically accessible for all to enjoy, with concessions provided for the most disadvantaged social groups.

| 3.7 | The European Commission has already outlined this process in its Communication of November 2001 entitled Working together for the future of European tourism (4), and in the subsequent Communication of November 2003 entitled Basic orientations for the sustainability of European tourism (5). It is now a question of giving substance to the ideas set out in these documents. |
| --- | --- |

3.7

The European Commission has already outlined this process in its Communication of November 2001 entitled Working together for the future of European tourism (4), and in the subsequent Communication of November 2003 entitled Basic orientations for the sustainability of European tourism (5). It is now a question of giving substance to the ideas set out in these documents.

| 3.8 | However, if high-quality tourism is to be achieved, tourism needs to be integrated with other production and/or entertainment sectors of society. Sport, which is characterised by a wealth of values, culture, rules and principles, is an ideal partner for promoting sustainable growth at all levels. |
| --- | --- |

3.8

However, if high-quality tourism is to be achieved, tourism needs to be integrated with other production and/or entertainment sectors of society. Sport, which is characterised by a wealth of values, culture, rules and principles, is an ideal partner for promoting sustainable growth at all levels.

| 3.9 | Sport, like tourism, is now an essential human leisure activity and, at the same time, a driving force for social growth and economic development with great potential. |
| --- | --- |

3.9

Sport, like tourism, is now an essential human leisure activity and, at the same time, a driving force for social growth and economic development with great potential.

| 3.10 | The values it promotes which, as is a well-known fact, date back to the first Greek Olympics in the eighth century BC, are very relevant to and find increasing expression in training policies for young people. |
| --- | --- |

3.10

The values it promotes which, as is a well-known fact, date back to the first Greek Olympics in the eighth century BC, are very relevant to and find increasing expression in training policies for young people.

| 3.11 | The economic dimension of sport has grown out of all proportion in recent years. Major sporting events have become general large-scale social gatherings which send out messages and promote values to all age groups throughout the world. |
| --- | --- |

3.11

The economic dimension of sport has grown out of all proportion in recent years. Major sporting events have become general large-scale social gatherings which send out messages and promote values to all age groups throughout the world.

| 3.12 | Sporting events have also generated new forms of tourism which combine conventional holidays with the chance to practise a particular sport. In this sense, major events serve as catalysts and spur people into taking up new sports. |
| --- | --- |

3.12

Sporting events have also generated new forms of tourism which combine conventional holidays with the chance to practise a particular sport. In this sense, major events serve as catalysts and spur people into taking up new sports.

| 3.13 | Sport on the one hand takes advantage of tourist infrastructure and services and on the other generates tourism, which benefits considerably from the sporting events which take place in tourist destinations: consider the number of people who travel to watch the World Football Championships or the Olympic Games, and above all the image promotion which a country hosting such events can derive from them. |
| --- | --- |

3.13

Sport on the one hand takes advantage of tourist infrastructure and services and on the other generates tourism, which benefits considerably from the sporting events which take place in tourist destinations: consider the number of people who travel to watch the World Football Championships or the Olympic Games, and above all the image promotion which a country hosting such events can derive from them.

| 3.14 | This opinion will consider first and foremost, although not exclusively, the major sporting events which, generally speaking, bring European destinations the greatest profits and cultural and social benefits and give them most publicity. |
| --- | --- |

3.14

This opinion will consider first and foremost, although not exclusively, the major sporting events which, generally speaking, bring European destinations the greatest profits and cultural and social benefits and give them most publicity.

| 3.15 | In purely general terms, ‘major sporting event’ is here taken to mean an event capable of attracting a substantial flow of tourists who stay in the destination overnight and thus boost the destination's tourist economy. |
| --- | --- |

3.15

In purely general terms, ‘major sporting event’ is here taken to mean an event capable of attracting a substantial flow of tourists who stay in the destination overnight and thus boost the destination's tourist economy.

| 3.16 | Major events can be opportunities for highlighting values, forms of behaviour and practices which can then be implemented and developed in the countless events which take place at local level (6). |
| --- | --- |

3.16

Major events can be opportunities for highlighting values, forms of behaviour and practices which can then be implemented and developed in the countless events which take place at local level (6).

| 3.17 | However, the complex links between tourism and sport are part of a wider relationship which includes the social, cultural and environmental sectors too. The modern tourist is in search of increasingly comprehensive holidays which can satisfy recreational, cultural and sporting needs in one package. |
| --- | --- |

3.17

However, the complex links between tourism and sport are part of a wider relationship which includes the social, cultural and environmental sectors too. The modern tourist is in search of increasingly comprehensive holidays which can satisfy recreational, cultural and sporting needs in one package.

4.   The institutional level

| 4.1 | In the past, the only legal basis for a Community tourism policy was Article 3(u) of the EC Treaty, which contained a general reference to measures in the sphere of tourism. For a sector with such a strong impact on the economies of many EU countries, this was a heavy constraint on the achievement of a genuine European tourism policy. |
| --- | --- |

4.1

In the past, the only legal basis for a Community tourism policy was Article 3(u) of the EC Treaty, which contained a general reference to measures in the sphere of tourism. For a sector with such a strong impact on the economies of many EU countries, this was a heavy constraint on the achievement of a genuine European tourism policy.

| 4.2 | Indeed, tourism is very cross-sectoral in nature: it embraces almost all production sectors and services and requires effective economies of scale both as regards regional management and the underlying decision and policy-making process. |
| --- | --- |

4.2

Indeed, tourism is very cross-sectoral in nature: it embraces almost all production sectors and services and requires effective economies of scale both as regards regional management and the underlying decision and policy-making process.

| 4.3 | However, particularly since 1999, the Community institutions have displayed renewed and increasing interest in tourism (7). The EESC has actively monitored this new trend and enthusiastically welcomes the inclusion of an ad hoc provision on tourism in the European Constitution (8). |
| --- | --- |

4.3

However, particularly since 1999, the Community institutions have displayed renewed and increasing interest in tourism (7). The EESC has actively monitored this new trend and enthusiastically welcomes the inclusion of an ad hoc provision on tourism in the European Constitution (8).

| 4.4 | This milestone marks the end of a long and, at times, harmful marginalisation of tourism and provides the necessary conditions for the sector to be recognised and officially integrated into the EU's policies. |
| --- | --- |

4.4

This milestone marks the end of a long and, at times, harmful marginalisation of tourism and provides the necessary conditions for the sector to be recognised and officially integrated into the EU's policies.

| 4.5 | The EESC hopes that tourism will henceforth be able to count on genuinely targeted, specific European measures, programmes and initiatives. In this connection it calls for the creation of a single governing body at Community level modelled on the European agencies for specific sectors (9). |
| --- | --- |

4.5

The EESC hopes that tourism will henceforth be able to count on genuinely targeted, specific European measures, programmes and initiatives. In this connection it calls for the creation of a single governing body at Community level modelled on the European agencies for specific sectors (9).

| 4.6 | At all events, the EESC welcomes the fact that the European Union is already working on a tourism policy promoting sustainable development of all kinds (10). |
| --- | --- |

4.6

At all events, the EESC welcomes the fact that the European Union is already working on a tourism policy promoting sustainable development of all kinds (10).

| 4.7 | Turning to European policy on sport, this is underpinned by a number of key documents, including the European Sports Charter (1992), the Treaty of Amsterdam, which specified the social significance of sport, and the Declaration annexed to the Treaty of Nice, which gave sport a specific place among areas of Community competence. |
| --- | --- |

4.7

Turning to European policy on sport, this is underpinned by a number of key documents, including the European Sports Charter (1992), the Treaty of Amsterdam, which specified the social significance of sport, and the Declaration annexed to the Treaty of Nice, which gave sport a specific place among areas of Community competence.

| 4.8 | Thanks in part to the impetus it received from the Nice Summit, sport was given its rightful place in the Constitution for Europe adopted in June 2004, where it is the subject of a specific provision (11). |
| --- | --- |

4.8

Thanks in part to the impetus it received from the Nice Summit, sport was given its rightful place in the Constitution for Europe adopted in June 2004, where it is the subject of a specific provision (11).

| 4.9 | To highlight the social and educational importance of sport, the Commission has made 2004 the European Year of Education through Sport. This is a way of drawing attention to the sector, as well as funding training, awareness-raising and development projects in schools and educational organisations throughout the Union. |
| --- | --- |

4.9

To highlight the social and educational importance of sport, the Commission has made 2004 the European Year of Education through Sport. This is a way of drawing attention to the sector, as well as funding training, awareness-raising and development projects in schools and educational organisations throughout the Union.

| 4.10 | This initiative has also encouraged student mobility, albeit with limited funding, enabling students to visit places away from home and satisfying both their desire to travel and discover new places and their desire to practise their favourite sport. |
| --- | --- |

4.10

This initiative has also encouraged student mobility, albeit with limited funding, enabling students to visit places away from home and satisfying both their desire to travel and discover new places and their desire to practise their favourite sport.

| 4.11 | How to integrate tourism, sport and culture is one of the challenges we must address in the years ahead in order to boost the European economy and help to bring about a higher quality of life for all. |
| --- | --- |

4.11

How to integrate tourism, sport and culture is one of the challenges we must address in the years ahead in order to boost the European economy and help to bring about a higher quality of life for all.

| 4.12 | This takes on priority status in the light of the aforementioned Lisbon objectives, which must, in any case, take into account the changing economic situation of the EU countries in order to guarantee lasting, sustainable growth and development. |
| --- | --- |

4.12

This takes on priority status in the light of the aforementioned Lisbon objectives, which must, in any case, take into account the changing economic situation of the EU countries in order to guarantee lasting, sustainable growth and development.

| 4.13 | Specific workshops could be held in the European Tourism Forum and a European Sport Forum and innovative initiatives promoted as part of the process of drawing up an innovative strategy at European level seeking to integrate the tourism, sport and culture sectors. The innovative initiatives could include student exchanges, awareness-raising campaigns to involve the ‘sporting’ tourist in the cultural and social life of the place where an event is held, or courses designed to develop new skills. From this perspective, it is essential to involve both civil society and the private sector first and foremost. |
| --- | --- |

4.13

Specific workshops could be held in the European Tourism Forum and a European Sport Forum and innovative initiatives promoted as part of the process of drawing up an innovative strategy at European level seeking to integrate the tourism, sport and culture sectors. The innovative initiatives could include student exchanges, awareness-raising campaigns to involve the ‘sporting’ tourist in the cultural and social life of the place where an event is held, or courses designed to develop new skills. From this perspective, it is essential to involve both civil society and the private sector first and foremost.

| 4.14 | The legal recognition of the two sectors — tourism and sport — in the draft Constitutional Treaty is a major step towards the achievement of these objectives, particularly as regards the promotion and development of the competitiveness of European businesses operating in the two sectors. |
| --- | --- |

4.14

The legal recognition of the two sectors — tourism and sport — in the draft Constitutional Treaty is a major step towards the achievement of these objectives, particularly as regards the promotion and development of the competitiveness of European businesses operating in the two sectors.

5.   Security and the Olympic Truce

| 5.1 | As has been mentioned, the coming years will be full of sporting events and millions of people will flock from all over the world to watch them. |
| --- | --- |

5.1

As has been mentioned, the coming years will be full of sporting events and millions of people will flock from all over the world to watch them.

| 5.2 | This period of long-distance travelling, of major sporting events and of extensive media coverage raises the urgent question of security. This question must be addressed responsibly, without sparking unnecessary alarmism but putting in place all the preventive and surveillance measures needed to ensure the smooth running of each sporting event. |
| --- | --- |

5.2

This period of long-distance travelling, of major sporting events and of extensive media coverage raises the urgent question of security. This question must be addressed responsibly, without sparking unnecessary alarmism but putting in place all the preventive and surveillance measures needed to ensure the smooth running of each sporting event.

| 5.3 | Cooperation and prior establishment of joint action strategies are, in this respect, decisive elements in the organisation of major sporting events. |
| --- | --- |

5.3

Cooperation and prior establishment of joint action strategies are, in this respect, decisive elements in the organisation of major sporting events.

| 5.4 | Security must therefore underpin the organisation of all events in the coming years and it must be based essentially on prevention. |
| --- | --- |

5.4

Security must therefore underpin the organisation of all events in the coming years and it must be based essentially on prevention.

| 5.5 | The United Nations General Assembly of 6 September 2000 adopted a Declaration, point 10 of which states: ‘We urge Member States to observe the Olympic Truce, individually and collectively, now and in the future, and to support the International Olympic Committee in its efforts to promote peace and human understanding through sport and the Olympic Ideal’. |
| --- | --- |

5.5

The United Nations General Assembly of 6 September 2000 adopted a Declaration, point 10 of which states: ‘We urge Member States to observe the Olympic Truce, individually and collectively, now and in the future, and to support the International Olympic Committee in its efforts to promote peace and human understanding through sport and the Olympic Ideal’.

| 5.6 | Both the recent Brussels European Council (12 December 2003) and the European Parliament (1 April 2004) made similar appeals. In particular, the European Parliament welcomed the IOC (International Olympic Committee)'s creation of an International Foundation for the Olympic Truce, an organisation seeking to further promote the ideals of peace and understanding through sport. |
| --- | --- |

5.6

Both the recent Brussels European Council (12 December 2003) and the European Parliament (1 April 2004) made similar appeals. In particular, the European Parliament welcomed the IOC (International Olympic Committee)'s creation of an International Foundation for the Olympic Truce, an organisation seeking to further promote the ideals of peace and understanding through sport.

| 5.7 | In its contribution to the security debate, the EESC stresses the need to promote the Olympic Truce as a universal message relevant to all world sporting events in the coming years. Indeed, it maintains that sport can contribute to spreading the culture of dialogue and increasing the opportunities for people to meet. |
| --- | --- |

5.7

In its contribution to the security debate, the EESC stresses the need to promote the Olympic Truce as a universal message relevant to all world sporting events in the coming years. Indeed, it maintains that sport can contribute to spreading the culture of dialogue and increasing the opportunities for people to meet.

6.   Integrated sustainability

| 6.1 | As has already been mentioned, complex links are generated between tourism and sport which have a social, economic and environmental impact. The relationship is even more complex where large-scale (major) events are concerned. |
| --- | --- |

6.1

As has already been mentioned, complex links are generated between tourism and sport which have a social, economic and environmental impact. The relationship is even more complex where large-scale (major) events are concerned.

| 6.2 | All the principles of sustainability — socio-cultural, economic and environmental — must therefore be taken into account in the organisation of events. The guidelines for sustainable tourism adopted by the European Commission in its aforementioned recent Communication on basic orientations for the sustainability of European tourism (12) and evaluated in the EESC opinion on socially sustainable tourism for everyone (13) must be applied to sport and sports destinations. |
| --- | --- |

6.2

All the principles of sustainability — socio-cultural, economic and environmental — must therefore be taken into account in the organisation of events. The guidelines for sustainable tourism adopted by the European Commission in its aforementioned recent Communication on basic orientations for the sustainability of European tourism (12) and evaluated in the EESC opinion on socially sustainable tourism for everyone (13) must be applied to sport and sports destinations.

| 6.3 | In social and cultural terms, sporting events should, first and foremost, be occasions for enhancing identities and for cultural exchange. It is therefore proposed that support be given to initiatives and events of a tourist/sporting character involving several regions of different European countries (on the model of the Interreg programme). |
| --- | --- |

6.3

In social and cultural terms, sporting events should, first and foremost, be occasions for enhancing identities and for cultural exchange. It is therefore proposed that support be given to initiatives and events of a tourist/sporting character involving several regions of different European countries (on the model of the Interreg programme).

| 6.4 | From a social and economic point of view, we would point out that the greatest attention should be paid to the local community in the organisation of an event. All services and infrastructure should be planned with potential future use thereof by the inhabitants in mind. The local community must also be used as the reference for the creation of jobs and the implementation of training relating to events. |
| --- | --- |

6.4

From a social and economic point of view, we would point out that the greatest attention should be paid to the local community in the organisation of an event. All services and infrastructure should be planned with potential future use thereof by the inhabitants in mind. The local community must also be used as the reference for the creation of jobs and the implementation of training relating to events.

| 6.5 | Models have already been developed to measure the capacity of the destinations and related services in terms of environmental sustainability and other criteria. It would be appropriate to promote the dissemination of these models and their application in the field of sporting events too, advocating, as has been said, an integrated approach with three strands: society, economy and environment. |
| --- | --- |

6.5

Models have already been developed to measure the capacity of the destinations and related services in terms of environmental sustainability and other criteria. It would be appropriate to promote the dissemination of these models and their application in the field of sporting events too, advocating, as has been said, an integrated approach with three strands: society, economy and environment.

| 6.6 | Planning, management and development models for these events must therefore be identified and promoted in order to maximise the profits and added value generated, especially for the host region and community, which, in any case, suffers detrimental effects from such events and only rarely enjoys any significant gain. |
| --- | --- |

6.6

Planning, management and development models for these events must therefore be identified and promoted in order to maximise the profits and added value generated, especially for the host region and community, which, in any case, suffers detrimental effects from such events and only rarely enjoys any significant gain.

| 6.7 | Large-scale sporting events can be opportunities to develop high-level skills and expertise, which can also be valuable to the sports/tourist destination in the medium and long term as regards developing facilities and meeting visitors' needs. They can also serve to disseminate best practice in the field of the integrated management of tourism and sport. |
| --- | --- |

6.7

Large-scale sporting events can be opportunities to develop high-level skills and expertise, which can also be valuable to the sports/tourist destination in the medium and long term as regards developing facilities and meeting visitors' needs. They can also serve to disseminate best practice in the field of the integrated management of tourism and sport.

| 6.8 | The organisation of complex events requires an initial mapping of potential conflicts between local people and short-term visitors, with regard to the use of resources, services and facilities and the quality thereof. |
| --- | --- |

6.8

The organisation of complex events requires an initial mapping of potential conflicts between local people and short-term visitors, with regard to the use of resources, services and facilities and the quality thereof.

| 6.9 | Close cooperation will be essential between promoters, organisers, local representatives, representatives of end users and representatives of social stakeholders, and between all the parties involved in general. |
| --- | --- |

6.9

Close cooperation will be essential between promoters, organisers, local representatives, representatives of end users and representatives of social stakeholders, and between all the parties involved in general.

| 6.10 | Sporting events must be included in the medium- and long-term planning of the host destination and country. In particular, consideration must be given to the impact that they will have on the overall image of the tourist/sports destination. |
| --- | --- |

6.10

Sporting events must be included in the medium- and long-term planning of the host destination and country. In particular, consideration must be given to the impact that they will have on the overall image of the tourist/sports destination.

| 6.11 | It is a well-known fact that the seasonal nature of tourism is often a barrier to its development. Sporting events also help to further a policy of developing tourism and the tourism economy all year round, maximising profits and providing stable, long-term jobs. |
| --- | --- |

6.11

It is a well-known fact that the seasonal nature of tourism is often a barrier to its development. Sporting events also help to further a policy of developing tourism and the tourism economy all year round, maximising profits and providing stable, long-term jobs.

| 6.12 | It is worth setting up ongoing monitoring of current and future experiences in order to help define a model of experiences for the planning and management of sporting events which fully takes into account the above-mentioned social, environmental and economic factors. In particular, it would seem worthwhile to monitor the use of facilities and the subsequent use of the structures and services set up for a particular event after it has finished. |
| --- | --- |

6.12

It is worth setting up ongoing monitoring of current and future experiences in order to help define a model of experiences for the planning and management of sporting events which fully takes into account the above-mentioned social, environmental and economic factors. In particular, it would seem worthwhile to monitor the use of facilities and the subsequent use of the structures and services set up for a particular event after it has finished.

| 6.13 | In general terms, the EESC would stress the possibility of adopting the measures, actions and recommendations set out in the multiannual programme for sustainable European tourism by creating an Agenda 21 for sport and for the most popular destinations for organising and hosting sporting events. |
| --- | --- |

6.13

In general terms, the EESC would stress the possibility of adopting the measures, actions and recommendations set out in the multiannual programme for sustainable European tourism by creating an Agenda 21 for sport and for the most popular destinations for organising and hosting sporting events.

| 6.14 | Good practice and positive experiences of planning and managing sporting events with a tourist dimension must be recorded systematically, disseminated and pooled in order to make the organisation of the forthcoming major EU events as successful as possible. |
| --- | --- |

6.14

Good practice and positive experiences of planning and managing sporting events with a tourist dimension must be recorded systematically, disseminated and pooled in order to make the organisation of the forthcoming major EU events as successful as possible.

7.   Tourism, sport and training

| 7.1 | The EESC would reiterate the need to reinforce at all levels the objective of training and education as part of sport and tourism policies. |
| --- | --- |

7.1

The EESC would reiterate the need to reinforce at all levels the objective of training and education as part of sport and tourism policies.

| 7.2 | This approach was also called for in the Declaration on the specific characteristics of sport annexed to the conclusions of the December 2000 Nice European Council, which stressed that ‘the Community must ... take account of the social, educational and cultural functions inherent in sport ... in order that the code of ethics and the solidarity essential to the preservation of its social role may be respected and nurtured’. |
| --- | --- |

7.2

This approach was also called for in the Declaration on the specific characteristics of sport annexed to the conclusions of the December 2000 Nice European Council, which stressed that ‘the Community must ... take account of the social, educational and cultural functions inherent in sport ... in order that the code of ethics and the solidarity essential to the preservation of its social role may be respected and nurtured’.

| 7.3 | Integrating and promoting positive values common to tourism and sport can be effective ways of bringing about integration at the level of communities, destinations and states. |
| --- | --- |

7.3

Integrating and promoting positive values common to tourism and sport can be effective ways of bringing about integration at the level of communities, destinations and states.

| 7.4 | The series of events which began in 2004 therefore acquires even greater importance because of the proposed objective of using major events which will receive tremendous media coverage and attention from institutions as vehicles for disseminating training principles and guidelines. |
| --- | --- |

7.4

The series of events which began in 2004 therefore acquires even greater importance because of the proposed objective of using major events which will receive tremendous media coverage and attention from institutions as vehicles for disseminating training principles and guidelines.

| 7.5 | As the EU expands to include 10 new countries, these opportunities will increase. The use of mass media networks will make it possible to extend and share with the new Member States educational projects to bring about familiarisation with the Union and its peoples and an exchange of values based on sportsmanship, fair play and competitiveness. |
| --- | --- |

7.5

As the EU expands to include 10 new countries, these opportunities will increase. The use of mass media networks will make it possible to extend and share with the new Member States educational projects to bring about familiarisation with the Union and its peoples and an exchange of values based on sportsmanship, fair play and competitiveness.

| 7.6 | Key values which could be developed and conveyed include tolerance, an open, welcoming attitude and openness to exchange between different peoples and ethnic groups. The exchange of these values within the European Union will require: a) appropriate education in schools and adult education for all those employed in tourism and sport, and b) intensive sharing of experience, which needs to be promoted. When tourists travel, they have expectations with regard to the above-mentioned values. |
| --- | --- |

7.6

Key values which could be developed and conveyed include tolerance, an open, welcoming attitude and openness to exchange between different peoples and ethnic groups. The exchange of these values within the European Union will require: a) appropriate education in schools and adult education for all those employed in tourism and sport, and b) intensive sharing of experience, which needs to be promoted. When tourists travel, they have expectations with regard to the above-mentioned values.

| 7.7 | There should be particular focus, where sporting and tourist events are concerned, on disseminating the principle of the right for all population groups — and in particular for the weaker groups: young people, the elderly, people with disabilities — to practise different kinds of sports and take part in events in those sports. |
| --- | --- |

7.7

There should be particular focus, where sporting and tourist events are concerned, on disseminating the principle of the right for all population groups — and in particular for the weaker groups: young people, the elderly, people with disabilities — to practise different kinds of sports and take part in events in those sports.

| 7.8 | As is stated in the aforementioned Declaration on the specific characteristics of sport annexed to the conclusions of the 2000 Nice European Council, ‘For the physically or mentally disabled, the practice of physical and sporting activities provides a particularly favourable opening for the development of individual talent, rehabilitation, social integration and solidarity ...’. |
| --- | --- |

7.8

As is stated in the aforementioned Declaration on the specific characteristics of sport annexed to the conclusions of the 2000 Nice European Council, ‘For the physically or mentally disabled, the practice of physical and sporting activities provides a particularly favourable opening for the development of individual talent, rehabilitation, social integration and solidarity ...’.

| 7.9 | These measures seeking to benefit the weakest groups of society must be implemented by central governments and local authorities, national federations, sports societies and associations, amateur clubs and schools. |
| --- | --- |

7.9

These measures seeking to benefit the weakest groups of society must be implemented by central governments and local authorities, national federations, sports societies and associations, amateur clubs and schools.

| 7.10 | Schools are the most fertile ground for disseminating positive values and developing mutual understanding, since the complex relationship between sport, tourism and training can be exploited to the full by starting with school-age children. |
| --- | --- |

7.10

Schools are the most fertile ground for disseminating positive values and developing mutual understanding, since the complex relationship between sport, tourism and training can be exploited to the full by starting with school-age children.

| 7.11 | It is therefore proposed to continue to facilitate student mobility and exchanges by organising sporting events which include opportunities for familiarisation with local culture and life. |
| --- | --- |

7.11

It is therefore proposed to continue to facilitate student mobility and exchanges by organising sporting events which include opportunities for familiarisation with local culture and life.

| 7.12 | It is also proposed to increase cooperation between the Member States especially in the field of exchange of information about best practices including the involvement of sports tourists in the cultural and social life of communities hosting sports events, in order both to reduce violence and intolerance of all kinds and to generate opportunities for mutual growth. |
| --- | --- |

7.12

It is also proposed to increase cooperation between the Member States especially in the field of exchange of information about best practices including the involvement of sports tourists in the cultural and social life of communities hosting sports events, in order both to reduce violence and intolerance of all kinds and to generate opportunities for mutual growth.

| 7.13 | It would also be worthwhile ascertaining whether there is a need for courses developing new skills necessary for organising tourist/sports events, which take into account all the aspects of social growth, integrated sustainability, communication and marketing which are relevant to tourism. |
| --- | --- |

7.13

It would also be worthwhile ascertaining whether there is a need for courses developing new skills necessary for organising tourist/sports events, which take into account all the aspects of social growth, integrated sustainability, communication and marketing which are relevant to tourism.

8.   Conclusions

| 8.1 | Tourism and sport can become laboratories for the development, exchange and sharing of positive values, inspired by respect for others and directed towards mutual understanding, tolerance and reciprocal acceptance. These sectors are naturally suited to this task and their role takes on special importance in the context of a society which is increasingly dynamic and marked by profound socio-cultural, geopolitical and technological changes. |
| --- | --- |

8.1

Tourism and sport can become laboratories for the development, exchange and sharing of positive values, inspired by respect for others and directed towards mutual understanding, tolerance and reciprocal acceptance. These sectors are naturally suited to this task and their role takes on special importance in the context of a society which is increasingly dynamic and marked by profound socio-cultural, geopolitical and technological changes.

| 8.2 | Tourism and sport can also contribute a great deal to achieving the objectives set in the Lisbon strategy. Indeed, their growing economic impact could become a real driving force for the economy of the European Union, especially if all the opportunities for developing and spreading the skills linked to these two sectors were used to the full. |
| --- | --- |

8.2

Tourism and sport can also contribute a great deal to achieving the objectives set in the Lisbon strategy. Indeed, their growing economic impact could become a real driving force for the economy of the European Union, especially if all the opportunities for developing and spreading the skills linked to these two sectors were used to the full.

| 8.3 | The inclusion of tourism and sport in the final version of the European Constitution represents a historic turning point for the two sectors. The EESC now hopes for significant activity at Community level in these two areas and suggests using the open method of coordination to guarantee the interchange of skills and knowledge and comparison at European level. |
| --- | --- |

8.3

The inclusion of tourism and sport in the final version of the European Constitution represents a historic turning point for the two sectors. The EESC now hopes for significant activity at Community level in these two areas and suggests using the open method of coordination to guarantee the interchange of skills and knowledge and comparison at European level.

| 8.4 | Sport and tourism are two complex, distinct sectors; it is very difficult to study them together and make economic and social comparisons between them. The EESC therefore proposes that a joint European monitoring agency and a data bank be set up to collect and classify knowledge and best practice and disseminate them in the Member States in order to promote development in the two sectors. |
| --- | --- |

8.4

Sport and tourism are two complex, distinct sectors; it is very difficult to study them together and make economic and social comparisons between them. The EESC therefore proposes that a joint European monitoring agency and a data bank be set up to collect and classify knowledge and best practice and disseminate them in the Member States in order to promote development in the two sectors.

| 8.5 | The EESC also hopes that the European Union will promote studies and research to make possible a comparative analysis at European level of the social, economic and environmental impact of the tourism-sport combination. |
| --- | --- |

8.5

The EESC also hopes that the European Union will promote studies and research to make possible a comparative analysis at European level of the social, economic and environmental impact of the tourism-sport combination.

| 8.6 | The spread of a culture of access for all to tourism and sport, and the formulation of policies to support that culture, must be a priority for all development measures in the two sectors, considering the needs of weaker population groups — young people, the elderly and the disabled — and of those with not much money to spend. To this end, the EESC would like to see a campaign to promote awareness of the fact that accessibility and sustainability are necessary characteristics which make market players more competitive. |
| --- | --- |

8.6

The spread of a culture of access for all to tourism and sport, and the formulation of policies to support that culture, must be a priority for all development measures in the two sectors, considering the needs of weaker population groups — young people, the elderly and the disabled — and of those with not much money to spend. To this end, the EESC would like to see a campaign to promote awareness of the fact that accessibility and sustainability are necessary characteristics which make market players more competitive.

| 8.7 | It is proposed that a European tourism agency be set up with the role of safeguarding the specific characteristics of this sector, analysing its problems, setting out potential lines for development and identifying innovative instruments for sustainable growth to be incorporated into the EU's structural measures. |
| --- | --- |

8.7

It is proposed that a European tourism agency be set up with the role of safeguarding the specific characteristics of this sector, analysing its problems, setting out potential lines for development and identifying innovative instruments for sustainable growth to be incorporated into the EU's structural measures.

| 8.8 | Tourism and sport are many-sided, complex phenomena with a high potential for development. This opinion maintains the need for horizontal integration of these sectors at European level, so that this potential can be realised in both the socio-economic and the cultural fields. Moreover, the EESC emphasises the need, when implementing the proposed measures, to give constant attention to their sustainability both in those fields and in environmental terms. |
| --- | --- |

8.8

Tourism and sport are many-sided, complex phenomena with a high potential for development. This opinion maintains the need for horizontal integration of these sectors at European level, so that this potential can be realised in both the socio-economic and the cultural fields. Moreover, the EESC emphasises the need, when implementing the proposed measures, to give constant attention to their sustainability both in those fields and in environmental terms.

| 8.9 | The EESC named this opinion the Declaration of Rome on tourism and sport so as to give it a higher profile and improve its dissemination at all important tourist and sporting events at European level. |
| --- | --- |

8.9

The EESC named this opinion the Declaration of Rome on tourism and sport so as to give it a higher profile and improve its dissemination at all important tourist and sporting events at European level.

Brussels, 15 December 2004.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  A good example of this process is the city of Turin, which, thanks to the forthcoming 2006 Winter Olympics and Paralympics, is reviving abandoned industrial areas and exploiting new suburban areas, boosting the local economy in all sectors.

1

(2)  Public hearing on Tourism and sport: the future challenges for Europe held at the CNEL (National Economic and Labour Council) in Rome on 22 April 2004.

2

(3)  See footnote 3.

3

(4)  COM(2001) 665 final

4

(5)  COM(2003) 716 final

5

(6)  Local competitions, inter-school and amateur tournaments, regional sporting events, world university games etc.

6

(7)  Including the 1999 European action plan for employment in tourism, the Commission Communication of 13 November 2001 on Working together for the future of European tourism, the European Parliament Resolution of 14 May 2002, the Council Resolution of 21 May 2002 on the future of European tourism, and the Communication from the Commission of November 2003 on basic orientations for the sustainability of European tourism.

7

(8)  Article I-17 and Article III-281 (Section 4).

8

(9)  For example, the European Agency for the Evaluation of Medicinal Products, the European Agency for Safety and Health at Work, the European Food Safety Authority, the European Environment Agency etc.

9

(10)  The EESC has participated in this process by producing an own-initiative opinion on Socially sustainable tourism for everyone (OJ C 32 of 5.2.2004), intended as a contribution to future measures.

10

(11)  Article I-17 and Article III-282 (Section 5).

11

(12)  COM(2003) 716 final.

12

(13)  OJ C 32 of 5.2.2004.

13

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| 28.6.2005 | EN | Official Journal of the European Union | C 157/22 |
| --- | --- | --- | --- |

28.6.2005

EN

Official Journal of the European Union

C 157/22

---

Opinion of the European Economic and Social Committee on the ‘Communication from the Commission: Towards a European strategy for nanotechnology’

(COM(2004) 338 final)

(2005/C 157/03)

On 12 May 2004, the European Commission decided to consult the European Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on the ‘Communication from the Commission: Towards a European strategy for nanotechnology’.

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 10 November 2004. The rapporteur was Mr Pezzini.

At its 413th plenary session of 15 December 2004, the European Economic and Social Committee adopted the following opinion by 151 votes and one abstention.

1.   Background

| 1.1 | The Committee is conscious of the fact that this opinion deals with a partly new subject, whose vocabulary is little known or at any rate little used. For this reason, it was deemed useful to provide a brief series of definitions and to detail the state of nanotechnology research and applications in the United States and Asia. |
| --- | --- |

1.1

The Committee is conscious of the fact that this opinion deals with a partly new subject, whose vocabulary is little known or at any rate little used. For this reason, it was deemed useful to provide a brief series of definitions and to detail the state of nanotechnology research and applications in the United States and Asia.

| 1.2 | Index
  2.
  3.
  4.
  5.
  6.
  7.
  8. |
| --- | --- |

1.2

Index

2.

3.

4.

5.

6.

7.

8.

2.   Definitions

| 2.1 | Nano — means one billionth of a whole. In this case, nano is used to mean a billionth of a metre. |
| --- | --- |

2.1

Nano — means one billionth of a whole. In this case, nano is used to mean a billionth of a metre.

| 2.2 | Micro — means one millionth of a whole. In this case, it means one millionth of a metre. |
| --- | --- |

2.2

Micro — means one millionth of a whole. In this case, it means one millionth of a metre.

| 2.3 | Nanosciences — The nanosciences are a new approach to traditional science (chemistry, physics, electronic biology, etc.) and deal with the basic structure and behaviour of materials at the level of atoms and molecules. These sciences in fact study the potential of atoms in the various scientific disciplines (1). |
| --- | --- |

2.3

Nanosciences — The nanosciences are a new approach to traditional science (chemistry, physics, electronic biology, etc.) and deal with the basic structure and behaviour of materials at the level of atoms and molecules. These sciences in fact study the potential of atoms in the various scientific disciplines (1).

| 2.4 | Nanotechnologies — These technologies enable atoms and molecules to be manipulated so as to create new surfaces and objects that, having a different make-up and arrangement of atoms, have properties that can be used in day-to-day life (2). These are technologies that deal with billionths of a metre. |
| --- | --- |

2.4

Nanotechnologies — These technologies enable atoms and molecules to be manipulated so as to create new surfaces and objects that, having a different make-up and arrangement of atoms, have properties that can be used in day-to-day life (2). These are technologies that deal with billionths of a metre.

| 2.5 | In addition to the above definition, it is worthwhile going into greater detail from a scientific point of view. The term nanotechnology describes a multidisciplinary approach to the creation of materials, mechanisms and systems, by means of the nanometric scale control of materials. |
| --- | --- |

2.5

In addition to the above definition, it is worthwhile going into greater detail from a scientific point of view. The term nanotechnology describes a multidisciplinary approach to the creation of materials, mechanisms and systems, by means of the nanometric scale control of materials.

| 2.6 | Nanomechanics — The dimensions of an object begin to be important in determining its properties when the scale of its dimensions is of one or a few dozen nanometres (objects made of a few dozen or a few thousand atoms). Within this range of dimensions, an object composed of 100 iron atoms has physical and chemical properties that are radically different to one composed of 200 atoms, even if they are both made of the same atoms. Similarly, the mechanical and electromagnetic properties of a solid made up of nanoparticles are radically different to those of a traditional solid of the same chemical composition and are affected by the properties of the individual constituent units. |
| --- | --- |

2.6

Nanomechanics — The dimensions of an object begin to be important in determining its properties when the scale of its dimensions is of one or a few dozen nanometres (objects made of a few dozen or a few thousand atoms). Within this range of dimensions, an object composed of 100 iron atoms has physical and chemical properties that are radically different to one composed of 200 atoms, even if they are both made of the same atoms. Similarly, the mechanical and electromagnetic properties of a solid made up of nanoparticles are radically different to those of a traditional solid of the same chemical composition and are affected by the properties of the individual constituent units.

| 2.7 | This is a fundamental scientific and technological novelty that changes the approach to making and manipulating materials in all fields of science and technology. Nanotechnology is not therefore a new science, joining the ranks of chemistry, physics and biology, but rather a new way of doing chemistry, physics and biology. |
| --- | --- |

2.7

This is a fundamental scientific and technological novelty that changes the approach to making and manipulating materials in all fields of science and technology. Nanotechnology is not therefore a new science, joining the ranks of chemistry, physics and biology, but rather a new way of doing chemistry, physics and biology.

| 2.8 | It follows that a nanostructured material or system is made of units of nanometric proportions (the structures made of individual atoms that we are used to are no longer relevant) and therefore possesses certain properties that can be built into complex structures. Clearly, therefore, production models based on the assembly of individual atoms or molecules that are all alike should be changed and replaced with approaches within which dimensions are a fundamental parameter. |
| --- | --- |

2.8

It follows that a nanostructured material or system is made of units of nanometric proportions (the structures made of individual atoms that we are used to are no longer relevant) and therefore possesses certain properties that can be built into complex structures. Clearly, therefore, production models based on the assembly of individual atoms or molecules that are all alike should be changed and replaced with approaches within which dimensions are a fundamental parameter.

| 2.9 | To give an idea of the revolutionary impact of nanotechnology, it is equivalent to discovering a new periodic table of elements that is much bigger and more complicated than the previous one, and to finding that the limitations imposed by phase diagrams (for instance the possibilities of mixing two materials) can be overcome. |
| --- | --- |

2.9

To give an idea of the revolutionary impact of nanotechnology, it is equivalent to discovering a new periodic table of elements that is much bigger and more complicated than the previous one, and to finding that the limitations imposed by phase diagrams (for instance the possibilities of mixing two materials) can be overcome.

| 2.10 | These are therefore bottom-up technologies, that shift the emphasis from individual functions to a set of functions. They have an ever-increasing number of applications, in the following fields to name but a few: health, information technology, materials science, manufacturing, energy, safety, aerospace, optics, acoustics, chemicals, food and the environment. |
| --- | --- |

2.10

These are therefore bottom-up technologies, that shift the emphasis from individual functions to a set of functions. They have an ever-increasing number of applications, in the following fields to name but a few: health, information technology, materials science, manufacturing, energy, safety, aerospace, optics, acoustics, chemicals, food and the environment.

| 2.11 | Thanks to these applications, some of which are already possible and used by the public (3), it is realistic to state that nanotechnologies could significantly improve quality of life, the competitiveness of the manufacturing industry and sustainable development
   (4)
  . |
| --- | --- |

2.11

Thanks to these applications, some of which are already possible and used by the public (3), it is realistic to state that nanotechnologies could significantly improve quality of life, the competitiveness of the manufacturing industry and sustainable development
   (4)
  .

| 2.12 | Microelectronics — This is a branch of electronics that deals with the development of integrated circuits, built within individual semiconductor regions, with minute dimensions. Microelectronics can currently create individual components with dimensions in the realms of 0.1 micrometre, or 100 nanometres (5). |
| --- | --- |

2.12

Microelectronics — This is a branch of electronics that deals with the development of integrated circuits, built within individual semiconductor regions, with minute dimensions. Microelectronics can currently create individual components with dimensions in the realms of 0.1 micrometre, or 100 nanometres (5).

| 2.13 | Nanoelectronics — This is a science that studies and produces circuits that are made using technologies and materials other than silicon and that work on a substantially different set of principles (6). |
| --- | --- |

2.13

Nanoelectronics — This is a science that studies and produces circuits that are made using technologies and materials other than silicon and that work on a substantially different set of principles (6).

| 2.13.1 | Nanoelectronics is set to become a cornerstone of nanotechnology, just as electronics today permeates all scientific sectors and industrial processes (7). |
| --- | --- |

2.13.1

Nanoelectronics is set to become a cornerstone of nanotechnology, just as electronics today permeates all scientific sectors and industrial processes (7).

| 2.13.2 | Development in the field of electric and electronic components has been very rapid. In the space of a few decades, valves have given way to semiconductors, chips, microchips and now nanochips, assembled using elements each made of a few 100 atoms. A nanochip can hold as much information as 25 volumes of the Encyclopaedia Britannica (8). |
| --- | --- |

2.13.2

Development in the field of electric and electronic components has been very rapid. In the space of a few decades, valves have given way to semiconductors, chips, microchips and now nanochips, assembled using elements each made of a few 100 atoms. A nanochip can hold as much information as 25 volumes of the Encyclopaedia Britannica (8).

| 2.13.3 | Scientists and electronic component producers quickly realised that the smaller the chip, the faster the flow of information (9). Nanoelectronics, therefore, enables information to be managed much more rapidly and contained in extremely small spaces. |
| --- | --- |

2.13.3

Scientists and electronic component producers quickly realised that the smaller the chip, the faster the flow of information (9). Nanoelectronics, therefore, enables information to be managed much more rapidly and contained in extremely small spaces.

| 2.14 | Scanning tunnelling microscope — This instrument, which won its inventors the Nobel Prize, has also been defined as the ‘lens of the 21st century’. It is used to ‘see’ material on an atomic scale. To work, the tip of the microscope moves in parallel over a surface. A tunnel effect causes the surface electrons (not the atoms) to move from the surface to the tip. This creates a current, which intensifies as the distance between the surface and the tip decreases. This current is converted by means of an altitude calculation, and gives the nanometric scale topography of the surface of a material. |
| --- | --- |

2.14

Scanning tunnelling microscope — This instrument, which won its inventors the Nobel Prize, has also been defined as the ‘lens of the 21st century’. It is used to ‘see’ material on an atomic scale. To work, the tip of the microscope moves in parallel over a surface. A tunnel effect causes the surface electrons (not the atoms) to move from the surface to the tip. This creates a current, which intensifies as the distance between the surface and the tip decreases. This current is converted by means of an altitude calculation, and gives the nanometric scale topography of the surface of a material.

| 2.14.1 | Tunnel effect — In traditional mechanics, a particle with a certain amount of energy cannot get out of a hole unless it has enough energy to jump out. In quantum mechanics however, owing to the uncertainty principle, the situation is very different. As the particle is confined to the hole, the degree of uncertainty as to its position is small, and as a result, uncertainty as to its speed is great. Therefore, the particle has a certain probability of having sufficient energy to escape from the hole, despite the fact that its average energy would not be sufficient (10). |
| --- | --- |

2.14.1

Tunnel effect — In traditional mechanics, a particle with a certain amount of energy cannot get out of a hole unless it has enough energy to jump out. In quantum mechanics however, owing to the uncertainty principle, the situation is very different. As the particle is confined to the hole, the degree of uncertainty as to its position is small, and as a result, uncertainty as to its speed is great. Therefore, the particle has a certain probability of having sufficient energy to escape from the hole, despite the fact that its average energy would not be sufficient (10).

| 2.15 | Carbon nanotubes — These are the product of a particular way of assembling carbon atoms. They are among the most resistant and lightest materials currently known. They are six times lighter and one hundred times stronger than steel. They have a diameter of a few nanometres and can be several microns long. (11) |
| --- | --- |

2.15

Carbon nanotubes — These are the product of a particular way of assembling carbon atoms. They are among the most resistant and lightest materials currently known. They are six times lighter and one hundred times stronger than steel. They have a diameter of a few nanometres and can be several microns long. (11)

| 2.16 | Self-assembly of macromolecules — This is the procedure used in laboratories to imitate nature: ‘every living thing is self-assembled’. The self-assembly procedure creates interfaces between electronic circuits and biological tissues and makes a connection between informatics and biology. The goal, which scientists believe is not so far off, is to give hearing to the deaf and sight to the blind (12). |
| --- | --- |

2.16

Self-assembly of macromolecules — This is the procedure used in laboratories to imitate nature: ‘every living thing is self-assembled’. The self-assembly procedure creates interfaces between electronic circuits and biological tissues and makes a connection between informatics and biology. The goal, which scientists believe is not so far off, is to give hearing to the deaf and sight to the blind (12).

| 2.17 | Biomimetics
   (13)
  — This is the science that studies the laws underpinning molecular structures existing in nature. Knowledge of these laws could enable artificial nanomotors to be created, based on the same principles as those existing in nature (14). |
| --- | --- |

2.17

Biomimetics
   (13)
  — This is the science that studies the laws underpinning molecular structures existing in nature. Knowledge of these laws could enable artificial nanomotors to be created, based on the same principles as those existing in nature (14).

3.   Introduction

| 3.1 | The EESC appreciates the clarity with which the nanotechnology communication has been drafted and shares the Commission's desire to waste no time in making a valid contribution to the debate. It also welcomes the many texts that have been published, including the CD ROMs, aimed at both experts and young people. |
| --- | --- |

3.1

The EESC appreciates the clarity with which the nanotechnology communication has been drafted and shares the Commission's desire to waste no time in making a valid contribution to the debate. It also welcomes the many texts that have been published, including the CD ROMs, aimed at both experts and young people.

| 3.1.1 | The educational CD ROMs in particular are extremely useful cultural vehicles for disseminating the necessary information on nanotechnology to a vast, sometimes uninformed, often young public. |
| --- | --- |

3.1.1

The educational CD ROMs in particular are extremely useful cultural vehicles for disseminating the necessary information on nanotechnology to a vast, sometimes uninformed, often young public.

| 3.2 | The EESC takes the view that information on this subject, which may spawn new and fruitful discoveries in many areas of everyday life, should be disseminated using the most universally accessible vocabulary. Furthermore, research on new products must be geared to consumers' needs and demands, never losing sight of sustainable development. |
| --- | --- |

3.2

The EESC takes the view that information on this subject, which may spawn new and fruitful discoveries in many areas of everyday life, should be disseminated using the most universally accessible vocabulary. Furthermore, research on new products must be geared to consumers' needs and demands, never losing sight of sustainable development.

| 3.2.1 | Journalists and mass media operators, particularly from the specialised press, have a special role to play, as they are the first to spread news of success stories as researchers challenge science to obtain real results. |
| --- | --- |

3.2.1

Journalists and mass media operators, particularly from the specialised press, have a special role to play, as they are the first to spread news of success stories as researchers challenge science to obtain real results.

| 3.2.2 | Current progress indicators for nanotechnology focus on four main strands: 1) publications (15); 2) patents; 3) new business start-ups; 4) turnover. The EU is in the lead on publications, with a percentage of 33 %, followed by the USA with 28 %. There are no precise figures for China, but publications are seemingly on the increase there. The USA is in first place on patents, with 42 %, followed by the EU with 36 %. As far as company start-ups are concerned, of every 1,000 genuine nanotech firms, 600 start life in the USA and 250 in the Euro- pean Union. Taken as a whole, data on turnover suggest an increase from the current EUR 50 billion to approximately EUR 350 billion in 2010, reaching EUR 1,000 billion in 2015 (16). |
| --- | --- |

3.2.2

Current progress indicators for nanotechnology focus on four main strands: 1) publications (15); 2) patents; 3) new business start-ups; 4) turnover. The EU is in the lead on publications, with a percentage of 33 %, followed by the USA with 28 %. There are no precise figures for China, but publications are seemingly on the increase there. The USA is in first place on patents, with 42 %, followed by the EU with 36 %. As far as company start-ups are concerned, of every 1,000 genuine nanotech firms, 600 start life in the USA and 250 in the Euro- pean Union. Taken as a whole, data on turnover suggest an increase from the current EUR 50 billion to approximately EUR 350 billion in 2010, reaching EUR 1,000 billion in 2015 (16).

| 3.3 | Not only do nanotechnology and nanoscience constitute a new approach to materials science and engineering, they are, above all, among the most promising and important multidisciplinary tools for coming up with production systems, highly innovative inventions and far-reaching applications, for the various sectors of society. |
| --- | --- |

3.3

Not only do nanotechnology and nanoscience constitute a new approach to materials science and engineering, they are, above all, among the most promising and important multidisciplinary tools for coming up with production systems, highly innovative inventions and far-reaching applications, for the various sectors of society.

| 3.3.1 | On nanometric scale, conventional materials acquire different properties to their macroscopic counterparts, thus enabling the creation of systems that work and perform better. The radical novelty of nanotechnology lies in the fact that by reducing the scale of a material, its physical and chemical properties are changed. This makes it possible to achieve production strategies similar to the approach used by nature to make complex systems, with a rational use of energy, minimising the raw material needed and waste products
   (17). |
| --- | --- |

3.3.1

On nanometric scale, conventional materials acquire different properties to their macroscopic counterparts, thus enabling the creation of systems that work and perform better. The radical novelty of nanotechnology lies in the fact that by reducing the scale of a material, its physical and chemical properties are changed. This makes it possible to achieve production strategies similar to the approach used by nature to make complex systems, with a rational use of energy, minimising the raw material needed and waste products
   (17).

| 3.3.2 | The production processes associated with nanotechnology should therefore be marked by a new approach, taking full account of these new properties, in order to ensure that the European economic and social system draws the maximum benefit. |
| --- | --- |

3.3.2

The production processes associated with nanotechnology should therefore be marked by a new approach, taking full account of these new properties, in order to ensure that the European economic and social system draws the maximum benefit.

| 3.4 | The nanotechnological approach pervades every production sector. The sectors currently applying nanotechnology to certain productive processes are: electronics (18); chemistry (19); pharmaceuticals (20); mechanics (21); and the automotive, aerospace (22), manufacturing (23) and cosmetics sectors. |
| --- | --- |

3.4

The nanotechnological approach pervades every production sector. The sectors currently applying nanotechnology to certain productive processes are: electronics (18); chemistry (19); pharmaceuticals (20); mechanics (21); and the automotive, aerospace (22), manufacturing (23) and cosmetics sectors.

| 3.5 | Nanotechnologies could go a long way towards helping the EU to achieve the objectives set by the Lisbon European Council, by developing the knowledge-based society, and to become the most dynamic and competitive force in the world, while protecting the environment, promoting cohesion, and generating new businesses, more skilled jobs and new professional and training profiles. |
| --- | --- |

3.5

Nanotechnologies could go a long way towards helping the EU to achieve the objectives set by the Lisbon European Council, by developing the knowledge-based society, and to become the most dynamic and competitive force in the world, while protecting the environment, promoting cohesion, and generating new businesses, more skilled jobs and new professional and training profiles.

| 3.6 | According to the Commission, Europe could enjoy pole position in the field of nanotechnologies, but it must first succeed in clinching a real competitive advantage for European industry and society and secure sufficient returns on the necessarily high investment in research. |
| --- | --- |

3.6

According to the Commission, Europe could enjoy pole position in the field of nanotechnologies, but it must first succeed in clinching a real competitive advantage for European industry and society and secure sufficient returns on the necessarily high investment in research.

| 3.6.1 | The real issue is the need to understand the strategic importance of these technologies, which concern broad sectors of the economy and society. Properly joined-up policy is also essential in the field of nanotechnologies and nanosciences and must be given substantial resources and be certain of the support of the private, industrial, financial and training sectors. |
| --- | --- |

3.6.1

The real issue is the need to understand the strategic importance of these technologies, which concern broad sectors of the economy and society. Properly joined-up policy is also essential in the field of nanotechnologies and nanosciences and must be given substantial resources and be certain of the support of the private, industrial, financial and training sectors.

4.   Gist of the Commission proposal

| 4.1 | The Commission's communication seeks to launch an institutional-level debate on a coherent initiative to:






  — | increase investment and coordination of R&D to reinforce the industrial exploitation of nanotechnologies whilst maintaining scientific excellence and competition; |
| --- | --- | --- |

4.1

The Commission's communication seeks to launch an institutional-level debate on a coherent initiative to:

—

increase investment and coordination of R&D to reinforce the industrial exploitation of nanotechnologies whilst maintaining scientific excellence and competition;

| — | develop world-class competitive R&D facilities (‘poles of excellence’) that take into account the needs of both industry and research organisations; |
| --- | --- |

—

develop world-class competitive R&D facilities (‘poles of excellence’) that take into account the needs of both industry and research organisations;

| — | promote the interdisciplinary education and training of research personnel, together with a stronger entrepreneurial mindset; |
| --- | --- |

—

promote the interdisciplinary education and training of research personnel, together with a stronger entrepreneurial mindset;

| — | ensure favourable conditions for technology transfer and innovation to ensure that European R&D excellence is translated into wealth-generating products and processes; |
| --- | --- |

—

ensure favourable conditions for technology transfer and innovation to ensure that European R&D excellence is translated into wealth-generating products and processes;

| — | integrate societal considerations into the R&D process at an early stage; |
| --- | --- |

—

integrate societal considerations into the R&D process at an early stage;

| — | address any potential public health, safety, environmental and consumer risks upfront by generating the data needed for risk assessment, integrating risk assessment into every step of the life cycle of nanotechnology-based products, and adapting existing methodologies and, as necessary, developing novel ones; |
| --- | --- |

—

address any potential public health, safety, environmental and consumer risks upfront by generating the data needed for risk assessment, integrating risk assessment into every step of the life cycle of nanotechnology-based products, and adapting existing methodologies and, as necessary, developing novel ones;

| — | complement the above actions with appropriate cooperation and initiatives at international level. |
| --- | --- |

—

complement the above actions with appropriate cooperation and initiatives at international level.

| 4.2 | More specifically, the Commission proposes the following:






  — | the establishment of a European Research Area for nanotechnology; |
| --- | --- | --- |

4.2

More specifically, the Commission proposes the following:

—

the establishment of a European Research Area for nanotechnology;

| — | the development of basic and applied research facilities and high-quality university facilities open to companies, SMEs in particular; |
| --- | --- |

—

the development of basic and applied research facilities and high-quality university facilities open to companies, SMEs in particular;

| — | heavy investment in human resources, at EU/Member State level; |
| --- | --- |

—

heavy investment in human resources, at EU/Member State level;

| — | support for industrial innovation, patenting, metrology and standardisation systems, regulation, and protection of safety, public health, the environment, consumers and investors to secure responsible development; |
| --- | --- |

—

support for industrial innovation, patenting, metrology and standardisation systems, regulation, and protection of safety, public health, the environment, consumers and investors to secure responsible development;

| — | the consolidation of a science/society dialogue, based on trust and an ongoing open dialogue; |
| --- | --- |

—

the consolidation of a science/society dialogue, based on trust and an ongoing open dialogue;

| — | maintaining and stepping up strong and structured international cooperation, with common nomenclatures and codes of conduct, and a concerted effort to avoid exclusion from nanotech development; |
| --- | --- |

—

maintaining and stepping up strong and structured international cooperation, with common nomenclatures and codes of conduct, and a concerted effort to avoid exclusion from nanotech development;

| — | Community-level coordination of strategy and joint policy measures, backed up by adequate financial and human resources. |
| --- | --- |

—

Community-level coordination of strategy and joint policy measures, backed up by adequate financial and human resources.

5.   Main developments in the USA, Asia and Oceania

| 5.1 | In the USA, the National Nanotechnology Initiative (NNI), a basic and applied research programme launched in 2001, coordinates the activity of a number of American agencies working in the field. It received funding of over a billion dollars for the 2005 financial year, doubling its initial 2001 budget. The main targets for this funding are: basic and applied research, the development of centres of excellence and facilities, and the evaluation and verification of the implications for society, particularly from an ethical, legal and public health and safety point of view, in addition to the development of human resources. |
| --- | --- |

5.1

In the USA, the National Nanotechnology Initiative (NNI), a basic and applied research programme launched in 2001, coordinates the activity of a number of American agencies working in the field. It received funding of over a billion dollars for the 2005 financial year, doubling its initial 2001 budget. The main targets for this funding are: basic and applied research, the development of centres of excellence and facilities, and the evaluation and verification of the implications for society, particularly from an ethical, legal and public health and safety point of view, in addition to the development of human resources.

| 5.1.1 | The NNI directly finances 10 federal agencies and coordinates various others. The National Science Foundation (NSF), the Office of Basic Energy Sciences of the Department of Energy (DOE), the Department of Defense (DoD), and the National Institutes of Health (NIH) have all seen significant increases in their budgets, aimed specifically at nanotechnology. The DOE in particular has invested massive sums and has managed to set up five major facilities, i.e. nanoscale science research centres, open to researchers from the entire scientific community. The DoD's nanotechnology programme meanwhile has grown over the years as a result for instance of the services required by the US armed forces. |
| --- | --- |

5.1.1

The NNI directly finances 10 federal agencies and coordinates various others. The National Science Foundation (NSF), the Office of Basic Energy Sciences of the Department of Energy (DOE), the Department of Defense (DoD), and the National Institutes of Health (NIH) have all seen significant increases in their budgets, aimed specifically at nanotechnology. The DOE in particular has invested massive sums and has managed to set up five major facilities, i.e. nanoscale science research centres, open to researchers from the entire scientific community. The DoD's nanotechnology programme meanwhile has grown over the years as a result for instance of the services required by the US armed forces.

| 5.1.2 | These major developments were made possible by the passing in December 2003 of basic legislation on American nanotechnology policy with the 21st Century Nanotechnology Research and Development Act. Among other things, this law established a National Nanotechnology Coordination Office, with the following tasks:






  — | to redefine evaluation objectives, priorities and parameters; |
| --- | --- | --- |

5.1.2

These major developments were made possible by the passing in December 2003 of basic legislation on American nanotechnology policy with the 21st Century Nanotechnology Research and Development Act. Among other things, this law established a National Nanotechnology Coordination Office, with the following tasks:

—

to redefine evaluation objectives, priorities and parameters;

| — | to coordinate the agencies and other federal activities; |
| --- | --- |

—

to coordinate the agencies and other federal activities;

| — | to invest in R&D programmes in nanotechnology and related sciences; |
| --- | --- |

—

to invest in R&D programmes in nanotechnology and related sciences;

| — | to set up, on a competitive basis, interdisciplinary nanotechnology research centres, in various geographical locations, without ruling out State and industrial sector participation; |
| --- | --- |

—

to set up, on a competitive basis, interdisciplinary nanotechnology research centres, in various geographical locations, without ruling out State and industrial sector participation;

| — | to step up the development of applications in the private sector, including company start-up activities; |
| --- | --- |

—

to step up the development of applications in the private sector, including company start-up activities;

| — | to provide for education and certified training, generating and consolidating a technological and engineering culture in the nanosciences; |
| --- | --- |

—

to provide for education and certified training, generating and consolidating a technological and engineering culture in the nanosciences;

| — | to ensure that the ethical, legal and environmental aspects are respected in nanotechnology development and to organise consensus conferences and debates with the public and civil society; |
| --- | --- |

—

to ensure that the ethical, legal and environmental aspects are respected in nanotechnology development and to organise consensus conferences and debates with the public and civil society;

| — | to promote the pooling of information between academia and industry, the State, central government and regional governments; |
| --- | --- |

—

to promote the pooling of information between academia and industry, the State, central government and regional governments;

| — | to develop a plan to use the federal programmes, such as the Small Business Innovation Research Program and the Small Business Technology Transfer Research Program, to sustain an all-pervasive spread of nanotechnological development throughout the business fabric, however small the companies involved. |
| --- | --- |

—

to develop a plan to use the federal programmes, such as the Small Business Innovation Research Program and the Small Business Technology Transfer Research Program, to sustain an all-pervasive spread of nanotechnological development throughout the business fabric, however small the companies involved.

| 5.1.3 | To reinforce the above legislation, the National Institute of Standards and Technology (NIST) has launched a specific programme to develop manufacturing in the nanotechnology sector, centring on: metrology, reliability and qualitative standards, process control, and manufacturing best practice. The Manufacturing Extension Partnership will also enable the results of the programme to be disseminated to SMEs. |
| --- | --- |

5.1.3

To reinforce the above legislation, the National Institute of Standards and Technology (NIST) has launched a specific programme to develop manufacturing in the nanotechnology sector, centring on: metrology, reliability and qualitative standards, process control, and manufacturing best practice. The Manufacturing Extension Partnership will also enable the results of the programme to be disseminated to SMEs.

| 5.1.4 | The above law also provides for the establishment of an information clearing-house, with the task of:






  — | managing the commercialisation of nanotechnology and the transfer of technologies and new concepts into commercial and military products; |
| --- | --- | --- |

5.1.4

The above law also provides for the establishment of an information clearing-house, with the task of:

—

managing the commercialisation of nanotechnology and the transfer of technologies and new concepts into commercial and military products;

| — | demonstrating the best practice of universities and government and private sector laboratories, with a view to transfer to commercial use. |
| --- | --- |

—

demonstrating the best practice of universities and government and private sector laboratories, with a view to transfer to commercial use.

| 5.1.5 | There are also plans for an American Nanotechnology Preparedness Center, with the task of conducting, coordinating, collecting, and disseminating studies on the ethical, legal, educational, environmental and workforce implications of nanotechnology and anticipating any problems so as to prevent potential negative fall-out. |
| --- | --- |

5.1.5

There are also plans for an American Nanotechnology Preparedness Center, with the task of conducting, coordinating, collecting, and disseminating studies on the ethical, legal, educational, environmental and workforce implications of nanotechnology and anticipating any problems so as to prevent potential negative fall-out.

| 5.1.6 | The organisational framework set up by law is made complete by the establishment of a Center for Nanomaterials Manufacturing, to encourage, conduct and coordinate research into new manufacturing technologies and to collect and disseminate the results, in order to facilitate their transfer to United States industries. |
| --- | --- |

5.1.6

The organisational framework set up by law is made complete by the establishment of a Center for Nanomaterials Manufacturing, to encourage, conduct and coordinate research into new manufacturing technologies and to collect and disseminate the results, in order to facilitate their transfer to United States industries.

| 5.1.7 | The law also provides for the relevant 2005-2008 financial appropriations for the main agencies and federal departments, such as NSF, DOE, NASA and NIST (24). |
| --- | --- |

5.1.7

The law also provides for the relevant 2005-2008 financial appropriations for the main agencies and federal departments, such as NSF, DOE, NASA and NIST (24).

| 5.2 | After the announcement of the American NNI, there were significant changes in scientific research and technological development policy in Asia and the Pacific, with decisions designed to enable the region to take up a strong position in nanotechnology development. Nanotechnology became top priority in a number of Asian and Pacific countries, with overall spending in 2003 of over USD 1.4 billion. Of that figure, 70 % refers to Japan, but major investments were also made in China, South Korea, Taiwan, Hong Kong, India, Malaysia, Thailand, Vietnam and Singapore, not to mention Australia and New Zealand. |
| --- | --- |

5.2

After the announcement of the American NNI, there were significant changes in scientific research and technological development policy in Asia and the Pacific, with decisions designed to enable the region to take up a strong position in nanotechnology development. Nanotechnology became top priority in a number of Asian and Pacific countries, with overall spending in 2003 of over USD 1.4 billion. Of that figure, 70 % refers to Japan, but major investments were also made in China, South Korea, Taiwan, Hong Kong, India, Malaysia, Thailand, Vietnam and Singapore, not to mention Australia and New Zealand.

| 5.3 | Japan has launched a number of five- to ten-year programmes in the field of nanoscience and nanotechnology since the mid-1980s. In 2003, the budget for the R&D programme for nanotechnology and materials stood at USD 900 million, but nanotechnology-related themes are also present in life science, environment and information society programmes. This brings the total budget earmarked for the sector in 2003 to nearly USD 1.5 billion, with an increase of approximately 20 % in 2004. The Japanese private sector is also very much present, represented by two major trading houses, Mitsui & Co and the Mitsubishi Corporation. Most of the major Japanese companies, such as NEC, Hitachi, Fujitsu, NTT, Toshiba, Sony, Sumitomo Electric, Fuji Xerox, etc. have invested heavily in nanotechnology. |
| --- | --- |

5.3

Japan has launched a number of five- to ten-year programmes in the field of nanoscience and nanotechnology since the mid-1980s. In 2003, the budget for the R&D programme for nanotechnology and materials stood at USD 900 million, but nanotechnology-related themes are also present in life science, environment and information society programmes. This brings the total budget earmarked for the sector in 2003 to nearly USD 1.5 billion, with an increase of approximately 20 % in 2004. The Japanese private sector is also very much present, represented by two major trading houses, Mitsui & Co and the Mitsubishi Corporation. Most of the major Japanese companies, such as NEC, Hitachi, Fujitsu, NTT, Toshiba, Sony, Sumitomo Electric, Fuji Xerox, etc. have invested heavily in nanotechnology.

| 5.3.1 | Under its current five-year plan for 2001 to 2005, China has set aside a budget of approximately USD 300 million for nanotechnology. According to the Chinese minister for science and technology, about 50 universities, 20 institutes and over 100 companies are active in the sector. To secure an adequate platform for commercialising nanotechnology, an engineering centre and a nanotech industry base have been set up between Beijing and Shanghai. Furthermore, the Chinese government has set aside USD 33 million for the establishment of a national research centre on nanoscience and technology, in order to better coordinate scientific and research efforts in the sector. |
| --- | --- |

5.3.1

Under its current five-year plan for 2001 to 2005, China has set aside a budget of approximately USD 300 million for nanotechnology. According to the Chinese minister for science and technology, about 50 universities, 20 institutes and over 100 companies are active in the sector. To secure an adequate platform for commercialising nanotechnology, an engineering centre and a nanotech industry base have been set up between Beijing and Shanghai. Furthermore, the Chinese government has set aside USD 33 million for the establishment of a national research centre on nanoscience and technology, in order to better coordinate scientific and research efforts in the sector.

| 5.3.2 | In 2002, the Chinese Academy of Sciences (CAS) founded Casnec (the CAS Nanotechnology Engineering Centre), with an overall budget of USD 6 million, as a platform to accelerate the commercialisation of nanoscience and nanotechnology. In Hong Kong, the two main sources of nanotech financing are the Grant Research Council and the Innovation and Technology Fund, spending an overall budget of USD 20.6 million in the period from 1998 to 2002. For 2003 and 2004, the Hong Kong University of Science and Technology and the Hong Kong Polytechnic University have granted their own nanotech centres nearly USD 9 million. |
| --- | --- |

5.3.2

In 2002, the Chinese Academy of Sciences (CAS) founded Casnec (the CAS Nanotechnology Engineering Centre), with an overall budget of USD 6 million, as a platform to accelerate the commercialisation of nanoscience and nanotechnology. In Hong Kong, the two main sources of nanotech financing are the Grant Research Council and the Innovation and Technology Fund, spending an overall budget of USD 20.6 million in the period from 1998 to 2002. For 2003 and 2004, the Hong Kong University of Science and Technology and the Hong Kong Polytechnic University have granted their own nanotech centres nearly USD 9 million.

| 5.3.3 | In Australia and New Zealand meanwhile, the Australia Research Council (ARC) has doubled its funding for competitive projects over the last five years, and has plans to set up eight centres of excellence in various locations, with a view to more in-depth research into themes such as quantum computer technology, quantum atom optics, photovoltaics, advanced photonics and advanced optics systems. |
| --- | --- |

5.3.3

In Australia and New Zealand meanwhile, the Australia Research Council (ARC) has doubled its funding for competitive projects over the last five years, and has plans to set up eight centres of excellence in various locations, with a view to more in-depth research into themes such as quantum computer technology, quantum atom optics, photovoltaics, advanced photonics and advanced optics systems.

| 5.3.4 | In New Zealand, the MacDiarmid Institute for Advanced Materials and Nanotechnology is the national coordinator for advanced research and training in materials science and nanotechnology, working on the basis of close cooperation between universities and various partners, including Industry Research Ltd (IRL) and the Institute of Geological and Nuclear Sciences (IGNS). |
| --- | --- |

5.3.4

In New Zealand, the MacDiarmid Institute for Advanced Materials and Nanotechnology is the national coordinator for advanced research and training in materials science and nanotechnology, working on the basis of close cooperation between universities and various partners, including Industry Research Ltd (IRL) and the Institute of Geological and Nuclear Sciences (IGNS).

| 5.3.5 | The MacDiarmid Institute is focusing on the following sectors in particular: nanoengineered materials, optoelectronics (25), superconductors, carbon nanotubes, light materials and complex fluids, sensorial and image systems, and lastly, new energy-storing materials. |
| --- | --- |

5.3.5

The MacDiarmid Institute is focusing on the following sectors in particular: nanoengineered materials, optoelectronics (25), superconductors, carbon nanotubes, light materials and complex fluids, sensorial and image systems, and lastly, new energy-storing materials.

6.   General comments

| 6.1 | The explosion of nanotechnologies around the world, in America, Asia and Oceania alike, is proof that it is high time that Europe took systematic and coordinated action to secure joint Community and national financing for basic and applied research and its speedy transfer to new products, processes and services. |
| --- | --- |

6.1

The explosion of nanotechnologies around the world, in America, Asia and Oceania alike, is proof that it is high time that Europe took systematic and coordinated action to secure joint Community and national financing for basic and applied research and its speedy transfer to new products, processes and services.

| 6.2 | A joint European strategy should be based on:






  — | boosting joint efforts in the field of scientific and technological research, demonstration and training, as part of the establishment of the European Innovation and Research Area; |
| --- | --- | --- |

6.2

A joint European strategy should be based on:

—

boosting joint efforts in the field of scientific and technological research, demonstration and training, as part of the establishment of the European Innovation and Research Area;

| — | maximising interplay between industry and academia (research, education and advanced training); |
| --- | --- |

—

maximising interplay between industry and academia (research, education and advanced training);

| — | speeding up the development of industrial and multi-sectoral applications, and of the economic, social, legal, regulatory, fiscal and financial context to accommodate the work of innovative new businesses and professional profiles; |
| --- | --- |

—

speeding up the development of industrial and multi-sectoral applications, and of the economic, social, legal, regulatory, fiscal and financial context to accommodate the work of innovative new businesses and professional profiles;

| — | safeguarding ethical, environmental, health and safety interests throughout the lifecycle of scientific applications; promoting the relationship with civil society and regulation of metrological and technical standardisation matters; |
| --- | --- |

—

safeguarding ethical, environmental, health and safety interests throughout the lifecycle of scientific applications; promoting the relationship with civil society and regulation of metrological and technical standardisation matters;

| — | stepping up the European coordination of policies, measures, structures and networks, so that they are able to maintain and improve on current competitive levels of scientific, technological and applications development; |
| --- | --- |

—

stepping up the European coordination of policies, measures, structures and networks, so that they are able to maintain and improve on current competitive levels of scientific, technological and applications development;

| — | immediately involving the new Member States in the process of studying and applying nanoscience, by means of targeted measures, using the financial appropriations provided by the ERDF and the ESF (26) and joint programmes, managed with existing accredited EU research centres (27). |
| --- | --- |

—

immediately involving the new Member States in the process of studying and applying nanoscience, by means of targeted measures, using the financial appropriations provided by the ERDF and the ESF (26) and joint programmes, managed with existing accredited EU research centres (27).

| 6.3 | The achievement of a large critical mass and high value added should pave the way for the establishment and development of a joint strategy. Manufacturing and service companies, small ones in particular, should be able to use the results of such a strategy for their innovative and competitive development while also contributing by spawning trans-European networks of excellence together with universities, public and private research centres and financial bodies. |
| --- | --- |

6.3

The achievement of a large critical mass and high value added should pave the way for the establishment and development of a joint strategy. Manufacturing and service companies, small ones in particular, should be able to use the results of such a strategy for their innovative and competitive development while also contributing by spawning trans-European networks of excellence together with universities, public and private research centres and financial bodies.

| 6.4 | The development of this strategy must be firmly anchored in that of society. This means that the strategy must be firmly warranted by the major contribution it can make not only to the competitiveness of the European knowledge-based economy but also and above all to the health, environment, safety and quality of life of the European public. This also means working on the demand side of nanotechnologies, to solve the problems faced by the public, businesses and organisations, as these are the areas most in need of practical responses. |
| --- | --- |

6.4

The development of this strategy must be firmly anchored in that of society. This means that the strategy must be firmly warranted by the major contribution it can make not only to the competitiveness of the European knowledge-based economy but also and above all to the health, environment, safety and quality of life of the European public. This also means working on the demand side of nanotechnologies, to solve the problems faced by the public, businesses and organisations, as these are the areas most in need of practical responses.

| 6.5 | The commitment of society as a whole must be secured. This will require transparency and safety in the nanotechnological process, from basic research all the way to the application of results and their demonstration and development in innovative market products and services. It will also require agreements that are clear and comprehensible for the general public, providing an assurance that the entire life cycle of the products, including disposal, is subject to checks and constant risk assessment. |
| --- | --- |

6.5

The commitment of society as a whole must be secured. This will require transparency and safety in the nanotechnological process, from basic research all the way to the application of results and their demonstration and development in innovative market products and services. It will also require agreements that are clear and comprehensible for the general public, providing an assurance that the entire life cycle of the products, including disposal, is subject to checks and constant risk assessment.

| 6.6 | A positive relationship must be forged between science and society in this sector in order to avoid the emergence of barriers to or stagnation in nanotechnology development, in contrast to what happened during the growth of other new technologies recently. |
| --- | --- |

6.6

A positive relationship must be forged between science and society in this sector in order to avoid the emergence of barriers to or stagnation in nanotechnology development, in contrast to what happened during the growth of other new technologies recently.

| 6.7 | The creation of European facilities and of new multidisciplinary scientific and academic profiles is also essential. This too will mean winning the full trust of the tax-payer and of policy-makers, who need to be fully aware of the positive potential of the nanotechnological revolution. |
| --- | --- |

6.7

The creation of European facilities and of new multidisciplinary scientific and academic profiles is also essential. This too will mean winning the full trust of the tax-payer and of policy-makers, who need to be fully aware of the positive potential of the nanotechnological revolution.

| 6.8 | The development of nanotechnologies is therefore not only a major challenge intellectually and scientifically, but also and above all a challenge for society as a whole. Phenomena for which the scientific principles are known at macro level are being altered, increased, reduced or eliminated at nano level, with consequences that may have an — at times radical — impact on applications. New manufacturing techniques, new approaches, different types of service and new professions to manage them are developing. |
| --- | --- |

6.8

The development of nanotechnologies is therefore not only a major challenge intellectually and scientifically, but also and above all a challenge for society as a whole. Phenomena for which the scientific principles are known at macro level are being altered, increased, reduced or eliminated at nano level, with consequences that may have an — at times radical — impact on applications. New manufacturing techniques, new approaches, different types of service and new professions to manage them are developing.

| 6.8.1 | This rapid transformation demands a strategy for the creation and/or reskilling of senior managers to manage the transition, set up a new form of governance for the process, generate new professional profiles and attract the best brains, at world level. |
| --- | --- |

6.8.1

This rapid transformation demands a strategy for the creation and/or reskilling of senior managers to manage the transition, set up a new form of governance for the process, generate new professional profiles and attract the best brains, at world level.

| 6.9 | The Community's financial perspectives for 2007-2013, as recently proposed by the Commission, should be assessed and remoulded in the light of the challenges posed by this new technological revolution. Suffice it to say that the American Congress has approved a nanotechnology budget of over EUR 700 million for the 2004 fiscal year alone. According to the estimates of the US National Science Foundation (NSF), civil investment in the sector by various governmental organisations around the world in 2003 exceeded EUR 2,300 million, broken down as follows:






  — | approximately EUR 700 million in the USA (added to which a further EUR 250 million managed by the Defense Department, DoD); |
| --- | --- | --- |

6.9

The Community's financial perspectives for 2007-2013, as recently proposed by the Commission, should be assessed and remoulded in the light of the challenges posed by this new technological revolution. Suffice it to say that the American Congress has approved a nanotechnology budget of over EUR 700 million for the 2004 fiscal year alone. According to the estimates of the US National Science Foundation (NSF), civil investment in the sector by various governmental organisations around the world in 2003 exceeded EUR 2,300 million, broken down as follows:

—

approximately EUR 700 million in the USA (added to which a further EUR 250 million managed by the Defense Department, DoD);

| — | EUR 720 million in Japan; |
| --- | --- |

—

EUR 720 million in Japan;

| — | less than EUR 600 million in Europe, including Switzerland; |
| --- | --- |

—

less than EUR 600 million in Europe, including Switzerland;

| — | approximately EUR 720 million in the rest of the world. |
| --- | --- |

—

approximately EUR 720 million in the rest of the world.

| 6.10 | As far as the future is concerned, the growth of world industrial output in the sector has been estimated at around EUR 1,000 billion over 10 to 15 years, calling for over two million skilled people to join the sector's workforce. |
| --- | --- |

6.10

As far as the future is concerned, the growth of world industrial output in the sector has been estimated at around EUR 1,000 billion over 10 to 15 years, calling for over two million skilled people to join the sector's workforce.

| 6.10.1 | This confirms the principle that nanotechnology = progress for the employment strategy (28). The development of the knowledge-based society will be measured against its capacity to tap sensitively and intelligently into the new sources of employment and progress. |
| --- | --- |

6.10.1

This confirms the principle that nanotechnology = progress for the employment strategy (28). The development of the knowledge-based society will be measured against its capacity to tap sensitively and intelligently into the new sources of employment and progress.

| 6.11 | For the EU's strategy in this area to be certain of success, therefore, it is essential to build up financial and human resources and coordination at Community level. |
| --- | --- |

6.11

For the EU's strategy in this area to be certain of success, therefore, it is essential to build up financial and human resources and coordination at Community level.

| 6.12 | In both Asia and the USA, a joined-up approach to the various policies directly or indirectly concerning the sector's development has proved indispensable, in order to be proactive vis à vis the need for new entrepreneurship, new training, and a new regulatory and technical-legal framework. |
| --- | --- |

6.12

In both Asia and the USA, a joined-up approach to the various policies directly or indirectly concerning the sector's development has proved indispensable, in order to be proactive vis à vis the need for new entrepreneurship, new training, and a new regulatory and technical-legal framework.

| 6.13 | As has been shown by the many studies already carried out (29), nanotechnology enables the production, manipulation and positioning of objects, while also securing a proactive technological approach on a large scale at competitive processing and production costs. |
| --- | --- |

6.13

As has been shown by the many studies already carried out (29), nanotechnology enables the production, manipulation and positioning of objects, while also securing a proactive technological approach on a large scale at competitive processing and production costs.

| 6.14 | In the long term, science will be able to provide instruments to assemble nano-objects, so that they can form complex systems able to carry out functions that the individual parts cannot. The time-to-market of this ultimate goal is as yet difficult to estimate, but it must be pursued with the appropriate support instruments. |
| --- | --- |

6.14

In the long term, science will be able to provide instruments to assemble nano-objects, so that they can form complex systems able to carry out functions that the individual parts cannot. The time-to-market of this ultimate goal is as yet difficult to estimate, but it must be pursued with the appropriate support instruments.

| 6.15 | Various ‘intelligent’ materials (30) have been made and are already available to consumers:






  — | highly durable materials for the automotive and aerospace sectors; |
| --- | --- | --- |

6.15

Various ‘intelligent’ materials (30) have been made and are already available to consumers:

—

highly durable materials for the automotive and aerospace sectors;

| — | high-performance lubricants; |
| --- | --- |

—

high-performance lubricants;

| — | friction-reducing nanoparticles; |
| --- | --- |

—

friction-reducing nanoparticles;

| — | the surface processing of mechanical parts; |
| --- | --- |

—

the surface processing of mechanical parts;

| — | extremely small Intelligent Sticks, with memory capacity of 1,000 MB (31); |
| --- | --- |

—

extremely small Intelligent Sticks, with memory capacity of 1,000 MB (31);

| — | flexible CDs that can hold over 20 hours of music; |
| --- | --- |

—

flexible CDs that can hold over 20 hours of music;

| — | self-cleaning fabric, ceramic and glass surfaces (32); |
| --- | --- |

—

self-cleaning fabric, ceramic and glass surfaces (32);

| — | glass with electrically-adjustable transparency; |
| --- | --- |

—

glass with electrically-adjustable transparency;

| — | heat-proof glass that can withstand extremely high temperatures; |
| --- | --- |

—

heat-proof glass that can withstand extremely high temperatures;

| — | scratch- and corrosion-resistant nanostructured sheet metal; |
| --- | --- |

—

scratch- and corrosion-resistant nanostructured sheet metal;

| — | diagnostic systems; |
| --- | --- |

—

diagnostic systems;

| — | special paints to protect walls and buildings; |
| --- | --- |

—

special paints to protect walls and buildings;

| — | graffiti-proof paint for walls, train carriages and other objects. |
| --- | --- |

—

graffiti-proof paint for walls, train carriages and other objects.

| 6.15.1 | Many new applications, in addition to those described above, are already in use or are at the fine-tuning stage and will very soon be part of everyday life. They point to progress or even a revolution in ‘domotics’ (33) and will contribute to improving the public's quality of life. |
| --- | --- |

6.15.1

Many new applications, in addition to those described above, are already in use or are at the fine-tuning stage and will very soon be part of everyday life. They point to progress or even a revolution in ‘domotics’ (33) and will contribute to improving the public's quality of life.

| 6.16 | Thanks to biomimetics, the study of the possibility of interfacing electronic circuits with biological tissues, in the near future it will be possible to restore hearing to hearing-impaired and sight to sight-impaired organisms. |
| --- | --- |

6.16

Thanks to biomimetics, the study of the possibility of interfacing electronic circuits with biological tissues, in the near future it will be possible to restore hearing to hearing-impaired and sight to sight-impaired organisms.

| 6.16.1 | Various types of micromotor (34) are already at the laboratory stage. They are able to reach a predetermined target, such as an infected cell, and destroy it in order to prevent it from contaminating other cells. Currently however, the action taken on unhealthy cells also affects healthy cells, often causing considerable damage to organs. |
| --- | --- |

6.16.1

Various types of micromotor (34) are already at the laboratory stage. They are able to reach a predetermined target, such as an infected cell, and destroy it in order to prevent it from contaminating other cells. Currently however, the action taken on unhealthy cells also affects healthy cells, often causing considerable damage to organs.

| 6.16.2 | Scientific applications of the technique are already able to supply a number of practical results that are directly applicable to daily life. Unfortunately, the costs are still too high however. In order for them to become affordable, awareness of these new possibilities must become common knowledge, in order to alter deep-rooted procedures and habits that more often than not obstruct and delay change. |
| --- | --- |

6.16.2

Scientific applications of the technique are already able to supply a number of practical results that are directly applicable to daily life. Unfortunately, the costs are still too high however. In order for them to become affordable, awareness of these new possibilities must become common knowledge, in order to alter deep-rooted procedures and habits that more often than not obstruct and delay change.

| 6.17 | The traditional textiles/clothing/footwear sector has been in crisis throughout the European Union not least because of competition from products from countries that do not uphold basic labour standards or take into consideration the cost of environmental protection or of health and safety in the workplace. |
| --- | --- |

6.17

The traditional textiles/clothing/footwear sector has been in crisis throughout the European Union not least because of competition from products from countries that do not uphold basic labour standards or take into consideration the cost of environmental protection or of health and safety in the workplace.

| 6.17.1 | Intelligent and/or technical fabrics, including those designed with the help of nano powders, are on the increase in many European countries and showing growth of around 30 % a year. Particularly important are fabrics designed to enhance all aspects of safety: from road safety to protection from pollution, chemical agents, allergenic products and atmospheric agents, etc. (35). |
| --- | --- |

6.17.1

Intelligent and/or technical fabrics, including those designed with the help of nano powders, are on the increase in many European countries and showing growth of around 30 % a year. Particularly important are fabrics designed to enhance all aspects of safety: from road safety to protection from pollution, chemical agents, allergenic products and atmospheric agents, etc. (35).

| 6.18 | Nanotechnology is also revolutionising medicine, especially regarding the early diagnosis and treatment of serious tumours and neurodegenerative diseases associated with old age. Specifically designed nanoparticles can be used as markers for the highly effective diagnosis of infectious agents or metabolite properties, or as vectors for drugs to be deposited in certain areas or organs affected by highly localised diseases. Systems of this kind are already being used in various experiments. |
| --- | --- |

6.18

Nanotechnology is also revolutionising medicine, especially regarding the early diagnosis and treatment of serious tumours and neurodegenerative diseases associated with old age. Specifically designed nanoparticles can be used as markers for the highly effective diagnosis of infectious agents or metabolite properties, or as vectors for drugs to be deposited in certain areas or organs affected by highly localised diseases. Systems of this kind are already being used in various experiments.

7.   Specific comments

| 7.1 | The nanotechnological approach to new materials means creating new functions by using nanoscale components. A good example is that of technologies for the production and processing of durable and efficient materials for the automotive and aeronautics sectors, areas in which Europe has the edge over its main competitors. It has been clearly demonstrated that nanostructured systems can significantly reduce friction between two connecting surfaces, and thus reduce wear and tear. |
| --- | --- |

7.1

The nanotechnological approach to new materials means creating new functions by using nanoscale components. A good example is that of technologies for the production and processing of durable and efficient materials for the automotive and aeronautics sectors, areas in which Europe has the edge over its main competitors. It has been clearly demonstrated that nanostructured systems can significantly reduce friction between two connecting surfaces, and thus reduce wear and tear.

| 7.1.1 | Just one of many examples of nanotechnology's various commercial applications is that of the development of nanostructured materials and surfaces to reduce friction and wear and tear. These systems play a key role in the development of new, highly efficient industrial processes with a low environmental impact. Approximately 25 % of the energy used in the world is lost through friction (36), and losses owing to mechanical parts becoming worn out are estimated at between 1.3 % and 1.6 % of an industrialised country's GDP. The costs associated with problems of friction, wear and tear and lubrication can be estimated at approximately EUR 350 billion a year, broken down between the following sectors: land transport (46.6 %), industrial processes (33 %), energy supply (6.8 %), aeronautics (2.8 %), domestic consumption (0.5 %), other (10.3 %) (37). |
| --- | --- |

7.1.1

Just one of many examples of nanotechnology's various commercial applications is that of the development of nanostructured materials and surfaces to reduce friction and wear and tear. These systems play a key role in the development of new, highly efficient industrial processes with a low environmental impact. Approximately 25 % of the energy used in the world is lost through friction (36), and losses owing to mechanical parts becoming worn out are estimated at between 1.3 % and 1.6 % of an industrialised country's GDP. The costs associated with problems of friction, wear and tear and lubrication can be estimated at approximately EUR 350 billion a year, broken down between the following sectors: land transport (46.6 %), industrial processes (33 %), energy supply (6.8 %), aeronautics (2.8 %), domestic consumption (0.5 %), other (10.3 %) (37).

| 7.1.2 | New technological platforms must therefore be created on the basis of approaches that take into account the peculiarities of nanotechnologies and, in particular, the fact that functions and dimensions coincide, i.e. control over dimensions coincides with control over functions. For instance, in the case of lubrication: if nanometric particles of the right dimensions are built into a surface, there is no longer any need to lubricate, as that function is carried out by the nanoparticles, by means of their dimensions. |
| --- | --- |

7.1.2

New technological platforms must therefore be created on the basis of approaches that take into account the peculiarities of nanotechnologies and, in particular, the fact that functions and dimensions coincide, i.e. control over dimensions coincides with control over functions. For instance, in the case of lubrication: if nanometric particles of the right dimensions are built into a surface, there is no longer any need to lubricate, as that function is carried out by the nanoparticles, by means of their dimensions.

| 7.1.3 | Nanostructured materials and coatings, whose ingredients are of nanometric dimensions, can significantly reduce the above percentages. For instance, a decrease of 20 % in the friction coefficient in a car's gearbox could reduce energy losses by a percentage varying between 0.64 % and 0.80 %, yielding savings of EUR 26 billion a year in the transport sector alone. |
| --- | --- |

7.1.3

Nanostructured materials and coatings, whose ingredients are of nanometric dimensions, can significantly reduce the above percentages. For instance, a decrease of 20 % in the friction coefficient in a car's gearbox could reduce energy losses by a percentage varying between 0.64 % and 0.80 %, yielding savings of EUR 26 billion a year in the transport sector alone.

| 7.1.4 | Surface testing and engineering is a key technology in terms of sustainable growth. A report from the UK's Department of Trade and Industry describes the state of the surface engineering industry in the 1995-2005 period and in 2010 (38). The report shows that in 1995, the English market for surface modification processes totalled approximately EUR 15 billion, and involved the production of goods for a value of around EUR 150 billion, of which EUR 7 billion was linked to the development of technologies for the protection of surfaces from wear and tear. The prediction for 2005 is that in the UK this sector will be worth approximately EUR 32 billion, involving industrial processes valued at around EUR 215 billion. |
| --- | --- |

7.1.4

Surface testing and engineering is a key technology in terms of sustainable growth. A report from the UK's Department of Trade and Industry describes the state of the surface engineering industry in the 1995-2005 period and in 2010 (38). The report shows that in 1995, the English market for surface modification processes totalled approximately EUR 15 billion, and involved the production of goods for a value of around EUR 150 billion, of which EUR 7 billion was linked to the development of technologies for the protection of surfaces from wear and tear. The prediction for 2005 is that in the UK this sector will be worth approximately EUR 32 billion, involving industrial processes valued at around EUR 215 billion.

| 7.1.5 | Projecting these figures on to the European market gives EUR 240 billion for surface processing, and spin-offs to other production sectors of approximately EUR 1,600 billion. |
| --- | --- |

7.1.5

Projecting these figures on to the European market gives EUR 240 billion for surface processing, and spin-offs to other production sectors of approximately EUR 1,600 billion.

| 7.2 | In order to benefit from nanotechnology (39), industrial development must be based on the capacity to marry traditional manufacturing processes and technologies (top-down) with innovative processes able to create, manipulate and integrate the new nanometric ingredients, using existing or new platforms. |
| --- | --- |

7.2

In order to benefit from nanotechnology (39), industrial development must be based on the capacity to marry traditional manufacturing processes and technologies (top-down) with innovative processes able to create, manipulate and integrate the new nanometric ingredients, using existing or new platforms.

| 7.2.1 | An approach based on governance is of fundamental importance. In addition to general initiatives taken with consumers in mind, others must be developed and aimed at industry associations, local administrators and non-profit organisations, so as to tie in the warp and weft of the economic, political and social fabric. Competence centres could play an important role here (40), laying the foundations for greater coordination of local and European initiatives and generating a climate that is conducive to nanotechnological innovation. In this context, action must be taken to assess the impact of nanotechnologies on health and the environment, and any EU (top-down) initiatives should dovetail with action determined and promoted locally (bottom-up). |
| --- | --- |

7.2.1

An approach based on governance is of fundamental importance. In addition to general initiatives taken with consumers in mind, others must be developed and aimed at industry associations, local administrators and non-profit organisations, so as to tie in the warp and weft of the economic, political and social fabric. Competence centres could play an important role here (40), laying the foundations for greater coordination of local and European initiatives and generating a climate that is conducive to nanotechnological innovation. In this context, action must be taken to assess the impact of nanotechnologies on health and the environment, and any EU (top-down) initiatives should dovetail with action determined and promoted locally (bottom-up).

| 7.3 | The EESC wishes to stress the great potential of developing nanoscience and nanotechnology as part of the application of the Lisbon Strategy. Uniting the scientific disciplines around an approach based on nanoscale units of matter will lay new foundations for the integration of knowledge, innovation, technology and development. |
| --- | --- |

7.3

The EESC wishes to stress the great potential of developing nanoscience and nanotechnology as part of the application of the Lisbon Strategy. Uniting the scientific disciplines around an approach based on nanoscale units of matter will lay new foundations for the integration of knowledge, innovation, technology and development.

| 7.4 | Coordination is still rather fragmented at European level despite efforts made under the sixth framework programme. The focus appears to be on rationalising the use of resources. While there is strong backing for basic research and also for the development of new industrial processes, there is as yet a lack of direction and backing for initiatives to generate real progress in mass production technologies. Support for efforts to develop European governance in the area is more embryonic still. |
| --- | --- |

7.4

Coordination is still rather fragmented at European level despite efforts made under the sixth framework programme. The focus appears to be on rationalising the use of resources. While there is strong backing for basic research and also for the development of new industrial processes, there is as yet a lack of direction and backing for initiatives to generate real progress in mass production technologies. Support for efforts to develop European governance in the area is more embryonic still.

| 7.5 | In the Member States, genuine coordination is essential but it has thus far been absent, especially when it comes to applying research. In many European countries, businesses, SMEs especially, are encountering the following difficulties:






  — | a lack of basic knowledge of nanoscience and nanotechnology, |
| --- | --- | --- |

7.5

In the Member States, genuine coordination is essential but it has thus far been absent, especially when it comes to applying research. In many European countries, businesses, SMEs especially, are encountering the following difficulties:

—

a lack of basic knowledge of nanoscience and nanotechnology,

| — | a lack of professionals able to relate to companies' needs, |
| --- | --- |

—

a lack of professionals able to relate to companies' needs,

| — | an incapacity to assess the impact of the new technologies in terms of technological and market processes, |
| --- | --- |

—

an incapacity to assess the impact of the new technologies in terms of technological and market processes,

| — | difficulties in locating and assessing nanostructured raw materials, |
| --- | --- |

—

difficulties in locating and assessing nanostructured raw materials,

| — | the inability to insert nanotech processes into traditional production processes, |
| --- | --- |

—

the inability to insert nanotech processes into traditional production processes,

| — | difficulties in assessing the development of the market for nano products, |
| --- | --- |

—

difficulties in assessing the development of the market for nano products,

| — | inadequate links with universities and innovation centres. |
| --- | --- |

—

inadequate links with universities and innovation centres.

| 7.6 | The EESC believes it is very important to use research to design useful systems in the field of public health and everyday life, always adhering to the principle of mimesis, i.e. imitating nature. |
| --- | --- |

7.6

The EESC believes it is very important to use research to design useful systems in the field of public health and everyday life, always adhering to the principle of mimesis, i.e. imitating nature.

| 7.7 | The EESC welcomes the birth of the ‘Nanoforum’ network (41) and hopes that the network's publications will be translated and disseminated in all the Member States. As far as possible, the language used in the publications must be simple and accessible to a wide audience. Universities and research centres should be able to use the forum's findings. |
| --- | --- |

7.7

The EESC welcomes the birth of the ‘Nanoforum’ network (41) and hopes that the network's publications will be translated and disseminated in all the Member States. As far as possible, the language used in the publications must be simple and accessible to a wide audience. Universities and research centres should be able to use the forum's findings.

| 7.7.1 | The EESC is also convinced that the ‘European nanoelectronics technology platform’, suggested by the high level group (42), will be all the more successful providing it can avoid unnecessary and costly overlaps in research, working in close cooperation with the Commission. |
| --- | --- |

7.7.1

The EESC is also convinced that the ‘European nanoelectronics technology platform’, suggested by the high level group (42), will be all the more successful providing it can avoid unnecessary and costly overlaps in research, working in close cooperation with the Commission.

| 7.8 | It is also the EESC's opinion that by 2008 investment in these sectors in the EU will have to rise from the current EUR 3 billion a year, to EUR 8 billion, with periodical checks by the Commission on the following aspects:






  — | increase in market quotas, |
| --- | --- | --- |

7.8

It is also the EESC's opinion that by 2008 investment in these sectors in the EU will have to rise from the current EUR 3 billion a year, to EUR 8 billion, with periodical checks by the Commission on the following aspects:

—

increase in market quotas,

| — | public and private investment in research, |
| --- | --- |

—

public and private investment in research,

| — | increase in the number of students studying nanotechnology. |
| --- | --- |

—

increase in the number of students studying nanotechnology.

8.   Conclusions

| 8.1 | The EESC fully agrees with the conclusions of the Competitiveness Council of 24 September 2004 on the important role and potential of nanoscience and nanotechnology. The results achieved to date suggest that it is important to sharpen up the expertise and build the instruments that enable atoms to be worked on, in order to produce new structures and modify the properties of existing ones. |
| --- | --- |

8.1

The EESC fully agrees with the conclusions of the Competitiveness Council of 24 September 2004 on the important role and potential of nanoscience and nanotechnology. The results achieved to date suggest that it is important to sharpen up the expertise and build the instruments that enable atoms to be worked on, in order to produce new structures and modify the properties of existing ones.

| 8.2 | In this respect, the EESC recommends the immediate launch of a joint, integrated, responsible, European-level strategy, to focus in particular on: the development of joint efforts in RTD and scientific and technological demonstration and training; interaction between industry and the academic world; the accelerated development of industrial and multisectoral applications; and greater European coordination of policies, measures, structures and networks. As part of this strategy, a special effort must be made from the outset at international level too, to safeguard ethical, environmental, health and safety interests throughout the lifecycle of scientific applications and to promote appropriate technical standardisation. |
| --- | --- |

8.2

In this respect, the EESC recommends the immediate launch of a joint, integrated, responsible, European-level strategy, to focus in particular on: the development of joint efforts in RTD and scientific and technological demonstration and training; interaction between industry and the academic world; the accelerated development of industrial and multisectoral applications; and greater European coordination of policies, measures, structures and networks. As part of this strategy, a special effort must be made from the outset at international level too, to safeguard ethical, environmental, health and safety interests throughout the lifecycle of scientific applications and to promote appropriate technical standardisation.

| 8.3 | The EESC would emphasise the need for this strategy to be firmly anchored in the development of society, making a positive contribution not only to the competitiveness of the European economy but also, and above all, to human health, the environment and safety, not to mention quality of life. |
| --- | --- |

8.3

The EESC would emphasise the need for this strategy to be firmly anchored in the development of society, making a positive contribution not only to the competitiveness of the European economy but also, and above all, to human health, the environment and safety, not to mention quality of life.

| 8.3.1 | On this note, the EESC would stress the importance of securing the responsible and sustainable development of nanotechnology, from the outset, in order to meet the justifiable expectations of civil society with regard to environmental, health, ethical, industrial and economic aspects. |
| --- | --- |

8.3.1

On this note, the EESC would stress the importance of securing the responsible and sustainable development of nanotechnology, from the outset, in order to meet the justifiable expectations of civil society with regard to environmental, health, ethical, industrial and economic aspects.

| 8.3.2 | The EESC recommends a substantial increase in the resources earmarked for basic research, as technological and industrial excellence is always based on scientific excellence. |
| --- | --- |

8.3.2

The EESC recommends a substantial increase in the resources earmarked for basic research, as technological and industrial excellence is always based on scientific excellence.

| 8.3.3 | The 3 %
   (43)
  objective decided at Barcelona should be implemented, making a priority of concentrating resources in the field of nanoscience, the development of its applications, and the convergence between nano-, bio- and info- technology and knowledge-based technology. |
| --- | --- |

8.3.3

The 3 %
   (43)
  objective decided at Barcelona should be implemented, making a priority of concentrating resources in the field of nanoscience, the development of its applications, and the convergence between nano-, bio- and info- technology and knowledge-based technology.

| 8.3.4 | The Community's financial perspectives for 2007-2013, recently published by the Commission, should be assessed and remoulded in the light of the challenges posed by this new nanotechnology revolution. |
| --- | --- |

8.3.4

The Community's financial perspectives for 2007-2013, recently published by the Commission, should be assessed and remoulded in the light of the challenges posed by this new nanotechnology revolution.

| 8.3.5 | The increase in funds hoped for must be reflected in an appropriate financial provision under the forthcoming seventh framework programme. The figures should reflect those earmarked in other countries, such as the USA. |
| --- | --- |

8.3.5

The increase in funds hoped for must be reflected in an appropriate financial provision under the forthcoming seventh framework programme. The figures should reflect those earmarked in other countries, such as the USA.

| 8.4 | The EESC is convinced that Europe should launch a high-level action plan with a definite road map and timetable and a joined-up approach, securing the necessary consensus among all civil society players on a shared vision. This vision must be translated into clear and transparent objectives for responding to the requirements of economic and social progress, and improved quality of life, safety and health for all. |
| --- | --- |

8.4

The EESC is convinced that Europe should launch a high-level action plan with a definite road map and timetable and a joined-up approach, securing the necessary consensus among all civil society players on a shared vision. This vision must be translated into clear and transparent objectives for responding to the requirements of economic and social progress, and improved quality of life, safety and health for all.

| 8.5 | In the Committee's opinion, there is a need to establish technological platforms with a large critical mass and high European value added, bringing together public and private players from the worlds of science, finance and administration who are active in the various specific fields of application. |
| --- | --- |

8.5

In the Committee's opinion, there is a need to establish technological platforms with a large critical mass and high European value added, bringing together public and private players from the worlds of science, finance and administration who are active in the various specific fields of application.

| 8.6 | The Committee would reiterate the urgent need to set up high-level European facilities and to strengthen the competence centres (CCs). Their location and specialisation would be determined on the basis of close coordination between European and local bodies, so as to pinpoint homogeneous industrial areas for local product specialisation, where a critical mass of R&D may already have taken root. |
| --- | --- |

8.6

The Committee would reiterate the urgent need to set up high-level European facilities and to strengthen the competence centres (CCs). Their location and specialisation would be determined on the basis of close coordination between European and local bodies, so as to pinpoint homogeneous industrial areas for local product specialisation, where a critical mass of R&D may already have taken root.

| 8.6.1 | The CCs should be able to carry out and transfer high-quality research aimed at application and innovation, using nanotechnology, particularly in fields such as nanoelectronics, nanobiotechnology and nanomedicine. |
| --- | --- |

8.6.1

The CCs should be able to carry out and transfer high-quality research aimed at application and innovation, using nanotechnology, particularly in fields such as nanoelectronics, nanobiotechnology and nanomedicine.

| 8.7 | Researchers must be certain that their intellectual property is protected, particularly in such a sensitive field. The EESC believes that solving the patenting issue in a clear and satisfactory way is a top priority if the success of applied research in the field of nanotechnology is to be secured. No time must be wasted in establishing a European-level Nano-IPR helpdesk, to meet the needs of researchers, companies and research centres. |
| --- | --- |

8.7

Researchers must be certain that their intellectual property is protected, particularly in such a sensitive field. The EESC believes that solving the patenting issue in a clear and satisfactory way is a top priority if the success of applied research in the field of nanotechnology is to be secured. No time must be wasted in establishing a European-level Nano-IPR helpdesk, to meet the needs of researchers, companies and research centres.

| 8.8 | The Commission, in conjunction with the Member States, must step up its efforts and promote in-depth studies in universities and research centres, to ensure that the patenting process appears feasible, with straightforward and inexpensive procedures, particularly in such an innovative sector. |
| --- | --- |

8.8

The Commission, in conjunction with the Member States, must step up its efforts and promote in-depth studies in universities and research centres, to ensure that the patenting process appears feasible, with straightforward and inexpensive procedures, particularly in such an innovative sector.

| 8.8.1 | As far as international cooperation is concerned, work on safety and the standardisation of measures and processes should be stepped up in conjunction with non-EU countries. Special attention should be given to China, which is investing heavily in the field of nanotechnologies. The USA and Japan, meanwhile, have a very aggressive policy in this area (cf. the agreement between China and the State of California on the development of centres of excellence for biomedical nanotechnologies). |
| --- | --- |

8.8.1

As far as international cooperation is concerned, work on safety and the standardisation of measures and processes should be stepped up in conjunction with non-EU countries. Special attention should be given to China, which is investing heavily in the field of nanotechnologies. The USA and Japan, meanwhile, have a very aggressive policy in this area (cf. the agreement between China and the State of California on the development of centres of excellence for biomedical nanotechnologies).

| 8.8.2 | The EESC believes that an additional effort must be made, not least through the European initiative for growth launched in December 2003, to increase the number of nanotech companies in the EU. To this end, the relationship between universities, nanotechnological innovation centres and companies must be constantly promoted and improved. |
| --- | --- |

8.8.2

The EESC believes that an additional effort must be made, not least through the European initiative for growth launched in December 2003, to increase the number of nanotech companies in the EU. To this end, the relationship between universities, nanotechnological innovation centres and companies must be constantly promoted and improved.

| 8.8.3 | Measures are needed to target the development of nanotechnology-based industrial processes (from nanotechnology to nanomanufacturing), for companies both large and small. Europe should follow the American example of developing a plan to use federal programmes such as the Small Business Innovation Research Program and the Small Business Technology Transfer Research Program, in order to sustain an all-pervasive spread of nanotechnological development throughout the business fabric, however small the companies involved. |
| --- | --- |

8.8.3

Measures are needed to target the development of nanotechnology-based industrial processes (from nanotechnology to nanomanufacturing), for companies both large and small. Europe should follow the American example of developing a plan to use federal programmes such as the Small Business Innovation Research Program and the Small Business Technology Transfer Research Program, in order to sustain an all-pervasive spread of nanotechnological development throughout the business fabric, however small the companies involved.

| 8.8.4 | Industry associations can play an important part here both nationally and locally. The Research and Enterprise DGs could jointly promote a number of intensive awareness-raising campaigns, involving all the economic and social players, on the basis of the positive experience developed in Trieste (44). |
| --- | --- |

8.8.4

Industry associations can play an important part here both nationally and locally. The Research and Enterprise DGs could jointly promote a number of intensive awareness-raising campaigns, involving all the economic and social players, on the basis of the positive experience developed in Trieste (44).

| 8.8.5 | In the EESC's view, the establishment of a European information clearing-house (45) would be a very important mechanism to facilitate:






  — | the commercialisation of nanotechnology and the transfer of technologies and new concepts into commercial and military products, |
| --- | --- | --- |

8.8.5

In the EESC's view, the establishment of a European information clearing-house (45) would be a very important mechanism to facilitate:

—

the commercialisation of nanotechnology and the transfer of technologies and new concepts into commercial and military products,

| — | the dissemination of the best practice of universities and public and private laboratories, with a view to transfer into commercial use. |
| --- | --- |

—

the dissemination of the best practice of universities and public and private laboratories, with a view to transfer into commercial use.

| 8.9 | Alongside and in connection with the European forums, there should be a number of worldwide forums, open to UN countries, and able to deal with issues relating to:






  — | patents, |
| --- | --- | --- |

8.9

Alongside and in connection with the European forums, there should be a number of worldwide forums, open to UN countries, and able to deal with issues relating to:

—

patents,

| — | ethical rules, |
| --- | --- |

—

ethical rules,

| — | social consensus, |
| --- | --- |

—

social consensus,

| — | environmental aspects, |
| --- | --- |

—

environmental aspects,

| — | sustainable development, |
| --- | --- |

—

sustainable development,

| — | consumer safety. |
| --- | --- |

—

consumer safety.

| 8.10 | The European Investment Bank (EIB), possibly with the practical support of the European Investment Fund (EIF), should set up credit facilities, to be managed in conjunction with credit institutions, regional financing bodies specialised in company loans, venture capital companies and guarantee cooperatives, in order to facilitate the birth and growth of companies that are centring their production on nanotech products. |
| --- | --- |

8.10

The European Investment Bank (EIB), possibly with the practical support of the European Investment Fund (EIF), should set up credit facilities, to be managed in conjunction with credit institutions, regional financing bodies specialised in company loans, venture capital companies and guarantee cooperatives, in order to facilitate the birth and growth of companies that are centring their production on nanotech products.

| 8.10.1 | The Growth and Environment
  Programme was a positive experience that yielded excellent results in the past (though mainly in the environmental sector). It could be imitated, in order to encourage growth in new types of nanotechnology-based production (46). |
| --- | --- |

8.10.1

The Growth and Environment
  Programme was a positive experience that yielded excellent results in the past (though mainly in the environmental sector). It could be imitated, in order to encourage growth in new types of nanotechnology-based production (46).

| 8.11 | Research and its spin-offs for products should be geared towards the requirements of the public and sustainable development. In this context, action must be taken to assess the impact of nanotechnologies on health and the environment, and any EU (top-down) initiatives should dovetail with action determined and promoted locally (bottom-up). |
| --- | --- |

8.11

Research and its spin-offs for products should be geared towards the requirements of the public and sustainable development. In this context, action must be taken to assess the impact of nanotechnologies on health and the environment, and any EU (top-down) initiatives should dovetail with action determined and promoted locally (bottom-up).

| 8.12 | There must be an ongoing and scientifically well-founded dialogue with the public. The new technologies that are growing out of the use of atoms must be transparent and provide the public with an assurance that there are no hidden dangers for health or the environment. History has taught us that, very often, fear and concern regarding new products are born more out of ignorance than reality. |
| --- | --- |

8.12

There must be an ongoing and scientifically well-founded dialogue with the public. The new technologies that are growing out of the use of atoms must be transparent and provide the public with an assurance that there are no hidden dangers for health or the environment. History has taught us that, very often, fear and concern regarding new products are born more out of ignorance than reality.

| 8.12.1 | This is one of the reasons why the EESC hopes that there will be an unceasing and direct connection between research results and universally-recognised ethical principles, for which an international dialogue will be necessary. |
| --- | --- |

8.12.1

This is one of the reasons why the EESC hopes that there will be an unceasing and direct connection between research results and universally-recognised ethical principles, for which an international dialogue will be necessary.

| 8.13 | As the technology forums (47) are in their formative stage, special attention must be given to the new members of the European Union, ensuring they are fully represented and that they have a direct link with the European centres of excellence. |
| --- | --- |

8.13

As the technology forums (47) are in their formative stage, special attention must be given to the new members of the European Union, ensuring they are fully represented and that they have a direct link with the European centres of excellence.

| 8.14 | The EESC believes that the coordination of research in the vast field of nanoscience should be the responsibility of the Commission — albeit with basic research activity being the responsibility of the future European Research Council ESR. The Commission, in agreement with the Parliament and the Council, can secure the best possible added value for the European public including a wider and more far-reaching and objective use of research results. |
| --- | --- |

8.14

The EESC believes that the coordination of research in the vast field of nanoscience should be the responsibility of the Commission — albeit with basic research activity being the responsibility of the future European Research Council ESR. The Commission, in agreement with the Parliament and the Council, can secure the best possible added value for the European public including a wider and more far-reaching and objective use of research results.

| 8.15 | The EESC asks the Commission to provide it with a biennial report on nanotechnological development, in order to check the progress of the action plan adopted and to suggest possible changes and updates. |
| --- | --- |

8.15

The EESC asks the Commission to provide it with a biennial report on nanotechnological development, in order to check the progress of the action plan adopted and to suggest possible changes and updates.

Brussels, 15 December 2004.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  Interview with Commissioner Busquin (summary in IP/04/820 of 29 June 2004).

1

(2)  See footnote 1.

2

(3)  See point 6.15 of the conclusions.

3

(4)  See footnote 1.

4

(5)  Micro and nanoelectronics centre at the Politecnico di Milano, Prof. Alessandro Spinelli.

5

(6)  Ibidem.

6

(7)  Investment in nanoelectronics currently totals EUR 6 billion, broken down as follows: 1/3 in nano and micro, 1/3 in diagnostics, 1/3 in materials (source: European Commission, Research DG).

7

(8)  Source: European Commission, Research DG - 2003

8

(9)  See point 3.3.1.

9

(10)  Tullio Regge: ‘Il vuoto dei fisici’, L'Astronomia, No. 18 September-October 1982.

10

(11)  Source: European Commission, Research DG 2003

11

(12)  Various experiments are at an advanced stage, and an interface ‘dialogue’ has already been established between a snail neuron and an electronic chip.

12

(13)  From the Greek mimesis, to imitate nature.

13

mimesis

(14)  For instance the independent movement of spermatozoa.

14

(15)  These are quantitative rather than qualitative data. A more in-depth assessment would be useful, such as that referred to by the UK's Royal Society.

15

(16)  Source: European Commission, Research DG

16

(17)  Source: University of Milan, Physics Department, Interdisciplinary centre for nanostructured materials and interfaces.

17

(18)  See Technology Roadmap for Nanoelectronics, European Commission, IST Programme, Future and emerging technologies, Second edition, 2000.

18

(19)  Nanostructured additives for polymers, paints and lubricants.

19

(20)  Nanostructured vectors for active ingredients, diagnostic systems

20

(21)  Surface treatments for mechanical parts, to improve durability and performance.

21

(22)  Pneumatics, structural materials, control and monitoring systems

22

(23)  Technical and intelligent materials.

23

(24)  The multi-annual financial appropriations set out by the law of 3 December 2003 break down as follows:

24

| (a) | National Science Foundation







  (1) | USD 385,000,000 for 2005 |
| --- | --- | --- |

(a)

National Science Foundation

National Science Foundation

(1)

USD 385,000,000 for 2005

| (2) | USD 424,000,000 for 2006 |
| --- | --- |

(2)

USD 424,000,000 for 2006

| (3) | USD 449,000,000 for 2007 |
| --- | --- |

(3)

USD 449,000,000 for 2007

| (4) | USD 476,000,000 for 2008 |
| --- | --- |

(4)

USD 476,000,000 for 2008

| (b) | Department of Energy







  (1) | USD 317,000,000 the fiscal year 2005 |
| --- | --- | --- |

(b)

Department of Energy

Department of Energy

(1)

USD 317,000,000 the fiscal year 2005

| (2) | USD 347,000,000 the fiscal year 2006 |
| --- | --- |

(2)

USD 347,000,000 the fiscal year 2006

| (3) | USD 380,000,000 the fiscal year 2007 |
| --- | --- |

(3)

USD 380,000,000 the fiscal year 2007

| (4) | USD 415,000,000 the fiscal year 2008 |
| --- | --- |

(4)

USD 415,000,000 the fiscal year 2008

| (c) | National Aeronautics and Space Administration







  (1) | USD 34,100,000 for 2005 |
| --- | --- | --- |

(c)

National Aeronautics and Space Administration

National Aeronautics and Space Administration

(1)

USD 34,100,000 for 2005

| (2) | USD 37,500,000 for 2006 |
| --- | --- |

(2)

USD 37,500,000 for 2006

| (3) | USD 40,000,000 for 2007 |
| --- | --- |

(3)

USD 40,000,000 for 2007

| (4) | USD 42,300,000 for 2008 |
| --- | --- |

(4)

USD 42,300,000 for 2008

| (d) | National Institute of Standards and Technology







  (1) | USD 68,200,000 for 2005 |
| --- | --- | --- |

(d)

National Institute of Standards and Technology

National Institute of Standards and Technology

(1)

USD 68,200,000 for 2005

| (2) | USD 75,000,000 for 2006 |
| --- | --- |

(2)

USD 75,000,000 for 2006

| (3) | USD 80,000,000 for 2007 |
| --- | --- |

(3)

USD 80,000,000 for 2007

| (4) | USD 84,000,000 for 2008 |
| --- | --- |

(4)

USD 84,000,000 for 2008

| (e) | Environmental Protection Agency







  (1) | USD 5,500,000 the fiscal year 2005 |
| --- | --- | --- |

(e)

Environmental Protection Agency

Environmental Protection Agency

(1)

USD 5,500,000 the fiscal year 2005

| (2) | USD 6,050,000 the fiscal year 2006 |
| --- | --- |

(2)

USD 6,050,000 the fiscal year 2006

| (3) | USD 6,413,000 the fiscal year 2007 |
| --- | --- |

(3)

USD 6,413,000 the fiscal year 2007

| (4) | USD 6,800,000 the fiscal year 2008 |
| --- | --- |

(4)

USD 6,800,000 the fiscal year 2008

(25)  Optoelectronics is a technique that combines the disciplines of optics and electronics. It studies mechanisms that convert electrical signals into optical signals and vice versa (CD players, laser systems, etc.).

25

(26)  ERDF, European Regional Development Fund: one of the Structural Funds that, under Priority IV (local development systems), can be used to finance research facilities and equipment.

26

ESF, European Social Fund, another Structural Fund that, under Priority III (human resources), can be used to finance training for researchers and information for entrepreneurs.

(27)  The CD ROMs and recent publications of the Research DG provide a broad panorama of European research centres and their specialisations. For more information see:

27

http://cordis.lu/nanotechnology

(28)  See the Luxembourg (1997), Cardiff (1998), Cologne (1999) and Lisbon (2000) processes, on the use of development to increase and improve employment.

28

(29)  European Commission, Research DG

29

(30)  These are nanostructured surfaces that have different properties to traditional surfaces.

30

(31)  These are extremely useful instruments that can store an enormous quantity of data, photographs and music.

31

(32)  The way the surfaces are structured and enriched with certain types of atoms prevents dirt and dust from coming into direct contact with the fabric, ceramic or glass.

32

(33)  From the Latin domus (house), domotics is the science that studies all aspects of development in the home.

33

domus

(34)  The University of Grenoble has already run experiments on a number of types of micromotor, based on kinesin.

34

(35)  See Opinion CESE 967/2004 (OJ C 302, 7.12.2004) and studies conducted by the Universities of Ghent and Bergamo (textiles sector).

35

(36)  Source: Oakridge National Laboratory, USA.

36

(37)  Ibidem.

37

(38)  A. Matthews, R. Artley and P. Holiday, 2005 Revisited: The UK Surface Engineering Industry to 2010, NASURF, Dera, 1998.

38

(39)  NB: There is no such thing as the industrial development of nanotechnology, but rather development that benefits from nanotechnology.

39

(40)  Cf. the experience of Servitec, the Dalmine ‘innovation pole’ in Bergamo.

40

(41)  The Nanoforum network's members are: the Institute of Nanotechnology (UK), which is acting as coordinator; UDI Technologiezentrum (DE); CEA-LETI (FR); CMP Científica (ES); Nordic Nanotech (DK); and Malsch Techno Valutation (NL).

41

http://www.nanoforum.org.

(42)  See previous footnote: ‘Vision 2020’ report, published on 29 June 2004.

42

(43)  3 % of European gross domestic product should be spent on research and development by the public sector (the Member States and the Community) and industry.

43

(44)  Nanoforum in Trieste, in 2003, attended by over 1,000 people.

44

(45)  See: American nanotechnology legislation of December 2003.

45

(46)  The Growth and Environment Programme, managed by the EIF in conjunction with various European financial institutions, helped to improve the environmental credentials of micro-, small and medium-sized enterprises, by means of co-financing and credit facilities.

46

(47)  See point 6.3.

47

---

| 28.6.2005 | EN | Official Journal of the European Union | C 157/34 |
| --- | --- | --- | --- |

28.6.2005

EN

Official Journal of the European Union

C 157/34

---

Opinion of the European Economic and Social Committee on ‘A European highway code and vehicle register’

(2005/C 157/04)

On 29 January 2004, the European Economic and Social Committee decided to draw up an opinion, under Rule 29(2) of its Rules of Procedure, on ‘A European highway code and vehicle register’.

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 5 October 2004. The rapporteur was Mr Pegado Liz.

At its 413th plenary session of 15 and 16 December 2004 (meeting of 15 December 2004), the European Economic and Social Committee adopted the following opinion by 147 votes to one with three abstentions.

1.   Introduction: Aim of the opinion and grounds

| 1.1 | At its meeting on 29 January 2004, the EESC accepted the TEN Section's request to draw up an own-initiative opinion on a European highway code. |
| --- | --- |

1.1

At its meeting on 29 January 2004, the EESC accepted the TEN Section's request to draw up an own-initiative opinion on a European highway code.

| 1.2 | In view of the fact that (a) the free movement of people is one of the fundamental freedoms enshrined in the Treaty (1), (b) the abolition of border controls between the Member States is one of the EU's objectives (2), as consolidated by the Schengen acquis
   (3), and (c) transport is one area where the Community has a common policy (4), harmonising road traffic legislation would seem to be an issue of paramount importance, particularly for completing the internal market (5). |
| --- | --- |

1.2

In view of the fact that (a) the free movement of people is one of the fundamental freedoms enshrined in the Treaty (1), (b) the abolition of border controls between the Member States is one of the EU's objectives (2), as consolidated by the Schengen acquis
   (3), and (c) transport is one area where the Community has a common policy (4), harmonising road traffic legislation would seem to be an issue of paramount importance, particularly for completing the internal market (5).

| 1.3 | Account should also be taken of the volume of road passenger and freight transport in the Europe of 15, which has grown exponentially in recent years.
  The latest statistics indicate in particular that:






  — | the land transport sector employs 3.9 million people (data for 2001); |
| --- | --- | --- |

1.3

Account should also be taken of the volume of road passenger and freight transport in the Europe of 15, which has grown exponentially in recent years.

The latest statistics indicate in particular that:

—

the land transport sector employs 3.9 million people (data for 2001);

| — | road freight haulage accounts for 45 % of all freight haulage, having grown by 120 % since 1970; |
| --- | --- |

—

road freight haulage accounts for 45 % of all freight haulage, having grown by 120 % since 1970;

| — | road passenger transport accounts for 86.8 % of all passenger transport, having grown by 128 % since 1970; |
| --- | --- |

—

road passenger transport accounts for 86.8 % of all passenger transport, having grown by 128 % since 1970;

| — | turnover (data for 2000) for land passenger transport (€55.455 million) and freight haulage (€220.787 million) accounts for around 49 % of total turnover in the transport sector (€566.193 million) (no statistics are available for Greece) (6). |
| --- | --- |

—

turnover (data for 2000) for land passenger transport (€55.455 million) and freight haulage (€220.787 million) accounts for around 49 % of total turnover in the transport sector (€566.193 million) (no statistics are available for Greece) (6).

| 1.4 | Road passenger and freight transport is governed by many different national regulations, even as far as basic driving rules and principles are concerned. |
| --- | --- |

1.4

Road passenger and freight transport is governed by many different national regulations, even as far as basic driving rules and principles are concerned.

| 1.4.1 | As well as this, several international conventions are also in force, each with varying scopes and conflicting provisions. |
| --- | --- |

1.4.1

As well as this, several international conventions are also in force, each with varying scopes and conflicting provisions.

| 1.4.2 | A simple road journey across Europe therefore subjects drivers to varying rules and regulations, exposing them to diverse and sometimes contradictory rules. |
| --- | --- |

1.4.2

A simple road journey across Europe therefore subjects drivers to varying rules and regulations, exposing them to diverse and sometimes contradictory rules.

| 1.4.3 | This situation has become even more complicated with the recent EU enlargement, and the arrival of new Member States which also have their own particular driving rules. |
| --- | --- |

1.4.3

This situation has become even more complicated with the recent EU enlargement, and the arrival of new Member States which also have their own particular driving rules.

| 1.5 | The objective of this own-initiative opinion is to urge the Commission to consider the necessity and advisability of legislation to harmonise driving rules across the European Union, albeit with a number of exceptions, conducting an analysis of comparative law to highlight discrepancies in the rules and regulations contained in the highway codes of the various Member States, and proposing possible solutions for European-level harmonisation. |
| --- | --- |

1.5

The objective of this own-initiative opinion is to urge the Commission to consider the necessity and advisability of legislation to harmonise driving rules across the European Union, albeit with a number of exceptions, conducting an analysis of comparative law to highlight discrepancies in the rules and regulations contained in the highway codes of the various Member States, and proposing possible solutions for European-level harmonisation.

| 1.6 | When drawing up this opinion, it was deemed essential that the main stakeholders' views be taken into account (via representatives of road users, vehicle manufacturers and regulatory bodies). A public hearing was therefore organised in parallel with the second study group meeting on 17 May 2004, and was attended by individuals involved in the sector. |
| --- | --- |

1.6

When drawing up this opinion, it was deemed essential that the main stakeholders' views be taken into account (via representatives of road users, vehicle manufacturers and regulatory bodies). A public hearing was therefore organised in parallel with the second study group meeting on 17 May 2004, and was attended by individuals involved in the sector.

| 1.6.1 | To facilitate discussions, and at the same time collect information, a questionnaire was prepared and submitted to group members for their views. |
| --- | --- |

1.6.1

To facilitate discussions, and at the same time collect information, a questionnaire was prepared and submitted to group members for their views.

2.   Background to the opinion

| 2.1 | The idea of drawing up a universal highway code is not new; indeed, where Europe in particular is concerned, there have already been initiatives in this area, such as the call for codification of existing rules at the VIII International Congress on Traffic (7). |
| --- | --- |

2.1

The idea of drawing up a universal highway code is not new; indeed, where Europe in particular is concerned, there have already been initiatives in this area, such as the call for codification of existing rules at the VIII International Congress on Traffic (7).

| 2.2 | Also during the 38th Conference of the German Council of Transport Authorities held in January 2000, Working Group IV highlighted the harmonisation of European traffic rules as a key objective (8). |
| --- | --- |

2.2

Also during the 38th Conference of the German Council of Transport Authorities held in January 2000, Working Group IV highlighted the harmonisation of European traffic rules as a key objective (8).

| 2.3 | The Commission has been pursuing various initiatives arising from the same concern and targeting the same objective, but until now it has not fully taken on board the idea of drawing up a European highway code as such (9). |
| --- | --- |

2.3

The Commission has been pursuing various initiatives arising from the same concern and targeting the same objective, but until now it has not fully taken on board the idea of drawing up a European highway code as such (9).

| 2.4 | Particular emphasis must be given to the conclusions of a study recently conducted for the European Commission's DG Energy and Transport, which put forward the arguments for harmonising traffic rules and enforcement practices through future EU legislative initiatives (10). |
| --- | --- |

2.4

Particular emphasis must be given to the conclusions of a study recently conducted for the European Commission's DG Energy and Transport, which put forward the arguments for harmonising traffic rules and enforcement practices through future EU legislative initiatives (10).

| 2.5 | The EESC has, in turn, in various opinions, drawn attention to the need ‘to allow more free movement of vehicles within the Union’, placing ‘a responsibility on national authorities to abolish certain kinds of domestic rules and regulations which make it difficult for their own nationals to use vehicles registered in another Member State’
   (11)
  . |
| --- | --- |

2.5

The EESC has, in turn, in various opinions, drawn attention to the need ‘to allow more free movement of vehicles within the Union’, placing ‘a responsibility on national authorities to abolish certain kinds of domestic rules and regulations which make it difficult for their own nationals to use vehicles registered in another Member State’
   (11)
  .

3.   Brief summary of legislation set out in conventions and the scope thereof

| 3.1 | International road traffic rules are enshrined in a number of conventions, the most important ones being the 1926 Paris Convention, the 1949 Geneva Convention and the 1968 Vienna Convention. |
| --- | --- |

3.1

International road traffic rules are enshrined in a number of conventions, the most important ones being the 1926 Paris Convention, the 1949 Geneva Convention and the 1968 Vienna Convention.

| 3.2 | The
  International Convention relative to Motor Traffic
  was signed by 40 States in Paris on 24 April 1926. The Convention aimed to facilitate international tourism and is currently in force in over 50 countries. |
| --- | --- |

3.2

The
  International Convention relative to Motor Traffic
  was signed by 40 States in Paris on 24 April 1926. The Convention aimed to facilitate international tourism and is currently in force in over 50 countries.

| 3.2.1 | The main objectives of this Convention are:






  a) | to define minimum technical specifications for motor vehicles, including registration, lights and vehicle identification in each State visited; |
| --- | --- | --- |

3.2.1

The main objectives of this Convention are:

a)

to define minimum technical specifications for motor vehicles, including registration, lights and vehicle identification in each State visited;

| b) | to lay down rules on the issuing and validity of international motor vehicle certificates, so that drivers can legally enter and drive in the territory covered by the Convention; |
| --- | --- |

b)

to lay down rules on the issuing and validity of international motor vehicle certificates, so that drivers can legally enter and drive in the territory covered by the Convention;

| c) | to recognise certain domestic driving permits and define the features of international driving permits valid in Contracting States that do not recognise other States' domestic permits, without any intention of replacing the latter; |
| --- | --- |

c)

to recognise certain domestic driving permits and define the features of international driving permits valid in Contracting States that do not recognise other States' domestic permits, without any intention of replacing the latter;

| d) | to establish (six) danger signs which must be used by the Contracting States on roads within their territory; |
| --- | --- |

d)

to establish (six) danger signs which must be used by the Contracting States on roads within their territory;

| e) | to set up a system for exchanging information on drivers holding an international certificate and permit and involved in a serious accident or violating domestic road traffic laws. |
| --- | --- |

e)

to set up a system for exchanging information on drivers holding an international certificate and permit and involved in a serious accident or violating domestic road traffic laws.

| 3.2.2 | While this Convention simplified customs procedures, it did not exempt drivers from knowing and observing domestic road traffic laws. |
| --- | --- |

3.2.2

While this Convention simplified customs procedures, it did not exempt drivers from knowing and observing domestic road traffic laws.

| 3.2.3 | Moreover, the Convention did not enter into force until it had been ratified by each State and the respective ratified convention deposited. As a rule, the Convention is only in force in the main territory of the Contracting State; an explicit declaration is required for it to take effect in other territories under its administration. |
| --- | --- |

3.2.3

Moreover, the Convention did not enter into force until it had been ratified by each State and the respective ratified convention deposited. As a rule, the Convention is only in force in the main territory of the Contracting State; an explicit declaration is required for it to take effect in other territories under its administration.

| 3.3 | The
  Convention on Road Traffic
  was signed by 17 States in Geneva on 19 September 1949. It is currently in force in over 120 countries and replaces the 1926 Convention in relations between the Contracting and Signatory States. |
| --- | --- |

3.3

The
  Convention on Road Traffic
  was signed by 17 States in Geneva on 19 September 1949. It is currently in force in over 120 countries and replaces the 1926 Convention in relations between the Contracting and Signatory States.

| 3.3.1 | This Convention fleshed out the principles enshrined in the earlier convention, in line with developments in the car industry, and revealed a growing concern for road traffic safety. |
| --- | --- |

3.3.1

This Convention fleshed out the principles enshrined in the earlier convention, in line with developments in the car industry, and revealed a growing concern for road traffic safety.

| 3.3.2 | While it did not stipulate the use of specific traffic signs, it did require that States adopt a homogeneous system of road signs and signals and only use them where strictly necessary. |
| --- | --- |

3.3.2

While it did not stipulate the use of specific traffic signs, it did require that States adopt a homogeneous system of road signs and signals and only use them where strictly necessary.

| 3.3.3 | This Convention did not lay down very many driving rules or introduce much which was new, other than precautions to take when passing oncoming traffic, rules on priority and the use of lights. |
| --- | --- |

3.3.3

This Convention did not lay down very many driving rules or introduce much which was new, other than precautions to take when passing oncoming traffic, rules on priority and the use of lights.

| 3.3.4 | The Convention's entry into force was subject to the same conditions as previously, while moves to introduce harmonisation were tempered by the fact that States were not bound to adopt certain provisions and could also reject amendments to it. |
| --- | --- |

3.3.4

The Convention's entry into force was subject to the same conditions as previously, while moves to introduce harmonisation were tempered by the fact that States were not bound to adopt certain provisions and could also reject amendments to it.

| 3.4 | The
  Convention on Road Traffic
  of 8 November 1968 was signed in Vienna by 37 States and is currently in force in around 100. Once ratified and deposited, this Convention replaced the 1926 and 1949 Conventions in relations between the Contracting States. |
| --- | --- |

3.4

The
  Convention on Road Traffic
  of 8 November 1968 was signed in Vienna by 37 States and is currently in force in around 100. Once ratified and deposited, this Convention replaced the 1926 and 1949 Conventions in relations between the Contracting States.

| 3.4.1 | This Convention is the most comprehensive in terms of road traffic regulations, dedicating a whole 30-article chapter to the rules of the road and laying down rules on the main manoeuvres found in modern-day highway codes. The 1968 Convention went further than the previous — minimalist — conventions, which had just dealt with the passing of oncoming traffic and the associated signs and signals; it not only laid down the principles to be observed by drivers when performing the most dangerous manoeuvres (e.g. overtaking, change of direction, precautions to take vis-à-vis pedestrians, etc.) but also regulated standing and parking, passengers boarding and alighting from vehicles, driving in tunnels — in short, the whole gamut of typical situations that drivers face. |
| --- | --- |

3.4.1

This Convention is the most comprehensive in terms of road traffic regulations, dedicating a whole 30-article chapter to the rules of the road and laying down rules on the main manoeuvres found in modern-day highway codes. The 1968 Convention went further than the previous — minimalist — conventions, which had just dealt with the passing of oncoming traffic and the associated signs and signals; it not only laid down the principles to be observed by drivers when performing the most dangerous manoeuvres (e.g. overtaking, change of direction, precautions to take vis-à-vis pedestrians, etc.) but also regulated standing and parking, passengers boarding and alighting from vehicles, driving in tunnels — in short, the whole gamut of typical situations that drivers face.

| 3.4.2 | This Convention went further than previous texts requiring the Contracting and Signatory States to bring the substance of their domestic legislation into line with the driving rules laid down in it. The advantage of this for drivers was that they would be familiar with the main driving rules when driving in other Signatory States. |
| --- | --- |

3.4.2

This Convention went further than previous texts requiring the Contracting and Signatory States to bring the substance of their domestic legislation into line with the driving rules laid down in it. The advantage of this for drivers was that they would be familiar with the main driving rules when driving in other Signatory States.

| 3.4.3 | Nonetheless, States were still given the option of rejecting amendments to the Convention. |
| --- | --- |

3.4.3

Nonetheless, States were still given the option of rejecting amendments to the Convention.

| 3.5 | As this overview clearly shows, three international conventions are in force in the European Union (which now includes ten new members), although not every Member State has signed up to all three Conventions (12). The EU is therefore still far from having harmonised road traffic rules, particularly if twenty-five constantly evolving domestic bodies of law are added to the conventions mentioned above (13). |
| --- | --- |

3.5

As this overview clearly shows, three international conventions are in force in the European Union (which now includes ten new members), although not every Member State has signed up to all three Conventions (12). The EU is therefore still far from having harmonised road traffic rules, particularly if twenty-five constantly evolving domestic bodies of law are added to the conventions mentioned above (13).

| 3.6 | A number of barriers have been — or are in the process of being — overcome, such as the abolition of border controls, conditions for the type-approval of vehicles and their components, and the mutual recognition of — and harmonisation of rules on — driving licences. However, the fundamental aspects of road traffic remain unresolved: driving rules and road signs and signals. |
| --- | --- |

3.6

A number of barriers have been — or are in the process of being — overcome, such as the abolition of border controls, conditions for the type-approval of vehicles and their components, and the mutual recognition of — and harmonisation of rules on — driving licences. However, the fundamental aspects of road traffic remain unresolved: driving rules and road signs and signals.

| 3.7 | As far as the rest of the world is concerned, while these conventions facilitate customs procedures and driving within the Community, third-country nationals visiting the EU come across as many different driving rules and regulations as they do States. |
| --- | --- |

3.7

As far as the rest of the world is concerned, while these conventions facilitate customs procedures and driving within the Community, third-country nationals visiting the EU come across as many different driving rules and regulations as they do States.

4.   A number of glaring discrepancies between Member States' national legislation

| 4.1 | A brief study of comparative law clearly reveals that there are significant differences between the road traffic legislation of the various Member States in a number of key areas. Such discrepancies constitute a genuine barrier to free movement and are likely to jeopardise the safety of people and goods and result in more accidents across Europe. |
| --- | --- |

4.1

A brief study of comparative law clearly reveals that there are significant differences between the road traffic legislation of the various Member States in a number of key areas. Such discrepancies constitute a genuine barrier to free movement and are likely to jeopardise the safety of people and goods and result in more accidents across Europe.

| 4.2 | The following comments take particular, but not exclusive, account of observations made in the aforementioned study carried out for the Commission, which discusses these aspects in depth (14). |
| --- | --- |

4.2

The following comments take particular, but not exclusive, account of observations made in the aforementioned study carried out for the Commission, which discusses these aspects in depth (14).

| 4.3 | Below are some (of several) particularly significant and worrying current examples of differences in laws:
  Speed limit outside built-up areas on roads where there is a physical barrier separating the two carriageways






  BE | 120 km/h |
| --- | --- | --- |
| PT | 90 km/h |
| UK | 70 mph (112 km/h) |

4.3

Below are some (of several) particularly significant and worrying current examples of differences in laws:

Speed limit outside built-up areas on roads where there is a physical barrier separating the two carriageways

BE

120 km/h

PT

90 km/h

UK

70 mph (112 km/h)

Serious offences

| BE | + 10 km/h |
| --- | --- |
| PT | + 30 km/h |

BE

- 10 km/h

PT

- 30 km/h

Alcohol

| SE | 0.2 |
| --- | --- |
| UK | 0.8 |

SE

0.2

UK

0.8

Requirement for light vehicles to be equipped with a first aid kit

| EL | Yes |
| --- | --- |
| FR | No |

EL

Yes

FR

No

Red + amber light: prepare to move forward

| DK/FI | Yes |
| --- | --- |
| NL/ES | No |

DK/FI

Yes

NL/ES

No

Requirement to give way to cyclists at a roundabout

| DE | Yes |
| --- | --- |
| PT | No |

DE

Yes

PT

No

Requirement to give way to public transport vehicles pulling out of bus and tram stops

| ES | Yes |
| --- | --- |
| IT | No |

ES

Yes

IT

No

Requirement to use lights during the day outside built-up areas

| IT | Yes |
| --- | --- |
| LU | No |

IT

Yes

LU

No

No-parking sign

| IE | White background and red border |
| --- | --- |
| Other States | Blue background and red border |

IE

White background and red border

Other States

Blue background and red border

Passengers prohibited from alighting on the carriageway

| PT | Yes |
| --- | --- |
| IE | No |

PT

Yes

IE

No

| 4.4 | However, as the aforementioned study demonstrates in detail, similar discrepancies can also be observed in areas such as driving licence requirements, road signs and signals, compulsory safety equipment, pedestrian crossings, rules on priority, the use of lights, the conditions under which passengers may board and alight from a vehicle, the use of special lanes, overtaking, vehicle classification, types of tyre, towing and even the form of traffic signs and lights themselves. The study identifies a total of forty-five discrepancies in basic everyday driving rules. |
| --- | --- |

4.4

However, as the aforementioned study demonstrates in detail, similar discrepancies can also be observed in areas such as driving licence requirements, road signs and signals, compulsory safety equipment, pedestrian crossings, rules on priority, the use of lights, the conditions under which passengers may board and alight from a vehicle, the use of special lanes, overtaking, vehicle classification, types of tyre, towing and even the form of traffic signs and lights themselves. The study identifies a total of forty-five discrepancies in basic everyday driving rules.

| 4.5 | Furthermore, although there are significant differences just in the way that basic traffic rules are formulated, even more serious is the fact that these rules are interpreted and applied differently in the various Member States. This is not only because people view failure to comply with these rules differently, but also because the penalties for driving offences vary considerably too. |
| --- | --- |

4.5

Furthermore, although there are significant differences just in the way that basic traffic rules are formulated, even more serious is the fact that these rules are interpreted and applied differently in the various Member States. This is not only because people view failure to comply with these rules differently, but also because the penalties for driving offences vary considerably too.

5.   Summary of the hearing held on 17 May 2004

| 5.1 | Thanks to the quality of the contributions, this public hearing — attended by representatives of i) various private bodies representing the interests of drivers, the car industry, road safety and accident prevention and ii) the boards of the AIT–FIA and TIS-PT, which is the company coordinating the study referred to above (15) — held on 17 May 2004, helped to clarify and explain various points relevant to this opinion, reflecting the viewpoints of the main stakeholders in civil society.
  Various bodies also supplemented their statements by sending in responses to the questionnaire which they had received on the subject. |
| --- | --- |

5.1

Thanks to the quality of the contributions, this public hearing — attended by representatives of i) various private bodies representing the interests of drivers, the car industry, road safety and accident prevention and ii) the boards of the AIT–FIA and TIS-PT, which is the company coordinating the study referred to above (15) — held on 17 May 2004, helped to clarify and explain various points relevant to this opinion, reflecting the viewpoints of the main stakeholders in civil society.

Various bodies also supplemented their statements by sending in responses to the questionnaire which they had received on the subject.

| 5.2 | Taken together, the statements and written contributions show that there is widespread acceptance of the substance and timeliness of the EESC's initiative to introduce a certain degree of Europe-wide harmonisation of road traffic rules. Also, some parties have been open to the possibility and desirability of gradually aligning systems for a vehicle register and vehicle registration. |
| --- | --- |

5.2

Taken together, the statements and written contributions show that there is widespread acceptance of the substance and timeliness of the EESC's initiative to introduce a certain degree of Europe-wide harmonisation of road traffic rules. Also, some parties have been open to the possibility and desirability of gradually aligning systems for a vehicle register and vehicle registration.

| 5.3 | In this connection, the following points were highlighted in particular:






  a) | the EU framework decision of 8 May 2003 — which covers the cross-border recognition and enforcement of financial penalties for offences against the Highway Code — implies and requires measures to make road traffic rules uniform throughout Europe; |
| --- | --- | --- |

5.3

In this connection, the following points were highlighted in particular:

a)

the EU framework decision of 8 May 2003 — which covers the cross-border recognition and enforcement of financial penalties for offences against the Highway Code — implies and requires measures to make road traffic rules uniform throughout Europe;

| b) | at the same time, it is important to bear in mind i) the procedural rules for setting and applying fines and penalties and ii) the legal defence options available in the different Member States; |
| --- | --- |

b)

at the same time, it is important to bear in mind i) the procedural rules for setting and applying fines and penalties and ii) the legal defence options available in the different Member States;

| c) | driving rules do in fact vary considerably in key areas in the different Member States, and this entails increased dangers for drivers when driving vehicles outside their home country; |
| --- | --- |

c)

driving rules do in fact vary considerably in key areas in the different Member States, and this entails increased dangers for drivers when driving vehicles outside their home country;

| d) | the main differences highlighted, in addition to those mentioned in the TIS-PT study, include:






  — | differences in the legal limits for blood alcohol levels |
| --- | --- | --- |

d)

the main differences highlighted, in addition to those mentioned in the TIS-PT study, include:

—

differences in the legal limits for blood alcohol levels

| — | speed limits |
| --- | --- |

—

speed limits

| — | traffic signs, traffic police signals and road markings |
| --- | --- |

—

traffic signs, traffic police signals and road markings

| — | penalties for offences and the procedural rules for enforcing them and |
| --- | --- |

—

penalties for offences and the procedural rules for enforcing them and

| — | mandatory safety equipment; |
| --- | --- |

—

mandatory safety equipment;

| e) | a step-by step approach to the process of aligning legislation leading to possible Community-wide harmonisation of traffic rules should be adopted; |
| --- | --- |

e)

a step-by step approach to the process of aligning legislation leading to possible Community-wide harmonisation of traffic rules should be adopted;

| f) | full harmonisation does not seem to be possible at the moment, except in key, fundamental areas; |
| --- | --- |

f)

full harmonisation does not seem to be possible at the moment, except in key, fundamental areas;

| g) | these areas must include:






  — | various aspects of road safety |
| --- | --- | --- |

g)

these areas must include:

—

various aspects of road safety

| — | mandatory equipment for vehicles (e.g. replacement car light bulbs, warning triangles, hands-free mobile phones, airbags, etc) |
| --- | --- |

—

mandatory equipment for vehicles (e.g. replacement car light bulbs, warning triangles, hands-free mobile phones, airbags, etc)

| — | road signs and markings |
| --- | --- |

—

road signs and markings

| — | criteria for awarding driving licences |
| --- | --- |

—

criteria for awarding driving licences

| — | standard penalty points on driving licences |
| --- | --- |

—

standard penalty points on driving licences

| — | the type of penalties for more serious offences; |
| --- | --- |

—

the type of penalties for more serious offences;

| h) | the model to follow for such a legislative alignment should be the Vienna Convention; |
| --- | --- |

h)

the model to follow for such a legislative alignment should be the Vienna Convention;

| i) | prior to any proposal, a cost-benefit study should be carried out along the lines of the ones already used for some transport sectors and road safety initiatives (16); |
| --- | --- |

i)

prior to any proposal, a cost-benefit study should be carried out along the lines of the ones already used for some transport sectors and road safety initiatives (16);

| j) | special focus should be on effective enforcement of traffic rules, their monitoring and penalties for offences. |
| --- | --- |

j)

special focus should be on effective enforcement of traffic rules, their monitoring and penalties for offences.

| 5.4 | Some parallel and complementary aspects mentioned for any initiative in these areas include:






  a) | standardised systems for the automatic payment of motorway and bridge tolls (17); |
| --- | --- | --- |

5.4

Some parallel and complementary aspects mentioned for any initiative in these areas include:

a)

standardised systems for the automatic payment of motorway and bridge tolls (17);

| b) | standardised definitions of vehicle weight and size and the concomitant restrictions; |
| --- | --- |

b)

standardised definitions of vehicle weight and size and the concomitant restrictions;

| c) | minimum amount of driving instruction for drivers, depending on the type of vehicle involved; |
| --- | --- |

c)

minimum amount of driving instruction for drivers, depending on the type of vehicle involved;

| d) | that fact that this instruction should cover what to do in the event of an accident, as well as first aid; |
| --- | --- |

d)

that fact that this instruction should cover what to do in the event of an accident, as well as first aid;

| e) | definition of minimum quality standards for building road infrastructures; and |
| --- | --- |

e)

definition of minimum quality standards for building road infrastructures; and

| f) | traffic and accident prevention education campaigns at all levels of education and also for adults. |
| --- | --- |

f)

traffic and accident prevention education campaigns at all levels of education and also for adults.

6.   Scope of a European highway code

| 6.1 | Following the hearing referred to above, a clear desire was expressed to move towards the harmonisation of road rules, not however limited to just traffic issues, but also affecting matters such as road infrastructures and road safety. |
| --- | --- |

6.1

Following the hearing referred to above, a clear desire was expressed to move towards the harmonisation of road rules, not however limited to just traffic issues, but also affecting matters such as road infrastructures and road safety.

| 6.2 | Since it was established, the European Union has issued numerous pieces of legislation on road traffic: on driving licences, type-approval of vehicles and their components, rules applying to transport, motor insurance, etc. What is at stake here is the establishment of traffic rules, with a view to harmonising these rules; this could help further other areas of interests, such as road safety which is affected by a driver's certainty and knowledge regarding what course to adopt in different driving circumstances. |
| --- | --- |

6.2

Since it was established, the European Union has issued numerous pieces of legislation on road traffic: on driving licences, type-approval of vehicles and their components, rules applying to transport, motor insurance, etc. What is at stake here is the establishment of traffic rules, with a view to harmonising these rules; this could help further other areas of interests, such as road safety which is affected by a driver's certainty and knowledge regarding what course to adopt in different driving circumstances.

| 6.3 | As already mentioned above, the 1968 Vienna Convention contains the most complete text regarding road traffic; it goes into this matter in the greatest of detail, and — being the one international instrument adopted by most European countries — has the particular feature of requiring the signatory states to bring their national laws into line with the Convention's provisions. Given that this is the best known and most widely accepted text amongst the European countries, this convention could serve as a basis for wider discussion on the European Highway Code.. |
| --- | --- |

6.3

As already mentioned above, the 1968 Vienna Convention contains the most complete text regarding road traffic; it goes into this matter in the greatest of detail, and — being the one international instrument adopted by most European countries — has the particular feature of requiring the signatory states to bring their national laws into line with the Convention's provisions. Given that this is the best known and most widely accepted text amongst the European countries, this convention could serve as a basis for wider discussion on the European Highway Code..

| 6.4 | Thus, the proposal being put forward is to harmonise the traffic rules which form the nucleus of the most modern of the European highway codes — especially, but not exclusively:






  a) | general rules for driving vehicles: starting up and moving off, putting the car into gear, multiple traffic lanes and parallel lanes, crossroads, junctions, roundabouts, distance between road edge and pavements, speed and distance between vehicles; |
| --- | --- | --- |

6.4

Thus, the proposal being put forward is to harmonise the traffic rules which form the nucleus of the most modern of the European highway codes — especially, but not exclusively:

a)

general rules for driving vehicles: starting up and moving off, putting the car into gear, multiple traffic lanes and parallel lanes, crossroads, junctions, roundabouts, distance between road edge and pavements, speed and distance between vehicles;

| b) | drivers' signals; |
| --- | --- |

b)

drivers' signals;

| c) | speed when driving (not necessarily the maximum speed limit); |
| --- | --- |

c)

speed when driving (not necessarily the maximum speed limit);

| d) | general rules for priority at crossroads, junctions and roundabouts and between vehicles; |
| --- | --- |

d)

general rules for priority at crossroads, junctions and roundabouts and between vehicles;

| e) | overtaking; |
| --- | --- |

e)

overtaking;

| f) | changing direction; |
| --- | --- |

f)

changing direction;

| g) | reversing; |
| --- | --- |

g)

reversing;

| h) | U-turns; |
| --- | --- |

h)

U-turns;

| i) | stopping and parking; |
| --- | --- |

i)

stopping and parking;

| j) | capacity and size of vehicles, passenger and goods transport, boarding and alighting of passengers, loading and unloading operations; |
| --- | --- |

j)

capacity and size of vehicles, passenger and goods transport, boarding and alighting of passengers, loading and unloading operations;

| k) | lights and the use thereof; |
| --- | --- |

k)

lights and the use thereof;

| l) | emergency vehicles and special lanes, e.g. on motorways and similar roads, level crossings and lanes reserved for particular vehicles, whether or not on rails; |
| --- | --- |

l)

emergency vehicles and special lanes, e.g. on motorways and similar roads, level crossings and lanes reserved for particular vehicles, whether or not on rails;

| m) | legal limits for blood alcohol levels and levels of psychotropic substances; |
| --- | --- |

m)

legal limits for blood alcohol levels and levels of psychotropic substances;

| n) | use of safety equipment (seat belts, child restraints); |
| --- | --- |

n)

use of safety equipment (seat belts, child restraints);

| o) | mandatory documents; |
| --- | --- |

o)

mandatory documents;

| p) | what to do in the event of an accident or breakdown; |
| --- | --- |

p)

what to do in the event of an accident or breakdown;

| q) | standardised definition and rules applying to the various users of public roads, in particular motorcycles, quadricycles, tricycles, mopeds, bicycles, roller-skaters and skateboarders and drivers with disabilities; |
| --- | --- |

q)

standardised definition and rules applying to the various users of public roads, in particular motorcycles, quadricycles, tricycles, mopeds, bicycles, roller-skaters and skateboarders and drivers with disabilities;

| r) | rules for pedestrians and precautions to be taken by drivers; |
| --- | --- |

r)

rules for pedestrians and precautions to be taken by drivers;

| s) | special rules for drivers to observe as regards public transport and special vehicles; and |
| --- | --- |

s)

special rules for drivers to observe as regards public transport and special vehicles; and

| t) | animals on the road. |
| --- | --- |

t)

animals on the road.

| 6.5 | Traffic rules must be supplemented and clarified, and any exceptions made clear, using traffic signs to provide a variety of information likely to increase road traffic safety. Thus, road signs should be standardised in terms of shape, content, location and precedence in relation to the traffic rules, ensuring better management as regards their quantity and visibility. |
| --- | --- |

6.5

Traffic rules must be supplemented and clarified, and any exceptions made clear, using traffic signs to provide a variety of information likely to increase road traffic safety. Thus, road signs should be standardised in terms of shape, content, location and precedence in relation to the traffic rules, ensuring better management as regards their quantity and visibility.

| 6.6 | Road signs are not the only area targeted here. It would also make sense to harmonise traffic police signals, light signals, drivers' signals and road markings. |
| --- | --- |

6.6

Road signs are not the only area targeted here. It would also make sense to harmonise traffic police signals, light signals, drivers' signals and road markings.

| 6.7 | It is an offence not to comply with traffic rules or follow the instructions on road signs; this implies standard rules for monitoring procedures, particularly in detecting speed, blood alcohol levels and psychotropic drug levels. However, prior to this, Member States must agree on what constitutes an offence, so as to avoid a situation where one activity is an offence in one Member State but not in another. Therefore, the definition of offences must be standardised. |
| --- | --- |

6.7

It is an offence not to comply with traffic rules or follow the instructions on road signs; this implies standard rules for monitoring procedures, particularly in detecting speed, blood alcohol levels and psychotropic drug levels. However, prior to this, Member States must agree on what constitutes an offence, so as to avoid a situation where one activity is an offence in one Member State but not in another. Therefore, the definition of offences must be standardised.

| 6.8 | It is consequently important to study and set up simplified mechanisms to promote a uniform interpretation of a European Highway Code, given that procedures relating to traffic offences must be speedy if their standards are to be effective — basically what is needed is a simplified process for questions referred to the Court of Justice for a preliminary ruling. |
| --- | --- |

6.8

It is consequently important to study and set up simplified mechanisms to promote a uniform interpretation of a European Highway Code, given that procedures relating to traffic offences must be speedy if their standards are to be effective — basically what is needed is a simplified process for questions referred to the Court of Justice for a preliminary ruling.

7.   A single vehicle registration number throughout Europe

| 7.1 | Vehicle registration requirements, instruments and procedures also vary considerably across the Member States. The possibility of moving towards a single European vehicle register was also discussed at the hearing, and there was support for this from several quarters. |
| --- | --- |

7.1

Vehicle registration requirements, instruments and procedures also vary considerably across the Member States. The possibility of moving towards a single European vehicle register was also discussed at the hearing, and there was support for this from several quarters.

| 7.2 | In addition, the hearing weighed up the pros and cons of a central European register of vehicle ownership, which could also record other key points relating to the vehicle such as duties, taxes and other associated costs, together with different forms of ownership/use. Highlighted in this connection were the advantages of this kind of solution for intra-Community trade in vehicles, fraud and vehicle theft prevention, and the prosecution of drivers from other Member States who have committed traffic offences. |
| --- | --- |

7.2

In addition, the hearing weighed up the pros and cons of a central European register of vehicle ownership, which could also record other key points relating to the vehicle such as duties, taxes and other associated costs, together with different forms of ownership/use. Highlighted in this connection were the advantages of this kind of solution for intra-Community trade in vehicles, fraud and vehicle theft prevention, and the prosecution of drivers from other Member States who have committed traffic offences.

| 7.3 | The feeling is that conditions are right for moving towards the introduction of a single vehicle register, linked to the vehicles themselves and not the vehicle owners or users. This would make use of experience already acquired with the information system on registration numbers and owner identification for motor insurance (3rd Directive). |
| --- | --- |

7.3

The feeling is that conditions are right for moving towards the introduction of a single vehicle register, linked to the vehicles themselves and not the vehicle owners or users. This would make use of experience already acquired with the information system on registration numbers and owner identification for motor insurance (3rd Directive).

| 7.4 | The possibilities would thus be greater for buying, insuring and registering a vehicle in any Member State and this would make a key contribution to boosting cross-border trade in vehicles, people's mobility, tourism and the development of the single market (18). |
| --- | --- |

7.4

The possibilities would thus be greater for buying, insuring and registering a vehicle in any Member State and this would make a key contribution to boosting cross-border trade in vehicles, people's mobility, tourism and the development of the single market (18).

| 7.5 | Moreover, a single European vehicle registration system seems to be extremely worth-while, in addition to the fact that it would be possible to set up without excessively high costs; it would initially involve enormous advantages from the point of view of: determining the holder of the vehicle's papers (ownership or other legal arrangement); legal certainty in vehicle transactions; theft and fraud prevention; and easier monitoring and penalties for offences committed in any Member State. |
| --- | --- |

7.5

Moreover, a single European vehicle registration system seems to be extremely worth-while, in addition to the fact that it would be possible to set up without excessively high costs; it would initially involve enormous advantages from the point of view of: determining the holder of the vehicle's papers (ownership or other legal arrangement); legal certainty in vehicle transactions; theft and fraud prevention; and easier monitoring and penalties for offences committed in any Member State.

8.   Legal basis and appropriate Community instrument

| 8.1 | As things stand at present, the EESC feels that the most appropriate legal instrument for launching an initiative of the scale set out here would be a directive for minimum harmonisation.. |
| --- | --- |

8.1

As things stand at present, the EESC feels that the most appropriate legal instrument for launching an initiative of the scale set out here would be a directive for minimum harmonisation..

| 8.2 | The legal basis for adopting such a directive should take into account the impact of the initiative as a means of completing the single market and increasing freedom of movement within the Community for the people in Europe. |
| --- | --- |

8.2

The legal basis for adopting such a directive should take into account the impact of the initiative as a means of completing the single market and increasing freedom of movement within the Community for the people in Europe.

9.   Conclusions and recommendations

A)   A European Highway Code

| 9.1 | The EESC holds the view that a certain degree of harmonisation of legislation on road traffic rules is not only an effective way of speeding up completion of the single market, but also of ensuring the safer movement of cars on the European market. |
| --- | --- |

9.1

The EESC holds the view that a certain degree of harmonisation of legislation on road traffic rules is not only an effective way of speeding up completion of the single market, but also of ensuring the safer movement of cars on the European market.

| 9.2 | Moreover, the EESC feels that such harmonisation may well make a key contribution to boosting road safety and promoting accident prevention, thus securing more consistent freedom of movement for the people of Europe. |
| --- | --- |

9.2

Moreover, the EESC feels that such harmonisation may well make a key contribution to boosting road safety and promoting accident prevention, thus securing more consistent freedom of movement for the people of Europe.

| 9.3 | The EESC believes that the conditions are right for launching preparatory work for a Community legislative initiative with the above-mentioned aims, taking into account the various points of view and difficulties set out in this Opinion. |
| --- | --- |

9.3

The EESC believes that the conditions are right for launching preparatory work for a Community legislative initiative with the above-mentioned aims, taking into account the various points of view and difficulties set out in this Opinion.

| 9.4 | It understands that as matters stand at present, the possibility of using a directive for minimum harmonisation should be considered as a first step towards setting up a European Highway Code, using the Vienna Convention as a model, with a definition of basic traffic rules and signals, drivers' qualifications and licences, and the nature of offences and the associated penalties. |
| --- | --- |

9.4

It understands that as matters stand at present, the possibility of using a directive for minimum harmonisation should be considered as a first step towards setting up a European Highway Code, using the Vienna Convention as a model, with a definition of basic traffic rules and signals, drivers' qualifications and licences, and the nature of offences and the associated penalties.

B)   A single Europe-wide vehicle register

| 9.5 | The EESC also thinks that legal certainty in motor vehicle use, because it makes it easier to trace vehicles, will benefit considerably from the creation of a single European-wide vehicle register, linked as it would be to the vehicles themselves. |
| --- | --- |

9.5

The EESC also thinks that legal certainty in motor vehicle use, because it makes it easier to trace vehicles, will benefit considerably from the creation of a single European-wide vehicle register, linked as it would be to the vehicles themselves.

| 9.6 | The EESC also considers that a binding Community instrument could define the basis for setting up a single system for a European vehicle register, strongly based on experience to date in cooperation between the national bodies responsible. |
| --- | --- |

9.6

The EESC also considers that a binding Community instrument could define the basis for setting up a single system for a European vehicle register, strongly based on experience to date in cooperation between the national bodies responsible.

| 9.7 | Consequently, it urges the Commission to start up the studies necessary for analysing the cost/benefit situation regarding the various areas to be harmonised. |
| --- | --- |

9.7

Consequently, it urges the Commission to start up the studies necessary for analysing the cost/benefit situation regarding the various areas to be harmonised.

C)   Conclusion

| 9.8 | It suggests that the Commission use a ‘Green Paper’ to launch a public discussion on the issue, with a view to obtaining the views of as many stakeholders as possible. |
| --- | --- |

9.8

It suggests that the Commission use a ‘Green Paper’ to launch a public discussion on the issue, with a view to obtaining the views of as many stakeholders as possible.

| 9.9 | In the meantime, it urges the Commission, for its part, to continue with its current studies with a view to ever-greater harmonization of matters related to driving in general and to the increased safety of cars themselves. |
| --- | --- |

9.9

In the meantime, it urges the Commission, for its part, to continue with its current studies with a view to ever-greater harmonization of matters related to driving in general and to the increased safety of cars themselves.

| 9.10 | The EESC would draw Member States' attention to the need for and timeliness of adopting increasingly stringent measures for cooperation and coordination in matters pertaining to road traffic rules, accident prevention, first aid/initial steps to take in the event of an accident and damage compensation. |
| --- | --- |

9.10

The EESC would draw Member States' attention to the need for and timeliness of adopting increasingly stringent measures for cooperation and coordination in matters pertaining to road traffic rules, accident prevention, first aid/initial steps to take in the event of an accident and damage compensation.

| 9.11 | The EESC hopes that the European Parliament will fully support this initiative and urge the Commission and Council to take steps to carry out its objectives. |
| --- | --- |

9.11

The EESC hopes that the European Parliament will fully support this initiative and urge the Commission and Council to take steps to carry out its objectives.

Brussels, 15 December 2004

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  Articles 39 et seq. of the EC Treaty.

1

(2)  Article 2, 4th indent of the EU Treaty and Articles 61 et seq. of the EC Treaty.

2

th

(3)  Protocol No. 2 to the EU Treaty.

3

(4)  Articles 70 et seq. of the EC Treaty.

4

(5)  Articles 95 et seq. of the EC Treaty.

5

(6)  See ‘EU Energy and Transport in Figures’, DG Energy and Transport in cooperation with EUROSTAT (2003).

6

EU Energy and Transport in Figures

(7)  Dott. Argante Righetti, Procuratore Pubblico, Bellinzona – Ticino, Criteri di applicazione delle norme di circolazione per i veicoli stranieri in caso di difformità fra la Convenzione di Ginevra e la legislazione interna degli Stati aderenti, Automobile Club di Perugia, 8-10 September 1961.

7

(8)  This subject should be broached at the upcoming European Traffic Law Days (Trier V) in October 2004 and during the 1
  st European Road Congress, to be held in Lisbon from 24 to 26 November 2004, on the subject of ‘Mobility in an enlarged Europe: challenges and responsibilities in the Road Sector’.

8

European Traffic Law Days (Trier V)

1

st

European Road Congress

(9)  In particular, Council Act of 17 June 1998 drawing up the Convention on Driving Disqualifications (OJ C 216 of 10/07/98), Regulation (EC) No. 2411/98 of 3 November 1998 (OJ L 299 of 10.11.1998) on the recognition in intra-Community traffic of the distinguishing sign of the Member State in which motor vehicles and their trailers are registered, Directives 1999/37/EC and 2003/127/EC of 29 April 1999 and 23 December 2003 on the registration documents for vehicles (OJ L 138 of 01.06.1999 and OJ L 10 of 16.01.2004), Council resolution of 26 June 2000 on the improvement of road safety (OJ C 218 of 31/07/2000), Commission Recommendation of 6 April 2004 on enforcement in the field of road safety (OJ L 111 of 17/04/04), Commission Decision of 23 December 2003 on the technical prescriptions for the implementation of Article 3 of Directive 2003/102/EC relating to the protection of pedestrians and other vulnerable road users (OJ L 31 of 04/02/04), Directive 2004/11/EC of 11 February 2004 relating to speed limitation devices or similar speed limitation on-board systems of certain categories of motor vehicles (OJ L 44 of 14/02/04), Commission Decision of 2 April 2004 on the application of Council Directive 72/166/EEC with regard to checks on insurance against civil liability in respect of the use of motor vehicles (OJ L 105 of 14/04/04), the proposal for a Directive of 21 October 2003 on driving licences (COM(2003) 621 final), Proposal for a Directive on the establishment of common rules for certain types of carriage of goods by road (COM (2004) 47 final of 02/02/04), and the proposal for a Regulation on the gradual abolition of checks at common borders as regards access to the Schengen Information System by the services in the Member States responsible for issuing registration certificates for vehicles (COM(2003) 510 final of 21.08.2003). Likewise, Regulations 39, 60, 62, 71, 73, 78, 101 and 103 of the Economic Commission for Europe of the United Nations (UN/ECE) have the same objective of providing information (OJ L 95 of 31.03.2004).

9

(10)  Comparative Study of Road Traffic Rules and corresponding enforcement actions in the Member States of the European Union, carried out by TIS.PT, Consultores em Transportes, Inovação e Sistemas, S.A. and completed in February 2004.

10

Comparative Study of Road Traffic Rules and corresponding enforcement actions in the Member States of the European Union

(11)  Cf OJ C 110 of 30.4.2004 on the Proposal for a Regulation amending the Convention implementing the Schengen Agreement of 14 June 1985 on the gradual abolition of checks at common borders as regards access to the Schengen Information System by the services in the Member States responsible for issuing registration certificates for vehicles, for which the Rapporteur was Mr Barros Vale. Also see inter alia OJ C 112 of 30.4.2004 on the Proposal for a Directive on driving licences (Recasting), for which the Rapporteur was Mr Jan Simmons, and OJ C 108 of 30.4.2004 on the Communication from the Commission on Information and Communications Technologies for safe and intelligent vehicles, for which the Rapporteur was Mr V Ranocchiari.

11

Mr V Ranocchiari

(12)  For example, between Portugal and Germany, the 1926 Convention is in force; between Portugal and Belgium, the 1949 Convention; between Germany and Belgium, the 1968 Convention. There are even more examples if account is taken of the new Member States. Further examples include the 1926 convention between Germany, Ireland and Holland; the 1949 one between Holland, Portugal and Sweden; and the 1968 one between Finland, Italy, Austria and Latvia. This diversity is rooted in the accession (or not) of states to the most recent instrument. Thus, when two or more countries sign up to the most recent instrument, previous conventions are no longer in force between them, but continue to be in force in relation to the other countries not signing up to the latest convention.

12

(13)  For example, Portugal recently revised its highway code and Italy has just started to do the same.

13

(14)  See the footnote referred to in footnote 10.

14

(15)  Cf points 2.4 and 4

15

(16)  Cf the Report of the European Transport Safety Council on ‘Cost Effective EU Transport Safety Measures’(2003) and the Final report on ‘Cost-Benefit Analysis of Road Safety Improvements’ carried out by ICF Consulting, Ltd, London, 12 June 2003.

16

‘Cost Effective EU Transport Safety Measures’

‘Cost-Benefit Analysis of Road Safety Improvements’

(17)  Cf. Directive 2004/52/EC of 29 April 2004 on the interoperability of electronic road toll systems in the Community (OJ L 166 of 30/04/04).

17

(18)  Some members of the study group suggested moving forward now with a system whereby it would be possible to buy and register a vehicle on a trans-national basis, to cover the circumstances of people who, for professional reasons, are in a Member State on a temporary basis or are obliged to visit that country regularly.

18

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| 28.6.2005 | EN | Official Journal of the European Union | C 157/42 |
| --- | --- | --- | --- |

28.6.2005

EN

Official Journal of the European Union

C 157/42

---

Opinion of the European Economic and Social Committee on the ‘Promotion of sea transport and the recruitment and training of seafarers’

(2005/C 157/05)

On 29 January 2004, the European Economic and Social Committee decided to draw up an opinion, under Rule 29(2) of its Rules of Procedure, on the ‘Promotion of sea transport and the recruitment and training of seafarers’.

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 5 October 2004. The rapporteur was Mr Chagas.

At its 413th plenary session of 15 and 16 December 2004 (meeting of 15 December 2004), the European Economic and Social Committee adopted the following opinion by 137 votes to 1 with 5 abstentions.

1.   Introduction

| 1.1 | In 1996 the European Commission and the Irish Presidency of the EU Council of Ministers organised an international conference in Dublin under the title ‘Is the European Union Seafarer an Endangered Species?’ The conference acknowledged that European seafarers were vital to the sustainability of Europe's maritime industry. A number of proposals were made to re-establish, in sufficient numbers, a highly skilled pool of seafarers. That same year the Commission presented an analysis of the situation in its Communication ‘Towards a new maritime strategy’ (1). Those concerns were also reflected in a Resolution of 24 March 1997 on a new strategy to increase the competitiveness of Community shipping (2). The Council of Ministers of the European Union endorsed the Commission's communication and ‘inter-alia’ recognised that positive measures were needed to foster the employment of Community seafarers. |
| --- | --- |

1.1

In 1996 the European Commission and the Irish Presidency of the EU Council of Ministers organised an international conference in Dublin under the title ‘Is the European Union Seafarer an Endangered Species?’ The conference acknowledged that European seafarers were vital to the sustainability of Europe's maritime industry. A number of proposals were made to re-establish, in sufficient numbers, a highly skilled pool of seafarers. That same year the Commission presented an analysis of the situation in its Communication ‘Towards a new maritime strategy’ (1). Those concerns were also reflected in a Resolution of 24 March 1997 on a new strategy to increase the competitiveness of Community shipping (2). The Council of Ministers of the European Union endorsed the Commission's communication and ‘inter-alia’ recognised that positive measures were needed to foster the employment of Community seafarers.

| 1.2 | The Commission has recognised in the Communication on the training and recruitment of seafarers (3) a sharp decline in the supply of well-trained personnel, especially officers in the last two decades. Since the early 1980s both EU fleet and the number of EU seafarers have declined significantly. However, the schedule passenger and ferry industry in the EU is an exception, continuing to be served mainly by EU-flag vessels crewed predominantly by EU nationals. The industry, the Member States and the Commission have addressed the issue of the declining number of EU seafarers, together with the shortage of well-qualified seafarers on a number of occasions; however, measures identified to arrest and reverse the decline have largely been ineffective. |
| --- | --- |

1.2

The Commission has recognised in the Communication on the training and recruitment of seafarers (3) a sharp decline in the supply of well-trained personnel, especially officers in the last two decades. Since the early 1980s both EU fleet and the number of EU seafarers have declined significantly. However, the schedule passenger and ferry industry in the EU is an exception, continuing to be served mainly by EU-flag vessels crewed predominantly by EU nationals. The industry, the Member States and the Commission have addressed the issue of the declining number of EU seafarers, together with the shortage of well-qualified seafarers on a number of occasions; however, measures identified to arrest and reverse the decline have largely been ineffective.

| 1.3 | A number of studies and research projects have sought to identify and address the decline in EU seafarer numbers. This has included:






  — | the 1996 study on the maritime professions in the European Union (financed by the Commission); |
| --- | --- | --- |

1.3

A number of studies and research projects have sought to identify and address the decline in EU seafarer numbers. This has included:

—

the 1996 study on the maritime professions in the European Union (financed by the Commission);

| — | the 1998 FST/ECSA Joint Study (financed by the Commission) (4); |
| --- | --- |

—

the 1998 FST/ECSA Joint Study (financed by the Commission) (4);

| — | the METHAR (5) Research Project and the METNET (6) Research Project (both funded by the European Commission under the Transport RTD Programme of the 4th and 5th frameworks respectively). |
| --- | --- |

—

the METHAR (5) Research Project and the METNET (6) Research Project (both funded by the European Commission under the Transport RTD Programme of the 4th and 5th frameworks respectively).

| 1.4 | The BIMCO/ISF 2000 Manpower Update Report (7), published in April 2000, is probably the most comprehensive study of the global supply and demand for merchant seafarers to date. It estimated a shortfall of 16,000 officers, or 4 % of the workforce. The projections for officers for the year 2010, dependent upon growth, manning skills, wastage and increased training, show, after sensitivity analysis, either an excess of around 11 %, or a deficit of 24 %. It is expected that a further update in 2005 is likely to indicate a deficit. According to the FST/ECSA Joint Study in 1998 (8), the EU is more seriously affected with an estimated shortage of some 13,000 officers in 2001, rising to around 36,000officers in 2006. |
| --- | --- |

1.4

The BIMCO/ISF 2000 Manpower Update Report (7), published in April 2000, is probably the most comprehensive study of the global supply and demand for merchant seafarers to date. It estimated a shortfall of 16,000 officers, or 4 % of the workforce. The projections for officers for the year 2010, dependent upon growth, manning skills, wastage and increased training, show, after sensitivity analysis, either an excess of around 11 %, or a deficit of 24 %. It is expected that a further update in 2005 is likely to indicate a deficit. According to the FST/ECSA Joint Study in 1998 (8), the EU is more seriously affected with an estimated shortage of some 13,000 officers in 2001, rising to around 36,000officers in 2006.

| 1.5 | A recent study (9) conducted in the United Kingdom (UK), by the University of Cardiff, commissioned by the Department for Transport, the Chamber of Shipping and the Marine Society have identified a significant shortfall with respect to the number of well qualified seafarers available to fill positions in maritime shore-based employment in the UK. |
| --- | --- |

1.5

A recent study (9) conducted in the United Kingdom (UK), by the University of Cardiff, commissioned by the Department for Transport, the Chamber of Shipping and the Marine Society have identified a significant shortfall with respect to the number of well qualified seafarers available to fill positions in maritime shore-based employment in the UK.

| 1.6 | The Commission has recognised that Short Sea Shipping is an integral part of the transport system (10). While a number of initiatives have been taken to promote Short Sea Shipping, namely in the frame of the guidelines for state aid to maritime transport, this has not brought about any significant material improvement with respect to the employment of EU seafarers. Registered tonnage has ceased to decline in some Member States and some have seen an increase. However, the number of EU seafarers continues to decline. |
| --- | --- |

1.6

The Commission has recognised that Short Sea Shipping is an integral part of the transport system (10). While a number of initiatives have been taken to promote Short Sea Shipping, namely in the frame of the guidelines for state aid to maritime transport, this has not brought about any significant material improvement with respect to the employment of EU seafarers. Registered tonnage has ceased to decline in some Member States and some have seen an increase. However, the number of EU seafarers continues to decline.

2.   Commission recommendations promoting the recruitment and training of seafarers, and sea transport (11)

| 2.1 | Whilst acknowledging that employment and training are two issues for which the Member States have prime responsibility, the Commission has identified and made recommendations with respect to priority actions:






  a) | proper application of existing Community and international law on living and working conditions and the quality of shipboard operations in order to improve the social conditions as a means of recruitment and retention of high calibre personnel; |
| --- | --- | --- |

2.1

Whilst acknowledging that employment and training are two issues for which the Member States have prime responsibility, the Commission has identified and made recommendations with respect to priority actions:

a)

proper application of existing Community and international law on living and working conditions and the quality of shipboard operations in order to improve the social conditions as a means of recruitment and retention of high calibre personnel;

| b) | recognised the increased competition from cheaper non-EU labour on schedule passenger ferry services within the European Union. While providing a solution to this problem identified the need for parallel arrangements by the social partners; |
| --- | --- |

b)

recognised the increased competition from cheaper non-EU labour on schedule passenger ferry services within the European Union. While providing a solution to this problem identified the need for parallel arrangements by the social partners;

| c) | Member States and the social partners organise coordinated awareness campaigns at national and European level to re-launch the image of the shipping industry and give young people the facts about the opportunities and implications of a maritime career; |
| --- | --- |

c)

Member States and the social partners organise coordinated awareness campaigns at national and European level to re-launch the image of the shipping industry and give young people the facts about the opportunities and implications of a maritime career;

| d) | ship owners explore the possibilities in respect of the improvement of living and working conditions, including tours of duty and remuneration; |
| --- | --- |

d)

ship owners explore the possibilities in respect of the improvement of living and working conditions, including tours of duty and remuneration;

| e) | ensure the preservation of a high-quality system of maritime training in the EU with Member States and the social partners ensuring a sufficient number of on-board training places; |
| --- | --- |

e)

ensure the preservation of a high-quality system of maritime training in the EU with Member States and the social partners ensuring a sufficient number of on-board training places;

| f) | Member States and the social partners explore and take advantage of the opportunities offered by Community instruments that are available for the financial support of maritime training; |
| --- | --- |

f)

Member States and the social partners explore and take advantage of the opportunities offered by Community instruments that are available for the financial support of maritime training;

| g) | gave recognition that the Community may support the industry's efforts to reverse the present shortfall of the EU seafarers by sponsoring a number of ad hoc research projects through the 6th framework programme. |
| --- | --- |

g)

gave recognition that the Community may support the industry's efforts to reverse the present shortfall of the EU seafarers by sponsoring a number of ad hoc research projects through the 6th framework programme.

| 2.1.1 | The European Economic and Social Committee expressed the opinion (12) that all those to whom the Commission communication on training and recruitment of seafarers was addressed, should take careful note of its recommendations. In particular, reference was made to Member States making the fullest use of state aid to maritime transport and other existing EU aid measures. The Committee drew attention for the need for improvement in on-board living and working conditions, the ratification and enforcement of the relevant international standards and where necessary take appropriate action to boost the social, prestige and job satisfaction of the seafaring professions. The Committee also drew attention to the need for cooperation and promotion of the profession by Member States and the social partners. |
| --- | --- |

2.1.1

The European Economic and Social Committee expressed the opinion (12) that all those to whom the Commission communication on training and recruitment of seafarers was addressed, should take careful note of its recommendations. In particular, reference was made to Member States making the fullest use of state aid to maritime transport and other existing EU aid measures. The Committee drew attention for the need for improvement in on-board living and working conditions, the ratification and enforcement of the relevant international standards and where necessary take appropriate action to boost the social, prestige and job satisfaction of the seafaring professions. The Committee also drew attention to the need for cooperation and promotion of the profession by Member States and the social partners.

| 2.2 | Acknowledging that sea transport is an issue for which the Member States have prime responsibility, the Commission has identified and made recommendations with respect to priority actions. Whilst there has been considerable emphasis upon Short Sea Shipping, measures have not been confined to this sector:






  a) | legislative actions include implementation of the Directive on certain formalities for ships to arrive in and/or depart from ports in Member States (IMO–FAL), implementation of Marco Polo, standardisation and harmonization of inter-modal loading units, Motorways of the Sea and improving the environmental performance of Shipping; |
| --- | --- | --- |

2.2

Acknowledging that sea transport is an issue for which the Member States have prime responsibility, the Commission has identified and made recommendations with respect to priority actions. Whilst there has been considerable emphasis upon Short Sea Shipping, measures have not been confined to this sector:

a)

legislative actions include implementation of the Directive on certain formalities for ships to arrive in and/or depart from ports in Member States (IMO–FAL), implementation of Marco Polo, standardisation and harmonization of inter-modal loading units, Motorways of the Sea and improving the environmental performance of Shipping;

| b) | technical actions include Guide to Customs Procedures for Short Sea Shipping, identification and elimination of obstacles to making Short Sea Shipping more successful, approximation of national applications and computerisation of Community Customs procedures and research and technological development; |
| --- | --- |

b)

technical actions include Guide to Customs Procedures for Short Sea Shipping, identification and elimination of obstacles to making Short Sea Shipping more successful, approximation of national applications and computerisation of Community Customs procedures and research and technological development;

| c) | operational actions include One-Stop Administrative Shops, ensuring the vital role of Short Sea Shipping Focal Points, ensuring good functioning of and guidance to Short Sea Promotion Centres, promote the image of Short Sea Shipping as a successful transport alternative and the collection of statistical information. |
| --- | --- |

c)

operational actions include One-Stop Administrative Shops, ensuring the vital role of Short Sea Shipping Focal Points, ensuring good functioning of and guidance to Short Sea Promotion Centres, promote the image of Short Sea Shipping as a successful transport alternative and the collection of statistical information.

| 2.2.1 | The European Economic and Social Committee supported the Communication from the Commission in an opinion (13) on the action programme for the promotion of Short Sea Shipping. The Committee did, however, draw attention to the need for the removal of bottlenecks in order that Short Sea Shipping could evolve into intermodality. Concern was expressed on a number of associated issues. The Committee also stressed the importance for continuous monitoring of the actions to be undertaken. |
| --- | --- |

2.2.1

The European Economic and Social Committee supported the Communication from the Commission in an opinion (13) on the action programme for the promotion of Short Sea Shipping. The Committee did, however, draw attention to the need for the removal of bottlenecks in order that Short Sea Shipping could evolve into intermodality. Concern was expressed on a number of associated issues. The Committee also stressed the importance for continuous monitoring of the actions to be undertaken.

3.   Council recommendations promoting the recruitment and training of seafarers, and sea transport

| 3.1 | The Council acknowledged (14) the general structure and policy directions of the Commission's Communication on the ‘training and recruitment of seafarers’ (15). In so doing acknowledged the importance of shipping in world and intra-Community trade. Further acknowledged that sea transport is the most effective, environment-friendly and cheap mode of transport. |
| --- | --- |

3.1

The Council acknowledged (14) the general structure and policy directions of the Commission's Communication on the ‘training and recruitment of seafarers’ (15). In so doing acknowledged the importance of shipping in world and intra-Community trade. Further acknowledged that sea transport is the most effective, environment-friendly and cheap mode of transport.

| 3.2 | While recognising the competitive nature of shipping, the Council also stressed the importance of combating sub-standard shipping by both the incorporation of international standards or filling gaps in international legislation, thereby emphasizing the importance of the implementation and enforcement of existing legislation, including legislation relating to living and working conditions as seafarers are fundamental elements for ship safety. |
| --- | --- |

3.2

While recognising the competitive nature of shipping, the Council also stressed the importance of combating sub-standard shipping by both the incorporation of international standards or filling gaps in international legislation, thereby emphasizing the importance of the implementation and enforcement of existing legislation, including legislation relating to living and working conditions as seafarers are fundamental elements for ship safety.

| 3.3 | It specifically acknowledged the importance of the human factor in quality shipping and the need to favourably influence public opinion, both with respect to image and the attractiveness of seafaring as a career. |
| --- | --- |

3.3

It specifically acknowledged the importance of the human factor in quality shipping and the need to favourably influence public opinion, both with respect to image and the attractiveness of seafaring as a career.

| 3.4 | Further acknowledge the positive effect of the Community guidelines for state aid in the maritime sector and their importance in maintaining competitiveness of Member States' fleets and increasing the number of vessels under Member States' registers. |
| --- | --- |

3.4

Further acknowledge the positive effect of the Community guidelines for state aid in the maritime sector and their importance in maintaining competitiveness of Member States' fleets and increasing the number of vessels under Member States' registers.

| 3.5 | While acknowledging the importance of sea transport, the Council identified and made recommendations, ‘inter alia’, with respect to the following specific issues:






  a) | early production of revised Community guidelines for state aid in the maritime sector in order to ensure the maintenance of competitiveness and the promotion of maritime knowledge, as well as the employment of European seafarers; |
| --- | --- | --- |

3.5

While acknowledging the importance of sea transport, the Council identified and made recommendations, ‘inter alia’, with respect to the following specific issues:

a)

early production of revised Community guidelines for state aid in the maritime sector in order to ensure the maintenance of competitiveness and the promotion of maritime knowledge, as well as the employment of European seafarers;

| b) | Member States to improve the image of shipping; |
| --- | --- |

b)

Member States to improve the image of shipping;

| c) | further promotion of quality shipping through stricter compliance with IMO and ILO legal instruments, as well as Community legislation in the framework of Flag State Implementation (FSI) and Port State Control (PSC); |
| --- | --- |

c)

further promotion of quality shipping through stricter compliance with IMO and ILO legal instruments, as well as Community legislation in the framework of Flag State Implementation (FSI) and Port State Control (PSC);

| d) | the possibility of setting up a European quality reward system, recognising quality operators complying ‘inter alia’ with standards of safety, living and working conditions for seafarers, security and environmental protection as an incentive to promote quality shipping; |
| --- | --- |

d)

the possibility of setting up a European quality reward system, recognising quality operators complying ‘inter alia’ with standards of safety, living and working conditions for seafarers, security and environmental protection as an incentive to promote quality shipping;

| e) | welcomed the intention of the Commission to provide a report on possible development of specific recognition procedures for certificates of competency within the Community, thorough compliance with STCW requirements; |
| --- | --- |

e)

welcomed the intention of the Commission to provide a report on possible development of specific recognition procedures for certificates of competency within the Community, thorough compliance with STCW requirements;

| f) | social partners to contribute to the efforts of Member States and the Commission to attract young people to the seafaring profession, including the creation of attractive working and salary conditions. This also to include the promotion of employment of women at sea as well as on land; |
| --- | --- |

f)

social partners to contribute to the efforts of Member States and the Commission to attract young people to the seafaring profession, including the creation of attractive working and salary conditions. This also to include the promotion of employment of women at sea as well as on land;

| g) | ship owners to ensure and preserve a sufficient level of employment for EU citizens on board their ships and in their companies. In particular, the promotion of a career with perspectives of mobility, promotion and future employment by signing with young officers' career contracts. This to be complimented by improvements in working and living conditions taking advantage of modern technological and communication means; |
| --- | --- |

g)

ship owners to ensure and preserve a sufficient level of employment for EU citizens on board their ships and in their companies. In particular, the promotion of a career with perspectives of mobility, promotion and future employment by signing with young officers' career contracts. This to be complimented by improvements in working and living conditions taking advantage of modern technological and communication means;

| h) | the importance of conventions referring to labour standards, i.e. ILO conventions. |
| --- | --- |

h)

the importance of conventions referring to labour standards, i.e. ILO conventions.

4.   European Parliament's opinions concerning promoting the recruitment and training of seafarers, and sea transport

| 4.1 | On a number of occasions the European Parliament has addressed the issue of the promotion of maritime transport and the seafaring professions. In particular, in its recent resolution on improving safety at sea (P5_TA_PROV(2004)0350), following the accident with the tanker Prestige off the Spanish Galician coast, a number of proposals would, if implemented, significantly contribute, directly or indirectly, to promote EU shipping with benefits for both the EU ship owners and the EU seafarers. |
| --- | --- |

4.1

On a number of occasions the European Parliament has addressed the issue of the promotion of maritime transport and the seafaring professions. In particular, in its recent resolution on improving safety at sea (P5_TA_PROV(2004)0350), following the accident with the tanker Prestige off the Spanish Galician coast, a number of proposals would, if implemented, significantly contribute, directly or indirectly, to promote EU shipping with benefits for both the EU ship owners and the EU seafarers.

| 4.2 | Amongst others, the EESC notes with interest the following recommendations included in that report: |
| --- | --- |

4.2

Amongst others, the EESC notes with interest the following recommendations included in that report:

| 4.2.1 | ‘[The EP] calls for a comprehensive and cohesive European maritime policy, which would have as its objective the creation of a European maritime safety area; considers that this policy should be based on the following measures:






  — | the banning of substandard vessels; |
| --- | --- | --- |

4.2.1

‘[The EP] calls for a comprehensive and cohesive European maritime policy, which would have as its objective the creation of a European maritime safety area; considers that this policy should be based on the following measures:

—

the banning of substandard vessels;

| — | ...; |
| --- | --- |

—

...;

| — | the improvement of living and working conditions and training for seafarers...’. |
| --- | --- |

—

the improvement of living and working conditions and training for seafarers...’.

| 4.2.2 | ‘[The EP] stresses that, in the interests of safety at sea, it is essential that seafarers should receive a wage which assigns value to their work, and that an end be put to the overexploitation which exists on many ships; calls on the Commission to work for harmonisation of, and a higher status for, this occupation on a European scale by means of legislation and to act to this end within the IMO.’ |
| --- | --- |

4.2.2

‘[The EP] stresses that, in the interests of safety at sea, it is essential that seafarers should receive a wage which assigns value to their work, and that an end be put to the overexploitation which exists on many ships; calls on the Commission to work for harmonisation of, and a higher status for, this occupation on a European scale by means of legislation and to act to this end within the IMO.’

| 4.2.3 | ‘[The EP] calls for measures to raise the prestige of maritime occupations and make them more attractive to young people in general and young Europeans in particular.’ |
| --- | --- |

4.2.3

‘[The EP] calls for measures to raise the prestige of maritime occupations and make them more attractive to young people in general and young Europeans in particular.’

5.   General comments and observations

| 5.1 | As part of an ongoing programme of sustainable development within the EU, it is recognised that shipping has a vital role. The importance of sea transport was identified in a White Paper from the Commission entitled ‘European Transport Policy for 2010: Time to Decide’ (16) and outlined in a maritime policy document entitled ‘European Union Legislation and Objectives for Sea Transport’ (17). |
| --- | --- |

5.1

As part of an ongoing programme of sustainable development within the EU, it is recognised that shipping has a vital role. The importance of sea transport was identified in a White Paper from the Commission entitled ‘European Transport Policy for 2010: Time to Decide’ (16) and outlined in a maritime policy document entitled ‘European Union Legislation and Objectives for Sea Transport’ (17).

| 5.2 | Shipping carries 40.7 % by value and 69.9 % by weight of EU Exports/Imports (18). This is significantly higher for Member States with island status. Sea transport is the most important mode of transport with respect to external EU trade. |
| --- | --- |

5.2

Shipping carries 40.7 % by value and 69.9 % by weight of EU Exports/Imports (18). This is significantly higher for Member States with island status. Sea transport is the most important mode of transport with respect to external EU trade.

| 5.3 | Shipping carries 12 % by value and 19.7 % by weight of intra-Community trade (19). For off-lying islands and some regions this is significantly higher, in particular, the UK and Ireland who are almost entirely dependent upon sea transport for their economic well-being and prosperity. |
| --- | --- |

5.3

Shipping carries 12 % by value and 19.7 % by weight of intra-Community trade (19). For off-lying islands and some regions this is significantly higher, in particular, the UK and Ireland who are almost entirely dependent upon sea transport for their economic well-being and prosperity.

| 5.4 | A healthy and vibrant shipping industry contributes to the maintenance of other forms of transport. In addition, a successful shipping industry aids the maintenance and prosperity of the whole maritime sector. In particular, meeting the requirement for trained, high calibre seafarers to migrate into the service, financial, leisure and manufacturing sub-sectors. While there is the possibility of some element of substitution, alternative methods of training are not always desirable or possible. |
| --- | --- |

5.4

A healthy and vibrant shipping industry contributes to the maintenance of other forms of transport. In addition, a successful shipping industry aids the maintenance and prosperity of the whole maritime sector. In particular, meeting the requirement for trained, high calibre seafarers to migrate into the service, financial, leisure and manufacturing sub-sectors. While there is the possibility of some element of substitution, alternative methods of training are not always desirable or possible.

| 5.5 | A distinction needs to be made between ratings and officers. Ship owners appear to be more inclined to employ EU officers, despite higher labour costs. |
| --- | --- |

5.5

A distinction needs to be made between ratings and officers. Ship owners appear to be more inclined to employ EU officers, despite higher labour costs.

| 5.6 | A significant number of EU officers are employed at sea in areas of high risk and high value and in senior positions throughout the industry on a variety of ships at sea. The experience of such individuals is utilised extensively in both shipping companies and management of fleets both within and outside the EU. |
| --- | --- |

5.6

A significant number of EU officers are employed at sea in areas of high risk and high value and in senior positions throughout the industry on a variety of ships at sea. The experience of such individuals is utilised extensively in both shipping companies and management of fleets both within and outside the EU.

| 5.7 | EU ratings have been replaced in significant numbers by non-EU seafarers on EU registered vessels. Increasingly employment of EU ratings is confined to specialist vessels, including those deployed in the offshore energy sector. This is a consequence of cost reduction measures by ship owners seeking to reduce their labour costs to remain competitive and/or increase their profitability. |
| --- | --- |

5.7

EU ratings have been replaced in significant numbers by non-EU seafarers on EU registered vessels. Increasingly employment of EU ratings is confined to specialist vessels, including those deployed in the offshore energy sector. This is a consequence of cost reduction measures by ship owners seeking to reduce their labour costs to remain competitive and/or increase their profitability.

| 5.8 | It is recognised that the sea ports are vital transport hubs essential for furtherance of trade and economic development of Member States. The importance of sea ports as transport hubs supported by statistical data is included in the Annual Report 2003 of the European Sea Port Organisation (20). EU sea ports rely upon highly qualified and experienced seafarers in a number of positions. While marine pilots and harbour masters are a readily identifiable group, experienced seafarers are employed in port management and logistic operations. |
| --- | --- |

5.8

It is recognised that the sea ports are vital transport hubs essential for furtherance of trade and economic development of Member States. The importance of sea ports as transport hubs supported by statistical data is included in the Annual Report 2003 of the European Sea Port Organisation (20). EU sea ports rely upon highly qualified and experienced seafarers in a number of positions. While marine pilots and harbour masters are a readily identifiable group, experienced seafarers are employed in port management and logistic operations.

| 5.9 | A significant amount of revenue is generated in the EU from the provision of specialist shipping services. In addition to the direct management and operation of fleets, this extends to areas such as brokerage, law and financial services. |
| --- | --- |

5.9

A significant amount of revenue is generated in the EU from the provision of specialist shipping services. In addition to the direct management and operation of fleets, this extends to areas such as brokerage, law and financial services.

| 5.10 | The manufacture of equipment, including safety equipment for ships and the leisure industry is significant within the EU. A number of ex-seafarers are employed in this sub-sector in both development and sales. |
| --- | --- |

5.10

The manufacture of equipment, including safety equipment for ships and the leisure industry is significant within the EU. A number of ex-seafarers are employed in this sub-sector in both development and sales.

| 5.11 | Shipbuilding, while suffering extensively from competition, particularly from the Far East, is important to the economies of some Member States and regions. Concentration is now focused upon warship, cruise ship and highly specialised vessels. There is also significant activity with respect to the repair of ships and provision for the Offshore Energy sector. |
| --- | --- |

5.11

Shipbuilding, while suffering extensively from competition, particularly from the Far East, is important to the economies of some Member States and regions. Concentration is now focused upon warship, cruise ship and highly specialised vessels. There is also significant activity with respect to the repair of ships and provision for the Offshore Energy sector.

| 5.12 | There is also a significant demand for highly qualified and experienced seafarers in the regulatory bodies of the EU Member States. Such personnel are essential in order to ensure adequate FSI and PSC inspection of vessels in order to ensure the safety of life at sea and the protection of the marine environment. |
| --- | --- |

5.12

There is also a significant demand for highly qualified and experienced seafarers in the regulatory bodies of the EU Member States. Such personnel are essential in order to ensure adequate FSI and PSC inspection of vessels in order to ensure the safety of life at sea and the protection of the marine environment.

| 5.13 | Nautical Colleges in the Community provide a high standard of education/training for non-EU nationals so aiding the safety of navigation, safety of life at sea and protection of the marine environment. |
| --- | --- |

5.13

Nautical Colleges in the Community provide a high standard of education/training for non-EU nationals so aiding the safety of navigation, safety of life at sea and protection of the marine environment.

| 5.14 | Highly qualified and experienced EU seafarers are required for sustainable development of the maritime infrastructure and service related sub-sections. The joint proposal from ECSA/ETF for a project (21) on the mapping of career paths in the maritime industries has been accepted and its conclusions should be available in the course of 2005. |
| --- | --- |

5.14

Highly qualified and experienced EU seafarers are required for sustainable development of the maritime infrastructure and service related sub-sections. The joint proposal from ECSA/ETF for a project (21) on the mapping of career paths in the maritime industries has been accepted and its conclusions should be available in the course of 2005.

| 5.15 | There is insufficient evidence to suggest that young EU citizens do not wish to embark upon a career in the shipping industry. Where there are effective promotional campaigns offering opportunities within the shipping industry they attract a significant number of applicants. |
| --- | --- |

5.15

There is insufficient evidence to suggest that young EU citizens do not wish to embark upon a career in the shipping industry. Where there are effective promotional campaigns offering opportunities within the shipping industry they attract a significant number of applicants.

6.   Maritime profession

| 6.1 | It is recognised that there is an increasingly ageing workforce and present levels of recruitment are insufficient to replace the current number of EU seafarers. This is particularly so with respect to senior officers who are not only employed on EU flag vessels, but are in demand on foreign flag ships. Given the time necessary to train such individuals and for them to gain the necessary experience it has to be recognised that the situation is now becoming critical in some Member States. |
| --- | --- |

6.1

It is recognised that there is an increasingly ageing workforce and present levels of recruitment are insufficient to replace the current number of EU seafarers. This is particularly so with respect to senior officers who are not only employed on EU flag vessels, but are in demand on foreign flag ships. Given the time necessary to train such individuals and for them to gain the necessary experience it has to be recognised that the situation is now becoming critical in some Member States.

| 6.2 | The attraction of seafaring as a career appears to differ considerably across EU Member States. This may be as a consequence of differing economic circumstances, geographical location or culture. |
| --- | --- |

6.2

The attraction of seafaring as a career appears to differ considerably across EU Member States. This may be as a consequence of differing economic circumstances, geographical location or culture.

| 6.3 | It has been suggested that young people are increasingly unwilling to spend long periods of time at sea since it is considered to be socially and financially unattractive. However, there are few occupations that offer prolonged leave periods so as to engage in recreational activity and travel. |
| --- | --- |

6.3

It has been suggested that young people are increasingly unwilling to spend long periods of time at sea since it is considered to be socially and financially unattractive. However, there are few occupations that offer prolonged leave periods so as to engage in recreational activity and travel.

| 6.4 | There is empirical evidence from the United Kingdom to suggest that where there is an effective promotional campaign, bringing about increased awareness of careers in the shipping industry, there are sufficient numbers of young people applying for the training positions offered. |
| --- | --- |

6.4

There is empirical evidence from the United Kingdom to suggest that where there is an effective promotional campaign, bringing about increased awareness of careers in the shipping industry, there are sufficient numbers of young people applying for the training positions offered.

| 6.5 | In the interests of the sustainability of the maritime infrastructure industries and as part of a promotional campaign to induce young persons into the maritime profession, it is essential to offer a ‘career in shipping’ as opposed to ‘career at sea’. In so doing, this demonstrates the wider opportunities that are available and reduces the resistance of young persons and parents to a career in the industry. |
| --- | --- |

6.5

In the interests of the sustainability of the maritime infrastructure industries and as part of a promotional campaign to induce young persons into the maritime profession, it is essential to offer a ‘career in shipping’ as opposed to ‘career at sea’. In so doing, this demonstrates the wider opportunities that are available and reduces the resistance of young persons and parents to a career in the industry.

| 6.6 | Maritime education and training, whilst meeting the provisions of the STCW Convention and the ISM Code, need to ensure that courses are kept in date, meeting the needs of industry and equipping the individual for technological change. |
| --- | --- |

6.6

Maritime education and training, whilst meeting the provisions of the STCW Convention and the ISM Code, need to ensure that courses are kept in date, meeting the needs of industry and equipping the individual for technological change.

| 6.7 | Mariners from the fishing industry and the military provide a useful, albeit limited, pool of additional labour for the shipping industry. With both the decline in the fishing industry and contraction of EU Navies, those available for employment in the shipping sector, either at sea or ashore, are reducing. Substantial reductions in the size of the EU fishing fleet are unlikely to yield significant numbers, due to an ageing workforce. |
| --- | --- |

6.7

Mariners from the fishing industry and the military provide a useful, albeit limited, pool of additional labour for the shipping industry. With both the decline in the fishing industry and contraction of EU Navies, those available for employment in the shipping sector, either at sea or ashore, are reducing. Substantial reductions in the size of the EU fishing fleet are unlikely to yield significant numbers, due to an ageing workforce.

| 6.8 | The retention of EU ratings is also important for the retention of a European maritime skills base. Additionally, they can be a valuable source for recruitment to officers' positions through adequate training. |
| --- | --- |

6.8

The retention of EU ratings is also important for the retention of a European maritime skills base. Additionally, they can be a valuable source for recruitment to officers' positions through adequate training.

7.   Maritime transport

| 7.1 | It is acknowledged there have been a number of initiatives to promote short sea shipping in Member States. In some instances this is very much in its infancy and the effects are yet to be determined. However, there appears to be little cooperation between Member States. Initiatives such as branding ‘Motorways of the Sea’ are useful in increasing the profile of shipping. There is a need to engage all Member States in cooperative measures to make the fullest use of sea transport. |
| --- | --- |

7.1

It is acknowledged there have been a number of initiatives to promote short sea shipping in Member States. In some instances this is very much in its infancy and the effects are yet to be determined. However, there appears to be little cooperation between Member States. Initiatives such as branding ‘Motorways of the Sea’ are useful in increasing the profile of shipping. There is a need to engage all Member States in cooperative measures to make the fullest use of sea transport.

| 7.2 | While acknowledging that State Aid Guidelines with respect to support measures for shipping are essential to ensure fair competition between Member States and increased competitiveness, the effectiveness of such measures could be in question given the continued decline in the employment of EU seafarers. |
| --- | --- |

7.2

While acknowledging that State Aid Guidelines with respect to support measures for shipping are essential to ensure fair competition between Member States and increased competitiveness, the effectiveness of such measures could be in question given the continued decline in the employment of EU seafarers.

| 7.3 | There is evidence to suggest that some Member States are not making the fullest use of the provisions that now exist under State Aid Guidelines. Furthermore, there appears to be a lack of will to make change where restrictions either exist or are perceived to exist. |
| --- | --- |

7.3

There is evidence to suggest that some Member States are not making the fullest use of the provisions that now exist under State Aid Guidelines. Furthermore, there appears to be a lack of will to make change where restrictions either exist or are perceived to exist.

| 7.4 | While recognising that it is a responsibility of Member States to promote shipping, the lack of central coordination appears to hamper development. As a consequence, initiatives such as the Marco Polo or the Motorways of the Sea projects designed to promote Short Sea Shipping have not yet had time to take effect. |
| --- | --- |

7.4

While recognising that it is a responsibility of Member States to promote shipping, the lack of central coordination appears to hamper development. As a consequence, initiatives such as the Marco Polo or the Motorways of the Sea projects designed to promote Short Sea Shipping have not yet had time to take effect.

8.   Recommendations

| 8.1 | The Commission should take appropriate action and make recommendations to:






  a) | evaluate existing measures designed to encourage the promotion of sea transport by Member States; |
| --- | --- | --- |

8.1

The Commission should take appropriate action and make recommendations to:

a)

evaluate existing measures designed to encourage the promotion of sea transport by Member States;

| b) | evaluate existing measures designed to encourage the recruitment and training of seafarers in Member States; |
| --- | --- |

b)

evaluate existing measures designed to encourage the recruitment and training of seafarers in Member States;

| c) | estimate the number of EU seafarers necessary to sustain the maritime infrastructure and related industries; |
| --- | --- |

c)

estimate the number of EU seafarers necessary to sustain the maritime infrastructure and related industries;

| d) | examine the operation and adequacy of existing provisions of State Aid Guidelines with respect to 1st certificate qualification. In addition, examine the provisions of a training link to 2nd and 3rd STCW certificate level for service/training while in employment onboard ship; |
| --- | --- |

d)

examine the operation and adequacy of existing provisions of State Aid Guidelines with respect to 1st certificate qualification. In addition, examine the provisions of a training link to 2nd and 3rd STCW certificate level for service/training while in employment onboard ship;

| e) | ensure that priorities are set so as to encourage recruitment, training and retention of EU citizens as seafarers. |
| --- | --- |

e)

ensure that priorities are set so as to encourage recruitment, training and retention of EU citizens as seafarers.

| 8.2 | Member States should take appropriate action and make recommendations to:






  a) | ensure that core ILO and consolidated Conventions, IMO Conventions as amended, and EU Directives are implemented and complied with so as to enable adequate employment and living conditions; |
| --- | --- | --- |

8.2

Member States should take appropriate action and make recommendations to:

a)

ensure that core ILO and consolidated Conventions, IMO Conventions as amended, and EU Directives are implemented and complied with so as to enable adequate employment and living conditions;

| b) | provide adequate financial support for training making fullest use of existing State Aid Guidelines. This to include, where appropriate, use of tax and social security regimes; |
| --- | --- |

b)

provide adequate financial support for training making fullest use of existing State Aid Guidelines. This to include, where appropriate, use of tax and social security regimes;

| c) | identify any further measures necessary to encourage the recruitment and training of EU seafarers; |
| --- | --- |

c)

identify any further measures necessary to encourage the recruitment and training of EU seafarers;

| d) | work with the social partners in order to introduce effective promotional campaigns to encourage young persons to take up a career in the shipping industry; |
| --- | --- |

d)

work with the social partners in order to introduce effective promotional campaigns to encourage young persons to take up a career in the shipping industry;

| e) | ensure that adequate funding is available for the provision of high quality education/training establishments for specialist nautical training; |
| --- | --- |

e)

ensure that adequate funding is available for the provision of high quality education/training establishments for specialist nautical training;

| f) | encourage wider support with respect to training of seafarers from the maritime industries; |
| --- | --- |

f)

encourage wider support with respect to training of seafarers from the maritime industries;

| g) | ensure the necessary transport infrastructure so as to facilitate and expand the use of shipping; |
| --- | --- |

g)

ensure the necessary transport infrastructure so as to facilitate and expand the use of shipping;

| h) | promote the use of sea transport as an environmentally friendly mode of transport; |
| --- | --- |

h)

promote the use of sea transport as an environmentally friendly mode of transport;

| i) | ensure a range of ships available to meet strategic and economic needs; |
| --- | --- |

i)

ensure a range of ships available to meet strategic and economic needs;

| j) | ensure measures are not introduced to criminalise the seafaring profession and remove any measures currently in place that seek to criminalise seafarers, in particular, Masters. |
| --- | --- |

j)

ensure measures are not introduced to criminalise the seafaring profession and remove any measures currently in place that seek to criminalise seafarers, in particular, Masters.

| 8.3 | The European Parliament and Council should:






  a) | facilitate proposals from the Commission for measures to promote sea transport; |
| --- | --- | --- |

8.3

The European Parliament and Council should:

a)

facilitate proposals from the Commission for measures to promote sea transport;

| b) | facilitate proposals from the Commission for measures to promote the recruitment and training of seafarers; |
| --- | --- |

b)

facilitate proposals from the Commission for measures to promote the recruitment and training of seafarers;

| c) | monitor the actions of the Commission with respect to measures intended to promote sea transport; |
| --- | --- |

c)

monitor the actions of the Commission with respect to measures intended to promote sea transport;

| d) | monitor the actions of the Commission with respect to measures intended to promote the recruitment and training of seafarers. |
| --- | --- |

d)

monitor the actions of the Commission with respect to measures intended to promote the recruitment and training of seafarers.

| 8.4 | Ship-owners should take appropriate action to:






  a) | ensure adequate employment and social conditions so as to encourage recruitment and retention of high calibre EU seafarers; |
| --- | --- | --- |

8.4

Ship-owners should take appropriate action to:

a)

ensure adequate employment and social conditions so as to encourage recruitment and retention of high calibre EU seafarers;

| b) | seek to recruit high calibre individuals and provide appropriate training; |
| --- | --- |

b)

seek to recruit high calibre individuals and provide appropriate training;

| c) | ensure adequate number of training and subsequent employment positions to ensure the supply of EU senior officers; |
| --- | --- |

c)

ensure adequate number of training and subsequent employment positions to ensure the supply of EU senior officers;

| d) | investigate ways of developing shipping for intra EU trade and external trade. |
| --- | --- |

d)

investigate ways of developing shipping for intra EU trade and external trade.

| 8.5 | Trade unions should take appropriate action to:






  a) | promote careers in the shipping industry; |
| --- | --- | --- |

8.5

Trade unions should take appropriate action to:

a)

promote careers in the shipping industry;

| b) | seek to ensure the high professional standing of EU seafarers; |
| --- | --- |

b)

seek to ensure the high professional standing of EU seafarers;

| c) | include participation in the promotion of the shipping industry, including short sea shipping. |
| --- | --- |

c)

include participation in the promotion of the shipping industry, including short sea shipping.

Brussels, 15 December 2004.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  COM(96) 81 final, of 8.4.1997.

1

(2)  OJ C 109, 8.4.1997, p.1

2

(3)  COM(2001) 188 final of 6.4.2001. EESC Opinion : OJ C 80, 3.4.2002, p. 9.

3

(4)  Source: Joint Study of the Federation of Transport Workers' Unions in the European Union (FST) and of the European Ship Owners' Association (ECSA): ‘Improving the Employment Opportunities for EU Seafarers: An Investigation to Identify Seafarers Training and Education Priorities’ (1998)

4

(5)  METHAR: Harmonization of European Maritime Education and Training Schemes

5

(6)  METNET: Thematic Network on Maritime Education, Training and Mobility of Seafarers

6

(7)  BIMCO (Baltic and International Maritime Council)/ISF (International Shipping Federation) 2000 Manpower Update – The World-wide Demand for and Supply of Seafarers – April 2000

7

(8)  See footnote 3

8

(9)  Source: Study entitled ‘The UK economy's requirements for people with experience of working at sea 2003’, commissioned by the Department for Transport, the Chamber of Shipping and the Marine Society in the UK undertaken by the University of Cardiff.

9

(10)  COM(2003) 155 final of 7.4.2003

10

(11)  See footnote 3

11

(12)  EESC Opinion OJ C 80 of 3.4.2002 p.9

12

(13)  EESC Opinion OJ C 32 of 5.2.2004, p. 67

13

(14)  Council 2515th meeting 5.6.2003, 9686/03 (Presse 146)

14

th

(15)  See footnote 3

15

(16)  White Paper ‘European transport policy for 2010: time to decide’ – European Commission 2001

16

(17)  Maritime Policy ‘European Union legislation and objectives for sea transport’ – European Commission 2002

17

(18)  EU Energy and Transport in Figures Statistical Pocketbook 2003 – European Commission

18

(19)  See footnote 16

19

(20)  European Sea Ports Organisation Annual Report 2003

20

(21)  Proposal for a joint ECSA/ETF Project on the mapping of career paths in the maritime industries 2004

21

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| 28.6.2005 | EN | Official Journal of the European Union | C 157/48 |
| --- | --- | --- | --- |

28.6.2005

EN

Official Journal of the European Union

C 157/48

---

Opinion of the European Economic and Social Committee on the ‘Draft Commission decision on the application of Article 86 of the Treaty to State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest’ and the ‘Draft Commission Directive amending Directive 80/723/EEC on the transparency of financial relations between Member States and public undertakings’

(2005/C 157/06)

On 19 March 2004, the Commission decided to consult the European Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on the abovementioned drafts.

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 5 October 2004. The rapporteur was Mr Hernández Bataller and the co-rapporteur was Mr Burani.

At its 413th plenary session of 15 and 16 December 2004 (meeting of 15 December), the European Economic and Social Committee adopted the following opinion by 140 votes with nine abstentions.

1.   Introduction

| 1.1 | Article 3(g) of the EC Treaty stipulates that the activities of the Community shall include ‘a system ensuring that competition in the internal market is not distorted’. Maintaining effective control so as to guarantee that the aid granted by the Member States does not distort competition is an essential part of this system. |
| --- | --- |

1.1

Article 3(g) of the EC Treaty stipulates that the activities of the Community shall include ‘a system ensuring that competition in the internal market is not distorted’. Maintaining effective control so as to guarantee that the aid granted by the Member States does not distort competition is an essential part of this system.

| 1.2 | Several successive European Councils have confirmed the need to monitor State aid. In its conclusions of 24 March 2001, the Stockholm European Council indicated that ‘the level of State aids in the European Union must be reduced and the system made more transparent ... To that effect the Member States should demonstrate a downward trend in State aid in relation to GDP by 2003, taking into account the need to redirect aid towards horizontal objectives of common interest, including cohesion objectives.’ |
| --- | --- |

1.2

Several successive European Councils have confirmed the need to monitor State aid. In its conclusions of 24 March 2001, the Stockholm European Council indicated that ‘the level of State aids in the European Union must be reduced and the system made more transparent ... To that effect the Member States should demonstrate a downward trend in State aid in relation to GDP by 2003, taking into account the need to redirect aid towards horizontal objectives of common interest, including cohesion objectives.’

| 1.3 | The European Commission has presented a proposal for regulating State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest. This proposal comprises a decision and an ad hoc Community framework, as outlined in the amendment to Directive 80/723/EEC concerning the transparency of financial relations between Member States and public undertakings (1). |
| --- | --- |

1.3

The European Commission has presented a proposal for regulating State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest. This proposal comprises a decision and an ad hoc Community framework, as outlined in the amendment to Directive 80/723/EEC concerning the transparency of financial relations between Member States and public undertakings (1).

| 1.4 | The aim of this proposal is to apply the rules contained in the Treaty, and in particular those governing competition, to the compensation paid by the Member States for specific services of general economic interest (SGEI) to cover, in full or in part, the costs that arise from these public service obligations. |
| --- | --- |

1.4

The aim of this proposal is to apply the rules contained in the Treaty, and in particular those governing competition, to the compensation paid by the Member States for specific services of general economic interest (SGEI) to cover, in full or in part, the costs that arise from these public service obligations.

| 1.4.1 | However, the proposal does distinguish between several different categories of compensation. This limits its application. For example, those type of compensation that fulfil the four criteria set out by the Court of Justice of the European Communities in its Altmark
   (2) and Enirisorse
   (3) rulings remain outside the new provisions. These stipulate that: the company receiving the aid must also be entrusted with discharging the corresponding, clearly defined public service obligation; the parameters used to calculate the compensation must be established in advance in an objective and transparent manner; the compensation must not exceed the amount needed to cover all or part of the costs incurred in discharging the public service obligation, taking account of all relevant receipts and a reasonable profit; and, lastly, where the company entrusted with the fulfilment of the obligations was not commissioned according to the best possible procedures for public procurement contracts, the level of compensation is calculated on the basis of an analysis of the costs which an average, well-managed and suitably equipped company would have incurred in discharging those obligations, plus a reasonable profit. For the Court of Justice this compensation does not fall under the Treaty provisions on State aid. |
| --- | --- |

1.4.1

However, the proposal does distinguish between several different categories of compensation. This limits its application. For example, those type of compensation that fulfil the four criteria set out by the Court of Justice of the European Communities in its Altmark
   (2) and Enirisorse
   (3) rulings remain outside the new provisions. These stipulate that: the company receiving the aid must also be entrusted with discharging the corresponding, clearly defined public service obligation; the parameters used to calculate the compensation must be established in advance in an objective and transparent manner; the compensation must not exceed the amount needed to cover all or part of the costs incurred in discharging the public service obligation, taking account of all relevant receipts and a reasonable profit; and, lastly, where the company entrusted with the fulfilment of the obligations was not commissioned according to the best possible procedures for public procurement contracts, the level of compensation is calculated on the basis of an analysis of the costs which an average, well-managed and suitably equipped company would have incurred in discharging those obligations, plus a reasonable profit. For the Court of Justice this compensation does not fall under the Treaty provisions on State aid.

| 1.4.2 | Similarly, the ‘de minimis’ economic aid provided in accordance with Commission Regulation (EC) No. 69-2001 of 12 January 2001 (4) as well as all State aid provided to certain public service broadcasters (5), are excluded here. |
| --- | --- |

1.4.2

Similarly, the ‘de minimis’ economic aid provided in accordance with Commission Regulation (EC) No. 69-2001 of 12 January 2001 (4) as well as all State aid provided to certain public service broadcasters (5), are excluded here.

| 1.4.3 | Furthermore, in accordance with the provisions of Article 73 EC Treaty and Council Regulations (EEC) No. 1191/69 (6) and 1107/70 (7), some types of aid granted within the land transport sector (rail, road and waterway) and in particular to companies that provide exclusively urban, suburban and regional transport services, are also excluded from the scope of the proposal. |
| --- | --- |

1.4.3

Furthermore, in accordance with the provisions of Article 73 EC Treaty and Council Regulations (EEC) No. 1191/69 (6) and 1107/70 (7), some types of aid granted within the land transport sector (rail, road and waterway) and in particular to companies that provide exclusively urban, suburban and regional transport services, are also excluded from the scope of the proposal.

| 1.4.4 | Lastly, on the basis of points raised by the European Commission itself with respect to the specific objectives of the Common Transport Policy, compensation for public services in the air and maritime transport sectors are also excluded (8), with the exception of public service maritime links to islands on which annual traffic does not exceed 100 000 passengers. |
| --- | --- |

1.4.4

Lastly, on the basis of points raised by the European Commission itself with respect to the specific objectives of the Common Transport Policy, compensation for public services in the air and maritime transport sectors are also excluded (8), with the exception of public service maritime links to islands on which annual traffic does not exceed 100 000 passengers.

| 1.4.5 | Consequently, the scope of the proposal, in accordance with Article 1 of the decision, covers, in addition to the aforementioned island connection services, compensation for public services in the form of State aid granted to undertakings that work in all the sectors governed by the EC Treaty and which satisfy the following conditions:






  1) | An annual turnover before tax, all activities included, of less than a ‘threshold to be determined’ (9) for the two financial years preceding that in which the SGEI was assigned and with annual compensation for the service in question of less than ‘a threshold to be determined’ (10) and which, for credit institutions, is replaced by a ‘threshold to be determined’ in terms of balance-sheet total; |
| --- | --- | --- |

1.4.5

Consequently, the scope of the proposal, in accordance with Article 1 of the decision, covers, in addition to the aforementioned island connection services, compensation for public services in the form of State aid granted to undertakings that work in all the sectors governed by the EC Treaty and which satisfy the following conditions:

1)

An annual turnover before tax, all activities included, of less than a ‘threshold to be determined’ (9) for the two financial years preceding that in which the SGEI was assigned and with annual compensation for the service in question of less than ‘a threshold to be determined’ (10) and which, for credit institutions, is replaced by a ‘threshold to be determined’ in terms of balance-sheet total;

| 2) | Public service compensation granted to hospitals that carry out activities involving SGEI; |
| --- | --- |

2)

Public service compensation granted to hospitals that carry out activities involving SGEI;

| 3) | Public service compensation granted to social housing undertakings that carry out activities involving SGEI. |
| --- | --- |

3)

Public service compensation granted to social housing undertakings that carry out activities involving SGEI.

| 1.4.6 | The application of the decision to these areas does not alter the compatibility of State aid with Article 86(2) of the EC Treaty provided specific conditions are met. Thus the Commission proposes making a distinction between State aid which involves significant amounts and could severely distort competition on the one hand and State aid of a more modest nature on the other. |
| --- | --- |

1.4.6

The application of the decision to these areas does not alter the compatibility of State aid with Article 86(2) of the EC Treaty provided specific conditions are met. Thus the Commission proposes making a distinction between State aid which involves significant amounts and could severely distort competition on the one hand and State aid of a more modest nature on the other.

| 1.4.7 | The proposal sets even greater store by the need for transparency in terms of the financial relations between the Member States and public undertakings or undertakings that are entrusted with public service obligations, modifying current Directive 80/723/EEC by introducing a new definition of ‘undertakings required to maintain separate accounts’ which, irrespective of the legal classification of public service compensation, covers undertakings that maintain separate accounts and receive such compensation and which also carry out activities that are not SGEI. |
| --- | --- |

1.4.7

The proposal sets even greater store by the need for transparency in terms of the financial relations between the Member States and public undertakings or undertakings that are entrusted with public service obligations, modifying current Directive 80/723/EEC by introducing a new definition of ‘undertakings required to maintain separate accounts’ which, irrespective of the legal classification of public service compensation, covers undertakings that maintain separate accounts and receive such compensation and which also carry out activities that are not SGEI.

| 1.4.8 | Lastly, the provisions of the proposal will apply without prejudice to the more stringent and specific provisions concerning public service obligations contained in sector-specific Community legislation and in the current Community provisions governing public procurement contracts. |
| --- | --- |

1.4.8

Lastly, the provisions of the proposal will apply without prejudice to the more stringent and specific provisions concerning public service obligations contained in sector-specific Community legislation and in the current Community provisions governing public procurement contracts.

| 1.4.9 | At all events, the scope of the proposal is limited to services that constitute services of general economic interest within the meaning of Article 86(2) of the EC Treaty, although no definition of that concept is provided. |
| --- | --- |

1.4.9

At all events, the scope of the proposal is limited to services that constitute services of general economic interest within the meaning of Article 86(2) of the EC Treaty, although no definition of that concept is provided.

| 1.4.10 | Some of the other provisions of the proposal, such as those governing compatibility and exemption from notification, the requirements placed on public service missions and how compensation is calculated, are more concrete. |
| --- | --- |

1.4.10

Some of the other provisions of the proposal, such as those governing compatibility and exemption from notification, the requirements placed on public service missions and how compensation is calculated, are more concrete.

| 1.4.11 | Thus Article 2 of the draft decision stipulates that public service compensation which meets the necessary conditions is compatible with the common market and shall be exempt from the obligation of prior notification provided for in Treaty Article 88(3). |
| --- | --- |

1.4.11

Thus Article 2 of the draft decision stipulates that public service compensation which meets the necessary conditions is compatible with the common market and shall be exempt from the obligation of prior notification provided for in Treaty Article 88(3).

| 1.4.12 | Under Article 4 of the draft decision, the public service task shall be assigned by way of an official act (legislative or regulatory instrument or contract) specifying the precise nature of the public service obligations, and the undertakings and territory concerned. |
| --- | --- |

1.4.12

Under Article 4 of the draft decision, the public service task shall be assigned by way of an official act (legislative or regulatory instrument or contract) specifying the precise nature of the public service obligations, and the undertakings and territory concerned.

| 1.4.13 | This last point is dealt with particularly briefly both in Article 5 of the decision and points 12 to 23 of the Community framework. Basically, the amount of compensation must not exceed the costs of discharging the public service obligation, taking into account the relevant receipts and a reasonable profit for discharging these obligations. |
| --- | --- |

1.4.13

This last point is dealt with particularly briefly both in Article 5 of the decision and points 12 to 23 of the Community framework. Basically, the amount of compensation must not exceed the costs of discharging the public service obligation, taking into account the relevant receipts and a reasonable profit for discharging these obligations.

| 1.4.14 | The costs tied to the SGEI may cover all the variable costs incurred in providing the SGEI, an appropriate contribution to fixed costs and an adequate return on capital insofar as it is assigned to the SGEI (11). The costs associated with any activities outside the scope of the SGEI may under no circumstances be imputed to the SGEI. As a general rule, the calculation of costs must be ‘based on generally accepted cost accounting principles’. |
| --- | --- |

1.4.14

The costs tied to the SGEI may cover all the variable costs incurred in providing the SGEI, an appropriate contribution to fixed costs and an adequate return on capital insofar as it is assigned to the SGEI (11). The costs associated with any activities outside the scope of the SGEI may under no circumstances be imputed to the SGEI. As a general rule, the calculation of costs must be ‘based on generally accepted cost accounting principles’.

| 1.4.15 | The receipts to be taken into account must include at least the entire revenue earned from the SGEI. ‘Reasonable profit’ meanwhile is taken to mean a rate of return of capital that takes account of the risk, or absence of risk, incurred by the undertaking by virtue of the intervention by the Member State (12). |
| --- | --- |

1.4.15

The receipts to be taken into account must include at least the entire revenue earned from the SGEI. ‘Reasonable profit’ meanwhile is taken to mean a rate of return of capital that takes account of the risk, or absence of risk, incurred by the undertaking by virtue of the intervention by the Member State (12).

| 1.4.16 | Finally, the Member States must conduct regular checks to ensure that the compensation provided is not excessive, i.e. that it does not go beyond that necessary to allow the provision of the SGEI, as such State aid would be incompatible with the common market. Nevertheless, provided the excess compensation does not amount to any more than 10 % of the annual compensation provided, it can be deducted the following year. The costs of some SGEI vary to such an extent throughout the year that excess compensation of more than 10 % is necessary in order to ensure they can be provided. In such cases, the Member State must draw up a periodic sector-specific balance (not exceeding 3 years) following which the excess compensation is reimbursed. |
| --- | --- |

1.4.16

Finally, the Member States must conduct regular checks to ensure that the compensation provided is not excessive, i.e. that it does not go beyond that necessary to allow the provision of the SGEI, as such State aid would be incompatible with the common market. Nevertheless, provided the excess compensation does not amount to any more than 10 % of the annual compensation provided, it can be deducted the following year. The costs of some SGEI vary to such an extent throughout the year that excess compensation of more than 10 % is necessary in order to ensure they can be provided. In such cases, the Member State must draw up a periodic sector-specific balance (not exceeding 3 years) following which the excess compensation is reimbursed.

2.   General comments

| 2.1 | This proposal follows on from the undertaking made by the Commission to the Laeken European Council in December 2001 to improve legal certainty in the field of public service compensation and, in more concrete terms, to establish a Community framework for State aid granted to undertakings entrusted with the management of SGEI (13). |
| --- | --- |

2.1

This proposal follows on from the undertaking made by the Commission to the Laeken European Council in December 2001 to improve legal certainty in the field of public service compensation and, in more concrete terms, to establish a Community framework for State aid granted to undertakings entrusted with the management of SGEI (13).

| 2.2 | There is no doubt that the rules applicable to the financing of services of general interest and, more specifically, the application of the rules governing State aid are shrouded in legal uncertainty, despite the additional legal criteria for the discharge of public service obligations set out in the case law of the Court of Justice, namely in its Altmark and Enirisorse rulings. |
| --- | --- |

2.2

There is no doubt that the rules applicable to the financing of services of general interest and, more specifically, the application of the rules governing State aid are shrouded in legal uncertainty, despite the additional legal criteria for the discharge of public service obligations set out in the case law of the Court of Justice, namely in its Altmark and Enirisorse rulings.

| 2.3 | Nevertheless, there is a need to clarify these criteria, more specifically the methods used to calculate costs (in terms of transparency and the parameters used) and the nature of those public service obligations for which compensation is provided (14). |
| --- | --- |

2.3

Nevertheless, there is a need to clarify these criteria, more specifically the methods used to calculate costs (in terms of transparency and the parameters used) and the nature of those public service obligations for which compensation is provided (14).

| 2.4 | In this respect the proposal is especially needed for economic operators in that, until the regulatory framework enters into force, any State aid received by these operators as providers of a service of general economic interest which has not been notified to the Commission, irrespective of the amount involved, may be illegal. |
| --- | --- |

2.4

In this respect the proposal is especially needed for economic operators in that, until the regulatory framework enters into force, any State aid received by these operators as providers of a service of general economic interest which has not been notified to the Commission, irrespective of the amount involved, may be illegal.

| 2.5 | Hence they would not be protected against any action which challenged its legality before the courts of the Member States. |
| --- | --- |

2.5

Hence they would not be protected against any action which challenged its legality before the courts of the Member States.

| 2.6 | This need for clarification is all the more urgent given that in two particular areas –financing and the award of contracts — the Member States' discretion to define and design SGEI missions tends to clash with a series of basic rules of Community law. |
| --- | --- |

2.6

This need for clarification is all the more urgent given that in two particular areas –financing and the award of contracts — the Member States' discretion to define and design SGEI missions tends to clash with a series of basic rules of Community law.

| 2.7 | The Member States enjoy a wide margin of discretion when deciding whether and in what way to finance the provision of services of general economic interest. In the absence of Community harmonisation, the main limit to this discretion is the requirement that such financing mechanisms must not distort competition (15), without prejudice to the discharge of their social tasks and with full respect for the principle of subsidiarity which is a binding legal requirement under the Constitution that both the Union and the Member States must respect, and which must not lead to the Community acquis being called into question. |
| --- | --- |

2.7

The Member States enjoy a wide margin of discretion when deciding whether and in what way to finance the provision of services of general economic interest. In the absence of Community harmonisation, the main limit to this discretion is the requirement that such financing mechanisms must not distort competition (15), without prejudice to the discharge of their social tasks and with full respect for the principle of subsidiarity which is a binding legal requirement under the Constitution that both the Union and the Member States must respect, and which must not lead to the Community acquis being called into question.

| 2.8 | The Commission should examine how to explain clearly why each of its proposals is being presented (legal base, necessity, proportionality) and why — in the interests of good practice and conformity with the protocol on the application of the principles of subsidiarity and proportionality — it should be at Community level (subsidiarity criteria, qualitative and/or quantitative indicators). |
| --- | --- |

2.8

The Commission should examine how to explain clearly why each of its proposals is being presented (legal base, necessity, proportionality) and why — in the interests of good practice and conformity with the protocol on the application of the principles of subsidiarity and proportionality — it should be at Community level (subsidiarity criteria, qualitative and/or quantitative indicators).

| 2.9 | These and other reasons favour support for the Commission proposal which, in essence, urges the government authorities of the Member States to comply with some basic requirements, such as to ensure the procedures used to award public contracts are transparent and to monitor any potential damage to free competition caused by companies not fulfilling their SGEI mission effectively (16). |
| --- | --- |

2.9

These and other reasons favour support for the Commission proposal which, in essence, urges the government authorities of the Member States to comply with some basic requirements, such as to ensure the procedures used to award public contracts are transparent and to monitor any potential damage to free competition caused by companies not fulfilling their SGEI mission effectively (16).

| 2.10 | The EESC welcomes a legislative proposal which serves to extend the criteria advanced by the Court of Justice in order to remove public service compensation from the Treaty provisions governing State aid. |
| --- | --- |

2.10

The EESC welcomes a legislative proposal which serves to extend the criteria advanced by the Court of Justice in order to remove public service compensation from the Treaty provisions governing State aid.

3.   Specific comments

| 3.1 | Having analysed the proposal, it is worth raising some questions as to its content and layout. |
| --- | --- |

3.1

Having analysed the proposal, it is worth raising some questions as to its content and layout.

| 3.2 | The three main objectives of the proposal can be summed up as follows: (i) to ensure that State aid of a relatively limited amount granted to undertakings entrusted with discharging an SGEI is compatible with the common market; (ii) to enhance legal certainty regarding compensation for provision of SGEI exceeding that amount by means of a Community framework establishing criteria for evaluating the compensation; (iii) to establish the criteria according to which such compensation can be considered to be State aid. |
| --- | --- |

3.2

The three main objectives of the proposal can be summed up as follows: (i) to ensure that State aid of a relatively limited amount granted to undertakings entrusted with discharging an SGEI is compatible with the common market; (ii) to enhance legal certainty regarding compensation for provision of SGEI exceeding that amount by means of a Community framework establishing criteria for evaluating the compensation; (iii) to establish the criteria according to which such compensation can be considered to be State aid.

| 3.3 | The EESC considers that the proposal's provisions should be extended to cover all public service compensation which is clearly defined and regular and corresponds to, but does not exceed, the additional costs incurred and where the beneficiary undertaking keeps separate accounts; all subject to a posteriori control and sanction by the Commission and Court of Justice. |
| --- | --- |

3.3

The EESC considers that the proposal's provisions should be extended to cover all public service compensation which is clearly defined and regular and corresponds to, but does not exceed, the additional costs incurred and where the beneficiary undertaking keeps separate accounts; all subject to a posteriori control and sanction by the Commission and Court of Justice.

| 3.4 | However, the scope of application of the proposal is not clear. In the case of the decision especially, it is determined according to disparate criteria which either exclude specific situations or sectors (see 1.4.2-1.4.4 above) or delimit these in a general manner using quantitative rather than qualitative criteria (see 1.4.5 above). |
| --- | --- |

3.4

However, the scope of application of the proposal is not clear. In the case of the decision especially, it is determined according to disparate criteria which either exclude specific situations or sectors (see 1.4.2-1.4.4 above) or delimit these in a general manner using quantitative rather than qualitative criteria (see 1.4.5 above).

| 3.5 | Moreover, some of the legal concepts referred to in the proposal provisions are imprecise. For example, it stipulates that the costs attributed to SGEI must be calculated ‘based on generally accepted cost accounting principles’. Again, the scope of the decision is said to apply ‘only to services that constitute services of general economic interest within the meaning of Article 86(2) of the Treaty’. And yet, as mentioned above, this notion is defined neither in the Treaties nor in secondary Community legislation. |
| --- | --- |

3.5

Moreover, some of the legal concepts referred to in the proposal provisions are imprecise. For example, it stipulates that the costs attributed to SGEI must be calculated ‘based on generally accepted cost accounting principles’. Again, the scope of the decision is said to apply ‘only to services that constitute services of general economic interest within the meaning of Article 86(2) of the Treaty’. And yet, as mentioned above, this notion is defined neither in the Treaties nor in secondary Community legislation.

| 3.6 | In the Committee's view, all island cabotage should, like other modes of transport, be excluded from the scope of the proposal unless the Commission can adequately justify its inclusion. |
| --- | --- |

3.6

In the Committee's view, all island cabotage should, like other modes of transport, be excluded from the scope of the proposal unless the Commission can adequately justify its inclusion.

| 3.7 | Consequently, and in view of the markedly technical and instrumental nature of the objectives of the proposal, it would seem reasonable to ask the Commission to clarify the notion of SGEI so as to distinguish it from other similar concepts, such as public services and services of general interest, which prevail in the constitutional traditions of the Member States (17). Indeed, the general terms currently used by the Commission to describe SGEI fail to cover some activities that are of utmost social interest, including the funding of research into improving health and consumer protection (18). |
| --- | --- |

3.7

Consequently, and in view of the markedly technical and instrumental nature of the objectives of the proposal, it would seem reasonable to ask the Commission to clarify the notion of SGEI so as to distinguish it from other similar concepts, such as public services and services of general interest, which prevail in the constitutional traditions of the Member States (17). Indeed, the general terms currently used by the Commission to describe SGEI fail to cover some activities that are of utmost social interest, including the funding of research into improving health and consumer protection (18).

| 3.8 | In this respect it should be stressed that, faced with the need for legal clarification at supranational level of the concepts of services of general interest and services of general economic interest, there is not such a compelling need to define social services at the same level for at least two reasons: (i) such services would only fall within the Community remit if they involved economic profit for the supplier and (ii) if this were the case they would automatically fall under one or other of the abovementioned concepts. |
| --- | --- |

3.8

In this respect it should be stressed that, faced with the need for legal clarification at supranational level of the concepts of services of general interest and services of general economic interest, there is not such a compelling need to define social services at the same level for at least two reasons: (i) such services would only fall within the Community remit if they involved economic profit for the supplier and (ii) if this were the case they would automatically fall under one or other of the abovementioned concepts.

| 3.9 | Furthermore, the proposal does not address the classification of certain methods of financing of SGEI, such as solidarity-based financing, given the problems of access to certain national markets (insurance is one example), or lay down criteria for assessing best practice at Community level, which would offer the particular advantage of clarifying the legality of the practice known as ‘cream-skimming’ (19). |
| --- | --- |

3.9

Furthermore, the proposal does not address the classification of certain methods of financing of SGEI, such as solidarity-based financing, given the problems of access to certain national markets (insurance is one example), or lay down criteria for assessing best practice at Community level, which would offer the particular advantage of clarifying the legality of the practice known as ‘cream-skimming’ (19).

| 3.10 | The proposal applies the same criteria for compliance with the basic framework of rules governing the internal market to all sectors without distinction and without considering the different responses of the operators. |
| --- | --- |

3.10

The proposal applies the same criteria for compliance with the basic framework of rules governing the internal market to all sectors without distinction and without considering the different responses of the operators.

| 3.11 | Hence it applies the principle of equality of treatment wrongly to very different situations. The supply of drinking water, urban drainage and waste recycling are treated in the same way as the supply of electricity or gas. And yet these sectors neither operate according to the same conditions (in terms of environment protection, infrastructures and so on), nor on comparable markets: some are restricted to the local and regional level, whilst others are based at the national, trans-national and even international level. Applying the same supranational financing rules to all of these sectors is inappropriate. |
| --- | --- |

3.11

Hence it applies the principle of equality of treatment wrongly to very different situations. The supply of drinking water, urban drainage and waste recycling are treated in the same way as the supply of electricity or gas. And yet these sectors neither operate according to the same conditions (in terms of environment protection, infrastructures and so on), nor on comparable markets: some are restricted to the local and regional level, whilst others are based at the national, trans-national and even international level. Applying the same supranational financing rules to all of these sectors is inappropriate.

| 3.12 | Similarly, the appeal of SGEI for operators is not the same across the different sectors. Some services require specific infrastructures and equipment which, logically, results in an increase in the costs incurred and in some cases failure to attract private investment due to a poor return in the short and medium terms. |
| --- | --- |

3.12

Similarly, the appeal of SGEI for operators is not the same across the different sectors. Some services require specific infrastructures and equipment which, logically, results in an increase in the costs incurred and in some cases failure to attract private investment due to a poor return in the short and medium terms.

| 3.13 | In addition, the proposal, the legal basis of which is Article 86(3) EC Treaty, perpetuates the current asymmetry in the Treaties between the regulation of competition law, which interprets SGEI as derogations from Article 86(2) EC Treaty, and the positive recognition of SGEI in Article 16 EC Treaty and Article 36 of the Charter of Fundamental Rights. This approach diminishes somewhat the essential value of SGEI both in EU policymaking — social and territorial cohesion — and as a guarantee for the citizens of the Union of basic rights such as freedom of movement. |
| --- | --- |

3.13

In addition, the proposal, the legal basis of which is Article 86(3) EC Treaty, perpetuates the current asymmetry in the Treaties between the regulation of competition law, which interprets SGEI as derogations from Article 86(2) EC Treaty, and the positive recognition of SGEI in Article 16 EC Treaty and Article 36 of the Charter of Fundamental Rights. This approach diminishes somewhat the essential value of SGEI both in EU policymaking — social and territorial cohesion — and as a guarantee for the citizens of the Union of basic rights such as freedom of movement.

| 3.14 | The problems raised by the proposal relate to the very basis of the legislative strategy employed by the Commission, at the very least in terms of its instrumental aims and regulatory effectiveness. With respect to the former, the approach on which the proposal is based calls to mind the well-known typology of exemption by category which is widely used in the Community legal system for competition on the internal market. By lumping together diverse situations in this way, there is a risk of a hidden form of harmonisation which seeks, through regulation, a one-size-fits-all solution to the complex realities of SGEI, when what is really needed is a more detailed and further-reaching legal approach. |
| --- | --- |

3.14

The problems raised by the proposal relate to the very basis of the legislative strategy employed by the Commission, at the very least in terms of its instrumental aims and regulatory effectiveness. With respect to the former, the approach on which the proposal is based calls to mind the well-known typology of exemption by category which is widely used in the Community legal system for competition on the internal market. By lumping together diverse situations in this way, there is a risk of a hidden form of harmonisation which seeks, through regulation, a one-size-fits-all solution to the complex realities of SGEI, when what is really needed is a more detailed and further-reaching legal approach.

| 3.15 | This remark leads us to consider the issue of regulatory effectiveness. In the absence of a prior proposal for a framework directive, as recommended by the Committee (20), which would consolidate the basic regulatory objectives and principles of SGEI as well as clarifying (a) the concepts used by the Treaties and sector-specific directives and (b) the conditions governing the different operators (21), this proposal does not guarantee the level of legal certainty necessary for this sector of the internal market. |
| --- | --- |

3.15

This remark leads us to consider the issue of regulatory effectiveness. In the absence of a prior proposal for a framework directive, as recommended by the Committee (20), which would consolidate the basic regulatory objectives and principles of SGEI as well as clarifying (a) the concepts used by the Treaties and sector-specific directives and (b) the conditions governing the different operators (21), this proposal does not guarantee the level of legal certainty necessary for this sector of the internal market.

| 3.16 | Without any such aforementioned legal infrastructure, a number of conflicts will undoubtedly arise in terms of application and interpretation, leading potentially to a breakdown of the competent legal bodies. This in turn could result in infringements of the subsidiarity principle which, in the current context of the integration process, has achieved a new level of protection as demonstrated in Article I-9 of the ad-hoc protocol appended to the Draft Treaty establishing a Constitution for Europe, drawn up by the European Convention. |
| --- | --- |

3.16

Without any such aforementioned legal infrastructure, a number of conflicts will undoubtedly arise in terms of application and interpretation, leading potentially to a breakdown of the competent legal bodies. This in turn could result in infringements of the subsidiarity principle which, in the current context of the integration process, has achieved a new level of protection as demonstrated in Article I-9 of the ad-hoc protocol appended to the Draft Treaty establishing a Constitution for Europe, drawn up by the European Convention.

| 3.17 | The EESC is keen to ensure that the process of strengthening economic, social and territorial cohesion is not hampered by the introduction of the planned framework. State aid which promotes the economic development of those regions in which the standard of living is abnormally low or the unemployment rate is seriously high, as well as aid which promotes the development of specific activities or of specific economic regions, must be maintained, albeit reoriented towards the objectives of cohesion, as established in the Treaty. |
| --- | --- |

3.17

The EESC is keen to ensure that the process of strengthening economic, social and territorial cohesion is not hampered by the introduction of the planned framework. State aid which promotes the economic development of those regions in which the standard of living is abnormally low or the unemployment rate is seriously high, as well as aid which promotes the development of specific activities or of specific economic regions, must be maintained, albeit reoriented towards the objectives of cohesion, as established in the Treaty.

| 3.18 | It may indeed be necessary to adopt a new approach to State aid policy at Community level, in particular given that the relationship between the Commission and regional and/or local authorities, with whom the Commission is required to deal directly for all matters relating to the aid they dispense, may well become increasingly complex. |
| --- | --- |

3.18

It may indeed be necessary to adopt a new approach to State aid policy at Community level, in particular given that the relationship between the Commission and regional and/or local authorities, with whom the Commission is required to deal directly for all matters relating to the aid they dispense, may well become increasingly complex.

Brussels, 15 December 2004.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  Draft Directive amending Directive 2000/52/EC (OJ L 193 of 29.7.2000, p. 75).

1

(2)  Ruling of 24 July 2003 in case C-280/00, publication pending in case reports.

2

(3)  Ruling of 27 November 2003 in cases C-34/01 to C-38/01, publication pending in case reports.

3

(4)  OJ L 10 of 13.1.2001, p. 30. This is economic aid provided to companies that does not exceed EUR 100 000 for a period of three years. It is important to note that this Regulation does not apply to the transport sectors and activities related to the processing or marketing of the products listed under Annex I to the Treaty.

4

(5)  Specifically those defined under points 49 to 56 of the Communication from the Commission published in OJ C 320 of 15.11.2001.

5

(6)  OJ L 156, of 28.6.1969. Last amended by Regulation (EEC) No. 1893/91 (OJ L 169 of 29.6.1991, p. 1).

6

(7)  OJ L 130, of 15.6.1970. Last amended by Regulation (EC) No. 543/97 (OJ L 84 of 26.3.1997, p. 6).

7

(8)  Rules applicable to these sectors are provided in Council Regulation (EEC) No. 2408/92 of 23 July 1992 (OJ L 240 of 24.8.1992, p. 8), on access for Community air carriers to intra-Community air routes, last amended by Regulation (EC) No. 1882/2003 of the European Parliament and the Council (OJ L 284 of 31.10.2003, p. 1), and in Council Regulation (EEC) No. 3577/92 of 7 December 1992 (OJ L 364 of 12.12.1992, p. 7) on maritime cabotage.

8

(9)  The relevant thresholds will be set once the results of the consultation launched by the Commission in relation to the proposal have been obtained.

9

(10)  This last threshold will be fixed by taking an annual average representing the present value of the compensation granted during the term of the contract or over a period of five years.

10

(11)  See the ruling of the Court of Justice of 3 July 2003, CHRONOPOST, as. ac. C-83/01P, C-93/01P and C-94/01P, publication pending in case reports.

11

(12)  According to Article 5(4) of the Decision, any exclusive or special rights granted to an undertaking are of particular importance in determining its reasonable profit and the Member State concerned may introduce incentive criteria relating, in particular, to the quality of the service provided.

12

(13)  COM(2001) 598 final.

13

(14)  European Commission staff working paper ‘Report on the Public Consultation on the Green Paper on Services of General Interest’, Brussels, 29.3.2004, SEC (2004) 326, pp. 27-28.

14

(15)  Therefore, the Member States can apply various financing mechanisms including ‘direct financial support through the State budget, special or exclusive rights, contributions by market participants, tariff averaging and solidarity-based financing’, COM (2004) 374, p. 13.

15

(16)  See European Parliament report on the Green Paper on services of general interest, 17.12.2003, doc. A5-0484/2003 Final, EP 323.188, pp. 11-13, and the Committee of the Regions ‘Opinion on the Green Paper on services of general interest’, DOC 73 of 23.3.2004, p. 7 and in particular pp. 10-11.

16

(17)  This issue has been raised on several occasions by the European Economic and Social Committee and most recently in its opinion on the Green Paper on Services of General Interest of 11 December 2003, OJ C 80 of 30.3.2004, p. 66.

17

(18)  See Annex 1 (‘Definition of Terms’) to the White Paper on services of general interest, COM(2004) 374, cit. p. 23.

18

(19)  The averaging of tariffs and cross-financing between profit- and loss-making services could be called into question above all in the liberalised sectors.

19

(20)  OJ C 241 of 7.10.2002, point 4.4.

20

(21)  See points 3.1 to 3.5 of the opinion of the European Economic and Social Committee of 11 December 2003; cit. supra.

21

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| 28.6.2005 | EN | Official Journal of the European Union | C 157/53 |
| --- | --- | --- | --- |

28.6.2005

EN

Official Journal of the European Union

C 157/53

---

Opinion of the European Economic and Social Committee on the ‘Proposal for a Directive of the European Parliament and of the Council on the recognition of seafarers' certificates issued by the Member States and amending Directive 2001/25/EC’

(COM(2004) 311 final — 2004/0098 (COD))

(2005/C 157/07)

On 6 May 2004, the Council decided to consult the European Economic and Social Committee, under Article 80 para. 2 of the Treaty establishing the European Community, on the abovementioned proposal.

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 2004. The rapporteur was Mr Chagas.

At its 413th plenary session of 15 and 16 December 2004 (meeting of 15 December) the European Economic and Social Committee adopted the following opinion by 140 votes in favour and four abstentions.

1.   Background

| 1.1 | The Commission presented on 26 April 2004, a proposal for a Directive on the recognition of seafarers' certificates issued by the Member States and amending Directive 2001/25/EC (1), the purpose being to provide for a simplified procedure for the recognition of certificates that are issued by the Member States. |
| --- | --- |

1.1

The Commission presented on 26 April 2004, a proposal for a Directive on the recognition of seafarers' certificates issued by the Member States and amending Directive 2001/25/EC (1), the purpose being to provide for a simplified procedure for the recognition of certificates that are issued by the Member States.

| 1.2 | Training, certification and watchkeeping requirements for seafarers are prescribed by the Convention of the International Maritime Organisation on Standards of Training, Certification and Watchkeeping for Seafarers, 1978, as amended (STCW Convention). The Convention lays down, inter alia, specific criteria for the recognition of certificates of seafarers issued by the parties to a master, officer or radio operator. |
| --- | --- |

1.2

Training, certification and watchkeeping requirements for seafarers are prescribed by the Convention of the International Maritime Organisation on Standards of Training, Certification and Watchkeeping for Seafarers, 1978, as amended (STCW Convention). The Convention lays down, inter alia, specific criteria for the recognition of certificates of seafarers issued by the parties to a master, officer or radio operator.

| 1.3 | These international requirements were transposed into Community legislation by way of Directive 2001/25/EC (2) of the European Parliament and of the Council of 4 April 2001, as last amended by Directive 2003/103/EC (3) on the minimum level of training of seafarers (the Directive). Thus, Member States are required to issue certificates of competency to seafarers in line with these standards. |
| --- | --- |

1.3

These international requirements were transposed into Community legislation by way of Directive 2001/25/EC (2) of the European Parliament and of the Council of 4 April 2001, as last amended by Directive 2003/103/EC (3) on the minimum level of training of seafarers (the Directive). Thus, Member States are required to issue certificates of competency to seafarers in line with these standards.

| 1.4 | As regards recognition of certificates between Member States, Directive 2001/25/EC provides that recognition of certificates of seafarers who are nationals or non-nationals of Member States are subject to the provisions of Directives 89/48/EEC (4) and 92/51/EEC (5) on the general system for the recognition of professional education and training. The general system establishes a procedure for the recognition of evidence of professional qualifications of seafarers that involves the comparison of education and training received, as well as the corresponding qualifications. In case of substantial differences therein, the seafarers concerned may be subject to specific compensation measures. There is currently a paradox in that, within the EU, the mutual recognition between Member States is more difficult than recognition of third country certificates. |
| --- | --- |

1.4

As regards recognition of certificates between Member States, Directive 2001/25/EC provides that recognition of certificates of seafarers who are nationals or non-nationals of Member States are subject to the provisions of Directives 89/48/EEC (4) and 92/51/EEC (5) on the general system for the recognition of professional education and training. The general system establishes a procedure for the recognition of evidence of professional qualifications of seafarers that involves the comparison of education and training received, as well as the corresponding qualifications. In case of substantial differences therein, the seafarers concerned may be subject to specific compensation measures. There is currently a paradox in that, within the EU, the mutual recognition between Member States is more difficult than recognition of third country certificates.

| 1.5 | The Commission proposes the automatic acceptance by the Member States of all certificates issued by another Member State to seafarers in accordance with the Directive. The main objective of the proposed measure is to ensure that all seafarers who are qualified in a Member State and hold such certificates be permitted to serve on board ships flying the flag of any Member State without any further prerequisites. |
| --- | --- |

1.5

The Commission proposes the automatic acceptance by the Member States of all certificates issued by another Member State to seafarers in accordance with the Directive. The main objective of the proposed measure is to ensure that all seafarers who are qualified in a Member State and hold such certificates be permitted to serve on board ships flying the flag of any Member State without any further prerequisites.

| 1.6 | In addition, the Commission believes that it is appropriate to introduce into Community law the requirements of the STCW Convention as regards language skills for seafarers. Such requirements would enable effective communication on board ships, whilst would facilitate free movement of marine professionals. |
| --- | --- |

1.6

In addition, the Commission believes that it is appropriate to introduce into Community law the requirements of the STCW Convention as regards language skills for seafarers. Such requirements would enable effective communication on board ships, whilst would facilitate free movement of marine professionals.

| 1.7 | The Commission's proposals seek to amend Directive 2001/25/EC and additionally provide for:






  — | the obligation for Member States to adopt measures to prevent and penalise fraudulent practices associated with certificates of seafarers, and |
| --- | --- | --- |

1.7

The Commission's proposals seek to amend Directive 2001/25/EC and additionally provide for:

—

the obligation for Member States to adopt measures to prevent and penalise fraudulent practices associated with certificates of seafarers, and

| — | the regular assessment of compliance of Member States with the requirements of Directive 2001/25/EC. |
| --- | --- |

—

the regular assessment of compliance of Member States with the requirements of Directive 2001/25/EC.

2.   General comments

| 2.1 | The EESC recognises the necessity for a procedure to facilitate the recognition by all Member States of certificates of seafarers issued within the Union in accordance with the minimum requirements of Directive 2001/25/EC, as amended. |
| --- | --- |

2.1

The EESC recognises the necessity for a procedure to facilitate the recognition by all Member States of certificates of seafarers issued within the Union in accordance with the minimum requirements of Directive 2001/25/EC, as amended.

| 2.2 | The EESC further recognises the necessity to ensure thorough and continuous compliance with existing requirements in order to meet international obligations. |
| --- | --- |

2.2

The EESC further recognises the necessity to ensure thorough and continuous compliance with existing requirements in order to meet international obligations.

| 2.3 | The EESC notes, in its conclusions of 5 June 2003, the Council's emphasis upon the need to foster the mobility of seafarers within the Union (6). |
| --- | --- |

2.3

The EESC notes, in its conclusions of 5 June 2003, the Council's emphasis upon the need to foster the mobility of seafarers within the Union (6).

| 2.4 | The EESC further notes that the current general system for the recognition of professional education and training is somewhat cumbersome and precludes the mutual recognition of certificates issued between the Member States from the application of the relevant provisions of the Convention. |
| --- | --- |

2.4

The EESC further notes that the current general system for the recognition of professional education and training is somewhat cumbersome and precludes the mutual recognition of certificates issued between the Member States from the application of the relevant provisions of the Convention.

| 2.5 | The EESC acknowledges that the procedure recently introduced for the recognition of certificates outside the Union is simpler and hence seafarers qualified in a Member State may be disadvantaged. The proposed changes, consistent with international requirements, should redress this possible disadvantage. |
| --- | --- |

2.5

The EESC acknowledges that the procedure recently introduced for the recognition of certificates outside the Union is simpler and hence seafarers qualified in a Member State may be disadvantaged. The proposed changes, consistent with international requirements, should redress this possible disadvantage.

| 2.6 | The EESC further acknowledges that some Member States reserve positions for their nationals in the posts of master and chief mate as confirmed by the Court of Justice cases C-47/02 and C-405/01; this serves as confirmation that Member States may prevent the free movement of seafarers and so reserve positions for their own nationals. The Netherlands and the United Kingdom have the least restrictive policies amongst Member States with respect to the employment of non-nationals. |
| --- | --- |

2.6

The EESC further acknowledges that some Member States reserve positions for their nationals in the posts of master and chief mate as confirmed by the Court of Justice cases C-47/02 and C-405/01; this serves as confirmation that Member States may prevent the free movement of seafarers and so reserve positions for their own nationals. The Netherlands and the United Kingdom have the least restrictive policies amongst Member States with respect to the employment of non-nationals.

| 2.7 | The EESC appreciates the necessity for a common working language which all seafarers understand and are able to communicate in. This is particularly important in emergency situations and in the improvement of social conditions on board. |
| --- | --- |

2.7

The EESC appreciates the necessity for a common working language which all seafarers understand and are able to communicate in. This is particularly important in emergency situations and in the improvement of social conditions on board.

| 2.8 | The EESC welcomes the Commission drawing attention to the proliferation of fraudulent certificates in a recent study by the International Maritime Organisation (7) and urges Member States to take and enforce all necessary measures to prevent the fraudulent obtaining, fraudulent issuance and counterfeiting of seafarers' certificates. |
| --- | --- |

2.8

The EESC welcomes the Commission drawing attention to the proliferation of fraudulent certificates in a recent study by the International Maritime Organisation (7) and urges Member States to take and enforce all necessary measures to prevent the fraudulent obtaining, fraudulent issuance and counterfeiting of seafarers' certificates.

| 2.9 | The EESC while accepting the need for a more effective and less burdensome system of mutual recognition of certificates between Member States, believes that there is an ongoing necessity for procedures to actively combat fraudulent certification. Host Member States must have appropriate procedures in order that a certificate issued by another Member State may be used on a ship of the host Member State. |
| --- | --- |

2.9

The EESC while accepting the need for a more effective and less burdensome system of mutual recognition of certificates between Member States, believes that there is an ongoing necessity for procedures to actively combat fraudulent certification. Host Member States must have appropriate procedures in order that a certificate issued by another Member State may be used on a ship of the host Member State.

| 2.10 | The EESC believes that a host Member State, while requiring minimum standards with respect to language skills from all certificate holders, needs to satisfy requirements with respect to the knowledge of maritime law of that Member State. Thus necessitating the issue of a ‘recognition’ document. |
| --- | --- |

2.10

The EESC believes that a host Member State, while requiring minimum standards with respect to language skills from all certificate holders, needs to satisfy requirements with respect to the knowledge of maritime law of that Member State. Thus necessitating the issue of a ‘recognition’ document.

| 2.11 | The EESC accepts that there is an important role for the European Maritime Safety Agency (EMSA) in ensuring both compliance and consistency across Member States and that the administrative burden is kept to a minimum. This is essential in order to ensure the high professional standing of seafarers certificated in Member States. |
| --- | --- |

2.11

The EESC accepts that there is an important role for the European Maritime Safety Agency (EMSA) in ensuring both compliance and consistency across Member States and that the administrative burden is kept to a minimum. This is essential in order to ensure the high professional standing of seafarers certificated in Member States.

| 2.12 | The EESC while accepting the important role of EMSA, recognises its limitations. However, the EESC draws attention of the Commission to the need for appropriate resources of a financial, human and technical nature. |
| --- | --- |

2.12

The EESC while accepting the important role of EMSA, recognises its limitations. However, the EESC draws attention of the Commission to the need for appropriate resources of a financial, human and technical nature.

| 2.13 | The EESC draws the attention of the Commission to the possible adverse effects of permitting an unlimited number of nationals of one Member State sailing on ships of another Member State. Whilst recognizing that this is in line with the free movement of workers, as well as a necessity in some instances, the EESC notes that lack of any limitation on the number of certificates issued may adversely affect the continued employment of seafarers in certain Member States. Ultimately the sustainability and growth of the maritime skills base in the EU may be affected. |
| --- | --- |

2.13

The EESC draws the attention of the Commission to the possible adverse effects of permitting an unlimited number of nationals of one Member State sailing on ships of another Member State. Whilst recognizing that this is in line with the free movement of workers, as well as a necessity in some instances, the EESC notes that lack of any limitation on the number of certificates issued may adversely affect the continued employment of seafarers in certain Member States. Ultimately the sustainability and growth of the maritime skills base in the EU may be affected.

| 2.14 | The EESC urges Member States to work in concert with their social partners to bring about a balanced employment regime to ensure the sustainability and growth of the EU maritime skills base. |
| --- | --- |

2.14

The EESC urges Member States to work in concert with their social partners to bring about a balanced employment regime to ensure the sustainability and growth of the EU maritime skills base.

| 2.15 | The EESC expresses disappointment that the Commission while addressing previously the recognition of third country nationals and now the mutual recognition of EU seafarers' certificates is currently not seeking to have universally applied protective social provisions for all seafarers employed on EU flagged vessels. |
| --- | --- |

2.15

The EESC expresses disappointment that the Commission while addressing previously the recognition of third country nationals and now the mutual recognition of EU seafarers' certificates is currently not seeking to have universally applied protective social provisions for all seafarers employed on EU flagged vessels.

3.   Specific comments

3.1   Article 1

It is acknowledged that the Directive shall apply to the seafaring professions carried out by nationals of a Member State and non-nationals who hold a certificate of competency issued by a Member State. It is important that this should not be extended to include certificates issued originally by a third country and endorsed by a Member State.

3.2   Article 3

While acknowledging in paragraph 2 that any seafarer holding an appropriate certificate or any other certificate as defined in paragraph 1 shall be permitted to serve on board ships flying the flag of another Member State this should only be done upon the issuance of a formal recognition document. Such a document is required in order to prevent fraudulent use of certificates and to testify to the language skills and knowledge of maritime law of the host Member State.

3.3   Article 4

The EESC acknowledges the necessity for seafarers to acquire adequate language proficiency as defined in sections A-II/1, A-III/1, A-IV/2 and A-II/4 of the STCW Code. However, it is somewhat ambiguous in that it is difficult for the Member States to ensure that the provision has been met whereas the duty in accordance with the STCW Code should fall upon the host Member State to ensure that seafarers have adequate language proficiency. Once this is satisfied appropriate recognition may then be granted by the host Member State.

3.4   Article 5

The EESC welcomes the provisions with respect to the prevention of fraud. The use of fraudulent certificates of competency has the potential not only to endanger the safety of life at sea but also cause severe damage to the marine environment and undermining the standing of the nautical profession. The issuance of an appropriate recognition document would assist in the prevention of the fraudulent use of certificates.

3.5   Article 6

The EESC welcomes the role of the EMSA in ensuring that Member States take and enforce appropriate measures to prevent and penalise fraudulent use of certificates.

3.6   Article 7

The EESC acknowledges and welcomes that the Commission assisted by the Agency shall verify at intervals of not more than five years that the Member States comply with the application of the training and certification requirements laid down in Directive 2001/25/EC.

4.   Conclusion

| 4.1 | Without prejudice to the comments above, the EESC acknowledges and welcomes the Commission's proposal. |
| --- | --- |

4.1

Without prejudice to the comments above, the EESC acknowledges and welcomes the Commission's proposal.

| 4.2 | The EESC accepts the need for the less burdensome system of recognition of certificates by Member States. However, automatic recognition should not exclude the necessity for ensuring appropriate language skills, knowledge of maritime law of the host Member State and prevention of fraudulent use of certificates. This therefore requires the host Member State to have appropriate procedures in place. |
| --- | --- |

4.2

The EESC accepts the need for the less burdensome system of recognition of certificates by Member States. However, automatic recognition should not exclude the necessity for ensuring appropriate language skills, knowledge of maritime law of the host Member State and prevention of fraudulent use of certificates. This therefore requires the host Member State to have appropriate procedures in place.

| 4.3 | The EESC, while accepting the desirability for an effective and reliable system for the recognition of certificates of competency issued in Member States, expresses concern that the Commission fails to address the future employment of EU nationals and the retention and growth of the European maritime skills base. |
| --- | --- |

4.3

The EESC, while accepting the desirability for an effective and reliable system for the recognition of certificates of competency issued in Member States, expresses concern that the Commission fails to address the future employment of EU nationals and the retention and growth of the European maritime skills base.

| 4.4 | The EESC acknowledges the intended roles of the Commission assisted by the EMSA in ensuring integrity of the procedures and requests that the Commission consider that adequate resources are made available at both the Member State and European levels. |
| --- | --- |

4.4

The EESC acknowledges the intended roles of the Commission assisted by the EMSA in ensuring integrity of the procedures and requests that the Commission consider that adequate resources are made available at both the Member State and European levels.

| 4.5 | The EESC while acknowledging the importance the Commission places on maritime education and training in the interests of safety of life at sea and the protection of the marine environment, expresses concern that no additional measures have been taken to ensure that both third country nationals and EU citizens are not exploited on ships of Member States. |
| --- | --- |

4.5

The EESC while acknowledging the importance the Commission places on maritime education and training in the interests of safety of life at sea and the protection of the marine environment, expresses concern that no additional measures have been taken to ensure that both third country nationals and EU citizens are not exploited on ships of Member States.

Brussels, 15 December 2004.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  Directive 2001/25/EC of the European Parliament and of the Council of 4.4.2001 on the minimum level of training of seafarers.

1

(2)  See footnote 1.

2

(3)  Directive 2003/103/EC of the European Parliament and of the Council of 17.11.2003 amending Directive 2001/25/EC on the minimum level of training of seafarers.

3

(4)  Council Directive 89/48/EEC on a General System for the Recognition of Higher Education Diplomas awarded on completion of Professional Education and Training.

4

(5)  Council Directive 92/51/EEC on a Second General System for the Recognition of Education and Training to supplement Directive 89/48/EEC.

5

(6)  On the Promotion of the Shipping Industry and the Seafaring Profession within the Union.

6

(7)  A study of fraudulent practices associated with certificates of competency and endorsements, Seafarers International Research Centre (SIRC) 2001.

7

---

| 28.6.2005 | EN | Official Journal of the European Union | C 157/56 |
| --- | --- | --- | --- |

28.6.2005

EN

Official Journal of the European Union

C 157/56

---

Opinion of the European Economic and Social Committee on the ‘Proposal for a Directive of the European Parliament and of the Council on harmonised river traffic information services on inland waterways in the Community’

(COM(2004) 392 final — 2004/0123 (COD))

(2005/C 157/08)

On 8 June 2004, the Council decided to consult the European Economic and Social Committee, under Article 71 of the Treaty establishing the European Community, on the abovementioned proposal.

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 2004. The rapporteur was Mr Simons.

At its 413th plenary session of 15 and 16 December 2004 (meeting of 15 December) the European Economic and Social Committee adopted the following opinion by 144 votes in favour with one abstention:

1.   Introduction

| 1.1 | On 25 May 2004, the European Commission submitted a Proposal for a Directive of the European Parliament and of the Council on harmonised river traffic information services on inland waterways in the Community. In submitting this proposal, the Commission is seeking to support the future development of inland waterway transport (IWT) by integrating and harmonising the existing national telematic services which, over the past few years, have been or are being introduced in the various Member States. |
| --- | --- |

1.1

On 25 May 2004, the European Commission submitted a Proposal for a Directive of the European Parliament and of the Council on harmonised river traffic information services on inland waterways in the Community. In submitting this proposal, the Commission is seeking to support the future development of inland waterway transport (IWT) by integrating and harmonising the existing national telematic services which, over the past few years, have been or are being introduced in the various Member States.

| 1.2 | The proposal is part of a policymaking initiative to promote other transport modes as alternatives to road transport, in order to resolve the difficulties brought about by the inconsistent transport policy of the past few years, which is deemed to be the root cause of the major problems currently facing the European transport system.
  The IWT sector has sufficient infrastructure and shipping capacity to take a considerably higher share of Europe's overall freight market away from the road network. Much of Europe is within reach of Europe's cross-border waterways and many national waterways. On many fronts, innovation is the watchword of the IWT sector. Thanks to its higher profile as an alter- native to road haulage, IWT has already succeeded in winning new markets. |
| --- | --- |

1.2

The proposal is part of a policymaking initiative to promote other transport modes as alternatives to road transport, in order to resolve the difficulties brought about by the inconsistent transport policy of the past few years, which is deemed to be the root cause of the major problems currently facing the European transport system.

The IWT sector has sufficient infrastructure and shipping capacity to take a considerably higher share of Europe's overall freight market away from the road network. Much of Europe is within reach of Europe's cross-border waterways and many national waterways. On many fronts, innovation is the watchword of the IWT sector. Thanks to its higher profile as an alter- native to road haulage, IWT has already succeeded in winning new markets.

| 1.3 | In a number of (own-initiative) opinions, meetings (1) and conclusions, the European Economic and Social Committee has already highlighted the importance of inland waterway transport on the Community market. Particular attention should be given to eliminating national and international infrastructure bottlenecks. On that front, the EESC has repeatedly called on EU Member States to properly maintain waterways. The Committee views proper maintenance of waterways as a basic condition for making the introduction of advanced river traffic information services worthwhile. Failure to fulfil this basic condition has already led to bottlenecks, which could jeopardise the future development of the role of river traffic (2). |
| --- | --- |

1.3

In a number of (own-initiative) opinions, meetings (1) and conclusions, the European Economic and Social Committee has already highlighted the importance of inland waterway transport on the Community market. Particular attention should be given to eliminating national and international infrastructure bottlenecks. On that front, the EESC has repeatedly called on EU Member States to properly maintain waterways. The Committee views proper maintenance of waterways as a basic condition for making the introduction of advanced river traffic information services worthwhile. Failure to fulfil this basic condition has already led to bottlenecks, which could jeopardise the future development of the role of river traffic (2).

| 1.4 | Under the White Paper's strategy, the Commission is committed to further assist the sector in adapting to new market needs. It strongly encourages the deployment of modern information and communication technologies (ICT), in this context with the particular aim of improving traffic and transport management on inland waterways. |
| --- | --- |

1.4

Under the White Paper's strategy, the Commission is committed to further assist the sector in adapting to new market needs. It strongly encourages the deployment of modern information and communication technologies (ICT), in this context with the particular aim of improving traffic and transport management on inland waterways.

| 1.5 | The European Commission believes that the deployment of the river information services (RIS) concept will secure compatibility and interoperability between current and new RIS systems at European level. The idea is to encourage European equipment suppliers to produce RIS hardware and software at reasonable and affordable costs. |
| --- | --- |

1.5

The European Commission believes that the deployment of the river information services (RIS) concept will secure compatibility and interoperability between current and new RIS systems at European level. The idea is to encourage European equipment suppliers to produce RIS hardware and software at reasonable and affordable costs.

| 1.6 | The international river commissions — the Central Commission for Navigation on the Rhine and the Danube Commission — back the development and introduction of RIS. To that end, the Central Commission for Navigation on the Rhine has already adopted, for the Rhine, the technical guidelines and specifications provided for under the directive and drawn up by the International Navigation Association (PIANC). |
| --- | --- |

1.6

The international river commissions — the Central Commission for Navigation on the Rhine and the Danube Commission — back the development and introduction of RIS. To that end, the Central Commission for Navigation on the Rhine has already adopted, for the Rhine, the technical guidelines and specifications provided for under the directive and drawn up by the International Navigation Association (PIANC).

2.   Users and the importance of RIS for inland navigation

| 2.1 | According to the proposal for a directive, the RIS concept represents the most substantial change in the sector in several decades. The aim is to launch information services to support the planning and management of traffic and transport operations. To that end, telematic applications developed separately at national level are to be integrated into an interoperational concept. |
| --- | --- |

2.1

According to the proposal for a directive, the RIS concept represents the most substantial change in the sector in several decades. The aim is to launch information services to support the planning and management of traffic and transport operations. To that end, telematic applications developed separately at national level are to be integrated into an interoperational concept.

| 2.2 | The proposal envisages the introduction of RIS as benefiting the entire European inland waterway sector. The revitalisation of IWT through the implementation of RIS is of particular interest in the light of the enlargement of the EU to include central and eastern European countries.
  RIS are also designed to facilitate the tasks of the competent authorities, in particular traffic management and the monitoring of hazardous goods. From the perspective of security and environmental protection, this should prove beneficial by ensuring that parties concerned are better informed and that response times to emergencies are cut. |
| --- | --- |

2.2

The proposal envisages the introduction of RIS as benefiting the entire European inland waterway sector. The revitalisation of IWT through the implementation of RIS is of particular interest in the light of the enlargement of the EU to include central and eastern European countries.

RIS are also designed to facilitate the tasks of the competent authorities, in particular traffic management and the monitoring of hazardous goods. From the perspective of security and environmental protection, this should prove beneficial by ensuring that parties concerned are better informed and that response times to emergencies are cut.

| 2.3 | Both traffic- and transport-related services are set to benefit from the introduction of harmonised RIS. The directive is thus designed to be of advantage both to national authorities and to IWT, and its objectives fall under both public and private law. |
| --- | --- |

2.3

Both traffic- and transport-related services are set to benefit from the introduction of harmonised RIS. The directive is thus designed to be of advantage both to national authorities and to IWT, and its objectives fall under both public and private law.

| 2.4 | Given the differing aims and principles involved under public and private law in using the system, the information and services need special monitoring and steps must be taken to prevent any improper use. When the data are used for public law purposes, the protection of privacy in electronic communications must be clearly safeguarded. |
| --- | --- |

2.4

Given the differing aims and principles involved under public and private law in using the system, the information and services need special monitoring and steps must be taken to prevent any improper use. When the data are used for public law purposes, the protection of privacy in electronic communications must be clearly safeguarded.

3.   Benefits of RIS for the future development of inland navigation

| 3.1 | According to the proposal for a directive, river traffic information services are considered useful for a possible switch to waterborne transport and if IWT is to participate more in intermodal schemes, for the benefit of society. According to the proposal, RIS are expected to provide four types of strategic benefits:






  — | increased competitiveness, |
| --- | --- | --- |

3.1

According to the proposal for a directive, river traffic information services are considered useful for a possible switch to waterborne transport and if IWT is to participate more in intermodal schemes, for the benefit of society. According to the proposal, RIS are expected to provide four types of strategic benefits:

—

increased competitiveness,

| — | optimised use of infrastructures, |
| --- | --- |

—

optimised use of infrastructures,

| — | improved safety and security, and |
| --- | --- |

—

improved safety and security, and

| — | increased environmental protection. |
| --- | --- |

—

increased environmental protection.

| 3.2 | With regard to the first of these aspects, the EESC would like to point out that the aim is to strengthen the position of the sector as a whole relative to other means of transport. The planned services must not be allowed to further undermine the competitiveness of IWT in the new and future Member States, which is already weakened due to the economic situation there. Funding of services should give this aspect special priority. (3) |
| --- | --- |

3.2

With regard to the first of these aspects, the EESC would like to point out that the aim is to strengthen the position of the sector as a whole relative to other means of transport. The planned services must not be allowed to further undermine the competitiveness of IWT in the new and future Member States, which is already weakened due to the economic situation there. Funding of services should give this aspect special priority. (3)

| 3.3 | According to the proposal, more efficient voyage planning — where speed is adjusted as appropriate — will cut waiting times and limit productivity losses. Moreover, by providing information interfaces with all supply chain members, RIS are designed to promote the integration of IWT into intermodal transport chains. |
| --- | --- |

3.3

According to the proposal, more efficient voyage planning — where speed is adjusted as appropriate — will cut waiting times and limit productivity losses. Moreover, by providing information interfaces with all supply chain members, RIS are designed to promote the integration of IWT into intermodal transport chains.

| 3.4 | Alongside promoting IWT's competitiveness in relation to other transport modes, it is important to further emphasise the known advantages of IWT in areas such as safety, security and environmental protection. IWT is currently considered to be the safest transport mode (4). |
| --- | --- |

3.4

Alongside promoting IWT's competitiveness in relation to other transport modes, it is important to further emphasise the known advantages of IWT in areas such as safety, security and environmental protection. IWT is currently considered to be the safest transport mode (4).

| 3.5 | As things stand, IWT will be able to retain its environmental lead over other transport modes. A recent study on the environmental performance of inland shipping (5) concluded that inland shipping can help improve the environmental performance of the transport chain. This in turn can help achieve the Kyoto objectives by cutting exhaust gases. |
| --- | --- |

3.5

As things stand, IWT will be able to retain its environmental lead over other transport modes. A recent study on the environmental performance of inland shipping (5) concluded that inland shipping can help improve the environmental performance of the transport chain. This in turn can help achieve the Kyoto objectives by cutting exhaust gases.

| 3.6 | The EU environment ministers' decision of 28 June 2004 to limit the sulphur content of fuel used by inland-waterway vessels to 0.1 % by 2010 also reflects the IWT sector's environmental thinking. A high sulphur content in fuel damages human health and may cause soil and water acidification. IWT will play its part in combating these risks so as to maintain its reputation as the most environmentally-friendly transport mode. The European IWT fleet to a large extent already uses fuel with a sulphur content of less than 0.2 %.
  By fitting low-emission engines and using low-pollution fuels, IWT is able to maintain its environmental edge over other transport modes.
  Introducing river traffic information services will lead to a further cut in IWT energy consumption and the inherent benefits this brings can help the IWT sector achieve its environmental objectives. |
| --- | --- |

3.6

The EU environment ministers' decision of 28 June 2004 to limit the sulphur content of fuel used by inland-waterway vessels to 0.1 % by 2010 also reflects the IWT sector's environmental thinking. A high sulphur content in fuel damages human health and may cause soil and water acidification. IWT will play its part in combating these risks so as to maintain its reputation as the most environmentally-friendly transport mode. The European IWT fleet to a large extent already uses fuel with a sulphur content of less than 0.2 %.

By fitting low-emission engines and using low-pollution fuels, IWT is able to maintain its environmental edge over other transport modes.

Introducing river traffic information services will lead to a further cut in IWT energy consumption and the inherent benefits this brings can help the IWT sector achieve its environmental objectives.

4.   The proposal for a directive and its scope

| 4.1 | It is envisaged that the directive will oblige Member States to facilitate the introduction and use of harmonised river traffic information services (RIS) and to ensure that the regulatory conditions are in place for such services' establishment and ongoing development. The basic idea is to directly integrate existing technologies (Article 1). |
| --- | --- |

4.1

It is envisaged that the directive will oblige Member States to facilitate the introduction and use of harmonised river traffic information services (RIS) and to ensure that the regulatory conditions are in place for such services' establishment and ongoing development. The basic idea is to directly integrate existing technologies (Article 1).

| 4.2 | The Committee feels it is right to limit the scope of the directive to inland waterways of class IV and above. It also welcomes the dynamic reference to the Classification of European Inland Waterways. |
| --- | --- |

4.2

The Committee feels it is right to limit the scope of the directive to inland waterways of class IV and above. It also welcomes the dynamic reference to the Classification of European Inland Waterways.

| 4.3 | The directive defines the specific obligations of the Member States as regards the provision of data necessary for the execution of the voyage, the provision of electronic navigational charts and the provision of notices to skippers and the authorities.
  For the EESC, the requirement that Member States must ensure the availability of electronic navigational charts suitable for navigational purposes only for waterways of class Va and above in accordance with the Classification of European Inland Waterways raises some concerns, bearing in mind the waterway network in Germany, Belgium, the Czech Republic and Poland (Article 4). |
| --- | --- |

4.3

The directive defines the specific obligations of the Member States as regards the provision of data necessary for the execution of the voyage, the provision of electronic navigational charts and the provision of notices to skippers and the authorities.

For the EESC, the requirement that Member States must ensure the availability of electronic navigational charts suitable for navigational purposes only for waterways of class Va and above in accordance with the Classification of European Inland Waterways raises some concerns, bearing in mind the waterway network in Germany, Belgium, the Czech Republic and Poland (Article 4).

| 4.4 | In principle, the directive does not oblige private users — i.e. ship operators — to install the equipment necessary for participating in RIS. However, Member States are asked to take appropriate measures to encourage users and vessels to comply with the equipment requirements provided for in the directive. To meet this requirement and to encourage ship operators to use the services, the Committee feels that it is essential for Member States not only to make the requisite data available but also to provide incentives for onboard retrofitting.
  For reasons of transparency — and given the principle that the measures involved are to be voluntary — use of the services should not be made mandatory. That said, as part of their drive to implement RIS, Member States should also be required to provide ways and means of encouraging ship operators to use the system as widely as possible in order to attain the directive's intended objectives. |
| --- | --- |

4.4

In principle, the directive does not oblige private users — i.e. ship operators — to install the equipment necessary for participating in RIS. However, Member States are asked to take appropriate measures to encourage users and vessels to comply with the equipment requirements provided for in the directive. To meet this requirement and to encourage ship operators to use the services, the Committee feels that it is essential for Member States not only to make the requisite data available but also to provide incentives for onboard retrofitting.

For reasons of transparency — and given the principle that the measures involved are to be voluntary — use of the services should not be made mandatory. That said, as part of their drive to implement RIS, Member States should also be required to provide ways and means of encouraging ship operators to use the system as widely as possible in order to attain the directive's intended objectives.

| 4.5 | The technical specifications for the planning, implementation and operational use of the services are laid down in technical guidelines (RIS guidelines). For the sake of system uniformity, the Committee feels that these should match relevant international organisations' existing guidelines and specifications. |
| --- | --- |

4.5

The technical specifications for the planning, implementation and operational use of the services are laid down in technical guidelines (RIS guidelines). For the sake of system uniformity, the Committee feels that these should match relevant international organisations' existing guidelines and specifications.

| 4.6 | It is particularly important to protect the privacy of ship operators when RIS data are used for public and operational purposes. The Committee feels that data protection is a key requirement given the sensitive nature of some of the information involved, and steps must be taken to prevent data being passed on to public authorities. |
| --- | --- |

4.6

It is particularly important to protect the privacy of ship operators when RIS data are used for public and operational purposes. The Committee feels that data protection is a key requirement given the sensitive nature of some of the information involved, and steps must be taken to prevent data being passed on to public authorities.

| 4.7 | To implement and transpose the proposed directive, the Commission is to appoint a committee in line with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission. To make sure the directive is transposed in line with the objectives and the plan to promote IWT, this committee, made up of representatives from the EU Member States, should also, in the view of the EESC, consult trade body representatives in the course of its deliberations (Article 11). |
| --- | --- |

4.7

To implement and transpose the proposed directive, the Commission is to appoint a committee in line with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission. To make sure the directive is transposed in line with the objectives and the plan to promote IWT, this committee, made up of representatives from the EU Member States, should also, in the view of the EESC, consult trade body representatives in the course of its deliberations (Article 11).

5.   Transposing the directive

5.1   Acceptance by users

In the view of the Committee, special attention must be paid to implementing and transposing the directive. The standardised RIS must contain useful information that can help promote shipping. Surveys into telematics use in the EU Member States have indicated that the IWT sector does not yet have adequate facilities to implement RIS.

To boost acceptance among users and to encourage ship operators to implement the directive, the Committee feels that flanking measures are vital to help meet the equipment requirements. The Committee therefore supports the joint proposal of the Dutch and Austrian transport ministries to draft a joint RIS implementation plan for submission to the European Commission. The Committee calls for the implementation projects in (future) Member States to be funded from the relevant EU support programmes, particularly with a view to introducing RIS in economically disadvantaged regions.

To be effective, RIS need to be used as widely as possible by ship operators. The Committee feels that master plans that are to be developed for that purpose must meet these requirements.

5.2   Cost

As the explanatory memorandum of the proposal for a directive makes clear, European equipment suppliers are to be encouraged to produce RIS hardware and software at a reasonable and affordable price. The European Commission maintains that the introduction of the RIS concept will ensure compatibility and interoperability between current and new RIS systems at European level. The Committee feels that the Commission will need to continue monitoring the situation and spurring things on if that aim is to become a reality. Regular information and publications on the subject could help to speed up this process.

In addition to expensive RIS hardware and software, high communication costs for ship operators have so far restricted GSM data transfer and internet communication. The Committee feels that, in implementing this directive, it is essential to promote communication systems that best meet IWT requirements and can be used in a cost-effective way.

6.   Basis for the recommendations set out below

| 6.1 | The EU's main economic challenge is to realise its growth potential. To that end, it is essential to develop and support sustainable blueprints for growth. Freight transport plays a key role in the Community market. However, in the absence of a coherent transport policy, this sector is facing severe difficulties as a result of road congestion, the lack of cooperation between railway companies and restricted access to the market. |
| --- | --- |

6.1

The EU's main economic challenge is to realise its growth potential. To that end, it is essential to develop and support sustainable blueprints for growth. Freight transport plays a key role in the Community market. However, in the absence of a coherent transport policy, this sector is facing severe difficulties as a result of road congestion, the lack of cooperation between railway companies and restricted access to the market.

| 6.2 | Water transport is part of Europe's future. Water and waterways play an important role in society. 50 % of the EU population live in coastal areas or along Europe's fifteen largest rivers. With the enlargement of the European Union, IWT will play an even more important role in the internal market. Many of the new Member States have navigable waterways which are used for freight transport. Within the framework of the policy announced by the European Commission, IWT as such, and as part of the intermodal transport chain, can play a major role in the integration of the new Member States and realising their potential for economic growth. |
| --- | --- |

6.2

Water transport is part of Europe's future. Water and waterways play an important role in society. 50 % of the EU population live in coastal areas or along Europe's fifteen largest rivers. With the enlargement of the European Union, IWT will play an even more important role in the internal market. Many of the new Member States have navigable waterways which are used for freight transport. Within the framework of the policy announced by the European Commission, IWT as such, and as part of the intermodal transport chain, can play a major role in the integration of the new Member States and realising their potential for economic growth.

| 6.3 | To operate effectively, freight transport needs first-rate infrastructure. The proper maintenance and upkeep of existing IWT infrastructure and the elimination of bottlenecks are basic prerequisites for promoting intermodality in freight transport and boosting the role of IWT. The Committee views proper maintenance of waterways as a basic condition for making the introduction of advanced river traffic information services worthwhile. Failure to fulfil this basic condition has already led to bottlenecks, which could jeopardise the future development of the role of river traffic. The Committee therefore calls on Member States to act accordingly and to provide the necessary resources. |
| --- | --- |

6.3

To operate effectively, freight transport needs first-rate infrastructure. The proper maintenance and upkeep of existing IWT infrastructure and the elimination of bottlenecks are basic prerequisites for promoting intermodality in freight transport and boosting the role of IWT. The Committee views proper maintenance of waterways as a basic condition for making the introduction of advanced river traffic information services worthwhile. Failure to fulfil this basic condition has already led to bottlenecks, which could jeopardise the future development of the role of river traffic. The Committee therefore calls on Member States to act accordingly and to provide the necessary resources.

7.   General recommendations

| 7.1 | Against this backdrop, the Committee welcomes the introduction of a legal framework for harmonised river traffic information services on Community inland waterways. Provided they are accepted on a broad scale, harmonised information services on inland waterways can help achieve the stated objective of securing a modal shift to waterways as an alternative transport mode with a potential for growth and offering safety and environmental advantages.
  The main economic challenge facing the European Union is to realise its growth potential. It is therefore necessary to support sustainable growth. Freight transport plays an important role within the internal market. However, it faces huge problems all over Europe where mainly road congestion is threatening economic development within the European Union. The solution is to be found in modal shifts and sustainable development by facilitating the use of intelligent transport solutions.
  Economic development in Europe thus depends on a strong and balanced transport policy, a fact which needs to be fully recognised by European decision makers.
  For this purpose, a proper framework must be established and secured so as to make IWT development a political priority.
  With reference to the success achieved in the modal shift to short sea shipping, comparable advances are also possible in the IWT sector — through targeted measures and provided there is political support. |
| --- | --- |

7.1

Against this backdrop, the Committee welcomes the introduction of a legal framework for harmonised river traffic information services on Community inland waterways. Provided they are accepted on a broad scale, harmonised information services on inland waterways can help achieve the stated objective of securing a modal shift to waterways as an alternative transport mode with a potential for growth and offering safety and environmental advantages.

The main economic challenge facing the European Union is to realise its growth potential. It is therefore necessary to support sustainable growth. Freight transport plays an important role within the internal market. However, it faces huge problems all over Europe where mainly road congestion is threatening economic development within the European Union. The solution is to be found in modal shifts and sustainable development by facilitating the use of intelligent transport solutions.

Economic development in Europe thus depends on a strong and balanced transport policy, a fact which needs to be fully recognised by European decision makers.

For this purpose, a proper framework must be established and secured so as to make IWT development a political priority.

With reference to the success achieved in the modal shift to short sea shipping, comparable advances are also possible in the IWT sector — through targeted measures and provided there is political support.

| 7.2 | The economic benefits of reducing road congestion, incorporating IWT into intermodal transport chains and protecting natural resources by making even more efficient use of shipping capacity are good grounds for European support for telematics in the IWT sector and for the harmonisation of river traffic information services. So that the measures set out in the proposed directive can be introduced effectively, the Committee would recommend taking the following steps, which it considers to be necessary for the introduction of river traffic information services:






  — | the adoption of other relevant international organisations' existing technical guidelines in the context of the RIS directive; |
| --- | --- | --- |

7.2

The economic benefits of reducing road congestion, incorporating IWT into intermodal transport chains and protecting natural resources by making even more efficient use of shipping capacity are good grounds for European support for telematics in the IWT sector and for the harmonisation of river traffic information services. So that the measures set out in the proposed directive can be introduced effectively, the Committee would recommend taking the following steps, which it considers to be necessary for the introduction of river traffic information services:

—

the adoption of other relevant international organisations' existing technical guidelines in the context of the RIS directive;

| — | a requirement that Member States should make electronic navigational charts suitable for navigational purposes available for all European inland waterways of class IV and above in accordance with the Classification of European Inland Waterways; |
| --- | --- |

—

a requirement that Member States should make electronic navigational charts suitable for navigational purposes available for all European inland waterways of class IV and above in accordance with the Classification of European Inland Waterways;

| — | the protection of data against improper use; |
| --- | --- |

—

the protection of data against improper use;

| — | consultation of the sector in the committee that has been or is to be set up by the Commission to transpose the directive. |
| --- | --- |

—

consultation of the sector in the committee that has been or is to be set up by the Commission to transpose the directive.

8.   Specific comments

| 8.1 | Flanking measures are needed to transpose the directive on board inland-waterway vessels.
  The IWT sector does not yet have adequate facilities to implement RIS. To be effective, however, these services need to be used as widely as possible by ship operators. The master plans that are to be drawn up must include targeted measures to cater for these requirements, such as:






  — | Drafting a plan for implementation of RIS. |
| --- | --- | --- |

8.1

Flanking measures are needed to transpose the directive on board inland-waterway vessels.

The IWT sector does not yet have adequate facilities to implement RIS. To be effective, however, these services need to be used as widely as possible by ship operators. The master plans that are to be drawn up must include targeted measures to cater for these requirements, such as:

—

Drafting a plan for implementation of RIS.

| — | Encouragement and support for ship operators to introduce the requisite equipment on board ships so as to be able to use the system effectively in line with the objectives of the directive. |
| --- | --- |

—

Encouragement and support for ship operators to introduce the requisite equipment on board ships so as to be able to use the system effectively in line with the objectives of the directive.

| — | The promotion of cost-effective communications systems that best meet IWT requirements. |
| --- | --- |

—

The promotion of cost-effective communications systems that best meet IWT requirements.

| — | Monitoring of RIS hardware and software production costs. |
| --- | --- |

—

Monitoring of RIS hardware and software production costs.

| 9. | In order to effectively implement the proposal for a directive, the EESC recommends that these steps be taken. |
| --- | --- |

9.

In order to effectively implement the proposal for a directive, the EESC recommends that these steps be taken.

Brussels, 15 December 2004

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  See: DI CESE 48/2002: Joint conclusions adopted at the 5th meeting of the EU-Romania Joint Consultative Committee held in Bucharest on 23 and 24 May 2002 on Optimisation of the Danube as a pan-European TEN corridor, rapporteur: Dr Bredima-Savopoulou; EESC opinion on the Implementation of the structured social dialogue in the pan-European transport corridors, OJ C 85, 8.4.2002, rapporteur: Ms Alleweldt; EESC opinion on the future of the trans-European inland waterway network,
  OJ C 80, 3.5.2002, rapporteur. Mr Levaux; and EESC opinion Towards a pan-European system of inland waterway transport, OJ C 10, 14.1.2004, rapporteur: Mr Simons.

1

Optimisation of the Danube as a pan-European TEN corridor

Implementation of the structured social dialogue in the pan-European transport corridors

future of the trans-European inland waterway network,

Towards a pan-European system of inland waterway transport

(2)  For example, in 2004 investment in waterway maintenance was halted in the Netherlands, even though expenditure of at least €35 million is needed to overcome current stagnation and to prevent future stagnation; the requisite funding will not become available till 2007.

2

In Germany an estimated €11 billion of investment is needed for the 2000-2020 period, equivalent to annual instalments of over €500 million, whereas the new Federal Transport Infrastructure Plan for 2001-2015 assumes annual maintenance needs of only €440 million (Planco Report on The Potential and Future of German River Traffic (Potenziale und Zukunft der deutschen Binnenschifffahrt), November 2003).

The Potential and Future of German River Traffic

(3)  All the Danube States are already participating in RIS Lead Projects on harmonising river transport services (e.g. COMPRIS: Consortium, Operational Management Platform 2002-2005, involving 44 partners from 11 countries, including Slovakia, Hungary, Romania and Bulgaria). River traffic information services are expected to result in substantial modernisation of river traffic along the Danube (Via Donau: Strategy and achievements on the implementation of RIS in the Danube region, 13.10.2004).

3

Strategy and achievements on the implementation of RIS in the Danube region

(4)  EU Energy and transport in figures, statistical pocketbook 2003, Part 3: Transport, chapter 6: Safety.

4

(5)  Royal Haskoning: Environmental Performance of Inland Shipping, 27 January 2004.

5

Environmental Performance of Inland Shipping

---

| 28.6.2005 | EN | Official Journal of the European Union | C 157/61 |
| --- | --- | --- | --- |

28.6.2005

EN

Official Journal of the European Union

C 157/61

---

Opinion of the European Economic and Social Committee on the ‘Proposal for a Council Regulation establishing a Community Fisheries Control Agency and amending Regulation (EC) No. 2847/93 establishing a control system applicable to the Common Fisheries Policy’

(COM(2004) 289 final — 2003/0108 (CNS))

(2005/C 157/09)

On 14 May 2004, 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 16 November 2004. The rapporteur was Mr Sarró Iparraguirre.

At its 413th plenary session of 15 and 16 December 2004 (meeting of 15 December 2004), the European Economic and Social Committee adopted the following opinion by 138 votes to three, with seven abstentions.

1.   Introduction

| 1.1 | On 1 January 2003, the reform of the Common Fisheries Policy (CFP), the main aim of which is the conservation and sustainable exploitation of fisheries resources, entered into force. To this end, a set of mandatory rules was established for both the Community fisheries sector and the Member States. |
| --- | --- |

1.1

On 1 January 2003, the reform of the Common Fisheries Policy (CFP), the main aim of which is the conservation and sustainable exploitation of fisheries resources, entered into force. To this end, a set of mandatory rules was established for both the Community fisheries sector and the Member States.

| 1.2 | Chapter V of Regulation 2371/2002 (1) which governs the Community fisheries control and inspection system, clearly sets out the responsibilities of the Member States and of the European Commission and lays down the mechanisms for cooperation and coordination that must exist between Member States and between these and the Commission in order to ensure compliance with CFP rules. |
| --- | --- |

1.2

Chapter V of Regulation 2371/2002 (1) which governs the Community fisheries control and inspection system, clearly sets out the responsibilities of the Member States and of the European Commission and lays down the mechanisms for cooperation and coordination that must exist between Member States and between these and the Commission in order to ensure compliance with CFP rules.

| 1.3 | The European Commission believes that enforcing the rules of the CFP by Member States requires a sound operational control and inspection structure at Community level, sufficient means of control and inspection and an appropriate strategy for the co-ordinated deployment of these means. |
| --- | --- |

1.3

The European Commission believes that enforcing the rules of the CFP by Member States requires a sound operational control and inspection structure at Community level, sufficient means of control and inspection and an appropriate strategy for the co-ordinated deployment of these means.

| 1.4 | By means of this new proposal for a Regulation, (2) the European Commission wishes to create a Community Fisheries Control Agency (hereafter the Agency) as the Community's specialised technical body for ensuring the uniform and effective application of the rules of the Common Fisheries Policy by Member States, for organising operational coordination between Member States regarding fisheries monitoring and inspection and for promoting cooperation between them. |
| --- | --- |

1.4

By means of this new proposal for a Regulation, (2) the European Commission wishes to create a Community Fisheries Control Agency (hereafter the Agency) as the Community's specialised technical body for ensuring the uniform and effective application of the rules of the Common Fisheries Policy by Member States, for organising operational coordination between Member States regarding fisheries monitoring and inspection and for promoting cooperation between them.

| 1.5 | The European Commission therefore proposes that the Agency should coordinate control and inspection by Member States relating to Community control and inspection obligations; coordinate the deployment of the national means of control and inspection pooled by the Member States; assist Member States in reporting information on fishing activities and control and inspection activities to the Commission and third parties; and assist Member States in fulfilling their tasks and obligations under the rules of the Common Fisheries Policy. |
| --- | --- |

1.5

The European Commission therefore proposes that the Agency should coordinate control and inspection by Member States relating to Community control and inspection obligations; coordinate the deployment of the national means of control and inspection pooled by the Member States; assist Member States in reporting information on fishing activities and control and inspection activities to the Commission and third parties; and assist Member States in fulfilling their tasks and obligations under the rules of the Common Fisheries Policy.

| 1.6 | The Commission also proposes that the Agency may provide contractual services to Member States at their request and at their expense, assist them in the training of inspectors, undertake the joint procurement of goods and services relating to control and inspection activities and coordinate the implementation by Member States of joint pilot projects. |
| --- | --- |

1.6

The Commission also proposes that the Agency may provide contractual services to Member States at their request and at their expense, assist them in the training of inspectors, undertake the joint procurement of goods and services relating to control and inspection activities and coordinate the implementation by Member States of joint pilot projects.

| 1.7 | The proposal for a Regulation stipulates that the Agency will be a public body of the Community having legal personality. The Commission proposes that the Agency have an Administrative Board composed of one representative from each Member State whose vessels are engaged in fishing activities relating to marine living resources and four representatives of the Commission as well as of four representatives of the fishing industry nominated by the Commission The Agency will also have an Executive Director. |
| --- | --- |

1.7

The proposal for a Regulation stipulates that the Agency will be a public body of the Community having legal personality. The Commission proposes that the Agency have an Administrative Board composed of one representative from each Member State whose vessels are engaged in fishing activities relating to marine living resources and four representatives of the Commission as well as of four representatives of the fishing industry nominated by the Commission The Agency will also have an Executive Director.

| 1.8 | The Commission intends the Agency to be funded by means of a contribution from the Community, charges for services provided by the Agency to Member States and charges for publications, training and/or any other services provided by the Agency. |
| --- | --- |

1.8

The Commission intends the Agency to be funded by means of a contribution from the Community, charges for services provided by the Agency to Member States and charges for publications, training and/or any other services provided by the Agency.

| 1.9 | Lastly, the Commission envisages that the Agency will start its work in 2006, with a budget of EUR 4.9 million and a total staff of 38 in the first year, rising to EUR 5.2 million and 49 staff members in 2007. The seat of the Agency will be in Spain. |
| --- | --- |

1.9

Lastly, the Commission envisages that the Agency will start its work in 2006, with a budget of EUR 4.9 million and a total staff of 38 in the first year, rising to EUR 5.2 million and 49 staff members in 2007. The seat of the Agency will be in Spain.

2.   General comments

| 2.1 | The Commission Communication to the Council and to the European Parliament Towards a uniform and effective implementation of the Common Fisheries Policy
   (3) provided for a feasibility study to be drawn up in coordination with the Member States prior to the creation of a Community Fisheries Control Agency (the Agency). The Commission has presented the proposed Regulation without having undertaken this feasibility study beforehand. The EESC deplores this fact. |
| --- | --- |

2.1

The Commission Communication to the Council and to the European Parliament Towards a uniform and effective implementation of the Common Fisheries Policy
   (3) provided for a feasibility study to be drawn up in coordination with the Member States prior to the creation of a Community Fisheries Control Agency (the Agency). The Commission has presented the proposed Regulation without having undertaken this feasibility study beforehand. The EESC deplores this fact.

| 2.2 | The EESC welcomes the European Commission's proposal to create the Agency and shares its aims of achieving the effective implementation of the CFP and uniform inspection and enforcement throughout the Community. The EESC is aware of the need for uniform and effective compliance with the rules of the CFP but considers that for this to happen, these rules must be accepted and understood by the sector. If this is to be possible, the sector must be involved from the outset in the decision-making process, starting with collaborating on drafting the scientific advice on which the strategies and measures for the conservation of fisheries resources are based. The EESC therefore believes that the Agency should also focus on examining how to improve scientific advice and encouraging the sector's involvement in drafting this advice. This last point should be included in the Agency's mission as detailed in Article 4 of the proposal for a Regulation. |
| --- | --- |

2.2

The EESC welcomes the European Commission's proposal to create the Agency and shares its aims of achieving the effective implementation of the CFP and uniform inspection and enforcement throughout the Community. The EESC is aware of the need for uniform and effective compliance with the rules of the CFP but considers that for this to happen, these rules must be accepted and understood by the sector. If this is to be possible, the sector must be involved from the outset in the decision-making process, starting with collaborating on drafting the scientific advice on which the strategies and measures for the conservation of fisheries resources are based. The EESC therefore believes that the Agency should also focus on examining how to improve scientific advice and encouraging the sector's involvement in drafting this advice. This last point should be included in the Agency's mission as detailed in Article 4 of the proposal for a Regulation.

| 2.3 | Given that the Agency will be the first agency dedicated exclusively to fisheries-related issues, the Committee considers that the draft Regulation should provide for the possibility of the Agency's competences being extended in future. |
| --- | --- |

2.3

Given that the Agency will be the first agency dedicated exclusively to fisheries-related issues, the Committee considers that the draft Regulation should provide for the possibility of the Agency's competences being extended in future.

| 2.4 | To this end, the EESC believes that the Agency could provide Member States and the Commission with technical and scientific advice on the effective enforcement of the rules of the CFP, in particular on the effectiveness of the inspection and control measures proposed. It could, therefore, be given the task of promoting the training of inspectors and staff specialised in control activities and creating a special training centre. Lastly, the Agency could contribute to the effort necessary to harmonise sanctions in the different Member States. |
| --- | --- |

2.4

To this end, the EESC believes that the Agency could provide Member States and the Commission with technical and scientific advice on the effective enforcement of the rules of the CFP, in particular on the effectiveness of the inspection and control measures proposed. It could, therefore, be given the task of promoting the training of inspectors and staff specialised in control activities and creating a special training centre. Lastly, the Agency could contribute to the effort necessary to harmonise sanctions in the different Member States.

| 2.5 | The proposed Council Regulation states that operational coordination by the Agency shall cover the inspection and control of fishing activities, up to the first point of sale of fishery products, which are carried out on the territory of Member States or in Community waters or, outside Community waters, by Community fishing vessels. The EESC considers that the Agency's operational coordination must have a broader scope. Firstly, it should cover inspection and control not only up to the first point of sale of fishery products, but of the entire food chain, in other words, from the moment the fish is caught until it reaches the end consumer. Secondly, one of its duties should be to coordinate the control of fisheries products from fishing vessels flying the flag of a third country, in particular those that practise illegal, unreported and unregulated fishing. |
| --- | --- |

2.5

The proposed Council Regulation states that operational coordination by the Agency shall cover the inspection and control of fishing activities, up to the first point of sale of fishery products, which are carried out on the territory of Member States or in Community waters or, outside Community waters, by Community fishing vessels. The EESC considers that the Agency's operational coordination must have a broader scope. Firstly, it should cover inspection and control not only up to the first point of sale of fishery products, but of the entire food chain, in other words, from the moment the fish is caught until it reaches the end consumer. Secondly, one of its duties should be to coordinate the control of fisheries products from fishing vessels flying the flag of a third country, in particular those that practise illegal, unreported and unregulated fishing.

| 2.6 | The EESC considers it to be highly appropriate that the Agency should assist both the Community and the Member States in their relations with third countries and with regional fisheries organisations, and with the latter directly, because this will help to conserve and use fisheries resources from the waters of these third countries and from international waters in a sustainable fashion. The EESC therefore believes that the budget must provide the Agency with sufficient financial means to fulfil this task, thus benefiting sustainable fisheries development. |
| --- | --- |

2.6

The EESC considers it to be highly appropriate that the Agency should assist both the Community and the Member States in their relations with third countries and with regional fisheries organisations, and with the latter directly, because this will help to conserve and use fisheries resources from the waters of these third countries and from international waters in a sustainable fashion. The EESC therefore believes that the budget must provide the Agency with sufficient financial means to fulfil this task, thus benefiting sustainable fisheries development.

| 2.7 | The EESC shares the idea expressed in Article 6 of the proposed Regulation of establishing a Community Fisheries Monitoring Centre for the organisation of operational coordination of joint control and inspection activities. Nevertheless, it believes that the Regulation should spell out the duties of this Centre, in order to avoid duplicating Member State competences. The Committee believes that, once the Agency becomes operational, it must comply with the rules on confidentiality referred to in Article 33 of the Council proposal. |
| --- | --- |

2.7

The EESC shares the idea expressed in Article 6 of the proposed Regulation of establishing a Community Fisheries Monitoring Centre for the organisation of operational coordination of joint control and inspection activities. Nevertheless, it believes that the Regulation should spell out the duties of this Centre, in order to avoid duplicating Member State competences. The Committee believes that, once the Agency becomes operational, it must comply with the rules on confidentiality referred to in Article 33 of the Council proposal.

| 2.8 | The EESC considers the form of the joint deployment plans referred to in Chapter III of the Commission proposal to be crucial to the effective, uniform and balanced enforcement of control policy by the various Member States. The EESC is satisfied with the content of these joint deployment plans and the procedures for their adoption, implementation and assessment and believes that the Member States should work closely with the Agency in order to see these through. |
| --- | --- |

2.8

The EESC considers the form of the joint deployment plans referred to in Chapter III of the Commission proposal to be crucial to the effective, uniform and balanced enforcement of control policy by the various Member States. The EESC is satisfied with the content of these joint deployment plans and the procedures for their adoption, implementation and assessment and believes that the Member States should work closely with the Agency in order to see these through.

| 2.9 | The Committee believes that the annual assessment of the effectiveness of each deployment plan provided for in the proposed Regulation is crucial to determining whether the various fleets are complying properly with existing conservation and control rules. |
| --- | --- |

2.9

The Committee believes that the annual assessment of the effectiveness of each deployment plan provided for in the proposed Regulation is crucial to determining whether the various fleets are complying properly with existing conservation and control rules.

| 2.10 | The EESC agrees with the proposal to create a network for exchanging information between the Commission, the Agency and the competent Member State authorities, but believes that the Agency and the Commission itself should be particularly vigilant about ensuring that confidentiality is maintained on the data obtained and shared, as Member States are required to do under Article 17(2) of the proposed Regulation. |
| --- | --- |

2.10

The EESC agrees with the proposal to create a network for exchanging information between the Commission, the Agency and the competent Member State authorities, but believes that the Agency and the Commission itself should be particularly vigilant about ensuring that confidentiality is maintained on the data obtained and shared, as Member States are required to do under Article 17(2) of the proposed Regulation.

| 2.11 | As regards the Agency's internal structure and functioning, the proposal for a Regulation stipulates that the Agency shall be a public body of the Community having legal personality. The EESC wishes to express its full agreement with this statement, because the Agency must be a body that serves the entire Community, which acts in a completely transparent way, and which cannot influenced by the particular interests of the Commission or of the Member States. The Committee is therefore concerned at the lack of clarity as regards the way in which the Agency will appoint its officials, whether they are assigned or seconded by the Commission or Member States on a temporary basis by the Commission or the Member States. |
| --- | --- |

2.11

As regards the Agency's internal structure and functioning, the proposal for a Regulation stipulates that the Agency shall be a public body of the Community having legal personality. The EESC wishes to express its full agreement with this statement, because the Agency must be a body that serves the entire Community, which acts in a completely transparent way, and which cannot influenced by the particular interests of the Commission or of the Member States. The Committee is therefore concerned at the lack of clarity as regards the way in which the Agency will appoint its officials, whether they are assigned or seconded by the Commission or Member States on a temporary basis by the Commission or the Member States.

| 2.12 | Applying the Staff Regulations of officials of the European Communities, the Conditions of employment of other servants of the European Communities and the rules adopted jointly by the institutions of the European Communities to the Agency's staff is to be welcomed, as is the clear definition of the contractual and non-contractual liabilities of the Agency and its staff in the performance of their duties. Furthermore, the Committee accepts that the Court of Justice of the European Communities should have jurisdiction in disputes relating to compensation for any damage arising from the contractual liability of the Agency. |
| --- | --- |

2.12

Applying the Staff Regulations of officials of the European Communities, the Conditions of employment of other servants of the European Communities and the rules adopted jointly by the institutions of the European Communities to the Agency's staff is to be welcomed, as is the clear definition of the contractual and non-contractual liabilities of the Agency and its staff in the performance of their duties. Furthermore, the Committee accepts that the Court of Justice of the European Communities should have jurisdiction in disputes relating to compensation for any damage arising from the contractual liability of the Agency.

| 2.13 | The cornerstone of the Agency's structure as presented by the Commission in Article 25 is, as in any undertaking, be it public or private, the Administrative Board. The EESC is concerned to note the excessive dependence of this Administrative Board on the Commission, which has ten votes against the single vote held by each Member State whose vessels are engaged in fishing activities relating to marine living resources. The Member States will jointly have a maximum of twenty votes, which means that the Commission will easily be able to impose its decisions. The EESC believes that, like the other representatives, those from the Commission should each have a single vote. |
| --- | --- |

2.13

The cornerstone of the Agency's structure as presented by the Commission in Article 25 is, as in any undertaking, be it public or private, the Administrative Board. The EESC is concerned to note the excessive dependence of this Administrative Board on the Commission, which has ten votes against the single vote held by each Member State whose vessels are engaged in fishing activities relating to marine living resources. The Member States will jointly have a maximum of twenty votes, which means that the Commission will easily be able to impose its decisions. The EESC believes that, like the other representatives, those from the Commission should each have a single vote.

| 2.14 | The Commission proposes, furthermore, to nominate four representatives from the fisheries sector to form part of the Administrative Board, without voting rights. The EESC believes that the number of representatives of the sector proposed by the Commission is extremely low and should be increased to at least eight, stating specifically that these should be nominated by European employers' and workers' organisations and that they should have voting rights. The EESC believes that the proposed Regulation should set the minimum criteria to be fulfilled by the representatives of the sector in order to gain a place on the Administrative Board. The proposed Regulation should also state that the representatives of the sector also have the right to nominate alternates on the Administrative Board. |
| --- | --- |

2.14

The Commission proposes, furthermore, to nominate four representatives from the fisheries sector to form part of the Administrative Board, without voting rights. The EESC believes that the number of representatives of the sector proposed by the Commission is extremely low and should be increased to at least eight, stating specifically that these should be nominated by European employers' and workers' organisations and that they should have voting rights. The EESC believes that the proposed Regulation should set the minimum criteria to be fulfilled by the representatives of the sector in order to gain a place on the Administrative Board. The proposed Regulation should also state that the representatives of the sector also have the right to nominate alternates on the Administrative Board.

| 2.15 | The Commission proposes that the meetings of the Administrative Board be convened by its Chairperson and that the Board hold an ordinary meeting once a year or on the initiative of the Chairperson or at the request of the Commission or of one-third of the Member States represented on the Administrative Board. The EESC believes that the proposal should say ‘one-third of the Members of the Agency's Administrative Board’, because the representatives of the sector might also have a reason for wanting the Administrative Board to meet. |
| --- | --- |

2.15

The Commission proposes that the meetings of the Administrative Board be convened by its Chairperson and that the Board hold an ordinary meeting once a year or on the initiative of the Chairperson or at the request of the Commission or of one-third of the Member States represented on the Administrative Board. The EESC believes that the proposal should say ‘one-third of the Members of the Agency's Administrative Board’, because the representatives of the sector might also have a reason for wanting the Administrative Board to meet.

| 2.16 | Article 27(4) of the draft Regulation states that when there is a matter of confidentiality or conflict of interest, the Administrative Board may decide to examine specific items of its agenda without the presence of the members nominated by the Commission as representatives of the fishing industry. The EESC proposes that this paragraph should be removed because this would in practice constitute a significant restriction on the involvement of representatives of the fisheries sector in Administrative Board meetings. |
| --- | --- |

2.16

Article 27(4) of the draft Regulation states that when there is a matter of confidentiality or conflict of interest, the Administrative Board may decide to examine specific items of its agenda without the presence of the members nominated by the Commission as representatives of the fishing industry. The EESC proposes that this paragraph should be removed because this would in practice constitute a significant restriction on the involvement of representatives of the fisheries sector in Administrative Board meetings.

| 2.17 | One of the duties that the proposed Regulation confers on the Administrative Board is the duty to produce a general report on the Agency's activities for the previous year and on its work programme for the following year, which will be forwarded to the European Parliament, the Council, the Commission, the Court of Auditors and the Member States. In the interests of greater transparency and the closer involvement of the fisheries sector, the EESC considers that there should also be an obligation to forward these reports to the European Union's Advisory Committee on Fisheries and Aquaculture. |
| --- | --- |

2.17

One of the duties that the proposed Regulation confers on the Administrative Board is the duty to produce a general report on the Agency's activities for the previous year and on its work programme for the following year, which will be forwarded to the European Parliament, the Council, the Commission, the Court of Auditors and the Member States. In the interests of greater transparency and the closer involvement of the fisheries sector, the EESC considers that there should also be an obligation to forward these reports to the European Union's Advisory Committee on Fisheries and Aquaculture.

| 2.18 | Article 29 of the proposal for a Regulation requires representatives of the fishing industry on the Administrative Board to make a declaration of interests indicating either the absence of any interests which might be prejudicial to their independence or any direct or indirect interests which might be considered prejudicial to their independence. The EESC believes this declaration of interests to be inappropriate and unnecessary given that any representative of the sector who is active in the field and who could be selected will have a direct interest in fisheries that could prejudice his or her independence. If declarations of interest are to be made, then the other members of the Administrative Board should also be required to make them. |
| --- | --- |

2.18

Article 29 of the proposal for a Regulation requires representatives of the fishing industry on the Administrative Board to make a declaration of interests indicating either the absence of any interests which might be prejudicial to their independence or any direct or indirect interests which might be considered prejudicial to their independence. The EESC believes this declaration of interests to be inappropriate and unnecessary given that any representative of the sector who is active in the field and who could be selected will have a direct interest in fisheries that could prejudice his or her independence. If declarations of interest are to be made, then the other members of the Administrative Board should also be required to make them.

| 2.19 | The EESC is also concerned at the excessive decision-making power that the Commission will have in the selection, appointment and working practices of the Executive Director and in the removal of that individual from his or her post. Article 31 of the proposed Regulation should therefore state that the removal of the Executive Director from his or her post should, like his or her appointment, require a two-thirds majority of the members of the Executive Board. The EESC considers that the list of possible candidates for the post of Executive Director should be forwarded to the ACFA in advance so that this body can deliver a non-binding opinion on the candidates. |
| --- | --- |

2.19

The EESC is also concerned at the excessive decision-making power that the Commission will have in the selection, appointment and working practices of the Executive Director and in the removal of that individual from his or her post. Article 31 of the proposed Regulation should therefore state that the removal of the Executive Director from his or her post should, like his or her appointment, require a two-thirds majority of the members of the Executive Board. The EESC considers that the list of possible candidates for the post of Executive Director should be forwarded to the ACFA in advance so that this body can deliver a non-binding opinion on the candidates.

| 2.20 | The Agency's budget, at least for the first few years following its establishment, must be provided mainly from the Community contribution entered in the general budget of the European Union, because the two other sources of income — charges for services provided by the Agency to Member States and charges for publication or training — can only come into play once a certain amount of time has passed. The Committee believes that for the first three years of the Agency's operation, the budget should be reasonably flexible, because the Commission proposal appears to be somewhat too restrictive. |
| --- | --- |

2.20

The Agency's budget, at least for the first few years following its establishment, must be provided mainly from the Community contribution entered in the general budget of the European Union, because the two other sources of income — charges for services provided by the Agency to Member States and charges for publication or training — can only come into play once a certain amount of time has passed. The Committee believes that for the first three years of the Agency's operation, the budget should be reasonably flexible, because the Commission proposal appears to be somewhat too restrictive.

| 2.21 | The EESC wishes to express its support for the system for the implementation and control of the budget set out in the draft Regulation, in particular for the provisional inspection of the Agency's annual accounts by the Court of Auditors and for the provisions of Regulation (EC) No. 1073/1999 (4) to combat fraud, corruption and other unlawful activities to apply without restriction to the Agency. It is crucial that the Agency accedes to the Interinstitutional Agreement of 25 May 1999 concerning internal investigations by the European Anti-Fraud Office (OLAF). |
| --- | --- |

2.21

The EESC wishes to express its support for the system for the implementation and control of the budget set out in the draft Regulation, in particular for the provisional inspection of the Agency's annual accounts by the Court of Auditors and for the provisions of Regulation (EC) No. 1073/1999 (4) to combat fraud, corruption and other unlawful activities to apply without restriction to the Agency. It is crucial that the Agency accedes to the Interinstitutional Agreement of 25 May 1999 concerning internal investigations by the European Anti-Fraud Office (OLAF).

| 2.22 | The proposal for a Regulation amends Regulation (EC) No 2847/93 (5) establishing a control system applicable to the Common Fisheries Policy, replacing Article 34(c), which stated that the control and inspection programmes for fisheries laid down by the Commission could not last longer than two years and that responsibility for adopting the appropriate measures, in terms of both human and material resources, fell to the Member States. The amendment set out in the proposal extends the time limit to three years or any period laid down for this purpose in an appropriate recovery plan and it lays down that the Member States shall implement the programmes on the basis of joint deployment plans. The EESC approves this amendment. |
| --- | --- |

2.22

The proposal for a Regulation amends Regulation (EC) No 2847/93 (5) establishing a control system applicable to the Common Fisheries Policy, replacing Article 34(c), which stated that the control and inspection programmes for fisheries laid down by the Commission could not last longer than two years and that responsibility for adopting the appropriate measures, in terms of both human and material resources, fell to the Member States. The amendment set out in the proposal extends the time limit to three years or any period laid down for this purpose in an appropriate recovery plan and it lays down that the Member States shall implement the programmes on the basis of joint deployment plans. The EESC approves this amendment.

| 2.23 | In order to meet the deadlines set and in accordance with Article 40 on the start of the Agency's activities, the EESC believes that this proposal for a Regulation should enter into force on 1 January 2005 to ensure that the Agency is able to start its activities on 1 January 2006. |
| --- | --- |

2.23

In order to meet the deadlines set and in accordance with Article 40 on the start of the Agency's activities, the EESC believes that this proposal for a Regulation should enter into force on 1 January 2005 to ensure that the Agency is able to start its activities on 1 January 2006.

3.   Conclusion

| 3.1 | The EESC congratulates the Commission on its proposal to create the Agency and urges it to give the Agency a sufficient budget to meet its objectives, suggests that it provides for the possibility of extending its competences and asks it to meet the deadlines set in the proposal for a Regulation. |
| --- | --- |

3.1

The EESC congratulates the Commission on its proposal to create the Agency and urges it to give the Agency a sufficient budget to meet its objectives, suggests that it provides for the possibility of extending its competences and asks it to meet the deadlines set in the proposal for a Regulation.

| 3.2 | The EESC thus calls on the European Commission to take account of the recommendations made in this opinion, in particular the following: |
| --- | --- |

3.2

The EESC thus calls on the European Commission to take account of the recommendations made in this opinion, in particular the following:

| 3.2.1 | The Regulation should provide for the possibility of the Agency's competences being extended in future.






  — | The Agency should also focus on examining how to improve scientific advice and encouraging the sector's involvement in drafting this advice. |
| --- | --- | --- |

3.2.1

The Regulation should provide for the possibility of the Agency's competences being extended in future.

—

The Agency should also focus on examining how to improve scientific advice and encouraging the sector's involvement in drafting this advice.

| — | The Agency could provide Member States and the Commission with technical and scientific advice on the effective enforcement of the rules of the CFP, in particular on the effectiveness of the inspection and control measures proposed. The Agency could be given the task of promoting the training of inspectors and staff specialised in control activities and creating a special training centre. |
| --- | --- |

—

The Agency could provide Member States and the Commission with technical and scientific advice on the effective enforcement of the rules of the CFP, in particular on the effectiveness of the inspection and control measures proposed. The Agency could be given the task of promoting the training of inspectors and staff specialised in control activities and creating a special training centre.

| — | The Agency could be instrumental in the necessary drive to harmonise sanctions in the different Member States. |
| --- | --- |

—

The Agency could be instrumental in the necessary drive to harmonise sanctions in the different Member States.

| 3.3 | The Agency's operational coordination must have a broader scope. Firstly, it should cover inspection and control not only up to the first point of sale of fishery products, but of the entire agri-food chain, in other words, from the moment the fish is caught until it reaches the end consumer. Secondly, one of its duties should be to coordinate the control of fisheries products from fishing vessels flying the flag of a third country, in particular those that practise illegal, unreported and unregulated fishing. |
| --- | --- |

3.3

The Agency's operational coordination must have a broader scope. Firstly, it should cover inspection and control not only up to the first point of sale of fishery products, but of the entire agri-food chain, in other words, from the moment the fish is caught until it reaches the end consumer. Secondly, one of its duties should be to coordinate the control of fisheries products from fishing vessels flying the flag of a third country, in particular those that practise illegal, unreported and unregulated fishing.

| 3.4 | The Agency must be a body that serves the entire Community, which acts in a completely transparent way, and which cannot be influenced by the particular interests of the Commission or of the Member States. |
| --- | --- |

3.4

The Agency must be a body that serves the entire Community, which acts in a completely transparent way, and which cannot be influenced by the particular interests of the Commission or of the Member States.

| 3.5 | There must be balance in the representation on the Executive Board between the Member States, the European Commission and representatives of the sector. |
| --- | --- |

3.5

There must be balance in the representation on the Executive Board between the Member States, the European Commission and representatives of the sector.

| 3.6 | The number of representatives of the sector on the Executive Board proposed by the Commission is extremely low, and should therefore be increased to at least eight and it should be specified that they are to be nominated by European employers' and workers' organisations and that they will have voting rights. |
| --- | --- |

3.6

The number of representatives of the sector on the Executive Board proposed by the Commission is extremely low, and should therefore be increased to at least eight and it should be specified that they are to be nominated by European employers' and workers' organisations and that they will have voting rights.

| 3.7 | The Agency must comply strictly with the rules on confidentiality set out in Article 33 of the proposed Regulation. |
| --- | --- |

3.7

The Agency must comply strictly with the rules on confidentiality set out in Article 33 of the proposed Regulation.

| 3.8 | Article 27(4) of the proposal for a Regulation should be deleted. |
| --- | --- |

3.8

Article 27(4) of the proposal for a Regulation should be deleted.

| 3.9 | The declaration of sector representatives' interests set out in Article 29 is inconsistent and unnecessary. Alternatively, it should be required of all members of the Executive Board. |
| --- | --- |

3.9

The declaration of sector representatives' interests set out in Article 29 is inconsistent and unnecessary. Alternatively, it should be required of all members of the Executive Board.

| 3.10 | Lastly, the Regulation should provide greater detail on the tasks of the Community fisheries control centre. |
| --- | --- |

3.10

Lastly, the Regulation should provide greater detail on the tasks of the Community fisheries control centre.

Brussels, 15 December 2004.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

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(1)  Council Regulation (EC) No. 2371/2002 of 20 December 2002 on the conservation and sustainable exploitation of fisheries resources under the Common Fisheries Policy (OJ L 358 of 31.12.2002)

1

(2)  COM(2004) 289 final of 28.04.04

2

(3)  COM(2003) 130 final of 21.03.03

3

(4)  OJ L 136 of 31.05.99

4

(5)  OJ L 261 of 20.10.93

5

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| 28.6.2005 | EN | Official Journal of the European Union | C 157/65 |
| --- | --- | --- | --- |

28.6.2005

EN

Official Journal of the European Union

C 157/65

---

Opinion of the European Economic and Social Committee on the ‘Communication from the Council, the European Parliament, the European Economic and Social Committee — The European Environment and Health Action Plan 2004-2010’

(COM(2004) 416 final)

(2005/C 157/10)

On 10 June 2004, the Commission decided to consult the European Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on the abovementioned communication.

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 16 November 2004. The rapporteur was Mr Braghin.

At its 413th plenary session, held on 15 December 2004, the European Economic and Social Committee adopted the following opinion by 146 votes, with two abstentions.

1.   Gist of the Opinion

| 1.1 | The Committee, believing environmental and health issues to be strategic priority objectives, but considering that the proposed plan falls short of presenting a cohesive and comprehensive plan of concrete actions with accompanying timescales, urges the Council and the European Parliament to support the Commission's efforts to define a more concrete action plan, and thereby to ensure that an integrated approach is adopted for such matters, with more clearly defined objectives and precise guidelines for the establishment of appropriate Community and national policies. |
| --- | --- |

1.1

The Committee, believing environmental and health issues to be strategic priority objectives, but considering that the proposed plan falls short of presenting a cohesive and comprehensive plan of concrete actions with accompanying timescales, urges the Council and the European Parliament to support the Commission's efforts to define a more concrete action plan, and thereby to ensure that an integrated approach is adopted for such matters, with more clearly defined objectives and precise guidelines for the establishment of appropriate Community and national policies.

| 1.2 | With this objective in mind, the EESC recommends that the relevant authorities continue to engage with renewed commitment and with the full participation of experts and stakeholders with a view to:






  — | identifying existing possibilities for integrating the identified objectives into specific research programmes that are related to the theme, as well as actions provided for in the action programme for public health and the Community programme for the environment; |
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1.2

With this objective in mind, the EESC recommends that the relevant authorities continue to engage with renewed commitment and with the full participation of experts and stakeholders with a view to:

—

identifying existing possibilities for integrating the identified objectives into specific research programmes that are related to the theme, as well as actions provided for in the action programme for public health and the Community programme for the environment;

| — | taking immediate steps to include environmental and health issues as priority areas in the recently initiated FP7 debate, and to do likewise in the future debate on the new public health action programme; |
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—

taking immediate steps to include environmental and health issues as priority areas in the recently initiated FP7 debate, and to do likewise in the future debate on the new public health action programme;

| — | identifying the financial resources, within the context of such programmes, to be allocated to the three main objectives identified as priorities (with which the EESC fully concurs) and the 13 declared objectives; |
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—

identifying the financial resources, within the context of such programmes, to be allocated to the three main objectives identified as priorities (with which the EESC fully concurs) and the 13 declared objectives;

| — | developing scientific methods for risk assessment and standardising and testing methods so as to ensure a solid scientific basis for the endpoints and targets to be achieved; |
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—

developing scientific methods for risk assessment and standardising and testing methods so as to ensure a solid scientific basis for the endpoints and targets to be achieved;

| — | implementing and promoting cooperation and benchmarking activities to accelerate the consolidation of data relevant to effective action, and to identify successful interventions at national, regional and local level, which could be applied to other territories; |
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—

implementing and promoting cooperation and benchmarking activities to accelerate the consolidation of data relevant to effective action, and to identify successful interventions at national, regional and local level, which could be applied to other territories;

| — | defining the precise responsibilities and duties of the relevant authorities and identifying efficient cooperation and action coordination procedures, and the financial resources earmarked to implement them. |
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—

defining the precise responsibilities and duties of the relevant authorities and identifying efficient cooperation and action coordination procedures, and the financial resources earmarked to implement them.

| 1.3 | The EESC recommends that further efforts be made to find specific ways to rise above a predominantly cognitive approach and to adopt a genuine and authentic action plan with specific and, wherever possible, quantitative objectives. It urges the Commission to take steps to accelerate the implementation of the action plan and to identify the objectives and actions that are particularly relevant to the second phase of the plan itself. |
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1.3

The EESC recommends that further efforts be made to find specific ways to rise above a predominantly cognitive approach and to adopt a genuine and authentic action plan with specific and, wherever possible, quantitative objectives. It urges the Commission to take steps to accelerate the implementation of the action plan and to identify the objectives and actions that are particularly relevant to the second phase of the plan itself.

| 1.4 | Finally, the EESC reminds all European institutions and Member States of their political responsibility to ensure that due attention is paid to the fundamental objectives outlined in the Communication under consideration during ongoing discussions regarding the funding of the European Union and its activities from 2007 to 2013. Furthermore, it urges the Commission to draft, in good time, the necessary documentation to provide more targeted appropriations for these widely shared priorities. |
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1.4

Finally, the EESC reminds all European institutions and Member States of their political responsibility to ensure that due attention is paid to the fundamental objectives outlined in the Communication under consideration during ongoing discussions regarding the funding of the European Union and its activities from 2007 to 2013. Furthermore, it urges the Commission to draft, in good time, the necessary documentation to provide more targeted appropriations for these widely shared priorities.

2.   Summary of the Commission Communication

| 2.1 | The Commission launched an Environment and Health Strategy in June 2003 (referred to as the SCALE initiative (1)) proposing an integrated approach involving closer cooperation between the health, environment and research areas. Its added value is the development of a Community System integrating information on the state of the environment, the ecosystem and human health. This will render the assessment of the overall environmental impact on human health more efficient by taking into account effects such as: cocktail effects, combined exposure, and cumulative effects. The strategy's ultimate goal is to develop an environment and health ‘cause-effect framework’ that will provide the necessary information for the development of Community policy dealing with sources and the impact pathway of health stressors. |
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2.1

The Commission launched an Environment and Health Strategy in June 2003 (referred to as the SCALE initiative (1)) proposing an integrated approach involving closer cooperation between the health, environment and research areas. Its added value is the development of a Community System integrating information on the state of the environment, the ecosystem and human health. This will render the assessment of the overall environmental impact on human health more efficient by taking into account effects such as: cocktail effects, combined exposure, and cumulative effects. The strategy's ultimate goal is to develop an environment and health ‘cause-effect framework’ that will provide the necessary information for the development of Community policy dealing with sources and the impact pathway of health stressors.

| 2.2 | The Strategy puts special emphasis on children in so far as their exposure and susceptibility are greater than those of adults. The challenge now is to put into practice the commitments regarding children's right to grow and live in healthy environments. |
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2.2

The Strategy puts special emphasis on children in so far as their exposure and susceptibility are greater than those of adults. The challenge now is to put into practice the commitments regarding children's right to grow and live in healthy environments.

| 2.3 | The SCALE initiative involved 150 experts subdivided into 9 technical working groups and an equal number of representatives from all Member States, including members of national agencies, research centres, universities, health and environmental services, industry and social enterprises that have helped to draft recommendations in consultative and coordination groups, regional conferences, fora, and informal meetings amongst Member States. |
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2.3

The SCALE initiative involved 150 experts subdivided into 9 technical working groups and an equal number of representatives from all Member States, including members of national agencies, research centres, universities, health and environmental services, industry and social enterprises that have helped to draft recommendations in consultative and coordination groups, regional conferences, fora, and informal meetings amongst Member States.

| 2.4 | The Action Plan for the period 2004-2010 outlined in the Communication (2) is designed to give the EU the scientifically grounded information needed to help all 25 EU Member States reduce the adverse health impacts of certain environmental factors and to endorse better cooperation between actors in the environment, health and research fields. |
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2.4

The Action Plan for the period 2004-2010 outlined in the Communication (2) is designed to give the EU the scientifically grounded information needed to help all 25 EU Member States reduce the adverse health impacts of certain environmental factors and to endorse better cooperation between actors in the environment, health and research fields.

| 2.5 | The Action Plan has three main themes:






  — | improving the information chain to understand the links between sources of pollution and health effects (actions 1-4); |
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2.5

The Action Plan has three main themes:

—

improving the information chain to understand the links between sources of pollution and health effects (actions 1-4);

| — | filling the knowledge gap by strengthening research and addressing the emerging issues on environment and health (actions 5-8); |
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—

filling the knowledge gap by strengthening research and addressing the emerging issues on environment and health (actions 5-8);

| — | reviewing policies and improving communication (actions 9-13). |
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—

reviewing policies and improving communication (actions 9-13).

| 2.6 | The Action Plan focuses particularly on gaining a better understanding of the links between environmental factors and respiratory diseases, neurodevelopmental disorders, cancer and endocrine disrupting effects, all with a rising incidence in children. The Action Plan will set up targeted research actions to improve and refine knowledge of the relevant causal links, and at the same time, health monitoring will be improved to obtain a better picture of disease occurrence across the Community. |
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2.6

The Action Plan focuses particularly on gaining a better understanding of the links between environmental factors and respiratory diseases, neurodevelopmental disorders, cancer and endocrine disrupting effects, all with a rising incidence in children. The Action Plan will set up targeted research actions to improve and refine knowledge of the relevant causal links, and at the same time, health monitoring will be improved to obtain a better picture of disease occurrence across the Community.

| 2.7 | The other key information aspect is to monitor exposure to environmental risk factors, including food, the home environment, and behaviour that could be associated with health risks, such as specific life styles. |
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2.7

The other key information aspect is to monitor exposure to environmental risk factors, including food, the home environment, and behaviour that could be associated with health risks, such as specific life styles.

| 2.8 | In order to achieve the Action Plan, the Commission will engage with and promote cooperation with the European Environment Agency, the European Food Safety Agency and the principal stakeholders (Member States, national, regional and local authorities, health, environmental and research centres, the industrial and agricultural sectors, and other relevant bodies). It will also coordinate with international organisations, such as the WHO, OECD and relevant United Nations agencies. |
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2.8

In order to achieve the Action Plan, the Commission will engage with and promote cooperation with the European Environment Agency, the European Food Safety Agency and the principal stakeholders (Member States, national, regional and local authorities, health, environmental and research centres, the industrial and agricultural sectors, and other relevant bodies). It will also coordinate with international organisations, such as the WHO, OECD and relevant United Nations agencies.

| 2.9 | In 2007 the Commission will carry out a mid-term review of the implementation of the Action Plan. The Commission will implement the actions through existing initiatives and programmes, which already have allocated resources, notably the Public Health Programme, the Sixth Framework Programme for Research and under the operational budget of the services concerned. |
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2.9

In 2007 the Commission will carry out a mid-term review of the implementation of the Action Plan. The Commission will implement the actions through existing initiatives and programmes, which already have allocated resources, notably the Public Health Programme, the Sixth Framework Programme for Research and under the operational budget of the services concerned.

3.   Problematic issues within the scope of the Action Plan

| 3.1 | The Committee, like the Commission and the Member States, pays ever increasing attention to environment and health issues and upholds the need for a clear strategy and efficient action plan to ensure an integrated approach to these issues and to contribute to the development of appropriate Community and national policies. These should successfully contribute to citizens' wellbeing and quality of life through sustainable development. |
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3.1

The Committee, like the Commission and the Member States, pays ever increasing attention to environment and health issues and upholds the need for a clear strategy and efficient action plan to ensure an integrated approach to these issues and to contribute to the development of appropriate Community and national policies. These should successfully contribute to citizens' wellbeing and quality of life through sustainable development.

| 3.1.1 | The preparatory work was complex. It was subdivided into a series of tightly-scheduled working groups and meetings, which took place during the year. The EESC commends such commitment and recognises the value of the work undertaken by the participants, and in particular by the experts involved in the technical phases. However, the EESC maintains that the limited time available prevented an in-depth analysis of complex and hitherto little-understood areas. As a consequence, the Communication generally fails to present a cohesive and comprehensive plan of specific actions, nor does it specify any clear deadlines for their implementation. |
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3.1.1

The preparatory work was complex. It was subdivided into a series of tightly-scheduled working groups and meetings, which took place during the year. The EESC commends such commitment and recognises the value of the work undertaken by the participants, and in particular by the experts involved in the technical phases. However, the EESC maintains that the limited time available prevented an in-depth analysis of complex and hitherto little-understood areas. As a consequence, the Communication generally fails to present a cohesive and comprehensive plan of specific actions, nor does it specify any clear deadlines for their implementation.

| 3.1.2 | The differences in scope between the Commission's and Member States' competencies in the fields of environment and health undoubtedly complicated the process of establishing their respective responsibilities, and therefore, the actions to be proposed within the context of the principle of subsidiarity. The EESC considers that the Commission and the Member States should intensify their efforts to coordinate and accelerate the process of acquiring basic knowledge and exchanging information and data and to allocate appropriate funding for the proposed actions. |
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3.1.2

The differences in scope between the Commission's and Member States' competencies in the fields of environment and health undoubtedly complicated the process of establishing their respective responsibilities, and therefore, the actions to be proposed within the context of the principle of subsidiarity. The EESC considers that the Commission and the Member States should intensify their efforts to coordinate and accelerate the process of acquiring basic knowledge and exchanging information and data and to allocate appropriate funding for the proposed actions.

| 3.1.3 | The EESC therefore considers the action plan to be the initial, not the final, phase of the process. The following comments were framed within this context. |
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3.1.3

The EESC therefore considers the action plan to be the initial, not the final, phase of the process. The following comments were framed within this context.

| 3.2 | In particular, the EESC draws attention to the need for appropriate funding since the action plan has not been allocated specific funds for the implementation of the actions it outlines. It is assumed that each action can be integrated in existing initiatives and EU funded programmes such as the EU Public Health Programme, the Sixth Environment Action Programme (mentioned in Volume II only), and the Sixth Framework Programme for Research. |
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3.2

In particular, the EESC draws attention to the need for appropriate funding since the action plan has not been allocated specific funds for the implementation of the actions it outlines. It is assumed that each action can be integrated in existing initiatives and EU funded programmes such as the EU Public Health Programme, the Sixth Environment Action Programme (mentioned in Volume II only), and the Sixth Framework Programme for Research.

| 3.2.1 | This approach could help to avoid the dispersion of funds and the futile duplication of projects with identical objectives, but imposes upon the identified strategic priorities the measures and structures of programmes that are geared towards other objectives that do not necessarily coincide with the objectives outlined in the Communication. |
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3.2.1

This approach could help to avoid the dispersion of funds and the futile duplication of projects with identical objectives, but imposes upon the identified strategic priorities the measures and structures of programmes that are geared towards other objectives that do not necessarily coincide with the objectives outlined in the Communication.

| 3.2.2 | The EESC considers the promotion of health to be a strategic priority objective, especially where the more vulnerable sectors of the population are concerned (i.e., primarily children, who are the target beneficiaries of SCALE because they are amongst the most vulnerable, but, in the future, also the elderly and workers exposed to health hazards). It is therefore advisable to first allocate the necessary funds for the key issues and objectives identified. These needs should be taken into consideration during the ongoing discussions of the EU budget for 2007-2013, and its breakdown. |
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3.2.2

The EESC considers the promotion of health to be a strategic priority objective, especially where the more vulnerable sectors of the population are concerned (i.e., primarily children, who are the target beneficiaries of SCALE because they are amongst the most vulnerable, but, in the future, also the elderly and workers exposed to health hazards). It is therefore advisable to first allocate the necessary funds for the key issues and objectives identified. These needs should be taken into consideration during the ongoing discussions of the EU budget for 2007-2013, and its breakdown.

| 3.3 | Another extremely sensitive issue is the legal and financial interaction with other independent bodies and organisations. Many actions will be implemented as part of international cooperation projects, and this will provide greater scope for the proposed initiatives. However, there is a risk that the focus and pace of implementation might suffer. The coordination and cooperation mechanisms envisaged do not guarantee cohesive and uniform development of the relevant actions, nor will it be easy to identify the parties responsible for implementing specific phases of the actions. |
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3.3

Another extremely sensitive issue is the legal and financial interaction with other independent bodies and organisations. Many actions will be implemented as part of international cooperation projects, and this will provide greater scope for the proposed initiatives. However, there is a risk that the focus and pace of implementation might suffer. The coordination and cooperation mechanisms envisaged do not guarantee cohesive and uniform development of the relevant actions, nor will it be easy to identify the parties responsible for implementing specific phases of the actions.

| 3.3.1 | The diversity of stakeholders and their fields of competence and expertise (consider, for instance, organisations such as the WHO and the Environment Agency on the one hand and local and regional authorities on the other) will add to the complexity of implementation, and perhaps result in cumulative delays in identifying objectives and the appropriate measures to achieve them. |
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3.3.1

The diversity of stakeholders and their fields of competence and expertise (consider, for instance, organisations such as the WHO and the Environment Agency on the one hand and local and regional authorities on the other) will add to the complexity of implementation, and perhaps result in cumulative delays in identifying objectives and the appropriate measures to achieve them.

| 3.3.2 | The EESC believes that the roles and responsibilities of the parties involved should be clearly identified (especially those pertaining to the Commission, Member States and regional and local authorities) and that competencies should be specifically assigned according to the type of actions required and the respective competencies delegated under the Treaties. The Communication under consideration does not clarify these crucial points and thereby confirms the concerns expressed by the Committee in its earlier opinion on a European environment and health strategy. (3) |
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3.3.2

The EESC believes that the roles and responsibilities of the parties involved should be clearly identified (especially those pertaining to the Commission, Member States and regional and local authorities) and that competencies should be specifically assigned according to the type of actions required and the respective competencies delegated under the Treaties. The Communication under consideration does not clarify these crucial points and thereby confirms the concerns expressed by the Committee in its earlier opinion on a European environment and health strategy. (3)

| 3.4 | The specific actions described in Volume II do not define precise objectives to be achieved, but serve to identify needs and — in the best hypothesis — tools that the Commission and other stakeholders might use to respond to knowledge deficits or needs. Regrettably, it would appear that the EESC's (4) concerns are likely to be confirmed, i.e. that the lack of concrete objectives other than the so-called Millennium Goals, constitutes a serious shortcoming that calls into question the viability of the plan itself. |
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3.4

The specific actions described in Volume II do not define precise objectives to be achieved, but serve to identify needs and — in the best hypothesis — tools that the Commission and other stakeholders might use to respond to knowledge deficits or needs. Regrettably, it would appear that the EESC's (4) concerns are likely to be confirmed, i.e. that the lack of concrete objectives other than the so-called Millennium Goals, constitutes a serious shortcoming that calls into question the viability of the plan itself.

| 3.5 | The actions in the plan all share one common factor: they offer specific details for the first two- or three-year period but are more general, not to say vague, for the subsequent four-year period. This framework gives rise to concern since the plan should result in the practical implementation of a strategy, which by definition aims to make a significant long-term impact. Nor can this shortcoming be justified by the fact that the resources to be made available as of 2007 have not yet been specified. The clarity of the desired results is a basic requirement to ensure that funding commensurate with the strategy's importance is made available by political decision-makers. |
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3.5

The actions in the plan all share one common factor: they offer specific details for the first two- or three-year period but are more general, not to say vague, for the subsequent four-year period. This framework gives rise to concern since the plan should result in the practical implementation of a strategy, which by definition aims to make a significant long-term impact. Nor can this shortcoming be justified by the fact that the resources to be made available as of 2007 have not yet been specified. The clarity of the desired results is a basic requirement to ensure that funding commensurate with the strategy's importance is made available by political decision-makers.

| 3.6 | The 2007 mid-term review cannot be deemed sufficient. The EESC recommends two mid-term reviews, one in 2006, and the other in 2008. |
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3.6

The 2007 mid-term review cannot be deemed sufficient. The EESC recommends two mid-term reviews, one in 2006, and the other in 2008.

| 3.6.1 | The first mid-term review would make it possible to take into consideration the results of a series of programmes and/or actions (not mentioned in the Communication) that are nearing completion, and would facilitate a rapid assessment of progress made during the first two years. This would provide a firm foundation prior to initiating actions that would be financed by new appropriations from the 2007 budget. |
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3.6.1

The first mid-term review would make it possible to take into consideration the results of a series of programmes and/or actions (not mentioned in the Communication) that are nearing completion, and would facilitate a rapid assessment of progress made during the first two years. This would provide a firm foundation prior to initiating actions that would be financed by new appropriations from the 2007 budget.

| 3.6.2 | The second review would ensure that preparations for subsequent phases and further cycles are based on specific and timely assessments, extending their application to other vulnerable target groups (the elderly, for instance), on the basis of a deeper analysis of the progress achieved and the obstacles encountered. |
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3.6.2

The second review would ensure that preparations for subsequent phases and further cycles are based on specific and timely assessments, extending their application to other vulnerable target groups (the elderly, for instance), on the basis of a deeper analysis of the progress achieved and the obstacles encountered.

4.   Specific comments

| 4.1 | The first group of actions is intended to improve the information chain by developing integrated environment and health information to better understand the links between sources of pollutants and health effects. The EESC regrets that information needs are still so great, despite the adoption of a Community action programme 1999-2003 on pollution-related diseases (5) and a Community action programme on health monitoring (6) within the framework for action in the field of public health. It also regrets the fact that the Communication is not accompanied by progress reports on the programmes, and reports on the specific shortcomings to be remedied during the plan's first implementation phase. |
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4.1

The first group of actions is intended to improve the information chain by developing integrated environment and health information to better understand the links between sources of pollutants and health effects. The EESC regrets that information needs are still so great, despite the adoption of a Community action programme 1999-2003 on pollution-related diseases (5) and a Community action programme on health monitoring (6) within the framework for action in the field of public health. It also regrets the fact that the Communication is not accompanied by progress reports on the programmes, and reports on the specific shortcomings to be remedied during the plan's first implementation phase.

| 4.1.1 | Action 1 (developing environmental health indicators) and Action 2 (developing integrated monitoring of the environment, including food, to allow the determination of relevant human exposure) are predominantly cognitive in their approach. As a result, the development of the actions in the second phase is poorly conceived. Even in a knowledge deficit situation, targets such as the comparability and accessibility of health related data should have been mentioned explicitly, with a view to facilitating the interoperability and integration of existing databases, recommending, where appropriate, the allocation of resources, including financial resources, for the required methodological studies, and networking existing data, with the long-term view of creating a European database in the future. |
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4.1.1

Action 1 (developing environmental health indicators) and Action 2 (developing integrated monitoring of the environment, including food, to allow the determination of relevant human exposure) are predominantly cognitive in their approach. As a result, the development of the actions in the second phase is poorly conceived. Even in a knowledge deficit situation, targets such as the comparability and accessibility of health related data should have been mentioned explicitly, with a view to facilitating the interoperability and integration of existing databases, recommending, where appropriate, the allocation of resources, including financial resources, for the required methodological studies, and networking existing data, with the long-term view of creating a European database in the future.

| 4.1.1.1 | The EESC recommends, in order to integrate environmental and human health monitoring, the timely selection of clinical/epidemiological and experimental research activities to enhance and refine our knowledge of the causal links between specific environmental factors and disease. |
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4.1.1.1

The EESC recommends, in order to integrate environmental and human health monitoring, the timely selection of clinical/epidemiological and experimental research activities to enhance and refine our knowledge of the causal links between specific environmental factors and disease.

| 4.1.2 | The biomonitoring action (the use of biomarkers that are indicative of environmental exposures, diseases, and/or disorders and genetic susceptibility) appears to be more an account of the — albeit real — difficulties involved, than a course of action. The EESC recommends that immediate steps be taken to define the mandate and targets of the multidisciplinary working group on coordination, in order to ensure that it is an effective and, indeed, a credible operational tool at both national and Community levels. |
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4.1.2

The biomonitoring action (the use of biomarkers that are indicative of environmental exposures, diseases, and/or disorders and genetic susceptibility) appears to be more an account of the — albeit real — difficulties involved, than a course of action. The EESC recommends that immediate steps be taken to define the mandate and targets of the multidisciplinary working group on coordination, in order to ensure that it is an effective and, indeed, a credible operational tool at both national and Community levels.

| 4.1.2.1 | The EESC recommends that priority spheres of action and optimal coordination procedures amongst specialised operational centres be developed on the basis of activities carried out by existing technical working groups, in order to obtain optimal biomonitoring results. It further recommends that cohort studies (in particular, mother-child studies) be developed to evaluate bio-indicators for exposure effectively. |
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4.1.2.1

The EESC recommends that priority spheres of action and optimal coordination procedures amongst specialised operational centres be developed on the basis of activities carried out by existing technical working groups, in order to obtain optimal biomonitoring results. It further recommends that cohort studies (in particular, mother-child studies) be developed to evaluate bio-indicators for exposure effectively.

| 4.1.3 | Similarly, Action 4 (enhancing coordination and joint activities on environment and health) proposes the establishment of a consultative group and general support for exchanges between the relevant authorities. The EESC considers these proposals to be entirely inadequate since it does not believe that a consultative group would be sufficient to ensure the regular exchange of data and best practice. Therefore, in view of the fact that the responsibility for health and environment is shared by several ministries, the Committee urges the Member States to appoint as soon as possible a body or authority with the responsibility and necessary powers and tools to coordinate efforts to achieve the desired goals. Similarly, the EESC urges the Commission to set up more appropriate coordination bodies and to propose more incisive tools to facilitate the process. |
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4.1.3

Similarly, Action 4 (enhancing coordination and joint activities on environment and health) proposes the establishment of a consultative group and general support for exchanges between the relevant authorities. The EESC considers these proposals to be entirely inadequate since it does not believe that a consultative group would be sufficient to ensure the regular exchange of data and best practice. Therefore, in view of the fact that the responsibility for health and environment is shared by several ministries, the Committee urges the Member States to appoint as soon as possible a body or authority with the responsibility and necessary powers and tools to coordinate efforts to achieve the desired goals. Similarly, the EESC urges the Commission to set up more appropriate coordination bodies and to propose more incisive tools to facilitate the process.

| 4.2 | The second group of actions aims to ‘integrate and strengthen European environment and health research’. The concrete actions outlined in the Communication annexe are also indicative of the intention to consolidate fundamental information rather than the intention to set up concrete research projects. Action 5 consists of an analysis of what has already been achieved within the framework of the JRCs or existing research projects, together with plans for conferences on the subject. Action 6 is an analysis of the causes and mechanisms of specified diseases and the establishment of a Europe-wide research network rather than an attempt to ‘target research on diseases, disorders and exposures’ since it fails to indicate what course research should take. Finally, Action 7 aims to establish a methodological system to develop risk assessment methodologies taking account of complex interactions and externalities, and a methodological system for harmonising and validating these methods. |
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4.2

The second group of actions aims to ‘integrate and strengthen European environment and health research’. The concrete actions outlined in the Communication annexe are also indicative of the intention to consolidate fundamental information rather than the intention to set up concrete research projects. Action 5 consists of an analysis of what has already been achieved within the framework of the JRCs or existing research projects, together with plans for conferences on the subject. Action 6 is an analysis of the causes and mechanisms of specified diseases and the establishment of a Europe-wide research network rather than an attempt to ‘target research on diseases, disorders and exposures’ since it fails to indicate what course research should take. Finally, Action 7 aims to establish a methodological system to develop risk assessment methodologies taking account of complex interactions and externalities, and a methodological system for harmonising and validating these methods.

| 4.2.1 | The EESC recommends that the current large scale epidemiological data deficit be remedied as soon as possible, especially in matters relating to neurobehavioural disorders in Europe, where there is insufficient scientific data regarding infants and children but where there is sufficient evidence to establish an etiological link, even if this cannot be exclusively attributed to environmental factors. |
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4.2.1

The EESC recommends that the current large scale epidemiological data deficit be remedied as soon as possible, especially in matters relating to neurobehavioural disorders in Europe, where there is insufficient scientific data regarding infants and children but where there is sufficient evidence to establish an etiological link, even if this cannot be exclusively attributed to environmental factors.

| 4.2.2 | The EESC recommends that interdisciplinary research on health and the environment should be made priorities in the Seventh Framework Programme for Research. Furthermore, immediate steps should be taken to ensure that the specific programmes that are already funded have the resources they need to enable us to add to our knowledge and identify effective intervention tools and methods in the health and environmental sector. |
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4.2.2

The EESC recommends that interdisciplinary research on health and the environment should be made priorities in the Seventh Framework Programme for Research. Furthermore, immediate steps should be taken to ensure that the specific programmes that are already funded have the resources they need to enable us to add to our knowledge and identify effective intervention tools and methods in the health and environmental sector.

| 4.2.3 | Action 8 (Ensuring that potential health and environmental hazards are identified and addressed) puts forward more precise objectives. It aims to find ways to improve the health sector's early assessment and preparation for extreme climate change and other global environmental hazards. The EESC upholds these objectives, even if they are not strictly related to the overall objective of the SCALE initiative, i.e. safeguarding children's health. The EESC hopes that such actions should make it possible to set up an appropriate programme with specifically allocated funds in the medium term. It should not be incorporated, as proposed, in an unsuitable framework that lacks specifically allocated funds. |
| --- | --- |

4.2.3

Action 8 (Ensuring that potential health and environmental hazards are identified and addressed) puts forward more precise objectives. It aims to find ways to improve the health sector's early assessment and preparation for extreme climate change and other global environmental hazards. The EESC upholds these objectives, even if they are not strictly related to the overall objective of the SCALE initiative, i.e. safeguarding children's health. The EESC hopes that such actions should make it possible to set up an appropriate programme with specifically allocated funds in the medium term. It should not be incorporated, as proposed, in an unsuitable framework that lacks specifically allocated funds.

| 4.3 | The next two actions (Actions 9 and 10) aim to develop awareness raising, risk communication, training and education. They raise some interesting points but do not provide a solid basis for a real communication and training strategy that promotes appropriate behavioural changes and focuses the actions of Member States, which are responsible for this sphere of action. The EESC has already pointed out that ‘raising awareness and establishing grass-roots support and commitment will be essential, and the social partners and civil society organisations have a key role to play here’. (7) |
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4.3

The next two actions (Actions 9 and 10) aim to develop awareness raising, risk communication, training and education. They raise some interesting points but do not provide a solid basis for a real communication and training strategy that promotes appropriate behavioural changes and focuses the actions of Member States, which are responsible for this sphere of action. The EESC has already pointed out that ‘raising awareness and establishing grass-roots support and commitment will be essential, and the social partners and civil society organisations have a key role to play here’. (7)

| 4.3.1 | The last actions proposed (Actions 11, 12 and 13) aim to review and adjust risk reduction policy for risks that are directly related to the diseases primarily targeted by the plan (respiratory diseases, neurodevelopmental disorders, cancer, and endocrine disruption effects). They recommend initiatives such as pilot schemes, developing networks, encouraging coordination, or simply following developments regarding electromagnetic fields. In general, this reads more like a list of good intentions rather than an attempt to draw up a list of concrete and exhaustive conditions for high-risk scenarios. The EESC believes that such proposals are not commensurate with the grievously harmful effects on health already outlined in the previous Communication on the strategy. Nor are they likely to produce a genuine reduction policy within a reasonable period of time. |
| --- | --- |

4.3.1

The last actions proposed (Actions 11, 12 and 13) aim to review and adjust risk reduction policy for risks that are directly related to the diseases primarily targeted by the plan (respiratory diseases, neurodevelopmental disorders, cancer, and endocrine disruption effects). They recommend initiatives such as pilot schemes, developing networks, encouraging coordination, or simply following developments regarding electromagnetic fields. In general, this reads more like a list of good intentions rather than an attempt to draw up a list of concrete and exhaustive conditions for high-risk scenarios. The EESC believes that such proposals are not commensurate with the grievously harmful effects on health already outlined in the previous Communication on the strategy. Nor are they likely to produce a genuine reduction policy within a reasonable period of time.

| 4.3.2 | The EESC strongly recommends that research into factors that affect air quality in offices and homes should be addressed as a matter of urgency (as indicated in Action 12). Scientific data should be compiled by a clearly specified deadline in the not-too-distant future, in order to facilitate a re-assessment of the 1999 recommendation on electromagnetic fields. For the EESC, the lack of any specific objectives and outcomes expected within a specified timeframe raises the concern that the plan will not even succeed in identifying efficient mechanisms for the coordination of existing Community level activities, or coordination with Member States. |
| --- | --- |

4.3.2

The EESC strongly recommends that research into factors that affect air quality in offices and homes should be addressed as a matter of urgency (as indicated in Action 12). Scientific data should be compiled by a clearly specified deadline in the not-too-distant future, in order to facilitate a re-assessment of the 1999 recommendation on electromagnetic fields. For the EESC, the lack of any specific objectives and outcomes expected within a specified timeframe raises the concern that the plan will not even succeed in identifying efficient mechanisms for the coordination of existing Community level activities, or coordination with Member States.

Brussels, 15 December 2004

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  Communication from the Commission on a European Environment and Health Strategy COM(2003) 338 final. The EESC delivered its opinion on this Communication at its 404th plenary session of 10 December 2003. The rapporteur was Mr Ehnmark. OJ C 80 of 30.3.2004

1

th

(2)  Communication from the Commission – The European Environment and Health Action Plan 2004-2010, COM(2004) 416 final of 9.6.2004, Volumes I and II

2

(3)  Opinion on a European Environment and Health Strategy, point 6.4 – OJ C 80 of 30.3.2004. The rapporteur was Mr Ehnmark. See footnote 1.

3

(4)  Ibid, point 5.3

4

(5)  OJ C 19 of 21.1.1998

5

(6)  OJ C 174 of 17.6.1996

6

(7)  OJ C 80 of 30.3.2004

7

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| 28.6.2005 | EN | Official Journal of the European Union | C 157/70 |
| --- | --- | --- | --- |

28.6.2005

EN

Official Journal of the European Union

C 157/70

---

Opinion of the European Economic and Social Committee on the ‘Proposal for a Directive of the European Parliament and of the Council introducing humane trapping standards for certain animal species’

(COM(2004) 532 final — 2004/0183(COD))

(2005/C 157/11)

On 14 September 2004, the Council decided to consult the European Economic and Social Committee, under Article 175 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 16 November 2004. The rapporteur was Mr Donnelly.

At its 413th plenary session of 15 and 16 December 2004 (meeting of 16 December), the European Economic and Social Committee adopted the following opinion by 60 votes to one, with 6 abstentions.

I.   Introduction

1.   The leg-hold trap regulation

| 1.1 | In 1989, the European Parliament adopted a Resolution calling for a ban on leghold traps in the EU and on furs and fur products derived from countries using leghold traps.
  As a response, the Commission submitted a Proposal for Regulation on the issue, which was adopted by the by Council in 1991 (1). The Regulation bans the use of leghold traps in the EU from 1 January 1995 and the import of pelts from 13 named species from third countries unless one of the following conditions are met:






  — | Adequate administrative or legislative provisions in force to prohibit the use of leghold traps or |
| --- | --- | --- |

1.1

In 1989, the European Parliament adopted a Resolution calling for a ban on leghold traps in the EU and on furs and fur products derived from countries using leghold traps.

As a response, the Commission submitted a Proposal for Regulation on the issue, which was adopted by the by Council in 1991 (1). The Regulation bans the use of leghold traps in the EU from 1 January 1995 and the import of pelts from 13 named species from third countries unless one of the following conditions are met:

—

Adequate administrative or legislative provisions in force to prohibit the use of leghold traps or

| — | The trapping methods used for the 13 species mentioned (Annex I of the EU Regulation) would meet internationally agreed humane trapping standards |
| --- | --- |

—

The trapping methods used for the 13 species mentioned (Annex I of the EU Regulation) would meet internationally agreed humane trapping standards

| 1.2 | It is worth noting that the European Parliament in its opinion called for a ban on the sale of leghold traps and for a phasing out of furs and fur products derived from animals trapped with leghold traps. This opinion has not been taken into account by the Council in its deliberation in 1991. |
| --- | --- |

1.2

It is worth noting that the European Parliament in its opinion called for a ban on the sale of leghold traps and for a phasing out of furs and fur products derived from animals trapped with leghold traps. This opinion has not been taken into account by the Council in its deliberation in 1991.

| 1.3 | Although the use of leghold traps has been banned in the EU since 1995, this has not been the case in countries exporting fur products derived from animals trapped with leghold traps.
  In its Opinion of 1990 (2) the EESC, while stressing the importance of achieving consistency on this issue, not only supported a European ban on leghold traps, but also proposed an international ban for them. |
| --- | --- |

1.3

Although the use of leghold traps has been banned in the EU since 1995, this has not been the case in countries exporting fur products derived from animals trapped with leghold traps.

In its Opinion of 1990 (2) the EESC, while stressing the importance of achieving consistency on this issue, not only supported a European ban on leghold traps, but also proposed an international ban for them.

2.   The Agreement

| 2.1 | Following the Community leghold trap legislation, the need of establishing trapping standards at international level became prominent. An agreement was negotiated between the EU, Canada, Russia and the US. However only Canada, Russia and the EU signed it. The US could not become a Party to this Agreement given that competence in this field is decentralized within the US domestic system. However, the US agreed in implementing a weaker version of the Agreement. |
| --- | --- |

2.1

Following the Community leghold trap legislation, the need of establishing trapping standards at international level became prominent. An agreement was negotiated between the EU, Canada, Russia and the US. However only Canada, Russia and the EU signed it. The US could not become a Party to this Agreement given that competence in this field is decentralized within the US domestic system. However, the US agreed in implementing a weaker version of the Agreement.

| 2.2 | The Agreement was negotiated in order to prevent a possible European import ban on fur products from animal trapped in the wild from countries that had not banned leghold traps. |
| --- | --- |

2.2

The Agreement was negotiated in order to prevent a possible European import ban on fur products from animal trapped in the wild from countries that had not banned leghold traps.

| 2.3 | In the European Parliament's opinion, the Agreement was totally inadequate and ineffective and should have been rejected and instead an import ban on fur and fur products originated from wildlife animals listed into the Agreement should have been introduced. |
| --- | --- |

2.3

In the European Parliament's opinion, the Agreement was totally inadequate and ineffective and should have been rejected and instead an import ban on fur and fur products originated from wildlife animals listed into the Agreement should have been introduced.

| 2.4 | The Agreement prescribes certain standards, which must be respected when animals are trapped. It was ratified by the European Community in 1997. The trapping standards included in the Agreement reflected standards already existing in Russia, Canada and the US. The inclusion of the term ‘humane’ was very controversial, given that these standards are based on the acceptance of high level of suffering for the trapped animals. |
| --- | --- |

2.4

The Agreement prescribes certain standards, which must be respected when animals are trapped. It was ratified by the European Community in 1997. The trapping standards included in the Agreement reflected standards already existing in Russia, Canada and the US. The inclusion of the term ‘humane’ was very controversial, given that these standards are based on the acceptance of high level of suffering for the trapped animals.

| 2.5 | Scientific opinions (including the one from the Commission's Scientific and Veterinary Committee) confirmed that the humane trapping methods included into the Agreement did not exclude unacceptable levels of suffering. |
| --- | --- |

2.5

Scientific opinions (including the one from the Commission's Scientific and Veterinary Committee) confirmed that the humane trapping methods included into the Agreement did not exclude unacceptable levels of suffering.

| 2.6 | The Scientific Committee stressed that the essential criteria to be used in judging the degree of humaneness were the time taken to render the animal insensible to pain and the amount of pain and stress caused to the animal during this period. The Committee concluded that to be considered ‘humane’ a killing trap should render an animal insensible to pain instantaneously, or at least within a few seconds. The Agreement set instead a maximum time limit of 5 minutes and therefore the term ‘humane’ was considered inappropriate. |
| --- | --- |

2.6

The Scientific Committee stressed that the essential criteria to be used in judging the degree of humaneness were the time taken to render the animal insensible to pain and the amount of pain and stress caused to the animal during this period. The Committee concluded that to be considered ‘humane’ a killing trap should render an animal insensible to pain instantaneously, or at least within a few seconds. The Agreement set instead a maximum time limit of 5 minutes and therefore the term ‘humane’ was considered inappropriate.

| 2.7 | The Committee also concluded that the injury scale included into the Agreement had no valid scientific basis in comparison with other well-established methods of assessing poor welfare. |
| --- | --- |

2.7

The Committee also concluded that the injury scale included into the Agreement had no valid scientific basis in comparison with other well-established methods of assessing poor welfare.

| 2.8 | Presently the EU and Canada have ratified the Agreement, but Russia has not yet ratified it. For this reason the Agreement's enforcement is still pending. However, Canada and the EU agreed to in any case implement the provisions of the agreement during the pending period. |
| --- | --- |

2.8

Presently the EU and Canada have ratified the Agreement, but Russia has not yet ratified it. For this reason the Agreement's enforcement is still pending. However, Canada and the EU agreed to in any case implement the provisions of the agreement during the pending period.

3.   Gist of the Commission Proposal

| 3.1 | The Commission Proposal for a Directive introducing humane trapping standards for certain animal species (3) aims at transposing the Agreement on humane trapping standards into Community legislation, as foreseen by Council Decision 98/142/EC and 98/487/EC. |
| --- | --- |

3.1

The Commission Proposal for a Directive introducing humane trapping standards for certain animal species (3) aims at transposing the Agreement on humane trapping standards into Community legislation, as foreseen by Council Decision 98/142/EC and 98/487/EC.

| 3.2 | The Proposal applies to 19 wild species (5 of which live in the EU), as defined in Annex 1. |
| --- | --- |

3.2

The Proposal applies to 19 wild species (5 of which live in the EU), as defined in Annex 1.

| 3.3 | The Proposal sets some obligations and requirements concerning trapping methods, use of traps, trappers, research, penalties and certification. The text also includes a large series of possible derogations, and two annexes (Annex II and III) relating to humane trapping standards and testing of trapping methods. |
| --- | --- |

3.3

The Proposal sets some obligations and requirements concerning trapping methods, use of traps, trappers, research, penalties and certification. The text also includes a large series of possible derogations, and two annexes (Annex II and III) relating to humane trapping standards and testing of trapping methods.

| 3.4 | The Proposal highlights that Member States can be allowed to implement stringent legislation on the issue and the 1991 EU regulation banning the use of leghold trap remains in force. The implementation and enforcement falls under the competence of the Member States and their competent authorities. No Community budget line is included into the Proposal, Member States will therefore allocate financial resources for covering the costs involved. |
| --- | --- |

3.4

The Proposal highlights that Member States can be allowed to implement stringent legislation on the issue and the 1991 EU regulation banning the use of leghold trap remains in force. The implementation and enforcement falls under the competence of the Member States and their competent authorities. No Community budget line is included into the Proposal, Member States will therefore allocate financial resources for covering the costs involved.

II.   Comments

4.   The use of the term ‘humane trapping standards’

| 4.1 | In the EESC's view, the use of the term ‘humane’ (4) in the Proposal is questionable. Article 2 defines ‘trapping methods’ but it does not include a definition of ‘humane trapping standards’. In fact the Agreement's text (which inspires the Proposal) recognizes in its Preamble the absence of international trapping standards, and generally relates the word ‘humane’ with those standards which would ‘ensure a sufficient level of welfare of trapped animals’. |
| --- | --- |

4.1

In the EESC's view, the use of the term ‘humane’ (4) in the Proposal is questionable. Article 2 defines ‘trapping methods’ but it does not include a definition of ‘humane trapping standards’. In fact the Agreement's text (which inspires the Proposal) recognizes in its Preamble the absence of international trapping standards, and generally relates the word ‘humane’ with those standards which would ‘ensure a sufficient level of welfare of trapped animals’.

| 4.2 | At the time of the negotiation of the Agreement, the Scientific and Veterinary Committee of the Commission (5) commented that the standards indicated in the text could not be defined as ‘humane’ (as already stressed before), given that the maximum time allowed to render the animal insensible to pain was far beyond the acceptable length (instantaneous death). Particular emphasis was put on drowning traps as it was estimated that semi-aquatic mammals trapped underwater may take up to 15 minutes to die. |
| --- | --- |

4.2

At the time of the negotiation of the Agreement, the Scientific and Veterinary Committee of the Commission (5) commented that the standards indicated in the text could not be defined as ‘humane’ (as already stressed before), given that the maximum time allowed to render the animal insensible to pain was far beyond the acceptable length (instantaneous death). Particular emphasis was put on drowning traps as it was estimated that semi-aquatic mammals trapped underwater may take up to 15 minutes to die.

| 4.3 | The Committee therefore recommends that the word ‘humane’ be replaced by an alternative and more appropriate term in the text of the final EU legislation, at least until the trapping standards meet the requirements described above. |
| --- | --- |

4.3

The Committee therefore recommends that the word ‘humane’ be replaced by an alternative and more appropriate term in the text of the final EU legislation, at least until the trapping standards meet the requirements described above.

5.   Traps

| 5.1 | The Proposal covers two types of traps: killing traps and restraining traps. In relation to killing traps, the standards set in the Proposal clearly do not meet the scientific standards agreed upon by the Community, which recommend instantaneous death or a maximally tolerable threshold time of 30 seconds before death. In relation to restraining traps (traps used for catching animals alive) the Proposal does not provide specifications relating to the traps nor definitions of the purposes of the restraint of the animals. In addition, the Proposal does not set any welfare standards in the case of killing of restrained animals. This means that if an animal is caught in a restraining trap and killed afterwards, the killing method d is not regulated.
  Furthermore, the Proposal does not ensure that authorised trapping methods would not accidentally kill or restrain untargeted species. Trapping standards should ensure that this risk is reduced to the lowest possible level. |
| --- | --- |

5.1

The Proposal covers two types of traps: killing traps and restraining traps. In relation to killing traps, the standards set in the Proposal clearly do not meet the scientific standards agreed upon by the Community, which recommend instantaneous death or a maximally tolerable threshold time of 30 seconds before death. In relation to restraining traps (traps used for catching animals alive) the Proposal does not provide specifications relating to the traps nor definitions of the purposes of the restraint of the animals. In addition, the Proposal does not set any welfare standards in the case of killing of restrained animals. This means that if an animal is caught in a restraining trap and killed afterwards, the killing method d is not regulated.

Furthermore, the Proposal does not ensure that authorised trapping methods would not accidentally kill or restrain untargeted species. Trapping standards should ensure that this risk is reduced to the lowest possible level.

6.   Testing

| 6.1 | The Proposal foresees technical provisions for the testing of trapping methods, which do not exclude the use of live animals. For both compound and field-testing minimum requirements are laid down. Furthermore, tests performed by a Party to the Agreement can be recognised by the other Parties. |
| --- | --- |

6.1

The Proposal foresees technical provisions for the testing of trapping methods, which do not exclude the use of live animals. For both compound and field-testing minimum requirements are laid down. Furthermore, tests performed by a Party to the Agreement can be recognised by the other Parties.

| 6.2 | However, for results to be valid, tests must be performed under the same conditions as those in which the traps are destined to be used. Therefore parameters based on the results of compound tests cannot be used for evaluating the welfare of animals living in the wild. For the above reasons testing on animals should not be applicable at all and only the already available computer simulation tests should be considered. |
| --- | --- |

6.2

However, for results to be valid, tests must be performed under the same conditions as those in which the traps are destined to be used. Therefore parameters based on the results of compound tests cannot be used for evaluating the welfare of animals living in the wild. For the above reasons testing on animals should not be applicable at all and only the already available computer simulation tests should be considered.

7.   Derogations

| 7.1 | The Proposal lists a large spectrum of possible derogations that, if implemented, could fully undermine the scope of the Proposal itself. The EESC believes that derogations relating to public safety and to human and animal health should be allowed. In this case, public authorities should immediately inform and ask the advise of the operators working on the territory (e.g. farmers) where such problems take place. The EESC has some reservations with regard to the other proposed derogations. |
| --- | --- |

7.1

The Proposal lists a large spectrum of possible derogations that, if implemented, could fully undermine the scope of the Proposal itself. The EESC believes that derogations relating to public safety and to human and animal health should be allowed. In this case, public authorities should immediately inform and ask the advise of the operators working on the territory (e.g. farmers) where such problems take place. The EESC has some reservations with regard to the other proposed derogations.

| 7.2 | Given the difficulty in applying an effective monitoring and enforcement system in the wild, where the trapping takes place, the derogations proposed (except for those indicated above) by the Commission would only help undermine transparency and accountability among Parties of the Agreement. |
| --- | --- |

7.2

Given the difficulty in applying an effective monitoring and enforcement system in the wild, where the trapping takes place, the derogations proposed (except for those indicated above) by the Commission would only help undermine transparency and accountability among Parties of the Agreement.

8.   Trappers

| 8.1 | The proposal foresees that a system of authorizations and training for trappers should be put in place. However, licensing is not covered and control on trapping methods used by trappers is mainly inapplicable, given that it would have to be performed in the wild. The EESC recommends that a strict system of licensing leading to be harmonized at Community level be set up. |
| --- | --- |

8.1

The proposal foresees that a system of authorizations and training for trappers should be put in place. However, licensing is not covered and control on trapping methods used by trappers is mainly inapplicable, given that it would have to be performed in the wild. The EESC recommends that a strict system of licensing leading to be harmonized at Community level be set up.

9.   Certification

| 9.1 | The Commission's Proposal delegates to the Members States the certification of the trapping methods used and prescribes the mutual recognition of this certification among Member states.
  Although this system could be implemented well in the EU, an international certification system should also be set up. In fact, a standard certification system as well as a traceability system should be introduced among the Parties of the Agreement. This system would contribute to ensure transparency and effective implementation of the Agreement. |
| --- | --- |

9.1

The Commission's Proposal delegates to the Members States the certification of the trapping methods used and prescribes the mutual recognition of this certification among Member states.

Although this system could be implemented well in the EU, an international certification system should also be set up. In fact, a standard certification system as well as a traceability system should be introduced among the Parties of the Agreement. This system would contribute to ensure transparency and effective implementation of the Agreement.

10.   Sanctions

| 10.1 | The Commission's Proposal refers to possible application of administrative sanctions in case of infringement of the legislation. However, given that some EU member States apply criminal law in case of violation of animal welfare legislation, the EESC recommends that sanctions be imposed according to national systems. |
| --- | --- |

10.1

The Commission's Proposal refers to possible application of administrative sanctions in case of infringement of the legislation. However, given that some EU member States apply criminal law in case of violation of animal welfare legislation, the EESC recommends that sanctions be imposed according to national systems.

11.   Conclusions

| 11.1 | The EESC thinks that the humane trapping standards included in the Proposal are not to be defined as humane, as they just reflect standards indicated by the Agreement. The Agreement's standards have been evaluated as lower than existing animal welfare standards in EU legislation. The Committee therefore recommends replacing the word humane with a more appropriate term in the final text of the legislation. |
| --- | --- |

11.1

The EESC thinks that the humane trapping standards included in the Proposal are not to be defined as humane, as they just reflect standards indicated by the Agreement. The Agreement's standards have been evaluated as lower than existing animal welfare standards in EU legislation. The Committee therefore recommends replacing the word humane with a more appropriate term in the final text of the legislation.

| 11.2 | In relation to traps, the EESC feels that only instantaneous killing traps should be considered and the scope of the use of restraining traps should be specified. Furthermore, where the restrained animals are killed, the killing method should, as far as possible, be regulated according to animal welfare legislation. |
| --- | --- |

11.2

In relation to traps, the EESC feels that only instantaneous killing traps should be considered and the scope of the use of restraining traps should be specified. Furthermore, where the restrained animals are killed, the killing method should, as far as possible, be regulated according to animal welfare legislation.

| 11.3 | It is the EESC's view that drowning trap should be forbidden as the Scientific and Veterinary Committee of the Commission concluded they are a cruel killing method because it involves a slow suffocation underwater for the animal. |
| --- | --- |

11.3

It is the EESC's view that drowning trap should be forbidden as the Scientific and Veterinary Committee of the Commission concluded they are a cruel killing method because it involves a slow suffocation underwater for the animal.

| 11.4 | The EESC notes that even though the Proposal indicates provisions for testing of traps, there is no scientific basis for applying to wild animals parameters based on results from tests performed in a compound environment. The EESC therefore recommends to not use any animals for testing and to instead use the already available computer simulation. |
| --- | --- |

11.4

The EESC notes that even though the Proposal indicates provisions for testing of traps, there is no scientific basis for applying to wild animals parameters based on results from tests performed in a compound environment. The EESC therefore recommends to not use any animals for testing and to instead use the already available computer simulation.

| 11.5 | The EESC thinks that most of the derogations included in the proposal could, in some cases, allow actors involved in the issue to fully escape the application of the legislation, and therefore recommends that the competent authorities grant derogations based on public safety, and human and animal health. This aspect is important in light of the fact that controls and monitoring are difficult to apply in the wild. |
| --- | --- |

11.5

The EESC thinks that most of the derogations included in the proposal could, in some cases, allow actors involved in the issue to fully escape the application of the legislation, and therefore recommends that the competent authorities grant derogations based on public safety, and human and animal health. This aspect is important in light of the fact that controls and monitoring are difficult to apply in the wild.

| 11.6 | In the EESC's view, a transparent system of licensing of trappers should be put in place in the EU. The Proposal fully delegates to the Member States' authorities the establishment of training and authorization requirements for trappers. The EESC fears that this will lead to an un-harmonized system, which would not guarantee implementation of the welfare standards in the EU. |
| --- | --- |

11.6

In the EESC's view, a transparent system of licensing of trappers should be put in place in the EU. The Proposal fully delegates to the Member States' authorities the establishment of training and authorization requirements for trappers. The EESC fears that this will lead to an un-harmonized system, which would not guarantee implementation of the welfare standards in the EU.

| 11.7 | The EESC believes that an effective certification and traceability system should be implemented among Parties of the Agreement to ensure effective implementation. |
| --- | --- |

11.7

The EESC believes that an effective certification and traceability system should be implemented among Parties of the Agreement to ensure effective implementation.

| 11.8 | The EESC recommends that sanctions be applied according to national animal welfare legislation in case of infringement of the proposed legislation. |
| --- | --- |

11.8

The EESC recommends that sanctions be applied according to national animal welfare legislation in case of infringement of the proposed legislation.

| 11.9 | The EESC recommends that the timetable of implementation of the provisions foreseen in the Proposal should be stricter. According to the Proposal, traps should conform to the proposed standards as from 2009 and trapping methods as from 2012. The EESC feels that all provisions should be implemented as soon as possible. |
| --- | --- |

11.9

The EESC recommends that the timetable of implementation of the provisions foreseen in the Proposal should be stricter. According to the Proposal, traps should conform to the proposed standards as from 2009 and trapping methods as from 2012. The EESC feels that all provisions should be implemented as soon as possible.

Brussels, 16 December 2004.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  Council Regulation 3254/91, OJ L 308, 9/11/1991

1

(2)  Opinion on the proposal for a Council Regulation on the importation of certain furs, OJ C 168 of 10.7.1990, page 32

2

(3)  COM(2004) 532 final

3

(4)  In February 1994 the Working Committee established under ISO (International Standardization Organization) to discuss humane trapping standards, decided to remove the word ‘humane’ from the title of the standards. At this meeting it was agreed to remove all references to ‘humane’ or ‘humaneness’. An agreement on trapping standards could not be reached under ISO. During ISO negotiations, European vets highlighted that anything longer that 15 seconds to kill an animal is not to be defined as humane killing and clearly no submersion traps could be considered. These points, among others, have not been considered when drafting the final text of the Agreement.

4

The Opinion of the Scientific Veterinary Committee of the European Commission (1994) concluded that to be considered ‘humane’ a killing trap should render the animal insensible to pain instantaneously, and that more attention should be paid also to the design of traps, in order to take account of the behaviour of non-target species, to avoid their capture or injury. The Committee concluded that the proposed injury scale, having no scientific basis, is unacceptable as a measure of humaneness.

(5)  Opinion from the Scientific Committee established under CITES regulation, 1995; Scientific Committee Opinion, DG Agriculture, 1994.

5

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| 28.6.2005 | EN | Official Journal of the European Union | C 157/74 |
| --- | --- | --- | --- |

28.6.2005

EN

Official Journal of the European Union

C 157/74

---

Opinion of the European Economic and Social Committee on the ‘Proposal for a Council Directive amending Directive 87/328/EEC as regards the storage of semen of bovine animals intended for intra-Community trade’

(COM(2004) 563 final — 2004/0188 CNS)

(2005/C 157/12)

On 20 September 2004 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 16 November 2004. The rapporteur was Mr Leif E. Nielsen.

At its 413th plenary session, held on 15 and 16 December 2004 (meeting of 15 December), the European Economic and Social Committee adopted the following opinion with 139 votes in favour and seven abstentions.

1.   Gist of the Commission proposal

| 1.1 | Council Directive 88/407/EEC lays down a series of animal health requirements applicable to intra-Community trade in and imports of bovine semen of pure-bred breeding animals. In spite of the EESC opinion, which expressed grave reservations on the subject, the directive was amended in 2003 to allow semen to be stored not only in ‘semen collection centres’ with own production but also in ‘semen storage centres’ without own production. (1) |
| --- | --- |

1.1

Council Directive 88/407/EEC lays down a series of animal health requirements applicable to intra-Community trade in and imports of bovine semen of pure-bred breeding animals. In spite of the EESC opinion, which expressed grave reservations on the subject, the directive was amended in 2003 to allow semen to be stored not only in ‘semen collection centres’ with own production but also in ‘semen storage centres’ without own production. (1)

| 1.2 | ‘In order to avoid any confusion with the scope and definitions’, the Commission is now proposing to amend the analogous rules laid down in Council Directive 87/328/EEC on the acceptance for breeding purposes of pure-bred breeding animals, to the effect that, with regard to the collection, processing and storage of bovine semen, semen storage centres are, in future, to be placed on a par with semen collection centres. |
| --- | --- |

1.2

‘In order to avoid any confusion with the scope and definitions’, the Commission is now proposing to amend the analogous rules laid down in Council Directive 87/328/EEC on the acceptance for breeding purposes of pure-bred breeding animals, to the effect that, with regard to the collection, processing and storage of bovine semen, semen storage centres are, in future, to be placed on a par with semen collection centres.

2.   General comments

| 2.1 | The Commission should have been alert to the need for a consequential change in Directive 87/328/EEC to match the amendment to Council Directive 88/407/EEC — not least to ensure the requisite consistency in EU legislation. That could have avoided the present confusion and uncertainty about scope and definitions and dispensed with the need for the current additional legislative procedure. |
| --- | --- |

2.1

The Commission should have been alert to the need for a consequential change in Directive 87/328/EEC to match the amendment to Council Directive 88/407/EEC — not least to ensure the requisite consistency in EU legislation. That could have avoided the present confusion and uncertainty about scope and definitions and dispensed with the need for the current additional legislative procedure.

| 2.2 | Moreover, the proposed re-wording of Article 4 of Directive 87/328/EEC gives the impression that the scope of the approved storage centres is to be further widened to include the collection and processing of bovine semen, thereby establishing a parallel system of semen collection centres alongside those that exist at the moment. Given the circumstances, that would make no sense. Nor is it, on closer reading, what is actually meant. The amendment should therefore be worded in a way that does not give rise to misunderstanding. |
| --- | --- |

2.2

Moreover, the proposed re-wording of Article 4 of Directive 87/328/EEC gives the impression that the scope of the approved storage centres is to be further widened to include the collection and processing of bovine semen, thereby establishing a parallel system of semen collection centres alongside those that exist at the moment. Given the circumstances, that would make no sense. Nor is it, on closer reading, what is actually meant. The amendment should therefore be worded in a way that does not give rise to misunderstanding.

3.   Conclusion

| 3.1 | The Committee is aware that, despite its opposition back in 2002, approval was given to storage centres for the distribution of bovine semen under Council Directive 2003/43/EEC, and accepts that the proposed change, which should have been introduced at the same time as the 2003 decision, is needed to secure consistency in EU legislation. However, the wording may give rise to misunderstanding and should therefore be clarified. |
| --- | --- |

3.1

The Committee is aware that, despite its opposition back in 2002, approval was given to storage centres for the distribution of bovine semen under Council Directive 2003/43/EEC, and accepts that the proposed change, which should have been introduced at the same time as the 2003 decision, is needed to secure consistency in EU legislation. However, the wording may give rise to misunderstanding and should therefore be clarified.

Brussels, 15 December 2004.

The President

of European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  Directive 2003/43/EC, OJ L 143, 11.6.2003, p. 23

1

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| 28.6.2005 | EN | Official Journal of the European Union | C 157/75 |
| --- | --- | --- | --- |

28.6.2005

EN

Official Journal of the European Union

C 157/75

---

Opinion of the European Economic and Social Committee on ‘Fostering structural change: an industrial policy for an enlarged Europe’

(COM(2004) 274 final)

(2005/C 157/13)

On 20 April 2004, in accordance with Article 262 of the Treaty establishing the European Community, the Commission decided to consult the European Economic and Social Committee on the Communication: ‘Fostering structural change: an industrial policy for an enlarged Europe’.

The Consultative Commission on Industrial Change, which was responsible for the Committee's work on the subject, adopted its opinion on 2 December 2004. The rapporteur was Mr Van Iersel and the co-rapporteur was Mr Legelius.

At its 413th plenary session of 15 and 16 December 2004 (meeting of 15 December 2004), the European Economic and Social Committee adopted the following opinion by 142 votes to one with nine abstentions.

Executive summary

After many years industrial policy is once more a priority on the European agenda. Of course, in the past decade there have been specific industrial policy measures and thematic approaches but these have not always been properly coordinated or balanced from the point of view of European business. The changing world context — with the United States, China, India playing a major role– requires rethinking and enhanced efforts. The time has come for a reappraisal of manufacturing industry and for a clarification of the complex interrelationship between industry and services.

In the Committee's view, the need to raise public awareness constitutes an important challenge. Transparent data and analyses have to be made available to the public, thereby promoting consensus and public support. The EESC endorses wholeheartedly the three strategic axes: ‘better lawmaking’; an integrated approach at EU level; sectoral policies with specific and adapted measures. ‘Better lawmaking’ means a careful and ongoing assessment of current and new measures. Integrated approach means effective coordination of EU and national policies. A particularly new aspect of the Commission document is the sectoral dimension and tailor-made approaches. Notwithstanding certain common denominators, the picture varies from sector to sector. The Commission has carried out a number of sectoral analyses and more are foreseen. The EESC endorses this practice as a basis for ‘new style’ industrial policy.

The Committee considers industrial policy to be a useful tool to bring the European economy to the forefront of competitiveness, knowledge and sustainability as intended by the Lisbon Strategy. To that end, analyses and policies must be aligned more closely to the dynamics of the various sectors and businesses involved. ‘New style’ industrial policy has indeed to be based on market conformity and on a process of liberalisation. It also includes, however, sector-specific features, such as ongoing consultations of the business sector, regulation, removal of non-trade barriers, R&D, trade and targeted human resources management. In addition, it implies the setting-up of Technology Platforms that may generate new private-private and public-private alliances in Europe, e.g. between universities, research centres and businesses.

Improved coordination is desirable within the Commission (e.g. under the aegis of DG Enterprise) and in the Council of Ministers in order to promote visibility and encourage synergies. A mid-term action plan approved by the Commission and the Competitiveness Council configuration would be most desirable. The EESC urges that ‘new style’ industrial policy be taken into account in the preparation of the Mid-term Review of the Lisbon Strategy in March 2005.

1.   Introduction

| 1.1 | Industrial policy has been on the agenda of the European integration from the very outset. The ECSC Treaty embraced specific objectives and instruments for the coal and steel sectors. The EEC Treaty envisaged a more general approach in which the realisation of the internal market has always been and still is the key issue. |
| --- | --- |

1.1

Industrial policy has been on the agenda of the European integration from the very outset. The ECSC Treaty embraced specific objectives and instruments for the coal and steel sectors. The EEC Treaty envisaged a more general approach in which the realisation of the internal market has always been and still is the key issue.

| 1.2 | There have been specific industrial policy measures at EU level, targeting related objectives such as environmental, R&D or social ones. Over time, sectoral approaches were replaced by thematic approaches, but these have not always been properly coordinated with, or balanced from the point of view of European business. |
| --- | --- |

1.2

There have been specific industrial policy measures at EU level, targeting related objectives such as environmental, R&D or social ones. Over time, sectoral approaches were replaced by thematic approaches, but these have not always been properly coordinated with, or balanced from the point of view of European business.

| 1.3 | Apart from general policies some sector policies have been worked out in view of market liberalisation, such as in energy and telecommunications. Some European industrial projects were initiated, e.g. Galileo. |
| --- | --- |

1.3

Apart from general policies some sector policies have been worked out in view of market liberalisation, such as in energy and telecommunications. Some European industrial projects were initiated, e.g. Galileo.

| 1.4 | Continuous industrial change and globalization nowadays require a further adjustment of approach both of industry and of public authorities to enhance European competitiveness. Last July the European Commission published an impressive analysis of the situation and prospects of European industrial sectors in the current global context, characterised by strong dynamism in other world regions. (1) This dynamism may influence the investment strategies of European companies. Europe needs a qualitative technological leap forward to sustain competitiveness in most sectors. |
| --- | --- |

1.4

Continuous industrial change and globalization nowadays require a further adjustment of approach both of industry and of public authorities to enhance European competitiveness. Last July the European Commission published an impressive analysis of the situation and prospects of European industrial sectors in the current global context, characterised by strong dynamism in other world regions. (1) This dynamism may influence the investment strategies of European companies. Europe needs a qualitative technological leap forward to sustain competitiveness in most sectors.

| 1.5 | In the framework of the Lisbon Strategy the European Council and other Council configurations, such as Ecofin and the Competitiveness Council, have discussed and are discussing a number of Communications and concrete proposals of the Commission for the improvement of macro- and micro-conditions for industry. In these documents and discussions a horizontal policy approach prevails. For a number of years the expression ‘industrial policy’ was simply avoided. It provided too many memories of state intervention and state subsidies, which have hampered the creation of a level playing field in a well functioning internal market. In the meantime, these interventions have gradually been abolished. |
| --- | --- |

1.5

In the framework of the Lisbon Strategy the European Council and other Council configurations, such as Ecofin and the Competitiveness Council, have discussed and are discussing a number of Communications and concrete proposals of the Commission for the improvement of macro- and micro-conditions for industry. In these documents and discussions a horizontal policy approach prevails. For a number of years the expression ‘industrial policy’ was simply avoided. It provided too many memories of state intervention and state subsidies, which have hampered the creation of a level playing field in a well functioning internal market. In the meantime, these interventions have gradually been abolished.

| 1.6 | New views of industrial policy are being examined. In this context the Communication on Industrial Policy in an enlarged Europe was adopted in 2002 (2). |
| --- | --- |

1.6

New views of industrial policy are being examined. In this context the Communication on Industrial Policy in an enlarged Europe was adopted in 2002 (2).

| 1.7 | The 2003 Spring European Council set the Competitiveness Council the task to review on a regular basis both horizontal and sectoral issues
   (3). |
| --- | --- |

1.7

The 2003 Spring European Council set the Competitiveness Council the task to review on a regular basis both horizontal and sectoral issues
   (3).

| 1.8 | The Commission issued a second Communication on Industrial Policy in April 2004, which is the subject of the present document (4). |
| --- | --- |

1.8

The Commission issued a second Communication on Industrial Policy in April 2004, which is the subject of the present document (4).

| 1.9 | These initiatives and the outcome of the discussions to date led Commissioner Liikanen in May 2004 to state that contrary to the forecasts in the mid-1990s the EU's industrial policy is once again at the top of the European political agenda
   (5)
  . |
| --- | --- |

1.9

These initiatives and the outcome of the discussions to date led Commissioner Liikanen in May 2004 to state that contrary to the forecasts in the mid-1990s the EU's industrial policy is once again at the top of the European political agenda
   (5)
  .

| 1.10 | The EESC welcomes the change of attitude regarding industrial policy, which is timely. It shares the view that, while avoiding mistakes of the past, specific attention to industrial interests and to the sectoral dimension is desirable. Experience and knowledge in this field, represented by the CCMI, may be supportive for the future. Correct industrial and sectoral policies will help significantly the realisation of the goals of the Lisbon Strategy. |
| --- | --- |

1.10

The EESC welcomes the change of attitude regarding industrial policy, which is timely. It shares the view that, while avoiding mistakes of the past, specific attention to industrial interests and to the sectoral dimension is desirable. Experience and knowledge in this field, represented by the CCMI, may be supportive for the future. Correct industrial and sectoral policies will help significantly the realisation of the goals of the Lisbon Strategy.

2.   The Commission's views in a changing context

| 2.1 | The crucial element nowadays is the change of context in the world economy. This requires new approaches. In the Commission's view industrial policy in the future must be built around three axes:






  — | industry should not be overburdened by legislation and regulation. This implies careful assessment of both current and new measures; |
| --- | --- | --- |

2.1

The crucial element nowadays is the change of context in the world economy. This requires new approaches. In the Commission's view industrial policy in the future must be built around three axes:

—

industry should not be overburdened by legislation and regulation. This implies careful assessment of both current and new measures;

| — | an integrated approach at EU level is needed to reinforce industry's competitiveness; (6) |
| --- | --- |

—

an integrated approach at EU level is needed to reinforce industry's competitiveness; (6)

| — | sectoral policies with specific and adapted measures are desirable. |
| --- | --- |

—

sectoral policies with specific and adapted measures are desirable.

| 2.2 | This approach, cautiously announced by the Commission in 2002, marks a breakthrough. The previous document of the Commission on industrial policy dated from 1990 (7). Since then some decisive factors have pushed industrial policy to the background in favour of primarily horizontal policies. |
| --- | --- |

2.2

This approach, cautiously announced by the Commission in 2002, marks a breakthrough. The previous document of the Commission on industrial policy dated from 1990 (7). Since then some decisive factors have pushed industrial policy to the background in favour of primarily horizontal policies.

| 2.3 | In 2000 the Lisbon Strategy was set out to bring the European economy to the forefront of knowledge and competitiveness. Until now this strategy has not been actively driven forward. Instead, the growth of productivity has diminished and unemployment has increased. Moreover, certain fears have arisen regarding delocalisation of industries (8). |
| --- | --- |

2.3

In 2000 the Lisbon Strategy was set out to bring the European economy to the forefront of knowledge and competitiveness. Until now this strategy has not been actively driven forward. Instead, the growth of productivity has diminished and unemployment has increased. Moreover, certain fears have arisen regarding delocalisation of industries (8).

| 2.4 | For these reasons more precise analyses became desirable in the following areas:






  — | productivity and unemployment; |
| --- | --- | --- |

2.4

For these reasons more precise analyses became desirable in the following areas:

—

productivity and unemployment;

| — | what are the real facts about delocalisation? |
| --- | --- |

—

what are the real facts about delocalisation?

| — | what is the overall impact of industry for and in Europe? |
| --- | --- |

—

what is the overall impact of industry for and in Europe?

| — | how to realise an integrated EU-policy towards industry? |
| --- | --- |

—

how to realise an integrated EU-policy towards industry?

| — | how to define and to work out sectoral approaches? |
| --- | --- |

—

how to define and to work out sectoral approaches?

| 2.5 | The Commission's document of 2002 (9) sets the agenda for changes. It introduces a new content to ‘industrial policy’. But it still formulates this policy in rather abstract terms, putting together all EU-policies that are directly relevant for industry, without presenting concrete methods or procedures regarding a decision-making and coordinating role for the European institutions, and especially for the Commission. |
| --- | --- |

2.5

The Commission's document of 2002 (9) sets the agenda for changes. It introduces a new content to ‘industrial policy’. But it still formulates this policy in rather abstract terms, putting together all EU-policies that are directly relevant for industry, without presenting concrete methods or procedures regarding a decision-making and coordinating role for the European institutions, and especially for the Commission.

| 2.6 | The document Fostering structural change of April 2004, published under the aegis of Commissioner Liikanen and DG Enterprise, adds a lot more. This document in its analysis goes right to the heart of the matter in:






  — | presenting some illustrative figures on issues related to output and employment in manufacturing industry, also in relation with developments elsewhere in the world; |
| --- | --- | --- |

2.6

The document Fostering structural change of April 2004, published under the aegis of Commissioner Liikanen and DG Enterprise, adds a lot more. This document in its analysis goes right to the heart of the matter in:

—

presenting some illustrative figures on issues related to output and employment in manufacturing industry, also in relation with developments elsewhere in the world;

| — | presenting sectoral developments, thus giving a more precise picture of what is at stake in various sectors with a very different outlook. |
| --- | --- |

—

presenting sectoral developments, thus giving a more precise picture of what is at stake in various sectors with a very different outlook.

| 2.7 | The Commission rightly starts from ongoing dynamics, but emphasises at the same time that these dynamics can be conditioned positively by anticipation, identification of problems and fostering growth factors. |
| --- | --- |

2.7

The Commission rightly starts from ongoing dynamics, but emphasises at the same time that these dynamics can be conditioned positively by anticipation, identification of problems and fostering growth factors.

| 2.8 | The general analysis confirms the slowdown in the growth of productivity in Europe, the gap compared with developments in the US and the disappointing performance of industry, especially in high-technology sectors. The relative shortfall in R&D expenditure in European companies, partly due to lack of sufficient private sector investment in relation to that of American companies, is — according to the Commission — quite obvious, with notable exceptions such as Finland and Sweden. In addition, knowledge-based capacities in China and India are expanding rapidly. |
| --- | --- |

2.8

The general analysis confirms the slowdown in the growth of productivity in Europe, the gap compared with developments in the US and the disappointing performance of industry, especially in high-technology sectors. The relative shortfall in R&D expenditure in European companies, partly due to lack of sufficient private sector investment in relation to that of American companies, is — according to the Commission — quite obvious, with notable exceptions such as Finland and Sweden. In addition, knowledge-based capacities in China and India are expanding rapidly.

| 2.9 | The Commission mentions — and it is worthwhile to mention this also here — a survey of major firms carried out by the European Round Table of Industrialists in 2002 that shows that a number of these companies intend to locate new R&D activities outside Europe, if the regulatory environment does not improve (10). |
| --- | --- |

2.9

The Commission mentions — and it is worthwhile to mention this also here — a survey of major firms carried out by the European Round Table of Industrialists in 2002 that shows that a number of these companies intend to locate new R&D activities outside Europe, if the regulatory environment does not improve (10).

| 2.10 | Although European industry performs quite well in traditionally strong sectors, such as engineering, chemicals, telecommunications and the automotive industries, new competitors are emerging. China and India are starting to compete successfully both in traditional and high-technology sectors. Here a direct link with de- or relocation of European companies can be observed. |
| --- | --- |

2.10

Although European industry performs quite well in traditionally strong sectors, such as engineering, chemicals, telecommunications and the automotive industries, new competitors are emerging. China and India are starting to compete successfully both in traditional and high-technology sectors. Here a direct link with de- or relocation of European companies can be observed.

| 2.11 | An ongoing adjustment process is taking place worldwide. This adjustment is needed because of globalisation, which in turn also creates new opportunities. There are diverging analyses in this respect, but the Commission notes that certain worrying signals are emerging. |
| --- | --- |

2.11

An ongoing adjustment process is taking place worldwide. This adjustment is needed because of globalisation, which in turn also creates new opportunities. There are diverging analyses in this respect, but the Commission notes that certain worrying signals are emerging.

| 2.12 | In relation to enlargement, investment from the former EU-15 in the new Member States is expanding. Given that this now constitutes investment within the EU, the proper functioning of the internal market is all the more necessary as regards environmental and working standards, for example. |
| --- | --- |

2.12

In relation to enlargement, investment from the former EU-15 in the new Member States is expanding. Given that this now constitutes investment within the EU, the proper functioning of the internal market is all the more necessary as regards environmental and working standards, for example.

| 2.13 | As companies have to face competition in open markets within the framework set by the WTO, the Commission argues that it is up to the EU and to the Member States to give a clear-cut answer to the process of dynamic changes by:






  — | ‘better lawmaking’; |
| --- | --- | --- |

2.13

As companies have to face competition in open markets within the framework set by the WTO, the Commission argues that it is up to the EU and to the Member States to give a clear-cut answer to the process of dynamic changes by:

—

‘better lawmaking’;

| — | an integrated approach to different policies with a view to competitiveness; |
| --- | --- |

—

an integrated approach to different policies with a view to competitiveness;

| — | taking fully into account the specific needs of the various industrial sectors. |
| --- | --- |

—

taking fully into account the specific needs of the various industrial sectors.

| 2.14 | The Commission advocates a detailed impact assessment of existing regulations and legislation as well as of forthcoming measures. Closer cooperation between the Member States and the EU is required, as many rules are implemented at national level. The Commission insists that the Competitiveness Council plays an important and transparent role in this process. |
| --- | --- |

2.14

The Commission advocates a detailed impact assessment of existing regulations and legislation as well as of forthcoming measures. Closer cooperation between the Member States and the EU is required, as many rules are implemented at national level. The Commission insists that the Competitiveness Council plays an important and transparent role in this process.

| 2.15 | The Commission argues that synergy between policies can be obtained, when a more adequate fine-tuning consultation between the legislators, in close cooperation with industrial circles, is promoted. |
| --- | --- |

2.15

The Commission argues that synergy between policies can be obtained, when a more adequate fine-tuning consultation between the legislators, in close cooperation with industrial circles, is promoted.

| 2.16 | The same goes for R&D. Undoubtedly, this will have financial consequences for the EU and also at a national level. This touches on the core of the Lisbon Strategy. In the coming year the Commission will propose new guidelines on research in the manufacturing industry, and on state aid for innovation. Technological platforms can play a very useful role. |
| --- | --- |

2.16

The same goes for R&D. Undoubtedly, this will have financial consequences for the EU and also at a national level. This touches on the core of the Lisbon Strategy. In the coming year the Commission will propose new guidelines on research in the manufacturing industry, and on state aid for innovation. Technological platforms can play a very useful role.

| 2.17 | Some policies aim directly at the creation of a favourable climate for competitiveness, e.g. competition policy and the abolition of trade barriers. However, the Commission argues that sometimes more sophistication in the application of these policies is possible and is required. |
| --- | --- |

2.17

Some policies aim directly at the creation of a favourable climate for competitiveness, e.g. competition policy and the abolition of trade barriers. However, the Commission argues that sometimes more sophistication in the application of these policies is possible and is required.

| 2.18 | The Commission argues that cohesion policies can be used to promote desirable regional and structural changes as regards the functioning of the labour markets (11). The same goes for reconciling better sustainable development with competitiveness. |
| --- | --- |

2.18

The Commission argues that cohesion policies can be used to promote desirable regional and structural changes as regards the functioning of the labour markets (11). The same goes for reconciling better sustainable development with competitiveness.

| 2.19 | As the world at large is the field of play, the Commission advocates a level playing field on the basis of international standards. The EU standards are generally higher than in other competing world regions. In the future therefore a certain degree of equalisation will have to take place either via bilateral negotiations or in the framework of the WTO. This problem should be tackled not by adapting Europe's standards to those of the rest of the world; rather, Europe must take initiatives, as in the case of the implementation of the Kyoto Protocol, to raise the standards of other parts of the world by acting appropriately in all international institutions. |
| --- | --- |

2.19

As the world at large is the field of play, the Commission advocates a level playing field on the basis of international standards. The EU standards are generally higher than in other competing world regions. In the future therefore a certain degree of equalisation will have to take place either via bilateral negotiations or in the framework of the WTO. This problem should be tackled not by adapting Europe's standards to those of the rest of the world; rather, Europe must take initiatives, as in the case of the implementation of the Kyoto Protocol, to raise the standards of other parts of the world by acting appropriately in all international institutions.

| 2.20 | All these issues have at regular intervals been discussed previously at EU level. The increased emphasis on ‘competitiveness’ is striking. The ultra-rapid developments in world markets do not leave much choice for Europe. |
| --- | --- |

2.20

All these issues have at regular intervals been discussed previously at EU level. The increased emphasis on ‘competitiveness’ is striking. The ultra-rapid developments in world markets do not leave much choice for Europe.

| 2.21 | What is especially new in this Commission document is the sectoral dimension. For several years the Commission has been conducting in-depth studies on sectors, often based on consultations with sectoral organisations on EU level. |
| --- | --- |

2.21

What is especially new in this Commission document is the sectoral dimension. For several years the Commission has been conducting in-depth studies on sectors, often based on consultations with sectoral organisations on EU level.

| 2.22 | Interesting proposals have been made which have also been discussed by the EESC, regarding for example the pharmaceutical industry (CESE 842/2004), textiles and clothing (CESE 62/2004 fin; CCMI Supplementary Opinion CESE 528/2004), shipbuilding and ship-repair (CESE 397/2004 fin; CCMI Supplementary Opinion CESE 478/2004), space (CESE 501/2004), the chemical industry (CESE 524/2004; CCMI Information Report CESE 242/2004, currently under preparation) and life sciences and biotechnology (CESE 1010/2002; CESE 920/2003). |
| --- | --- |

2.22

Interesting proposals have been made which have also been discussed by the EESC, regarding for example the pharmaceutical industry (CESE 842/2004), textiles and clothing (CESE 62/2004 fin; CCMI Supplementary Opinion CESE 528/2004), shipbuilding and ship-repair (CESE 397/2004 fin; CCMI Supplementary Opinion CESE 478/2004), space (CESE 501/2004), the chemical industry (CESE 524/2004; CCMI Information Report CESE 242/2004, currently under preparation) and life sciences and biotechnology (CESE 1010/2002; CESE 920/2003).

| 2.23 | The picture varies from sector to sector. Of course, there are common denominators such as the requirement of quality as a competitive advantage, ICT as the new ‘raw material’, increasing capital-intensity and increasing international competition, but differences between the sectors are manifest. High technology and low technology, labour intensive and capital intensive, consumer goods and capital goods, few main players in the market and sectors characterised by SMEs etc. It is a fascinating picture that, as the Commission argues, has not been sufficiently taken into account by policymakers for many years. |
| --- | --- |

2.23

The picture varies from sector to sector. Of course, there are common denominators such as the requirement of quality as a competitive advantage, ICT as the new ‘raw material’, increasing capital-intensity and increasing international competition, but differences between the sectors are manifest. High technology and low technology, labour intensive and capital intensive, consumer goods and capital goods, few main players in the market and sectors characterised by SMEs etc. It is a fascinating picture that, as the Commission argues, has not been sufficiently taken into account by policymakers for many years.

| 2.24 | In the framework of ‘industrial policy’ sectoral analyses and approaches are also back on the agenda. In this document the Commission does not work out further initiatives as regards the mentioned sectors. |
| --- | --- |

2.24

In the framework of ‘industrial policy’ sectoral analyses and approaches are also back on the agenda. In this document the Commission does not work out further initiatives as regards the mentioned sectors.

| 2.25 | Alongside these sectors the Commission is planning new activities. For the coming year studies are announced on the mechanical engineering sector, the ECO-industry, the automobile sector, the non-ferrous metals sector and the ICT-sector. |
| --- | --- |

2.25

Alongside these sectors the Commission is planning new activities. For the coming year studies are announced on the mechanical engineering sector, the ECO-industry, the automobile sector, the non-ferrous metals sector and the ICT-sector.

3.   Favouring ‘new style’ industrial policy — EESC views

| 3.1 | The EESC shares the view that the dynamics in the world economy require a renewed focus. It welcomes the fact that after a long period of time, ‘industrial policy’ is again back as a priority on the EU agenda. Certain aspects of Europe's industry (such as the environment) have been on the EU agenda for the last decade, but the Council of Ministers has neglected to discuss policies that would improve coherently the conditions for overall output and that would sustain pro-actively the environment for (value-added) investments. |
| --- | --- |

3.1

The EESC shares the view that the dynamics in the world economy require a renewed focus. It welcomes the fact that after a long period of time, ‘industrial policy’ is again back as a priority on the EU agenda. Certain aspects of Europe's industry (such as the environment) have been on the EU agenda for the last decade, but the Council of Ministers has neglected to discuss policies that would improve coherently the conditions for overall output and that would sustain pro-actively the environment for (value-added) investments.

| 3.2 | In retrospect, and in view of the present change to a more focused industrial approach, it is worthwhile to summarize the main factors that have contributed to a certain taboo on industrial policy:






  — | the failure of state intervention, in the large majority of cases, to make industry stronger and more competitive in the long run; |
| --- | --- | --- |

3.2

In retrospect, and in view of the present change to a more focused industrial approach, it is worthwhile to summarize the main factors that have contributed to a certain taboo on industrial policy:

—

the failure of state intervention, in the large majority of cases, to make industry stronger and more competitive in the long run;

| — | the abolition of economically unjustified market distortions and promotion of a level playing field for industrial activities in Europe (although specific measures adopted in some Member States which distort competition need still to be scrutinised in a appropriate way at EU-level); |
| --- | --- |

—

the abolition of economically unjustified market distortions and promotion of a level playing field for industrial activities in Europe (although specific measures adopted in some Member States which distort competition need still to be scrutinised in a appropriate way at EU-level);

| — | the overall and successful emphasis on liberalisation of markets; |
| --- | --- |

—

the overall and successful emphasis on liberalisation of markets;

| — | the exaggerated expectations of the ‘new economy’ and of a post-industrial era; |
| --- | --- |

—

the exaggerated expectations of the ‘new economy’ and of a post-industrial era;

| — | the focus on implementing EMU and adequate macro-economic policies; |
| --- | --- |

—

the focus on implementing EMU and adequate macro-economic policies;

| — | the loss of influence of the Ministries responsible for industrial interests in a number of Member States. |
| --- | --- |

—

the loss of influence of the Ministries responsible for industrial interests in a number of Member States.

| 3.3 | Most of what is presented by the Commission in its Communication has already been known for several years. The way it is presented, however, and the links between the different areas of analysis and proposed action, differ from earlier documents. More than in the past, analyses and policies are more directly related to the dynamics of the various sectors and of the businesses involved. |
| --- | --- |

3.3

Most of what is presented by the Commission in its Communication has already been known for several years. The way it is presented, however, and the links between the different areas of analysis and proposed action, differ from earlier documents. More than in the past, analyses and policies are more directly related to the dynamics of the various sectors and of the businesses involved.

| 3.4 | The EESC strongly endorses that more numerous in-depth studies of sectoral developments be undertaken in cooperation with business itself. These may promote the necessary ‘sense of urgency’ that was also the objective of the Lisbon Strategy in 2000, but which has subsequently slipped away, largely because the Council and the Member States have not implemented their own arrangements and previously agreed policies. This means that, in the view of the EESC, new style industrial policy has to be taken into account in the Mid-term review of the Lisbon Strategy in 2005. It may become a key pillar of that strategy in the future. |
| --- | --- |

3.4

The EESC strongly endorses that more numerous in-depth studies of sectoral developments be undertaken in cooperation with business itself. These may promote the necessary ‘sense of urgency’ that was also the objective of the Lisbon Strategy in 2000, but which has subsequently slipped away, largely because the Council and the Member States have not implemented their own arrangements and previously agreed policies. This means that, in the view of the EESC, new style industrial policy has to be taken into account in the Mid-term review of the Lisbon Strategy in 2005. It may become a key pillar of that strategy in the future.

| 3.5 | ‘New style’ industrial policy is indeed based on market conformity and on a process of liberalisation but it includes other factors as well, such as sector-specific features; harmonisation of legislation in view of the internal market; the removal of non-tariff barriers; technology and R&D; and human resources. |
| --- | --- |

3.5

‘New style’ industrial policy is indeed based on market conformity and on a process of liberalisation but it includes other factors as well, such as sector-specific features; harmonisation of legislation in view of the internal market; the removal of non-tariff barriers; technology and R&D; and human resources.

| 3.6 | This industrial policy must by no means fall back on incorrect policies of the past, that were characterised by market distortions of various kinds. The financial discipline that was brought about by EMU has also led to caution as regards financial and other state intervention in business. Except in a few specifically justified cases, it is generally accepted that in the long run intervention and public financial support do not serve business interests. |
| --- | --- |

3.6

This industrial policy must by no means fall back on incorrect policies of the past, that were characterised by market distortions of various kinds. The financial discipline that was brought about by EMU has also led to caution as regards financial and other state intervention in business. Except in a few specifically justified cases, it is generally accepted that in the long run intervention and public financial support do not serve business interests.

| 3.7 | Taking into account recent worldwide developments and after some years of trying to implement the Lisbon Strategy — in particular as regards ailing economic growth in Europe, productivity, the application of ICT and reallocation of investment — the time has also come for a reappraisal of manufacturing industry and, to that end, for sectoral approaches and concrete steps. These should target activities best suited to European socio-economic conditions, particularly activities making intensive use of highly-skilled workforces in both operational and back-office areas (for instance, the manufacturing of tailor-made industrial equipment and systems: i.e. robotics, instrumentation, control equipment, etc.). The EESC endorses fully this approach and this objective. |
| --- | --- |

3.7

Taking into account recent worldwide developments and after some years of trying to implement the Lisbon Strategy — in particular as regards ailing economic growth in Europe, productivity, the application of ICT and reallocation of investment — the time has also come for a reappraisal of manufacturing industry and, to that end, for sectoral approaches and concrete steps. These should target activities best suited to European socio-economic conditions, particularly activities making intensive use of highly-skilled workforces in both operational and back-office areas (for instance, the manufacturing of tailor-made industrial equipment and systems: i.e. robotics, instrumentation, control equipment, etc.). The EESC endorses fully this approach and this objective.

| 3.8 | A very important issue is to raise public awareness regarding the need for a sound industry. In order to serve this objective, transparent data and analyses have to be made available to the public. In the same context, European and national decision-makers should pay special attention to aspects such as the coherence of EU policies, harmonisation of national legislations within the EU and relative alignment of European and world standards (e.g. WTO). |
| --- | --- |

3.8

A very important issue is to raise public awareness regarding the need for a sound industry. In order to serve this objective, transparent data and analyses have to be made available to the public. In the same context, European and national decision-makers should pay special attention to aspects such as the coherence of EU policies, harmonisation of national legislations within the EU and relative alignment of European and world standards (e.g. WTO).

| 3.9 | Public awareness will promote consensus and public backing. Industrial policy cannot be limited to selective groups of people who are directly involved, either in government or in business. This matter concerns society at large. The health of European manufacturing industry serves the interest of all. In all related fields efforts have to be made to promote its image, e.g. in the field of education — not only professional, but also general education, with a view to stimulating the creation of technical skills. |
| --- | --- |

3.9

Public awareness will promote consensus and public backing. Industrial policy cannot be limited to selective groups of people who are directly involved, either in government or in business. This matter concerns society at large. The health of European manufacturing industry serves the interest of all. In all related fields efforts have to be made to promote its image, e.g. in the field of education — not only professional, but also general education, with a view to stimulating the creation of technical skills.

| 3.10 | The public needs to be made more aware of the close interdependence between the different links in the industrial production chain. For example, the entire steel-processing industry, and with it the automobile industry, is reliant on a sufficient and cheap supply of steel, the production of which in turn depends on a sufficient and cheap supply of raw materials. |
| --- | --- |

3.10

The public needs to be made more aware of the close interdependence between the different links in the industrial production chain. For example, the entire steel-processing industry, and with it the automobile industry, is reliant on a sufficient and cheap supply of steel, the production of which in turn depends on a sufficient and cheap supply of raw materials.

| 3.11 | Directly related to this is the need to clarify the interrelationship between industry and services. The economy is moving to a service industry, indeed, but many services depend directly on industry due to outsourcing and they will continue to do so. On the other hand sophisticated services are of paramount importance for the development of high quality and high technology performance in industry. In many ways it is a single package. In the dynamics of today the dividing line between industry and services tends to disappear. |
| --- | --- |

3.11

Directly related to this is the need to clarify the interrelationship between industry and services. The economy is moving to a service industry, indeed, but many services depend directly on industry due to outsourcing and they will continue to do so. On the other hand sophisticated services are of paramount importance for the development of high quality and high technology performance in industry. In many ways it is a single package. In the dynamics of today the dividing line between industry and services tends to disappear.

| 3.12 | The EESC is of the opinion that the Commission has to play an active role in this process. Putting industrial policy on the agenda serves in itself the objective of creating awareness. But much more can be done. First of all analyses, data and an adequate publication of these should be improved on:






  — | industrial Europe, both in terms of output and in employment; |
| --- | --- | --- |

3.12

The EESC is of the opinion that the Commission has to play an active role in this process. Putting industrial policy on the agenda serves in itself the objective of creating awareness. But much more can be done. First of all analyses, data and an adequate publication of these should be improved on:

—

industrial Europe, both in terms of output and in employment;

| — | individual sectors and clusters; |
| --- | --- |

—

individual sectors and clusters;

| — | the interaction between industry and services; |
| --- | --- |

—

the interaction between industry and services;

| — | technological inter-linkages; |
| --- | --- |

—

technological inter-linkages;

| — | the development of service industry itself; |
| --- | --- |

—

the development of service industry itself;

| — | worldwide comparisons. |
| --- | --- |

—

worldwide comparisons.

| 3.13 | The analyses should also take into account the differences of structure in the Member States given that some countries and regions have a stronger industrial base than others. In-depth knowledge of major industrial sectors will improve the objectivity of the debate on trends in, and consequences of the dynamics in the world economy. |
| --- | --- |

3.13

The analyses should also take into account the differences of structure in the Member States given that some countries and regions have a stronger industrial base than others. In-depth knowledge of major industrial sectors will improve the objectivity of the debate on trends in, and consequences of the dynamics in the world economy.

| 3.14 | Correct data are the basis of any sectoral approach. Many studies are made in business and on a national or academic scale (12). The EESC advocates the gathering of the results of such studies at EU-level with the support of Eurostat in order to create reliable and dynamic European databases on industry and services and to make SWOT analyses. Comprehensive and clear statistics will give a continuous picture of the ongoing changes. Eurostat's fifty years of ECSC statistics could provide an example after appropriate adaptation. |
| --- | --- |

3.14

Correct data are the basis of any sectoral approach. Many studies are made in business and on a national or academic scale (12). The EESC advocates the gathering of the results of such studies at EU-level with the support of Eurostat in order to create reliable and dynamic European databases on industry and services and to make SWOT analyses. Comprehensive and clear statistics will give a continuous picture of the ongoing changes. Eurostat's fifty years of ECSC statistics could provide an example after appropriate adaptation.

| 3.15 | The Commission rightly emphasises an integrated approach to policies, such as national corporate taxation systems, tax formalities, standards, trade, intellectual property, R&D, environment, labour market, training and education. The EESC strongly welcomes this objective, which has failed for too long, not only at European level, but also in a number of Member States. |
| --- | --- |

3.15

The Commission rightly emphasises an integrated approach to policies, such as national corporate taxation systems, tax formalities, standards, trade, intellectual property, R&D, environment, labour market, training and education. The EESC strongly welcomes this objective, which has failed for too long, not only at European level, but also in a number of Member States.

| 3.16 | It is not the first time that an integrated approach is advocated. Unfortunately, such an approach is very difficult to realise in a complicated environment in which the EU institutions have to come to terms with 25 Member States. A viable solution would be that the Competitiveness Council, together with the Commission, defines a mid-term action plan, to be evaluated annually (13). |
| --- | --- |

3.16

It is not the first time that an integrated approach is advocated. Unfortunately, such an approach is very difficult to realise in a complicated environment in which the EU institutions have to come to terms with 25 Member States. A viable solution would be that the Competitiveness Council, together with the Commission, defines a mid-term action plan, to be evaluated annually (13).

| 3.17 | It is also necessary that any policy affecting the competitiveness of industry in this action plan takes into account the different policy objectives of the EU in a balanced way. This has not always been the case in the past (14). Consequently, better exploitation of synergies between Community policies is needed. |
| --- | --- |

3.17

It is also necessary that any policy affecting the competitiveness of industry in this action plan takes into account the different policy objectives of the EU in a balanced way. This has not always been the case in the past (14). Consequently, better exploitation of synergies between Community policies is needed.

| 3.18 | It is to be expected that, when the rules of procedure and a mid-term plan will be discussed and approved in the Competitiveness Council, similar patterns will come into being in the Member States as regards industry in general as well as the issues for which the Member States themselves are responsible. This will also increase the influence of the Ministries responsible for industrial interests in the Member States. |
| --- | --- |

3.18

It is to be expected that, when the rules of procedure and a mid-term plan will be discussed and approved in the Competitiveness Council, similar patterns will come into being in the Member States as regards industry in general as well as the issues for which the Member States themselves are responsible. This will also increase the influence of the Ministries responsible for industrial interests in the Member States.

| 3.19 | The improvement of the regulatory framework implies, among other things, simplification and effective legislation at EU level. It must certainly not be limited to new regulations. ‘Better lawmaking’ is related both to the past and to the future. The proposal of the Dutch Presidency to give greater attention to the simplification of legislation, and the reduction of the administrative burden must be worked out (15). It is necessary to coordinate the directives and regulations that have general aims (horizontal policies) involving industrial safety, energy saving, waste etc. because they are interrelated and, sometimes, their effects are contradictory. Environmental directives have a special impact. Because these directives focus primarily on objectives, without harmonising implementation procedures, inconsistent application by Member States can lead to distortion of the market. Impact assessment and implementation are of utmost importance, since credibility of policies depends on their effectiveness. |
| --- | --- |

3.19

The improvement of the regulatory framework implies, among other things, simplification and effective legislation at EU level. It must certainly not be limited to new regulations. ‘Better lawmaking’ is related both to the past and to the future. The proposal of the Dutch Presidency to give greater attention to the simplification of legislation, and the reduction of the administrative burden must be worked out (15). It is necessary to coordinate the directives and regulations that have general aims (horizontal policies) involving industrial safety, energy saving, waste etc. because they are interrelated and, sometimes, their effects are contradictory. Environmental directives have a special impact. Because these directives focus primarily on objectives, without harmonising implementation procedures, inconsistent application by Member States can lead to distortion of the market. Impact assessment and implementation are of utmost importance, since credibility of policies depends on their effectiveness.

| 3.20 | Some aspects are of specific interest for the new Member States who must not limit themselves to acquiring foreign investment for cost reasons; in order to strengthen the durable capabilities of their economies they will also have to diversify their own industrial activity. There are some major challenges ahead, such as improvement of environmental policies, focus on training and improving skills and the engagement of all stakeholders in the industrial field via sectoral social dialogue, inter alia. |
| --- | --- |

3.20

Some aspects are of specific interest for the new Member States who must not limit themselves to acquiring foreign investment for cost reasons; in order to strengthen the durable capabilities of their economies they will also have to diversify their own industrial activity. There are some major challenges ahead, such as improvement of environmental policies, focus on training and improving skills and the engagement of all stakeholders in the industrial field via sectoral social dialogue, inter alia.

| 3.21 | Market monitoring will have to be stepped up regarding products originating from outside the EU. Fair competition can only be safeguarded if there is a level playing field worldwide. In this connection, the EESC calls upon the Commission to strengthen its efforts in ensuring that appropriate labour, environmental and product standards are observed by all global players. |
| --- | --- |

3.21

Market monitoring will have to be stepped up regarding products originating from outside the EU. Fair competition can only be safeguarded if there is a level playing field worldwide. In this connection, the EESC calls upon the Commission to strengthen its efforts in ensuring that appropriate labour, environmental and product standards are observed by all global players.

| 3.22 | Another important element of industrial policy is the safeguarding of a level playing field worldwide as regards trade. Competition-distorting practices by third countries, such as state aid and dumping, need to be subjected to systematic and detailed monitoring by the European Commission. Trade-policy measures need to be implemented resolutely, when the relevant criteria are met. |
| --- | --- |

3.22

Another important element of industrial policy is the safeguarding of a level playing field worldwide as regards trade. Competition-distorting practices by third countries, such as state aid and dumping, need to be subjected to systematic and detailed monitoring by the European Commission. Trade-policy measures need to be implemented resolutely, when the relevant criteria are met.

| 3.23 | Along with ‘better lawmaking’ and the promotion of synergies between Community policies, the third pillar of the ‘new style’ industrial policy is the sectoral approach, an approach based on market conformity and open markets and one which is in line with the desirable horizontal policies. The EESC fully endorses this objective, which is already underway in practice. As the sectoral approach focuses on specific characteristics and developments of individual sectors, it may also be beneficial to the other two pillars, namely ‘better lawmaking’ and the promotion of synergies between EU policies. Environmental policy, vocational and professional training and research and development programmes can be formulated and implemented more successfully when embedded in a sectoral approach. |
| --- | --- |

3.23

Along with ‘better lawmaking’ and the promotion of synergies between Community policies, the third pillar of the ‘new style’ industrial policy is the sectoral approach, an approach based on market conformity and open markets and one which is in line with the desirable horizontal policies. The EESC fully endorses this objective, which is already underway in practice. As the sectoral approach focuses on specific characteristics and developments of individual sectors, it may also be beneficial to the other two pillars, namely ‘better lawmaking’ and the promotion of synergies between EU policies. Environmental policy, vocational and professional training and research and development programmes can be formulated and implemented more successfully when embedded in a sectoral approach.

| 3.24 | Sectoral analyses will show the dynamics of the developments in world context. They will have to put the picture of European industry in the perspective of the other partners and competitors on the world scene. They will show the interaction between industry and services. They also take proper account of social aspects, such as industrial relations and employment. Finally, sectoral analyses will also serve to identify the obstacles business faces as a result of specific EU rules and legislation. Consequently, business should be consulted more often at an early stage — when impact assessments are done — in order to identify desirable rules and procedures at EU level. |
| --- | --- |

3.24

Sectoral analyses will show the dynamics of the developments in world context. They will have to put the picture of European industry in the perspective of the other partners and competitors on the world scene. They will show the interaction between industry and services. They also take proper account of social aspects, such as industrial relations and employment. Finally, sectoral analyses will also serve to identify the obstacles business faces as a result of specific EU rules and legislation. Consequently, business should be consulted more often at an early stage — when impact assessments are done — in order to identify desirable rules and procedures at EU level.

| 3.25 | In this respect the Commission methodology for tackling competitiveness problems based on analysis, consultation and action (page 19) has to be extended. The Commission rightly cites cases as G10, STAR 21 and LeaderShip as examples. |
| --- | --- |

3.25

In this respect the Commission methodology for tackling competitiveness problems based on analysis, consultation and action (page 19) has to be extended. The Commission rightly cites cases as G10, STAR 21 and LeaderShip as examples.

| 3.26 | LeaderShip 2015 (16) is a graphic example, provided it is executed correctly. The target is to safeguard a profitable future for the EU shipbuilding and ship-repair industries in an open market. It has brought together the Commission and European business. It has led to a common identification of the problems. It has defined eight chapters for action either by the industry or by the Commission. It is the basis for a fruitful social dialogue with the social partners on the modernisation process. |
| --- | --- |

3.26

LeaderShip 2015 (16) is a graphic example, provided it is executed correctly. The target is to safeguard a profitable future for the EU shipbuilding and ship-repair industries in an open market. It has brought together the Commission and European business. It has led to a common identification of the problems. It has defined eight chapters for action either by the industry or by the Commission. It is the basis for a fruitful social dialogue with the social partners on the modernisation process.

| 3.27 | Other sectors may follow. There is no one-size-fits-all model. As the Member States themselves and their policies are also involved, it is desirable that tailor-made approaches as a consequence of these sectoral analyses will result in commitments of the industry, the Commission and the Member States alike. As far as the Member States are concerned such commitments may also contribute to promote exchanges of experiences and best practice. In the EESC's view, sectoral observatories at EU level could be very useful and should be set up. |
| --- | --- |

3.27

Other sectors may follow. There is no one-size-fits-all model. As the Member States themselves and their policies are also involved, it is desirable that tailor-made approaches as a consequence of these sectoral analyses will result in commitments of the industry, the Commission and the Member States alike. As far as the Member States are concerned such commitments may also contribute to promote exchanges of experiences and best practice. In the EESC's view, sectoral observatories at EU level could be very useful and should be set up.

| 3.28 | Because of the overwhelmingly important aspect of ‘knowledge’ and R&D and because of the phenomenon of worldwide ‘brains mobility’ (scientists, searchers, managers and professionals) the EESC strongly endorses the set-up of Technology Platforms in which industrial sectors and business are expected to participate actively. They must not be limited to business itself, but they have also to include other key players such as leading technological institutes and universities. These Platforms may also generate new private-private and public-private alliances in Europe. (17) |
| --- | --- |

3.28

Because of the overwhelmingly important aspect of ‘knowledge’ and R&D and because of the phenomenon of worldwide ‘brains mobility’ (scientists, searchers, managers and professionals) the EESC strongly endorses the set-up of Technology Platforms in which industrial sectors and business are expected to participate actively. They must not be limited to business itself, but they have also to include other key players such as leading technological institutes and universities. These Platforms may also generate new private-private and public-private alliances in Europe. (17)

| 3.29 | It is necessary to create a European environment for knowledge that derives from an effective synergy between university, technological institutes and industry in order to promote applied technology. Sector specific features have to be taken into account. Furthermore, establishing a knowledge-based economy must be accompanied by the tools needed for life-long training, which should also be undertaken within institutions and universities. Once more, this can be fostered by sector-based impulses. In this context, the role of professional and executive management should be reinforced, with a view to mobility within the European Union. |
| --- | --- |

3.29

It is necessary to create a European environment for knowledge that derives from an effective synergy between university, technological institutes and industry in order to promote applied technology. Sector specific features have to be taken into account. Furthermore, establishing a knowledge-based economy must be accompanied by the tools needed for life-long training, which should also be undertaken within institutions and universities. Once more, this can be fostered by sector-based impulses. In this context, the role of professional and executive management should be reinforced, with a view to mobility within the European Union.

| 3.30 | In this connection, and in response to projects elsewhere in the world, major initiatives need to be launched to generate synergies between different sectors (e.g. Galileo, defence industry) and to stimulate cooperation between knowledge centres and industry, establishing the necessary conditions for the creation of groupings (e.g. Airbus) and clusters; the latter may boost competitiveness and foster economic, social and territorial cohesion. (18) |
| --- | --- |

3.30

In this connection, and in response to projects elsewhere in the world, major initiatives need to be launched to generate synergies between different sectors (e.g. Galileo, defence industry) and to stimulate cooperation between knowledge centres and industry, establishing the necessary conditions for the creation of groupings (e.g. Airbus) and clusters; the latter may boost competitiveness and foster economic, social and territorial cohesion. (18)

| 3.31 | Human resources are more than ever of paramount importance. In the ongoing process of industrial change this is, of course, a responsibility both of the management and the employees and their organisations. It implies among others an emphasis on quality, professionalisation, skills and motivation. (19) |
| --- | --- |

3.31

Human resources are more than ever of paramount importance. In the ongoing process of industrial change this is, of course, a responsibility both of the management and the employees and their organisations. It implies among others an emphasis on quality, professionalisation, skills and motivation. (19)

| 3.32 | In this respect it has to be duly taken into account that young people have become disenchanted with the idea of working in industry due to a lack of positive image. This has led, inter alia, to the scarcity of skilled labour. |
| --- | --- |

3.32

In this respect it has to be duly taken into account that young people have become disenchanted with the idea of working in industry due to a lack of positive image. This has led, inter alia, to the scarcity of skilled labour.

| 3.33 | In addition, the EESC argues that in the framework of the desirable sectoral approach sectoral social dialogues will enhance the commitment of employees and their organisations in view to adjustment and quality. Tailor-made approaches on a sectoral level will also promote discussions between the social partners on specific requirements as concerns competences, adaptability and capabilities of the employees. |
| --- | --- |

3.33

In addition, the EESC argues that in the framework of the desirable sectoral approach sectoral social dialogues will enhance the commitment of employees and their organisations in view to adjustment and quality. Tailor-made approaches on a sectoral level will also promote discussions between the social partners on specific requirements as concerns competences, adaptability and capabilities of the employees.

| 3.34 | In order to promote the implementation of specific measures based on the sectoral analyses, each of these has to be discussed in the Competitiveness Council. In the view of the EESC, this Council configuration is bound to play a decisive role in ‘new style’ industrial policy by providing a general platform for the involved interests. Adequate sectoral analyses conducted by the Commission and the Council and, ultimately, negotiations on measures to be taken in the above-mentioned fields will also reinforce the commitment of the national administrations, which, alongside business, play an outstanding role in creating a future-oriented environment. |
| --- | --- |

3.34

In order to promote the implementation of specific measures based on the sectoral analyses, each of these has to be discussed in the Competitiveness Council. In the view of the EESC, this Council configuration is bound to play a decisive role in ‘new style’ industrial policy by providing a general platform for the involved interests. Adequate sectoral analyses conducted by the Commission and the Council and, ultimately, negotiations on measures to be taken in the above-mentioned fields will also reinforce the commitment of the national administrations, which, alongside business, play an outstanding role in creating a future-oriented environment.

| 3.35 | In such an environment and in this approach there is no room for a policy of ‘picking the winners’ as former Commissioner Liikanen rightly said. The same goes for ‘national champions’. (20) This would place the whole debate on ‘new style’ industrial policy on the wrong footing. The objective is to promote a climate in which risk taking by European industry is encouraged. A policy of empowering the winners or backing the winners is much more suitable. (21) Financial and non-financial instruments to realise this objective have to be (re-)examined. |
| --- | --- |

3.35

In such an environment and in this approach there is no room for a policy of ‘picking the winners’ as former Commissioner Liikanen rightly said. The same goes for ‘national champions’. (20) This would place the whole debate on ‘new style’ industrial policy on the wrong footing. The objective is to promote a climate in which risk taking by European industry is encouraged. A policy of empowering the winners or backing the winners is much more suitable. (21) Financial and non-financial instruments to realise this objective have to be (re-)examined.

4.   Specific conclusions

| 4.1 | The EESC welcomes the initiative of the Commission (in particular of Commissioner Liikanen and DG Enterprise) to restore ‘industrial policy’ as a priority to the EU agenda in addition to horizontal policies. This initiative corresponds with similar developments in various Member States and may promote common views across the Union in this area. It will contribute to define better the ways and means to boost European competitiveness. Hopefully, it will also be of help in defining appropriate and concrete goals in the Mid-term Review of the Lisbon Strategy in 2005. |
| --- | --- |

4.1

The EESC welcomes the initiative of the Commission (in particular of Commissioner Liikanen and DG Enterprise) to restore ‘industrial policy’ as a priority to the EU agenda in addition to horizontal policies. This initiative corresponds with similar developments in various Member States and may promote common views across the Union in this area. It will contribute to define better the ways and means to boost European competitiveness. Hopefully, it will also be of help in defining appropriate and concrete goals in the Mid-term Review of the Lisbon Strategy in 2005.

| 4.2 | The EESC notes that, in view of a ‘new style’ industrial policy, there is an urgent need for a confidence-inspiring institutional framework in terms of the proper division of tasks within the Union — who is responsible for what, and when? — and in terms of the implementation in the Member States of objectives and directives decided upon by the European Council and the various Council configurations. (22) |
| --- | --- |

4.2

The EESC notes that, in view of a ‘new style’ industrial policy, there is an urgent need for a confidence-inspiring institutional framework in terms of the proper division of tasks within the Union — who is responsible for what, and when? — and in terms of the implementation in the Member States of objectives and directives decided upon by the European Council and the various Council configurations. (22)

| 4.3 | The EESC supports the three elements of the ‘new style’ industrial policy: better regulation, promoting synergies between different Community policies and the development of the sectoral dimension. In view of transparency and visibility a better coordination is desirable within the Commission (e.g. under the aegis of DG Enterprise) and in the Council of Ministers. A better coordination must also lead to a much needed and fruitful synergy of policies. To that end a mid-term action plan approved by the Commission and by the Competitiveness Council, that is annually evaluated, would be most welcome. |
| --- | --- |

4.3

The EESC supports the three elements of the ‘new style’ industrial policy: better regulation, promoting synergies between different Community policies and the development of the sectoral dimension. In view of transparency and visibility a better coordination is desirable within the Commission (e.g. under the aegis of DG Enterprise) and in the Council of Ministers. A better coordination must also lead to a much needed and fruitful synergy of policies. To that end a mid-term action plan approved by the Commission and by the Competitiveness Council, that is annually evaluated, would be most welcome.

| 4.4 | The ESC welcomes the analysis and many recommendations in the report Facing the Challenge. (23) Nonetheless, it is a pity that the report does not refer to ‘new-style’ industrial policy as a useful tool to face challenges on world markets. In particular the sectoral approach and the need for well coordinated policies in that framework should have been emphasised. The EESC endorses the proposal of national action plans. In order to enhance the output of these action plans and of EU policies, each must be coordinated effectively in the Competitiveness Council configuration. The EESC urges that these elements be taken into account in the preparation of the Mid-term Review of the Lisbon Strategy in March 2005. |
| --- | --- |

4.4

The ESC welcomes the analysis and many recommendations in the report Facing the Challenge. (23) Nonetheless, it is a pity that the report does not refer to ‘new-style’ industrial policy as a useful tool to face challenges on world markets. In particular the sectoral approach and the need for well coordinated policies in that framework should have been emphasised. The EESC endorses the proposal of national action plans. In order to enhance the output of these action plans and of EU policies, each must be coordinated effectively in the Competitiveness Council configuration. The EESC urges that these elements be taken into account in the preparation of the Mid-term Review of the Lisbon Strategy in March 2005.

| 4.5 | The EESC emphasises the need for raising awareness, which is indispensable for consensus and public backing. It must become clear that the European society as a whole is involved in this worldwide industrial change that requires efforts in a much broader field than in business alone. |
| --- | --- |

4.5

The EESC emphasises the need for raising awareness, which is indispensable for consensus and public backing. It must become clear that the European society as a whole is involved in this worldwide industrial change that requires efforts in a much broader field than in business alone.

| 4.6 | The EESC believes that sectoral analyses can and will contribute positively to a better understanding of developments at stake. These will also favour a closer cooperation between public and private parties as well as tailor-made approaches and desirable adjustment of policies at EU-level and national level in order to promote the creation of new opportunities and, consequently, to contribute to the realisation of the Lisbon Strategy. Sectoral frameworks are also an appropriate vehicle for social dialogues aiming at promoting broadly shared commitment and at promoting the quality of human resources. |
| --- | --- |

4.6

The EESC believes that sectoral analyses can and will contribute positively to a better understanding of developments at stake. These will also favour a closer cooperation between public and private parties as well as tailor-made approaches and desirable adjustment of policies at EU-level and national level in order to promote the creation of new opportunities and, consequently, to contribute to the realisation of the Lisbon Strategy. Sectoral frameworks are also an appropriate vehicle for social dialogues aiming at promoting broadly shared commitment and at promoting the quality of human resources.

| 4.7 | A sectoral approach of this type increasingly requires knowledge of world trends and industrial change within the services of the Commission. The EESC recommends strongly that Commission officials deepen their practical knowledge of what is at stake in the private sector. The CCMI and the European Monitoring Centre on Change can contribute to sectoral analyses as consultative partners without encroaching upon the role of the social players. |
| --- | --- |

4.7

A sectoral approach of this type increasingly requires knowledge of world trends and industrial change within the services of the Commission. The EESC recommends strongly that Commission officials deepen their practical knowledge of what is at stake in the private sector. The CCMI and the European Monitoring Centre on Change can contribute to sectoral analyses as consultative partners without encroaching upon the role of the social players.

| 4.8 | Taking into account the developments in the other big world regions — costs, competences and the combination of both — the decisive factors for European competitiveness are knowledge, quality, both of companies as such and of human resources and skills, and adequate organisation. Future-oriented policies and measures in these fields will be crucial. |
| --- | --- |

4.8

Taking into account the developments in the other big world regions — costs, competences and the combination of both — the decisive factors for European competitiveness are knowledge, quality, both of companies as such and of human resources and skills, and adequate organisation. Future-oriented policies and measures in these fields will be crucial.

Brussels, 15 December 2004.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  European industry's place in the International Division of Labour: situation and prospects, July 2004, report commissioned by DG Trade of the European Commission and carried out by CEPII-CIREM (European Consortium for Trade Policy Analysis- ECTA).

1

European industry's place in the International Division of Labour: situation and prospects

(2)  COM(2002) 714 final, 11.12.2002. The Committee issued its Opinion on 17.7.2003 (Official Journal C 234, 30.9.2003, pages 76-85). This Opinion also had CCMI input, which can be consulted at the following website: http://www.esc.eu.int/ccmi/documents/docs/divers/di_ces25-2003_fin_rev_di_en.doc.

2

(3)  Presidency Conclusions pt. 21, Spring European Council 20/21.3.2003.

3

(4)  Fostering Structural Change: an Industrial Policy for an Enlarged Europe, COM(2004) 274 final.

4

(5)  Statement of Commissioner Liikanen on European Industrial Policy Day, 27 May 2004, SPEECH/04/268.

5

(6)  This objective is already worked out in the Commission's document: Some Key Issues in Europe's Competitiveness – Towards an Integrated Approach, COM(2003) 704 final.

6

(7)  The Bangemann report.

7

(8)  See the related CCMI Opinion on The scope and effects of company relocations, currently being drawn up.

8

(9)  Cf. footnote no. 2.

9

(10)  ‘The European Challenge’, message of the European Round Table of Industrialists to the Spring European Council, March 2003.

10

(11)  The Commission is mentioning among other factors the emphasis to be laid on ‘competitiveness’ in the regional policy, and the outcome of the Task Force for Employment in Europe under Mr Wim Kok, established on 1.4.2003. In this regard it is worthwhile to see the related Opinion of the CCIC on Industrial change and economic, social and territorial cohesion.

11

(12)  A very interesting example is the study The Significance of Competitive Manufacturing Industries for the Development of the Service Sector, Bremen, December 2003. It can be consulted at the following website: http://www.bmwi.de/Navigation/Service/bestellservice,did=31812,render=renderPrint.html

12

The Significance of Competitive Manufacturing Industries for the Development of the Service Sector

(13)  This objective has directly to do with effective economic governance. The importance of a transparent and visible framework, especially as concerns the Competitiveness Council, is underlined in the EESC opinion on Better economic governance in the EU.

13

Better economic governance in the EU

(14)  See also Mr Liikanen's speech on 27 May in favour of an active industrial policy (cf. footnote no. 4).

14

(15)  Cf. also COM(2004) 274, chapter 5, page 39.

15

(16)  See the Commission's document COM(2003) 717 final and the respective Opinions of the EESC: OJ C 241 of 28.9.2004.

16

(17)  Regarding technology platforms, cf. the Complementary Opinion of the CCMI on the Commission Communication Science and technology, the key to Europe's future – Guidelines for future European Union policy to support research (COM(2004) 353 final), CCMI/015; rapporteur: Mr. Van Iersel.

17

(18)  See the EESC Opinion on Industrial change and economic, social and territorial cohesion
  OJ C 241 of 28.9.2004, especially points 1.4, 3 and 10.i).

18

Industrial change and economic, social and territorial cohesion

(19)  Cf. the EESC Opinion on Industrial Change: current situation and prospects, An overall approach
  OJ C 10 of 14.1.2004, points 2.2.2.14 and 3.9.

19

Industrial Change: current situation and prospects, An overall approach

(20)  See footnote 5.

20

(21)  Ibid.

21

(22)  Cf. EESC Opinion on Better economic governance in the EU
  OJ C 74 of 23.3.2005.

22

Better economic governance in the EU

(23)  Facing the challenge, the Lisbon Strategy for growth and employment, report from the High Level Group chaired by Wim Kok, November 2004.

23

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| 28.6.2005 | EN | Official Journal of the European Union | C 157/83 |
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28.6.2005

EN

Official Journal of the European Union

C 157/83

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Opinion of the European Economic and Social Committee on the ‘Proposal for a Directive of the European Parliament and of the Council on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation’

(COM(2004) 279 final — 2004/0084 (COD))

(2005/C 157/14)

On 18 May 2004, 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 preparing the Committee's work on the subject, adopted its opinion on 25 November 2004 The rapporteur was Mrs Sharma.

At its 413th plenary session on 15/16 December 2004 (meeting of 15 December 2004), the European Economic and Social Committee adopted the following opinion by 147 votes in favour, one vote against and six abstentions.

1.   Introduction

| 1.1 | The proposal's principal objective is to enhance transparency and clarity of equal treatment legislation and to facilitate effective application by reinforcing the acquis and avoiding regression. A single piece of legislation is needed with a clear structure, easily accessible and legible to support the achievement of socio-economic Community policy goals for more and better jobs for women. |
| --- | --- |

1.1

The proposal's principal objective is to enhance transparency and clarity of equal treatment legislation and to facilitate effective application by reinforcing the acquis and avoiding regression. A single piece of legislation is needed with a clear structure, easily accessible and legible to support the achievement of socio-economic Community policy goals for more and better jobs for women.

| 1.2 | Regrouping the provisions of the Directives on access to employment, equal pay, occupational social security and the burden of proof opens the chance to present a single coherent text that is free of contradicting definitions. The proposal accounts for recent developments in European case law by updating existing secondary legislation in line with judgements of the European Court of Justice which have clarified and further developed the concept of equality. It also serves to guarantee a high level of legal certainty by putting together provisions of Directives linked by their subject — all this in the context of the new political environment which presents the Union as being open, understandable and relevant to daily life. |
| --- | --- |

1.2

Regrouping the provisions of the Directives on access to employment, equal pay, occupational social security and the burden of proof opens the chance to present a single coherent text that is free of contradicting definitions. The proposal accounts for recent developments in European case law by updating existing secondary legislation in line with judgements of the European Court of Justice which have clarified and further developed the concept of equality. It also serves to guarantee a high level of legal certainty by putting together provisions of Directives linked by their subject — all this in the context of the new political environment which presents the Union as being open, understandable and relevant to daily life.

| 1.3 | The Directive applies to the working population, including self-employed persons, persons whose activity is interrupted by illness, maternity, accident or involuntary unemployment and persons seeking employment, and to retired and disabled workers, and to those claiming under them, in accordance with national law and/or practice. |
| --- | --- |

1.3

The Directive applies to the working population, including self-employed persons, persons whose activity is interrupted by illness, maternity, accident or involuntary unemployment and persons seeking employment, and to retired and disabled workers, and to those claiming under them, in accordance with national law and/or practice.

2.   Background

| 2.1 | The Treaty of Amsterdam reinforced Community competence concerning equality between men and women and introduced the objective to eliminate inequalities in all fields of civil life and to promote gender equality. Unequal treatment not only violates a fundamental principle of the European Union, but it is also a limiting factor for economic growth and prosperity of national economy. |
| --- | --- |

2.1

The Treaty of Amsterdam reinforced Community competence concerning equality between men and women and introduced the objective to eliminate inequalities in all fields of civil life and to promote gender equality. Unequal treatment not only violates a fundamental principle of the European Union, but it is also a limiting factor for economic growth and prosperity of national economy.

| 2.2 | Equal treatment is a prerequisite for the EU to succeed in reaching the objectives for growth and sustainable economic, social and environmental development. Europe will more than ever before have to rely on a much higher proportion of women in the working population which can only be achieved by creating a floor of equal rights granted to all. |
| --- | --- |

2.2

Equal treatment is a prerequisite for the EU to succeed in reaching the objectives for growth and sustainable economic, social and environmental development. Europe will more than ever before have to rely on a much higher proportion of women in the working population which can only be achieved by creating a floor of equal rights granted to all.

| 2.3 | Research has shown that discrimination based on gender as well as the lack of specific support for employees with family responsibilities is a significant barrier which inhibits the growth of female employment in the first place. |
| --- | --- |

2.3

Research has shown that discrimination based on gender as well as the lack of specific support for employees with family responsibilities is a significant barrier which inhibits the growth of female employment in the first place.

2.4   Evolution of the legislation on equal treatment between men and women

Equal treatment for men and women is fundamental to the social concept of the European Community. As early as 1976, the principle of equal pay for men and women as laid down in Article 119 EEC (Article 141 EC) was described as one of the fundamental principles of Community law by the European Court of Justice. (1)

| — | The first equal treatment Directive adopted in 1975 deals with equal pay. (2) |
| --- | --- |

—

The first equal treatment Directive adopted in 1975 deals with equal pay. (2)

| — | In 1976, the Directive on equal treatment in employment followed. (3) This Directive was substantially amended in 2002 by Directive 2002/73 that defined ‘harassment’ and ‘sexual harassment’. (4) |
| --- | --- |

—

In 1976, the Directive on equal treatment in employment followed. (3) This Directive was substantially amended in 2002 by Directive 2002/73 that defined ‘harassment’ and ‘sexual harassment’. (4)

| — | In 1978, a Directive relating to statutory security schemes was adopted. (5) |
| --- | --- |

—

In 1978, a Directive relating to statutory security schemes was adopted. (5)

| — | In 1986, a Directive introducing the principle of equal treatment for men and women in occupational social schemes was adopted. (6) This Directive was later amended. (7) |
| --- | --- |

—

In 1986, a Directive introducing the principle of equal treatment for men and women in occupational social schemes was adopted. (6) This Directive was later amended. (7)

| — | In 1986 a Directive on equal treatment of men and women engaged in an activity in a self-employed capacity including agriculture was introduced with provisions on protection of self-employed women during pregnancy and motherhood. (8) |
| --- | --- |

—

In 1986 a Directive on equal treatment of men and women engaged in an activity in a self-employed capacity including agriculture was introduced with provisions on protection of self-employed women during pregnancy and motherhood. (8)

| — | In 1992 a Directive on protection of pregnant workers was adopted as a health and safety measure, including a statutory right to maternity leave of at least 14 weeks, time off for ante-natal examinations and protection against dismissal. (9) |
| --- | --- |

—

In 1992 a Directive on protection of pregnant workers was adopted as a health and safety measure, including a statutory right to maternity leave of at least 14 weeks, time off for ante-natal examinations and protection against dismissal. (9)

| — | In 1995 the framework agreement on parental leave was concluded between the European level cross industry organisations and this was subsequently adopted as a Directive; it points out that equal treatment also means applying measures to men and recognises the importance of fathers in child care. (10) This Directive was later amended and extended to cover the UK. (11) |
| --- | --- |

—

In 1995 the framework agreement on parental leave was concluded between the European level cross industry organisations and this was subsequently adopted as a Directive; it points out that equal treatment also means applying measures to men and recognises the importance of fathers in child care. (10) This Directive was later amended and extended to cover the UK. (11)

| — | In 1997 the burden of proof Directive was adopted. (12) This Directive was also later extended to cover the UK. (13) |
| --- | --- |

—

In 1997 the burden of proof Directive was adopted. (12) This Directive was also later extended to cover the UK. (13)

The European Court of Justice has always played an important role in contributing to diminish effectively discrimination of women in employment. The Court interprets Community Law and naturally develops the incomplete legal concepts of relatively young Community Law to a coherent system of law (14). In the field of equal opportunities, the court has predominantly used the construction of direct and indirect discrimination in pursuing the efficient application of equal treatment legislation (15) and has made clear that protection against sex discrimination relates also to men. (16)

3.   Specific comments

| 3.1 | The EESC congratulates the Commission on its work towards simplifying and making more accessible the bulk of the gender directives. Gender equality is a fundamental right in all aspects of social and economic life and therefore legislation must be clear and easy for everybody to read. |
| --- | --- |

3.1

The EESC congratulates the Commission on its work towards simplifying and making more accessible the bulk of the gender directives. Gender equality is a fundamental right in all aspects of social and economic life and therefore legislation must be clear and easy for everybody to read.

| 3.2 | A 30-year process of gender legislation has created 12 directives and the Committee notes that the Commission is now amalgamating seven of these directives with the common theme of equal treatment into a single recast version. (17) The Commission has chosen to recast these seven directives since there are many common threads throughout the Directives causing repetition and overlapping, but also a certain lack of coherence in the definitions. |
| --- | --- |

3.2

A 30-year process of gender legislation has created 12 directives and the Committee notes that the Commission is now amalgamating seven of these directives with the common theme of equal treatment into a single recast version. (17) The Commission has chosen to recast these seven directives since there are many common threads throughout the Directives causing repetition and overlapping, but also a certain lack of coherence in the definitions.

| 3.3 | The recast process modernises, clarifies and simplifies the seven into one by reducing the overall length of the texts and incorporating one set of definitions, including definitions on direct and indirect discrimination and harassment. The Committee welcomes this move in the light of the enlargement and the Commission's commitment to better regulation. |
| --- | --- |

3.3

The recast process modernises, clarifies and simplifies the seven into one by reducing the overall length of the texts and incorporating one set of definitions, including definitions on direct and indirect discrimination and harassment. The Committee welcomes this move in the light of the enlargement and the Commission's commitment to better regulation.

| 3.4 | The Committee notes that five gender directives have been omitted from the recasting exercise through lack of commonality. (18) These include the two parental rights' Directives, which were framed in conjunction with employer and employee organisations and are not considered to fall under equal treatment; the Directive on maternity and nursing mother rights, which fall under health and safety legislation; the Directive on equal treatment in matters of social security and the Directive on protection of women's rights in self-employment, including agriculture. |
| --- | --- |

3.4

The Committee notes that five gender directives have been omitted from the recasting exercise through lack of commonality. (18) These include the two parental rights' Directives, which were framed in conjunction with employer and employee organisations and are not considered to fall under equal treatment; the Directive on maternity and nursing mother rights, which fall under health and safety legislation; the Directive on equal treatment in matters of social security and the Directive on protection of women's rights in self-employment, including agriculture.

| 3.5 | The Committee supports the Commission's view that inclusion of these directives would complicate and lengthen the recast Directive. However, the EESC wishes to highlight Directive 86/613/EEC (19) as being in need of an immediate review in the light of the numbers of the female self-employed and women employed in agriculture. It is the EESC view that this particular piece of legislation is weak in content, providing insufficient protection for women. Given its relevance to the Lisbon objectives, an urgent update is therefore necessary. |
| --- | --- |

3.5

The Committee supports the Commission's view that inclusion of these directives would complicate and lengthen the recast Directive. However, the EESC wishes to highlight Directive 86/613/EEC (19) as being in need of an immediate review in the light of the numbers of the female self-employed and women employed in agriculture. It is the EESC view that this particular piece of legislation is weak in content, providing insufficient protection for women. Given its relevance to the Lisbon objectives, an urgent update is therefore necessary.

| 3.6 | The Commission has made two additions to the Directives that directly reflects well established case law and therefore just clarifies legislation already in place. These additions concern equal pay (Article 4) and occupational pensions for civil servants (Article 6). (20) The EESC notes that the European Court of Justice is instrumental in strengthening European law. Inclusion of case law in the recast directive adds clarity and purpose. |
| --- | --- |

3.6

The Commission has made two additions to the Directives that directly reflects well established case law and therefore just clarifies legislation already in place. These additions concern equal pay (Article 4) and occupational pensions for civil servants (Article 6). (20) The EESC notes that the European Court of Justice is instrumental in strengthening European law. Inclusion of case law in the recast directive adds clarity and purpose.

| 3.7 | The codification exercise is technical and the Commission has stated that the substance of the directives have not been added to, excepting Article 21 the provision on the bodies for the promotion of equal treatment in the ‘Horizontal Provisions’ of Title III. The inclusion of the ‘Horizontal Provisions’ across the whole directive now increases, albeit marginally, the powers of equality bodies by broadening the scope of application. This may open the door for further extension of powers at a later date. The EESC points out that whilst the substance has not changed, updating and modernising the Directives, together with the resulting case law may imply changes in the long term. |
| --- | --- |

3.7

The codification exercise is technical and the Commission has stated that the substance of the directives have not been added to, excepting Article 21 the provision on the bodies for the promotion of equal treatment in the ‘Horizontal Provisions’ of Title III. The inclusion of the ‘Horizontal Provisions’ across the whole directive now increases, albeit marginally, the powers of equality bodies by broadening the scope of application. This may open the door for further extension of powers at a later date. The EESC points out that whilst the substance has not changed, updating and modernising the Directives, together with the resulting case law may imply changes in the long term.

4.   Conclusion

| 4.1 | Gender equality has been supported by 30 years of legislation and whilst the EESC commends the Commission for its move to simplify and make the directive easier to read, true equality across Europe cannot be achieved without positive action on the part of all Member States in demanding equal treatment for men and women. The Committee believes that exchanging and promoting good practices and increasing social dialogue in this field are a concrete way of delivering progress and fully recognizes the fundamental role of the social partners, highlighting their activities within the ‘Work Programme of the European Social Partners 2003-2005’. The Commission must do more in promoting equal treatment, equal opportunities and the value of women to the European economy in order to achieve the Lisbon goals. |
| --- | --- |

4.1

Gender equality has been supported by 30 years of legislation and whilst the EESC commends the Commission for its move to simplify and make the directive easier to read, true equality across Europe cannot be achieved without positive action on the part of all Member States in demanding equal treatment for men and women. The Committee believes that exchanging and promoting good practices and increasing social dialogue in this field are a concrete way of delivering progress and fully recognizes the fundamental role of the social partners, highlighting their activities within the ‘Work Programme of the European Social Partners 2003-2005’. The Commission must do more in promoting equal treatment, equal opportunities and the value of women to the European economy in order to achieve the Lisbon goals.

| 4.2 | The EESC would request the Commission to consider encouraging Member States to produce a guideline booklet highlighting the main features of European gender directives as they have been transposed into national legislation, the obligations of employers and the rights of employees, to remove the ignorance surrounding equal treatment and enhance the benefits to the economy. |
| --- | --- |

4.2

The EESC would request the Commission to consider encouraging Member States to produce a guideline booklet highlighting the main features of European gender directives as they have been transposed into national legislation, the obligations of employers and the rights of employees, to remove the ignorance surrounding equal treatment and enhance the benefits to the economy.

Brussels, 15 December 2004.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

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(1)  ECJ 8.4.1976 – C-43/75 Defrenne II, ECR 1976, p. 455.

1

(2)  Council Directive 75/117/EEC of 10.2.1975 on the approximation of the laws of the Member States relating to the application of the principle of equal pay for men and women.

2

(3)  Council Directive 76/207/EEC of 9.2.1976 on the implementation of the principle of equal treatment for men and women as regards access to employment, vocational training and promotion, and working conditions.

3

(4)  Directive 2002/73/EC of the European Parliament and of the Council of 23.9.2002 amending Council Directive 76/207/EEC on the implementation of the principle of equal treatment for men and women as regards access to employment, vocational training and promotion, and working conditions.

4

(5)  Council Directive 79/7/EEC of 19.12.1978 on the progressive implementation of the principle of equal treatment for men and women in matters of social security.

5

(6)  Council Directive 86/378/EEC of 24.7.1986 on the implementation of the principle of equal treatment for men and women in occupational social security schemes.

6

(7)  Council Directive 96/97/EC of 20.12.1996 amending Directive 86/378/EEC of 24 July 1986 on the implementation of the principle of equal treatment for men and women in occupational social security schemes.

7

(8)  Council Directive 86/613/EEC of 11.12.1986 on the application of the principle of equal treatment between men and women engaged in an activity, including agriculture, in a self-employed capacity, and on the protection of self-employed women during pregnancy and motherhood.

8

(9)  Council Directive 92/85/EEC of 19.10.1992 on the introduction of measures to encourage improvements in the safety and health at work of pregnant workers and workers who have recently given birth or are breastfeeding.

9

(10)  Council Directive 96/34/EC of 3.6.1996 on the framework of parental leave concluded by UNICE, CEEP and the ETUC.

10

(11)  Council Directive 97/75/EC of 15.12.1997 amending and extending, to the United Kingdom of Great Britain and Northern Ireland, Directive 96/34/EC on the framework agreement on parental leave concluded by UNICE, CEEP and the ETUC.

11

(12)  Council Directive 97/80/EC of 15.12.1997 on the burden of proof in cases of discrimination based on sex.

12

(13)  Council Directive 98/52/EC of 13.7.1998 on the extension of Directive 97/80/EC on the burden of proof in cases of discrimination based on sex to the United Kingdom of Great Britain and Northern Ireland.

13

(14)  Streinz, Europarecht, 4th ed., Heidelberg 1999, para. 494.

14

th

(15)  Since ECJ Case C-96/80 Jenkins, Case C-170/84 Bilka v Weber von Hartz, Case C-171/88 Rinner-Kühn and Case C-184/89 Nimz v Freie und Hansestadt Hamburg.

15

(16)  ECJ Case C-450/93 Kalanke; ECJ Case C-409/95 Marschall.

16

(17)  Council Directive 75/117/EEC, Council Directive 76/207/EEC, Council Directive 86/378/EEC, Council Directive 96/97/EC, Council Directive 97/80/EC, Council Directive 98/52/EC, Directive 2002/73/EC of the European Parliament and of the Council.

17

(18)  Council Directive 79/7/EEC, Council Directive 86/613/EEC, Council Directive 92/85/EEC, Council Directive 96/34/EC, Council Directive 97/75/EC.

18

(19)  Council Directive 86/613/EEC of 11.12.1986 on the application of the principle of equal treatment between men and women engaged in an activity, including agriculture, in a self-employed capacity, and on the protection of self-employed women during pregnancy and motherhood.

19

(20)  Article 4 in the new Directive reflects that there, according to the Court, is ‘(nothing) in the wording of Article 141(1) EC (...) to suggest that the applicability of that provision is limited to situations in which men and women work for the same employer’ while Article 6 clarifies that it also applies to social security schemes concerning a particular category of public servants, if the benefits concerned are paid by reason of the employment relationship, are directly related to the period of service completed and the amount is calculated by reference to the last salary.

20

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| 28.6.2005 | EN | Official Journal of the European Union | C 157/86 |
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28.6.2005

EN

Official Journal of the European Union

C 157/86

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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’ — ‘Study on the links between legal and illegal migration’

(COM(2004) 412 final)

(2005/C 157/15)

On 4 June 2004, 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 communication.

The Section for Employment, Social Affairs and Citizenship, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 24 November 2004. The rapporteur was Mr Pariza Castaños.

At its 413th plenary session on 15 and 16 December 2004 (meeting of 15 December 2004), the European Economic and Social Committee adopted the following opinion by 138 votes, with 8 abstentions.

1.   Summary of the Communication

| 1.1 | The Thessaloniki European Council of July 2003 stressed the need for the EU to explore legal means for third country nationals to migrate to the Union, taking into account the reception capacity of the Member States, within the framework of an enhanced co-operation with the countries of origin. The Commission has presented the results of a study requested by the European Council on the links between legal and illegal migration. It asks whether or not legal avenues for the admission of migrants reduce incentives for illegal migration. Following this Communication, the Commission will present a Green Paper on legal channels for immigration. |
| --- | --- |

1.1

The Thessaloniki European Council of July 2003 stressed the need for the EU to explore legal means for third country nationals to migrate to the Union, taking into account the reception capacity of the Member States, within the framework of an enhanced co-operation with the countries of origin. The Commission has presented the results of a study requested by the European Council on the links between legal and illegal migration. It asks whether or not legal avenues for the admission of migrants reduce incentives for illegal migration. Following this Communication, the Commission will present a Green Paper on legal channels for immigration.

| 1.2 | In the first part, the Commission examines existing legal channels for labour migration. The admission of third-country nationals for the purpose of employment is governed by the legislation in force in each Member State and this varies considerably. Some States have closed their doors to labour migration, whilst others have policies that allow immigrant workers to enter the country if they have a job offer, with due respect for the principle of national preference. Some States also admit self-employed workers. Most economic migrants are initially admitted on a temporary residence permit, which may last from between one to five years. |
| --- | --- |

1.2

In the first part, the Commission examines existing legal channels for labour migration. The admission of third-country nationals for the purpose of employment is governed by the legislation in force in each Member State and this varies considerably. Some States have closed their doors to labour migration, whilst others have policies that allow immigrant workers to enter the country if they have a job offer, with due respect for the principle of national preference. Some States also admit self-employed workers. Most economic migrants are initially admitted on a temporary residence permit, which may last from between one to five years.

| 1.3 | The number of economic immigrants admitted by States in any given year is also determined by very different methods. Some States only accept highly skilled workers (for example the German Green Card system) and the United Kingdom's Highly Skilled Migrant Programme). Others (a number of southern European States) also accept less skilled workers under a range of procedures. Some States, such as Italy, use a quota system. Others, including Spain, have even signed bilateral agreements with some countries to allow their nationals to be admitted. The Commission Communication examines the various instruments used to manage immigration. |
| --- | --- |

1.3

The number of economic immigrants admitted by States in any given year is also determined by very different methods. Some States only accept highly skilled workers (for example the German Green Card system) and the United Kingdom's Highly Skilled Migrant Programme). Others (a number of southern European States) also accept less skilled workers under a range of procedures. Some States, such as Italy, use a quota system. Others, including Spain, have even signed bilateral agreements with some countries to allow their nationals to be admitted. The Commission Communication examines the various instruments used to manage immigration.

| 1.4 | The Commission also looks at the regularisation measures adopted in various countries, such as Belgium. On the one hand, these measures are welcomed because they integrate immigrants into society and prevent them from being exploited in the workplace, but on the other, they are criticised because they act as an incentive for illegal immigration. |
| --- | --- |

1.4

The Commission also looks at the regularisation measures adopted in various countries, such as Belgium. On the one hand, these measures are welcomed because they integrate immigrants into society and prevent them from being exploited in the workplace, but on the other, they are criticised because they act as an incentive for illegal immigration.

| 1.5 | In the second part, the Commission points out that illegal immigration takes many forms and that it is extremely difficult to obtain precise information. Although the exact scale of illegal immigration in the EU is not known, it is estimated to be considerable. Reducing illegal immigration flows is therefore a priority at both national and EU levels. |
| --- | --- |

1.5

In the second part, the Commission points out that illegal immigration takes many forms and that it is extremely difficult to obtain precise information. Although the exact scale of illegal immigration in the EU is not known, it is estimated to be considerable. Reducing illegal immigration flows is therefore a priority at both national and EU levels.

| 1.6 | The Commission highlights the clear link between hidden economies, unregulated labour markets and illegal immigration, especially in sectors such as construction, agriculture, catering, and cleaning and house-cleaning services. Within the EU, the shadow economy represents between 7 % and 16 % of GDP. |
| --- | --- |

1.6

The Commission highlights the clear link between hidden economies, unregulated labour markets and illegal immigration, especially in sectors such as construction, agriculture, catering, and cleaning and house-cleaning services. Within the EU, the shadow economy represents between 7 % and 16 % of GDP.

| 1.7 | The impact of existing legal channels, such as bilateral agreements, on reducing illegal immigration is extremely difficult to gauge. The Commission points out that the Member States have not carried out the necessary evaluations. Nor has an evaluation been made of the impact of visa policy on reducing illegal immigration. |
| --- | --- |

1.7

The impact of existing legal channels, such as bilateral agreements, on reducing illegal immigration is extremely difficult to gauge. The Commission points out that the Member States have not carried out the necessary evaluations. Nor has an evaluation been made of the impact of visa policy on reducing illegal immigration.

| 1.8 | It is hoped that closer cooperation with the countries of origin will help to reduce illegal immigration flows. This was recommended at the Tampere, Seville and Thessaloniki European Councils. Currently, however, Member States' experience implementing closer cooperation is limited and the results are not, on the whole, particularly striking. The Commission suggests that it might be necessary to adopt a different approach to the incentives offered to third countries. |
| --- | --- |

1.8

It is hoped that closer cooperation with the countries of origin will help to reduce illegal immigration flows. This was recommended at the Tampere, Seville and Thessaloniki European Councils. Currently, however, Member States' experience implementing closer cooperation is limited and the results are not, on the whole, particularly striking. The Commission suggests that it might be necessary to adopt a different approach to the incentives offered to third countries.

| 1.9 | In the third part, the Commission presents its conclusions and suggests approaches to follow. Given the clear lack of reliable and comparable data at EU level, the Commission has agreed to present an annual statistical report on migration, which will require information to be coordinated and exchanged between Member States. It refers to the steps taken to date: the establishment, in 2002, of the group of experts known as the Committee on Immigration and Asylum, the initial creation of the European Migration Network (on which a pilot project has run throughout 2004) and the creation of a network of National Contact Points for Integration. With regard to illegal immigration, an early-warning system has been set up and progress has been made on information exchanges. |
| --- | --- |

1.9

In the third part, the Commission presents its conclusions and suggests approaches to follow. Given the clear lack of reliable and comparable data at EU level, the Commission has agreed to present an annual statistical report on migration, which will require information to be coordinated and exchanged between Member States. It refers to the steps taken to date: the establishment, in 2002, of the group of experts known as the Committee on Immigration and Asylum, the initial creation of the European Migration Network (on which a pilot project has run throughout 2004) and the creation of a network of National Contact Points for Integration. With regard to illegal immigration, an early-warning system has been set up and progress has been made on information exchanges.

| 1.10 | The Commission believes that due to the effect of demographic decline and ageing, recruitment of third country national workers and immigration for economic reasons into the EU is likely to continue and increase. Countries of origin, too, are repeatedly asking for more legal migration channels. |
| --- | --- |

1.10

The Commission believes that due to the effect of demographic decline and ageing, recruitment of third country national workers and immigration for economic reasons into the EU is likely to continue and increase. Countries of origin, too, are repeatedly asking for more legal migration channels.

| 1.11 | The Commission draws attention to the fact that its proposal for a Directive on the admission of workers (1), tabled in 2001, received no support from the Council. It asks whether the admission of economic migrants should be regulated at EU level, the degree of harmonisation to aim for and whether or not the principle of Community preference for the domestic labour market should be maintained. The Commission states that the draft Treaty establishing a Constitution for Europe confirms European competence in migration policy, but leaves the Member States to decide the number of migrants to be admitted; there is also the need for measures adopted in this field to provide added value at EU level. At the end of this year, the Commission will present a Green Paper on the proposal for a Directive and the difficulties within the Council, and will organise a public hearing at the end of 2004. |
| --- | --- |

1.11

The Commission draws attention to the fact that its proposal for a Directive on the admission of workers (1), tabled in 2001, received no support from the Council. It asks whether the admission of economic migrants should be regulated at EU level, the degree of harmonisation to aim for and whether or not the principle of Community preference for the domestic labour market should be maintained. The Commission states that the draft Treaty establishing a Constitution for Europe confirms European competence in migration policy, but leaves the Member States to decide the number of migrants to be admitted; there is also the need for measures adopted in this field to provide added value at EU level. At the end of this year, the Commission will present a Green Paper on the proposal for a Directive and the difficulties within the Council, and will organise a public hearing at the end of 2004.

| 1.12 | The Commission considers that regularisation measures have helped to deal with a large number of illegal migrants, but must not be seen as an appropriate way of managing migration flows. The Committee on Immigration and Asylum must further analyse regularisation procedures with a view to identifying and comparing practices. |
| --- | --- |

1.12

The Commission considers that regularisation measures have helped to deal with a large number of illegal migrants, but must not be seen as an appropriate way of managing migration flows. The Committee on Immigration and Asylum must further analyse regularisation procedures with a view to identifying and comparing practices.

| 1.13 | Strengthening the integration of third country nationals legally residing in the Member States is an essential objective which, in the Commission's view, must form part of all future proposals. A fundamental aspect of this objective is integration into the labour market, and this is why the Commission recalls the need for measures such as reducing the unemployment gap between nationals of third countries and EU nationals. Reference is also made to the importance of promoting greater mobility in the EU labour market, which has already been facilitated by the 2003 Directive on long-term residents (2) and by Regulation 1408/71. The recognition of professional qualifications of third-country nationals also needs to be improved. |
| --- | --- |

1.13

Strengthening the integration of third country nationals legally residing in the Member States is an essential objective which, in the Commission's view, must form part of all future proposals. A fundamental aspect of this objective is integration into the labour market, and this is why the Commission recalls the need for measures such as reducing the unemployment gap between nationals of third countries and EU nationals. Reference is also made to the importance of promoting greater mobility in the EU labour market, which has already been facilitated by the 2003 Directive on long-term residents (2) and by Regulation 1408/71. The recognition of professional qualifications of third-country nationals also needs to be improved.

| 1.14 | The Commission is of the view that undeclared work is a significant pull factor for illegal migration, and the main aim must therefore be to transform undeclared work into regular employment. This objective is already included in the employment policy guidelines. |
| --- | --- |

1.14

The Commission is of the view that undeclared work is a significant pull factor for illegal migration, and the main aim must therefore be to transform undeclared work into regular employment. This objective is already included in the employment policy guidelines.

| 1.15 | Developing a Community return policy, amongst other policy instruments, is also a priority, to ensure that illegal immigrants return to their country of origin. The Commission proposes to create a financial instrument for return management for the years 2005 and 2006. |
| --- | --- |

1.15

Developing a Community return policy, amongst other policy instruments, is also a priority, to ensure that illegal immigrants return to their country of origin. The Commission proposes to create a financial instrument for return management for the years 2005 and 2006.

| 1.16 | Lastly, the Commission states that this study has confirmed that stepping up cooperation with countries of origin or transit is necessary to reduce illegal migration flows and to organise legal immigration. All available information must be pooled in order to determine how well this cooperation is working. The idea of developing training programmes in countries of origin in skills which are needed by the EU could be explored. There are also others, such as partially amending visa policy to establish some categories for which visas can be issued more rapidly. |
| --- | --- |

1.16

Lastly, the Commission states that this study has confirmed that stepping up cooperation with countries of origin or transit is necessary to reduce illegal migration flows and to organise legal immigration. All available information must be pooled in order to determine how well this cooperation is working. The idea of developing training programmes in countries of origin in skills which are needed by the EU could be explored. There are also others, such as partially amending visa policy to establish some categories for which visas can be issued more rapidly.

2.   General comments

| 2.1 | The EESC welcomes the fact that the Commission is presenting this Communication, which gives a new boost to Community immigration policy. Discussions within the Council are progressing extremely slowly due to the rather uncooperative attitude of some governments. The EESC has already stated in various opinions that there is a clear link between legal immigration and illegal immigration. Where adequate, transparent and flexible channels for legal immigration do not exist, illegal immigration increases (3). A sound asylum policy is also needed, as is harmonised legislation that guarantees adequate protection for those in need of international protection. |
| --- | --- |

2.1

The EESC welcomes the fact that the Commission is presenting this Communication, which gives a new boost to Community immigration policy. Discussions within the Council are progressing extremely slowly due to the rather uncooperative attitude of some governments. The EESC has already stated in various opinions that there is a clear link between legal immigration and illegal immigration. Where adequate, transparent and flexible channels for legal immigration do not exist, illegal immigration increases (3). A sound asylum policy is also needed, as is harmonised legislation that guarantees adequate protection for those in need of international protection.

| 2.2 | The Communication from the Commission on immigration, integration and employment (4) and the Thessaloniki European Council expressed the view that the number of economic migrants from third countries will increase markedly in the EU over the coming years. The increase in economic immigration is being seen in both highly skilled and low-skilled jobs. As the EESC has stated, immigration should be channelled through legal and transparent means in order to avoid the problems currently experienced by the labour markets. In order to achieve this, there must be appropriate cooperation between the authorities and the social partners. |
| --- | --- |

2.2

The Communication from the Commission on immigration, integration and employment (4) and the Thessaloniki European Council expressed the view that the number of economic migrants from third countries will increase markedly in the EU over the coming years. The increase in economic immigration is being seen in both highly skilled and low-skilled jobs. As the EESC has stated, immigration should be channelled through legal and transparent means in order to avoid the problems currently experienced by the labour markets. In order to achieve this, there must be appropriate cooperation between the authorities and the social partners.

| 2.3 | It is hard to understand why the Council has not adopted the Directive on the admission and residence of immigrant workers proposed by the Commission in 2001. In its opinion (5) the EESC considered the Commission proposal to be welcome but insufficient, proposing that two channels should be available for the admission of workers: obtaining a work and residence permit in their country of origin, and also the possibility of a temporary entry and residence permit for the purpose of seeking work. In proposing this Directive, the Commission has fulfilled its obligations arising from Tampere, but the Council, with the attitude it has demonstrated, has lost sight of this aim. |
| --- | --- |

2.3

It is hard to understand why the Council has not adopted the Directive on the admission and residence of immigrant workers proposed by the Commission in 2001. In its opinion (5) the EESC considered the Commission proposal to be welcome but insufficient, proposing that two channels should be available for the admission of workers: obtaining a work and residence permit in their country of origin, and also the possibility of a temporary entry and residence permit for the purpose of seeking work. In proposing this Directive, the Commission has fulfilled its obligations arising from Tampere, but the Council, with the attitude it has demonstrated, has lost sight of this aim.

| 2.4 | In response to the Commission's question, the EESC would state that it is indeed necessary for the admission of economic migrants to be regulated at EU level; to ensure this, there must be a high degree of legislative harmonisation, as set out in the draft Treaty establishing a Constitution for Europe. In previous opinions (6) the EESC has already called for the EU to rapidly develop a common immigration policy and harmonised legislation. The Committee will examine the Green Paper being drawn up by the Commission and will issue an opinion on the matter. |
| --- | --- |

2.4

In response to the Commission's question, the EESC would state that it is indeed necessary for the admission of economic migrants to be regulated at EU level; to ensure this, there must be a high degree of legislative harmonisation, as set out in the draft Treaty establishing a Constitution for Europe. In previous opinions (6) the EESC has already called for the EU to rapidly develop a common immigration policy and harmonised legislation. The Committee will examine the Green Paper being drawn up by the Commission and will issue an opinion on the matter.

3.   Specific comments

| 3.1 | Existing legal channels for labour migration are inadequate. Bilateral agreements, quotas, programmes for the admission of highly skilled workers and the other instruments currently available are clearly not sufficient to ensure that economic migration occurs through the legal channels, because illegal immigration continues to increase. The European Union and the Member States need an open form of legislation that allows labour immigration through channels that are legal and transparent, for both highly skilled workers and those working in less skilled jobs. |
| --- | --- |

3.1

Existing legal channels for labour migration are inadequate. Bilateral agreements, quotas, programmes for the admission of highly skilled workers and the other instruments currently available are clearly not sufficient to ensure that economic migration occurs through the legal channels, because illegal immigration continues to increase. The European Union and the Member States need an open form of legislation that allows labour immigration through channels that are legal and transparent, for both highly skilled workers and those working in less skilled jobs.

| 3.2 | Various Member States have decided to open up immigration only to highly skilled workers. The Commission Communication looks at the experiences of Germany and the United Kingdom. The EESC considers that these are extremely limited experiences, which should be viewed positively, although they fail to meet existing needs in these sectors of employment. Furthermore, Member States should have new legal instruments for the immigration of the less skilled workers required by their labour markets, who are currently to a large extent involved in the hidden economy and in illegal employment and immigration, especially in sectors such as domestic help, healthcare, personal services, agriculture, catering, construction, etc. |
| --- | --- |

3.2

Various Member States have decided to open up immigration only to highly skilled workers. The Commission Communication looks at the experiences of Germany and the United Kingdom. The EESC considers that these are extremely limited experiences, which should be viewed positively, although they fail to meet existing needs in these sectors of employment. Furthermore, Member States should have new legal instruments for the immigration of the less skilled workers required by their labour markets, who are currently to a large extent involved in the hidden economy and in illegal employment and immigration, especially in sectors such as domestic help, healthcare, personal services, agriculture, catering, construction, etc.

| 3.2.1 | It is extremely important that would-be immigrants have sufficient and clear information on existing instruments governing legal immigration in the Member States. The consular services must pass this information on to the countries of origin and, in Europe's reception States, immigrants must be informed about these instruments. |
| --- | --- |

3.2.1

It is extremely important that would-be immigrants have sufficient and clear information on existing instruments governing legal immigration in the Member States. The consular services must pass this information on to the countries of origin and, in Europe's reception States, immigrants must be informed about these instruments.

| 3.3 | Furthermore, the bilateral agreements between Member States and third countries to regulate labour migration constitute an extremely positive development, because they are managed through cooperation with the countries of origin, which is what the Council, the Commission, the European Parliament and the EESC have been calling for since Tampere. Most of these agreements are used to manage temporary immigrants and those in low-skilled jobs. The EESC would like it noted, however, that these agreements could be more effective if they were managed in collaboration with the social partners in Member States and countries of origin. These experiences have also highlighted problems in Member State consular offices, which lack staff specialised in labour migration. |
| --- | --- |

3.3

Furthermore, the bilateral agreements between Member States and third countries to regulate labour migration constitute an extremely positive development, because they are managed through cooperation with the countries of origin, which is what the Council, the Commission, the European Parliament and the EESC have been calling for since Tampere. Most of these agreements are used to manage temporary immigrants and those in low-skilled jobs. The EESC would like it noted, however, that these agreements could be more effective if they were managed in collaboration with the social partners in Member States and countries of origin. These experiences have also highlighted problems in Member State consular offices, which lack staff specialised in labour migration.

| 3.3.1 | The EESC also proposes that, on the basis of the association and cooperation agreements between the EU and various third countries, the EU could develop specialised labour migration departments. Association and cooperation agreements between the EU and third countries could cover opportunities for labour migration and training programmes. Migration to Europe by qualified workers from the countries of origin could create a new barrier to the development of those countries and the European Union and the Member States must, therefore, cooperate with them to ensure that immigration becomes a factor for development and not an additional problem. |
| --- | --- |

3.3.1

The EESC also proposes that, on the basis of the association and cooperation agreements between the EU and various third countries, the EU could develop specialised labour migration departments. Association and cooperation agreements between the EU and third countries could cover opportunities for labour migration and training programmes. Migration to Europe by qualified workers from the countries of origin could create a new barrier to the development of those countries and the European Union and the Member States must, therefore, cooperate with them to ensure that immigration becomes a factor for development and not an additional problem.

| 3.3.2 | Furthermore, those countries do not enjoy a balanced relationship with the EU in terms of trade and financial and technological flows. The association and cooperation agreements between the European Union and third countries must contain new political and economic instruments that make a positive contribution to the development of those countries. This is the only way to secure sound cooperation on preventing illegal immigration. Full cooperation between the EU and developing countries is also needed in the framework of the WTO. |
| --- | --- |

3.3.2

Furthermore, those countries do not enjoy a balanced relationship with the EU in terms of trade and financial and technological flows. The association and cooperation agreements between the European Union and third countries must contain new political and economic instruments that make a positive contribution to the development of those countries. This is the only way to secure sound cooperation on preventing illegal immigration. Full cooperation between the EU and developing countries is also needed in the framework of the WTO.

| 3.4 | Some Member States use a quota system to manage the bilateral agreements, once they have assessed the needs of their labour market, in collaboration with employers' associations and unions. Due to falling numbers and the cumbersome bureaucracy that this system creates, the results are not as good as expected. An example is provided by the States in which illegal immigration is increasing considerably (such as Spain) and yet the quotas have not been met. A more flexible system for managing quotas might be more useful, for example, if temporary visas for the purpose of seeking work were to be issued, as the EESC suggested in its opinion (7) on the Directive on admissions. |
| --- | --- |

3.4

Some Member States use a quota system to manage the bilateral agreements, once they have assessed the needs of their labour market, in collaboration with employers' associations and unions. Due to falling numbers and the cumbersome bureaucracy that this system creates, the results are not as good as expected. An example is provided by the States in which illegal immigration is increasing considerably (such as Spain) and yet the quotas have not been met. A more flexible system for managing quotas might be more useful, for example, if temporary visas for the purpose of seeking work were to be issued, as the EESC suggested in its opinion (7) on the Directive on admissions.

| 3.5 | There are many people in the EU, ‘without papers’ who, as the Commission states, work illegally and in the hidden economy. These people have entered the EU illegally or have reached the end of their legal stay and have not returned to their country of origin. The Commission Communication looks at return and regularisation policies. |
| --- | --- |

3.5

There are many people in the EU, ‘without papers’ who, as the Commission states, work illegally and in the hidden economy. These people have entered the EU illegally or have reached the end of their legal stay and have not returned to their country of origin. The Commission Communication looks at return and regularisation policies.

| 3.6 | The EESC does not agree with the Commission's statement that the only coherent approach to dealing with illegal residents is to ensure that they return to their country of origin
   (8)
  . This is not a realistic approach, because the systems and instruments for return are not equal to the task of addressing the situation facing millions of people. In its opinion (9) on the Green Paper on a Community return policy on illegal residents, and in its opinion (10) on the open method of coordination, the EESC has already expressed its position: The EESC believes that compulsory return should not be the EU's only or prime response to immigrants currently in the EU in an irregular situation. What is needed is a comprehensive policy incorporating both return and regularisation
   (11)
  . If the policy of compulsory return is not combined with regularisation measures, the numbers of people in irregular situations will remain unchanged, feeding the hidden economy and leading to increased exploitation in employment and social exclusion
   (12). The EESC hopes that Community policy will promote programmes for voluntary return and believes that forcible return should be reserved for situations in which such action is truly justified, as the EESC stated in the aforementioned opinion on the Green Paper on a Community return policy (13). |
| --- | --- |

3.6

The EESC does not agree with the Commission's statement that the only coherent approach to dealing with illegal residents is to ensure that they return to their country of origin
   (8)
  . This is not a realistic approach, because the systems and instruments for return are not equal to the task of addressing the situation facing millions of people. In its opinion (9) on the Green Paper on a Community return policy on illegal residents, and in its opinion (10) on the open method of coordination, the EESC has already expressed its position: The EESC believes that compulsory return should not be the EU's only or prime response to immigrants currently in the EU in an irregular situation. What is needed is a comprehensive policy incorporating both return and regularisation
   (11)
  . If the policy of compulsory return is not combined with regularisation measures, the numbers of people in irregular situations will remain unchanged, feeding the hidden economy and leading to increased exploitation in employment and social exclusion
   (12). The EESC hopes that Community policy will promote programmes for voluntary return and believes that forcible return should be reserved for situations in which such action is truly justified, as the EESC stated in the aforementioned opinion on the Green Paper on a Community return policy (13).

| 3.7 | The EESC has already stated that the status of the many people in an irregular situation should be regularised, under certain conditions linked to the degree to which they have put down roots in social and employment terms (14). The Council and the Commission are right to assert that undeclared work must be transformed into regular employment and, to achieve this, there must be cooperation from the persons concerned, many of whom are illegal immigrants. The cooperation of the social partners is also required (15). |
| --- | --- |

3.7

The EESC has already stated that the status of the many people in an irregular situation should be regularised, under certain conditions linked to the degree to which they have put down roots in social and employment terms (14). The Council and the Commission are right to assert that undeclared work must be transformed into regular employment and, to achieve this, there must be cooperation from the persons concerned, many of whom are illegal immigrants. The cooperation of the social partners is also required (15).

| 3.8 | Illegal immigration is closely linked to the hidden economy and to undeclared work. Immigration is only one aspect of the hidden economy, however, and the features of illegal employment constitute a pull factor for illegal migration flows. The EESC therefore welcomes the legislation in place in some Member States making it easier to regularise the situation of these persons, for employment or humanitarian reasons, or because they have already integrated into society. This approach might also help to prevent a build-up of persons in an illegal situation, necessitating extraordinary regularisation procedures. These instruments must be transparent and must be implemented with the necessary information and coordination between Member States. |
| --- | --- |

3.8

Illegal immigration is closely linked to the hidden economy and to undeclared work. Immigration is only one aspect of the hidden economy, however, and the features of illegal employment constitute a pull factor for illegal migration flows. The EESC therefore welcomes the legislation in place in some Member States making it easier to regularise the situation of these persons, for employment or humanitarian reasons, or because they have already integrated into society. This approach might also help to prevent a build-up of persons in an illegal situation, necessitating extraordinary regularisation procedures. These instruments must be transparent and must be implemented with the necessary information and coordination between Member States.

| 3.9 | Immigrants must be fully integrated into the European labour market, through the promotion of greater mobility. The EESC supported (16) the Directive on the status of third-country nationals who are long-term residents, which will make mobility easier for immigrants who are granted this status. The EESC also supported extending Regulation 1408/71 (17) to cover third-country nationals. It would be appropriate to extend this mobility to other immigrant groups, under the European Employment Strategy, also making use of the EURES network. |
| --- | --- |

3.9

Immigrants must be fully integrated into the European labour market, through the promotion of greater mobility. The EESC supported (16) the Directive on the status of third-country nationals who are long-term residents, which will make mobility easier for immigrants who are granted this status. The EESC also supported extending Regulation 1408/71 (17) to cover third-country nationals. It would be appropriate to extend this mobility to other immigrant groups, under the European Employment Strategy, also making use of the EURES network.

| 3.9.1 | The Commission states that the proposal for a Directive on services in the internal market for the provision of cross-border services will also increase mobility. The EESC is drafting an opinion (18) that contains a number of proposals to remedy the problems created by this Directive. |
| --- | --- |

3.9.1

The Commission states that the proposal for a Directive on services in the internal market for the provision of cross-border services will also increase mobility. The EESC is drafting an opinion (18) that contains a number of proposals to remedy the problems created by this Directive.

| 3.10 | Many immigrants are unable to undertake work that matches their training because the authorities in the Member States do not recognise their professional qualifications. The EU must extend the Directives on professional qualifications, in order to facilitate the recognition of those obtained in the country of origin. This will prevent situations of discrimination from arising and Member States and European companies will both gain more from people's work if they take account of their professional qualifications. |
| --- | --- |

3.10

Many immigrants are unable to undertake work that matches their training because the authorities in the Member States do not recognise their professional qualifications. The EU must extend the Directives on professional qualifications, in order to facilitate the recognition of those obtained in the country of origin. This will prevent situations of discrimination from arising and Member States and European companies will both gain more from people's work if they take account of their professional qualifications.

| 3.11 | The lack of adequate data means that the impact of visa policy on reducing illegal immigration cannot be evaluated. The requirement for a short-term visa for third-country citizens might reduce the volume of illegal immigration arising from this situation, but consideration must be given to the risk that the number of persons falling victim to human trafficking networks could increase. The EESC supports using the visa instrument only in exceptional circumstances. The Visa policy could restrict the mobility of persons in a severely discriminatory way, which means that appropriate management is required of the consular authorities' — a form of management that is transparent and which eliminates any potential corruption. |
| --- | --- |

3.11

The lack of adequate data means that the impact of visa policy on reducing illegal immigration cannot be evaluated. The requirement for a short-term visa for third-country citizens might reduce the volume of illegal immigration arising from this situation, but consideration must be given to the risk that the number of persons falling victim to human trafficking networks could increase. The EESC supports using the visa instrument only in exceptional circumstances. The Visa policy could restrict the mobility of persons in a severely discriminatory way, which means that appropriate management is required of the consular authorities' — a form of management that is transparent and which eliminates any potential corruption.

| 3.12 | The EESC agrees with the Commission's assertion that combating illegal immigration must continue to be a crucial part of managing immigration. Opening legal channels for labour migration, reducing the scale of the hidden economy and illegal employment, cooperation with the countries of origin, etc., must be accompanied by truly effective monitoring of the EU's external borders. |
| --- | --- |

3.12

The EESC agrees with the Commission's assertion that combating illegal immigration must continue to be a crucial part of managing immigration. Opening legal channels for labour migration, reducing the scale of the hidden economy and illegal employment, cooperation with the countries of origin, etc., must be accompanied by truly effective monitoring of the EU's external borders.

| 3.13 | Criminal organisations involved in trafficking human beings are extremely powerful and are linked to other criminal activities. In various opinions (19), the EESC has called for criminal networks trafficking in human beings to be combated more effectively. Cooperation between the Justice and Home Affairs authorities of the Member States and the European Commission must be improved. EUROPOL and EUROJUST must be provided with the most appropriate political, legal and administrative instruments. Work must be speeded up on the European Border Control Agency and also, in the medium term, on setting up a European border guard service. |
| --- | --- |

3.13

Criminal organisations involved in trafficking human beings are extremely powerful and are linked to other criminal activities. In various opinions (19), the EESC has called for criminal networks trafficking in human beings to be combated more effectively. Cooperation between the Justice and Home Affairs authorities of the Member States and the European Commission must be improved. EUROPOL and EUROJUST must be provided with the most appropriate political, legal and administrative instruments. Work must be speeded up on the European Border Control Agency and also, in the medium term, on setting up a European border guard service.

| 3.13.1 | Some parts of Europe, such as the southern islands (including Malta, Lampedusa and the Canaries), face particular difficulties because they form mid-way points for illegal immigration and sometimes receive more migrants than they are able to integrate. The European Union must therefore develop a system of solidarity to resolve these situations. |
| --- | --- |

3.13.1

Some parts of Europe, such as the southern islands (including Malta, Lampedusa and the Canaries), face particular difficulties because they form mid-way points for illegal immigration and sometimes receive more migrants than they are able to integrate. The European Union must therefore develop a system of solidarity to resolve these situations.

| 3.13.2 | The illegal trade and trafficking in persons must be combated whilst guaranteeing that victims are protected by international humanitarian legislation and by the European conventions on human rights. Illegal immigrants form part of vulnerable groups that require special protection. Their lives and safety are the priority. The EESC adopted an opinion (20) to improve victim protection. |
| --- | --- |

3.13.2

The illegal trade and trafficking in persons must be combated whilst guaranteeing that victims are protected by international humanitarian legislation and by the European conventions on human rights. Illegal immigrants form part of vulnerable groups that require special protection. Their lives and safety are the priority. The EESC adopted an opinion (20) to improve victim protection.

| 3.14 | The EESC supports the establishment of an open method of coordination for immigration and asylum policy (21). The EU currently has a Committee on Immigration and Asylum, which is doing sterling work coordinating and advising, but its mandate is inadequate. The Thessaloniki European Council provided for a pilot project to establish a European Migration Network. This Network warrants the EESC's support, because it represents a step towards better coordination within the EU. |
| --- | --- |

3.14

The EESC supports the establishment of an open method of coordination for immigration and asylum policy (21). The EU currently has a Committee on Immigration and Asylum, which is doing sterling work coordinating and advising, but its mandate is inadequate. The Thessaloniki European Council provided for a pilot project to establish a European Migration Network. This Network warrants the EESC's support, because it represents a step towards better coordination within the EU.

| 3.15 | The EESC welcomes the fact that the aims of Community immigration policy include measures for integration, as the Committee has called for (22). The reception given to newly arrived immigrants, their integration into the labour market, language training, combating discrimination, and participation in civil, cultural and political life must be strategic aims for the EU. The EESC considers it crucial for the social partners and civil society organisations to support the public authorities on integration policies. |
| --- | --- |

3.15

The EESC welcomes the fact that the aims of Community immigration policy include measures for integration, as the Committee has called for (22). The reception given to newly arrived immigrants, their integration into the labour market, language training, combating discrimination, and participation in civil, cultural and political life must be strategic aims for the EU. The EESC considers it crucial for the social partners and civil society organisations to support the public authorities on integration policies.

| 3.15.1. | The Committee wishes to convey the idea to the people of Europe that immigrants are much-needed members of our community and contribute to Europe's economic, social and cultural enrichment. The EESC wishes to continue to cooperate actively with the other EU institutions to ensure that the Tampere objectives are met and that an appropriate common immigration policy is implemented and that legislation is harmonised. With this aim in mind, the Committee will be putting in place a permanent instrument (23) in conjunction with the Commission, with the social partners and with civil society organisations. Combating racism, xenophobia and discrimination is the way to achieve equal treatment and integration. |
| --- | --- |

3.15.1.

The Committee wishes to convey the idea to the people of Europe that immigrants are much-needed members of our community and contribute to Europe's economic, social and cultural enrichment. The EESC wishes to continue to cooperate actively with the other EU institutions to ensure that the Tampere objectives are met and that an appropriate common immigration policy is implemented and that legislation is harmonised. With this aim in mind, the Committee will be putting in place a permanent instrument (23) in conjunction with the Commission, with the social partners and with civil society organisations. Combating racism, xenophobia and discrimination is the way to achieve equal treatment and integration.

| 3.16 | The Social Agenda (24) currently contains a number of objectives for promoting integration, combating discrimination and ensuring equal treatment. In the coming years, as a consequence of increasing numbers of immigrants, some of the objectives of the EU's social policy guidelines will have to be adapted. |
| --- | --- |

3.16

The Social Agenda (24) currently contains a number of objectives for promoting integration, combating discrimination and ensuring equal treatment. In the coming years, as a consequence of increasing numbers of immigrants, some of the objectives of the EU's social policy guidelines will have to be adapted.

| 3.17 | The EESC underlines the fact that the draft Treaty establishing a Constitution for Europe has laid new foundations for Community immigration policy and recalls that it adopted an own-initiative opinion (25) proposing that Treaty should grant EU citizenship to third-country nationals with long-term resident status, in order to make it easier for them to exercise their political rights and to promote integration. The EESC also adopted an own-initiative opinion (26) proposing that the Member States of the European Union ratify the International Convention on the Protection of the Rights of All Migrant Workers and Members of their Families, which was approved by the General Assembly of the United Nations (27), which aims to protect the human rights and dignity of people across the globe who emigrate for economic or employment-related reasons by means of appropriate legislation and good national practice. Once again, the Committee calls on the Council and the Commission to consider ratifying this convention. |
| --- | --- |

3.17

The EESC underlines the fact that the draft Treaty establishing a Constitution for Europe has laid new foundations for Community immigration policy and recalls that it adopted an own-initiative opinion (25) proposing that Treaty should grant EU citizenship to third-country nationals with long-term resident status, in order to make it easier for them to exercise their political rights and to promote integration. The EESC also adopted an own-initiative opinion (26) proposing that the Member States of the European Union ratify the International Convention on the Protection of the Rights of All Migrant Workers and Members of their Families, which was approved by the General Assembly of the United Nations (27), which aims to protect the human rights and dignity of people across the globe who emigrate for economic or employment-related reasons by means of appropriate legislation and good national practice. Once again, the Committee calls on the Council and the Commission to consider ratifying this convention.

Brussels, 15 December 2004

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

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(1)  COM(2001) 386 final

1

(2)  Directive 2003/109/EC

2

(3)  Opinion on the Communication on a Community immigration policy, in OJ C 260 of 17.9.2001, rapporteur: Mr Pariza Castaños

3

(4)  COM(2003) 336 final

4

(5)  Opinion in OJ C 80 of 3.4.2002, rapporteur: Mr Pariza Castaños

5

(6)  Opinion on the Communication on Community immigration policy, OJ C 260, 17.9.2002, rapporteur: Mr Pariza Castaños and Opinion on the Communication on illegal immigration, OJ C 149 of 21.6.2002, rapporteur: Mr Pariza Castaños

6

(7)  See OJ C 80 of 3.4.2002, the rapporteur was Mr Pariza Castaños

7

(8)  Point 3.2.2. of the Communication

8

(9)  See OJ C 61 of 14.3.2003, the rapporteur was Mr Pariza Castaños

9

(10)  See OJ C 221 of 17.9.2002, the rapporteur was Mrs zu Eulenburg

10

(11)  See point 2.2 of the EESC opinion on the Green Paper on a Community return policy on illegal residents

11

(12)  See point 2.4 of the same opinion

12

(13)  See OJ C 61 of 14.3.2003: rapporteur, Mr Pariza Castaños

13

(14)  Opinion on the Communication on Community immigration policy, OJ C 260, 17.9.2001; the rapporteur was Mr Pariza Castaños. Opinion on the Communication on Community immigration policy, OJ C 149, 21.6.2002, the rapporteur was Mr Pariza Castaños. Opinion on the Green Paper on a policy of return for illegal residents, OJ C 61 of 14.3.2003; the rapporteur was Mr Pariza Castaños

14

(15)  Opinion being drawn up, SOC/172, rapporteur: Mr Hahr

15

(16)  Opinion on the Directive concerning the status of third-country nationals who are long-term residents, OJ C 36 of 8.2.2002, rapporteur: Mr Pariza Castaños

16

(17)  Opinion on Regulation (EEC) No. 1408/71 in OJ C 157 of 25.5.1998, rapporteur: Mr Liverani

17

(18)  Opinion on the proposal for a Directive on services in the internal market. Rapporteur: Mr Metzler, co-rapporteur: Mr Ehnmark

18

(19)  Opinion on illegal immigration OJ C 149 of 21.6.2002; opinion on the Border Agency, OJ C 108 of 30.4.2004, and on the ARGO programme (SOC/186), rapporteur: Mr Pariza Castaños

19

(20)  Opinion on 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, OJ C 221 of 17.9.2002, rapporteur: Mr Pariza Castaños

20

(21)  Opinion of Ms zu Eulenburg in OJ C 221 of 17.9.2002

21

(22)  Opinion in OJ C 125, 27.5.2002, on Immigration, integration and the role of civil society organisations; conference organised by the EESC and the Commission on 9 and 10 September 2002: Immigration: the role of civil society in integration.

22

Immigration: the role of civil society in integration

(23)  To be decided on (a monitoring centre, annual conference ...)

23

(24)  Opinion of the EESC on the Communication on the mid-term review of the social policy agenda, OJ C 80 of 30.3.2004, rapporteur: Mr Jahier

24

(25)  Opinion: Access to European Union citizenship, in OJ C 208 of 3.9.2003, rapporteur: Mr Pariza Castaños

25

Access to European Union citizenship,

(26)  Opinion: International Convention on Migrants (OJ C 241 of 28.9.2004), rapporteur, Mr Pariza Castaños

26

(27)  Resolution No. 45/158 of 18 December 1990, in force since 1 July 2003

27

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| 28.6.2005 | EN | Official Journal of the European Union | C 157/92 |
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28.6.2005

EN

Official Journal of the European Union

C 157/92

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Opinion of the European Economic and Social Committee on the ‘Communication from the Commission to the Council and the European Parliament on the managed entry in the EU of persons in need of international protection and the enhancement of the protection capacity of the regions of origin — “Improving access to durable solutions”’

(COM(2004) 410 final)

(2005/C 157/16)

On 25 August 2004, 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 communication.

The Section for Employment, Social Affairs and Citizenship, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 25 November 2004. The rapporteur was Ms Le Nouail-Marlière.

At its 413th plenary session, held on 15 and 16 December 2004 (meeting of 15 December), the European Economic and Social Committee adopted the following opinion by 139 votes to one, with nine abstentions:

1.   Gist of the Commission document

| 1.1 | This Communication is the Commission's response to Conclusion 26 of the 19/20 June 2003 Thessaloniki European Council, in which the Commission was invited ‘to explore all parameters in order to ensure more orderly and managed entry in the EU of persons in need of international protection and to examine ways and means to enhance the protection capacity of regions of origin’. |
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1.1

This Communication is the Commission's response to Conclusion 26 of the 19/20 June 2003 Thessaloniki European Council, in which the Commission was invited ‘to explore all parameters in order to ensure more orderly and managed entry in the EU of persons in need of international protection and to examine ways and means to enhance the protection capacity of regions of origin’.

| 1.2 | It is set out in four chapters, the first of which explores ‘all parameters in order to ensure more orderly and managed entry in the EU of persons in need of international protection’. |
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1.2

It is set out in four chapters, the first of which explores ‘all parameters in order to ensure more orderly and managed entry in the EU of persons in need of international protection’.

| 1.3 | Resettlement involving the transfer of refugees from an initial host country or a transit country to the EU (or to a third country such as Canada, the United States or Australia) is by definition a managed and orderly entry into the EU. It could play an important part in the EU's common asylum policy. Therefore, the Commission believes that there are good reasons for taking an EU-wide approach in this area and for setting up an EU resettlement scheme. |
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1.3

Resettlement involving the transfer of refugees from an initial host country or a transit country to the EU (or to a third country such as Canada, the United States or Australia) is by definition a managed and orderly entry into the EU. It could play an important part in the EU's common asylum policy. Therefore, the Commission believes that there are good reasons for taking an EU-wide approach in this area and for setting up an EU resettlement scheme.

| 1.4 | Chapter II looks at ways and means for regions of origin to enhance the protection of persons in need of international protection, and how the EU could assist them in this task. |
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1.4

Chapter II looks at ways and means for regions of origin to enhance the protection of persons in need of international protection, and how the EU could assist them in this task.

| 1.5 | Action to enhance protection capacity requires a coordinated and systematic approach. In this context it is necessary to work towards a benchmark of effective protection for host countries to aim at, with the help of and in partnership with the EU. To do this the EU should first look at the elements it uses itself when guaranteeing protection to those who require it, and which focus on protection from persecution and refoulement, access to a legal procedure, and the possibility of adequate subsistence. |
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1.5

Action to enhance protection capacity requires a coordinated and systematic approach. In this context it is necessary to work towards a benchmark of effective protection for host countries to aim at, with the help of and in partnership with the EU. To do this the EU should first look at the elements it uses itself when guaranteeing protection to those who require it, and which focus on protection from persecution and refoulement, access to a legal procedure, and the possibility of adequate subsistence.

| 1.6 | The following aspects of protection could be regarded as suitable indicators to assess the protection capacity of a host country and whether a sustainable protection system has developed. Furthermore, they could serve as orientations for a capacity-building benchmark:






  — | accession and adherence to refugee instruments, including regional refugee instruments and other human rights and international humanitarian law treaties, including withdrawal of reservations; |
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1.6

The following aspects of protection could be regarded as suitable indicators to assess the protection capacity of a host country and whether a sustainable protection system has developed. Furthermore, they could serve as orientations for a capacity-building benchmark:

—

accession and adherence to refugee instruments, including regional refugee instruments and other human rights and international humanitarian law treaties, including withdrawal of reservations;

| — | national legal frameworks: adoption/amendment of refugee and asylum legislation; |
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—

national legal frameworks: adoption/amendment of refugee and asylum legislation;

| — | comprehensive and systematic registration and documentation of refugees and asylum-seekers; |
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—

comprehensive and systematic registration and documentation of refugees and asylum-seekers;

| — | admission and reception of asylum-seekers; |
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—

admission and reception of asylum-seekers;

| — | support for self-reliance and local integration. |
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—

support for self-reliance and local integration.

| 1.7 | Chapter III examines how to achieve an integrated, comprehensive, balanced, flexible and situation-specific approach to asylum and migration issues. |
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1.7

Chapter III examines how to achieve an integrated, comprehensive, balanced, flexible and situation-specific approach to asylum and migration issues.

| 1.8 | To this end, EU multi-annual regional protection programmes would be brought forward by the Commission with an agenda of actions and projects on asylum and migration, and elaborated in full partnership with third countries in the region. These programmes would be drawn up in conjunction with, and following the same cycles as, the Regional and Country Strategy Papers, providing the overarching framework of EC relations with developing countries. |
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1.8

To this end, EU multi-annual regional protection programmes would be brought forward by the Commission with an agenda of actions and projects on asylum and migration, and elaborated in full partnership with third countries in the region. These programmes would be drawn up in conjunction with, and following the same cycles as, the Regional and Country Strategy Papers, providing the overarching framework of EC relations with developing countries.

| 1.9 | EU regional protection programmes would provide a ‘tool box’ comprising a range of measures — some already in existence, some still in the process of development and some still to be proposed: action to enhance protection capacity, a registration scheme, an EU-wide resettlement scheme, assistance for improving local infrastructure, assistance with local integration of persons in need of international protection in the third country, cooperation in the area of legal migration, action on migration management, and return. |
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1.9

EU regional protection programmes would provide a ‘tool box’ comprising a range of measures — some already in existence, some still in the process of development and some still to be proposed: action to enhance protection capacity, a registration scheme, an EU-wide resettlement scheme, assistance for improving local infrastructure, assistance with local integration of persons in need of international protection in the third country, cooperation in the area of legal migration, action on migration management, and return.

| 1.10 | Finally, Chapter IV sets out the Communication's conclusions and outlines the best way forward, which it requests the European Parliament, the Council and the European Council to endorse. |
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1.10

Finally, Chapter IV sets out the Communication's conclusions and outlines the best way forward, which it requests the European Parliament, the Council and the European Council to endorse.

2.   General comments

| 2.1 | The Committee supports the Commission's intention, based on UNHCR recommendations, but does not believe the Commission Communication contains sufficient guarantees of the level of international protection granted since 1951. Sadly, there remains a need to guarantee this level of protection, and to increase it, in an international context still hallmarked by hate-based discrimination that can lead to armed conflict, discrimination affecting social groups in civilian populations or individuals belonging to these social groups, and persecution of individuals or groups by States or non-State agents (groups or individuals). From this perspective, the Committee supports the work being carried out in UNHCR's Convention Plus aimed at improving and adapting refugee status and the Geneva Convention. |
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2.1

The Committee supports the Commission's intention, based on UNHCR recommendations, but does not believe the Commission Communication contains sufficient guarantees of the level of international protection granted since 1951. Sadly, there remains a need to guarantee this level of protection, and to increase it, in an international context still hallmarked by hate-based discrimination that can lead to armed conflict, discrimination affecting social groups in civilian populations or individuals belonging to these social groups, and persecution of individuals or groups by States or non-State agents (groups or individuals). From this perspective, the Committee supports the work being carried out in UNHCR's Convention Plus aimed at improving and adapting refugee status and the Geneva Convention.

| 2.2 | The resettlement programme proposal should more clearly emphasise that the primary objective of resettlement as a durable solution is to re-establish beneficiaries of refugee status or international protection under the terms of the Qualification Directive (1) as quickly as possible in normal and dignified living conditions as recognised by the Geneva Convention and UNHCR's Guide to Procedures. |
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2.2

The resettlement programme proposal should more clearly emphasise that the primary objective of resettlement as a durable solution is to re-establish beneficiaries of refugee status or international protection under the terms of the Qualification Directive (1) as quickly as possible in normal and dignified living conditions as recognised by the Geneva Convention and UNHCR's Guide to Procedures.

| 2.3 | The Committee underlines the need for Member States to agree a legal status for recognising and supporting the resettlement schemes already in existence in certain Member States, and to work towards adopting common standards for extending these programmes to other EU Member States and signatories to the Geneva Convention. |
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2.3

The Committee underlines the need for Member States to agree a legal status for recognising and supporting the resettlement schemes already in existence in certain Member States, and to work towards adopting common standards for extending these programmes to other EU Member States and signatories to the Geneva Convention.

| 2.4 | These programmes would respond to the needs of persons genuinely in need of international protection within the meaning of the 1951 Convention, and prevent abuse of the asylum system diminishing refugee status and the level of protection it affords. While sharing this concern, the Committee notes that:






  — | those EU Member States that are signatories to the 1951 Convention remain bound by their international obligations, though some States no longer even take the trouble to accept or examine applications, proceeding instead directly to refusal of entry without examining whether, on return, the individual's life may be in danger; |
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2.4

These programmes would respond to the needs of persons genuinely in need of international protection within the meaning of the 1951 Convention, and prevent abuse of the asylum system diminishing refugee status and the level of protection it affords. While sharing this concern, the Committee notes that:

—

those EU Member States that are signatories to the 1951 Convention remain bound by their international obligations, though some States no longer even take the trouble to accept or examine applications, proceeding instead directly to refusal of entry without examining whether, on return, the individual's life may be in danger;

| — | in some Member States reception conditions for asylum-seekers whose applications have been received but not yet examined are turning into detention conditions, according to reports issued by social services, which reveal traumatising circumstances not only for the asylum-seekers themselves but also for civil society which, as a consequence, is forming a very negative opinion of the asylum issue in general; |
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—

in some Member States reception conditions for asylum-seekers whose applications have been received but not yet examined are turning into detention conditions, according to reports issued by social services, which reveal traumatising circumstances not only for the asylum-seekers themselves but also for civil society which, as a consequence, is forming a very negative opinion of the asylum issue in general;

| — | considerable improvements in such areas as the freedom of movement, financial support, assistance provided by refugee support groups and integration programmes should be among the objectives put forward in the Communication; |
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—

considerable improvements in such areas as the freedom of movement, financial support, assistance provided by refugee support groups and integration programmes should be among the objectives put forward in the Communication;

| — | the conditions under which NGOs and refugee associations can work in reception centres should be improved through partnership agreements with the authorities in the host countries, or at least by clarifying their rights. |
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—

the conditions under which NGOs and refugee associations can work in reception centres should be improved through partnership agreements with the authorities in the host countries, or at least by clarifying their rights.

| 2.5 | The blurring of the issue of international protection with the fight against illegal immigration, implying that every asylum application is an abuse of the asylum system and unfounded, and that the protection of refugee status hinges on global coercive measures, neither improves nor clarifies public perception of the obligations involved. |
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2.5

The blurring of the issue of international protection with the fight against illegal immigration, implying that every asylum application is an abuse of the asylum system and unfounded, and that the protection of refugee status hinges on global coercive measures, neither improves nor clarifies public perception of the obligations involved.

| 2.6 | European Parliament reports (2), EESC opinions (3) and recommendations by international organisations (4) all maintain that Member States should not implement protection programmes as a substitute for processing and examining individual applications. |
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2.6

European Parliament reports (2), EESC opinions (3) and recommendations by international organisations (4) all maintain that Member States should not implement protection programmes as a substitute for processing and examining individual applications.

| 2.7 | The Committee notes that those persons who manage to cross the EU's borders in the hope of applying for asylum make up just a small proportion (approximately 1 %) of all those entitled to apply. UNHCR's 2003 report detailing the number of people and the populations of concern to it shows the full scale of the EU's commitments and obligations. |
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2.7

The Committee notes that those persons who manage to cross the EU's borders in the hope of applying for asylum make up just a small proportion (approximately 1 %) of all those entitled to apply. UNHCR's 2003 report detailing the number of people and the populations of concern to it shows the full scale of the EU's commitments and obligations.

3.   Specific comments

| 3.1 | In light of the assessments by European NGOs and institutions, including the European Parliament, the Committee fears that the Member States' leeway to determine the criteria for access to resettlement schemes may lead to a gradual diminution of the protection guaranteed by the standards laid down in the 1951 Geneva Convention and the 1967 New York Protocol. |
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3.1

In light of the assessments by European NGOs and institutions, including the European Parliament, the Committee fears that the Member States' leeway to determine the criteria for access to resettlement schemes may lead to a gradual diminution of the protection guaranteed by the standards laid down in the 1951 Geneva Convention and the 1967 New York Protocol.

| 3.2 | Prima facie UNHCR recognition of refugees requesting international protection in the initial country of reception in the region of origin does not imply recognition of refugee status in terms of the Geneva Convention but enables UNHCR to draw up a list of individuals eligible for resettlement. It will then be up to the authorities in the initial country of reception, transit or resettlement to grant them either refugee status under the Convention or subsidiary protection status. The beneficiaries of a resettlement scheme will have to have been granted one of the forms of international protection status. |
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3.2

Prima facie UNHCR recognition of refugees requesting international protection in the initial country of reception in the region of origin does not imply recognition of refugee status in terms of the Geneva Convention but enables UNHCR to draw up a list of individuals eligible for resettlement. It will then be up to the authorities in the initial country of reception, transit or resettlement to grant them either refugee status under the Convention or subsidiary protection status. The beneficiaries of a resettlement scheme will have to have been granted one of the forms of international protection status.

| 3.3 | The Committee emphasises the need to examine applications on an individual basis irrespective of eligibility for resettlement schemes (with a right to legal redress suspending refoulement measures), and fears that if responsibilities are not clearly shared and clearly assumed it may lead to the creation of zones in which responsibility is passed back and forth indefinitely, regardless of the provisions of the Dublin II Convention, which in any case are not binding on host countries or transit countries in the regions of origin. Furthermore, making recognition of international protection status conditional on eligibility for a resettlement scheme could lead to Member States involved in resettlement schemes curbing the number of refugees granted recognition or subsidiary protection status. |
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3.3

The Committee emphasises the need to examine applications on an individual basis irrespective of eligibility for resettlement schemes (with a right to legal redress suspending refoulement measures), and fears that if responsibilities are not clearly shared and clearly assumed it may lead to the creation of zones in which responsibility is passed back and forth indefinitely, regardless of the provisions of the Dublin II Convention, which in any case are not binding on host countries or transit countries in the regions of origin. Furthermore, making recognition of international protection status conditional on eligibility for a resettlement scheme could lead to Member States involved in resettlement schemes curbing the number of refugees granted recognition or subsidiary protection status.

| 3.4 | The Committee supports the Commission's proposal and views it as an EU contribution to effective protection of persons with refugee status, provided the legal guarantees for procedures and respect for asylum-seekers' individual rights under international conventions, in particular the Geneva and New York Conventions, are applied and provided there is no diminution of the rights of those refugees not meeting resettlement scheme eligibility criteria to have their applications examined and their status recognised. However, the Committee would not view favourably a situation where reinforcement of capacities in the initial countries of reception or transit countries in the regions of origin led to EU Member States pulling back from their obligation to recognise legal refugee status or subsidiary protection status. |
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3.4

The Committee supports the Commission's proposal and views it as an EU contribution to effective protection of persons with refugee status, provided the legal guarantees for procedures and respect for asylum-seekers' individual rights under international conventions, in particular the Geneva and New York Conventions, are applied and provided there is no diminution of the rights of those refugees not meeting resettlement scheme eligibility criteria to have their applications examined and their status recognised. However, the Committee would not view favourably a situation where reinforcement of capacities in the initial countries of reception or transit countries in the regions of origin led to EU Member States pulling back from their obligation to recognise legal refugee status or subsidiary protection status.

| 3.5 | The Committee recommends that the harmonised procedures adopted by the Council on 29 April 2004 be implemented and revised, and that the present Communication avoids a drift towards the examination of applications in the regions of origin. The Committee believes that the minimum standards adopted will encourage Member States to offer guarantees going further than the standards proposed. |
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3.5

The Committee recommends that the harmonised procedures adopted by the Council on 29 April 2004 be implemented and revised, and that the present Communication avoids a drift towards the examination of applications in the regions of origin. The Committee believes that the minimum standards adopted will encourage Member States to offer guarantees going further than the standards proposed.

| 3.6 | Many regions have the potential to become sources of refugees, for a number of reasons: discrimination, human rights abuse, persecution of human rights activists, natural and related disasters, famine, financial speculation or climate change, or an accumulation of causes. The Committee therefore wonders whether countries bordering asylum-seekers' countries of origin are always the best placed to receive, recognise and select all the refugees eligible for resettlement schemes. It also seriously questions the capacity of EU representations in third countries to do so without the assistance and intervention of civil society organisations. The Committee recommends that the harmonised procedures adopted by the Council on 24 April 2004 should be implemented and revised before moving on to the next step of decentralising the examination of applications in the regions of origin. |
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3.6

Many regions have the potential to become sources of refugees, for a number of reasons: discrimination, human rights abuse, persecution of human rights activists, natural and related disasters, famine, financial speculation or climate change, or an accumulation of causes. The Committee therefore wonders whether countries bordering asylum-seekers' countries of origin are always the best placed to receive, recognise and select all the refugees eligible for resettlement schemes. It also seriously questions the capacity of EU representations in third countries to do so without the assistance and intervention of civil society organisations. The Committee recommends that the harmonised procedures adopted by the Council on 24 April 2004 should be implemented and revised before moving on to the next step of decentralising the examination of applications in the regions of origin.

| 3.7 | The Committee fears that assistance from European, international or local NGOs and associations, already difficult, will become impossible because of the distance, the extra cost, the multiplicity of partners representing the public authorities, strained relations or a lack of resources in certain countries for local associations. |
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3.7

The Committee fears that assistance from European, international or local NGOs and associations, already difficult, will become impossible because of the distance, the extra cost, the multiplicity of partners representing the public authorities, strained relations or a lack of resources in certain countries for local associations.

| 3.8 | Although there is a need to alleviate the burden on the initial countries of reception or transit in the regions of origin and to enhance the contribution to restoring normal and dignified living conditions for refugees, cooperation with the initial countries of reception or transit on resettlement schemes should in no case replace the right to apply for asylum on EU territory nor the obligations of the signatory States to the Geneva Convention when an individual request for asylum is made to them. |
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3.8

Although there is a need to alleviate the burden on the initial countries of reception or transit in the regions of origin and to enhance the contribution to restoring normal and dignified living conditions for refugees, cooperation with the initial countries of reception or transit on resettlement schemes should in no case replace the right to apply for asylum on EU territory nor the obligations of the signatory States to the Geneva Convention when an individual request for asylum is made to them.

| 3.9 | The Committee stresses that a ‘political’ approach needs to be pursued with the countries of origin, in particular calls and support for respect of human rights. Depending on the person's individual circumstances, a country can either be his/her country of origin, the host country or the transit country. This approach should also involve sharing of responsibility between states in all regions. |
| --- | --- |

3.9

The Committee stresses that a ‘political’ approach needs to be pursued with the countries of origin, in particular calls and support for respect of human rights. Depending on the person's individual circumstances, a country can either be his/her country of origin, the host country or the transit country. This approach should also involve sharing of responsibility between states in all regions.

| 3.10 | Mass influxes are still possible. The Directive on temporary protection in the event of a mass influx (5) applies only to a mass influx into the EU. The Committee regrets that the Communication gives no indication of the type of assistance it would favour or of the possibility of using resettlement programmes in such circumstances. |
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3.10

Mass influxes are still possible. The Directive on temporary protection in the event of a mass influx (5) applies only to a mass influx into the EU. The Committee regrets that the Communication gives no indication of the type of assistance it would favour or of the possibility of using resettlement programmes in such circumstances.

4.   Conclusions

| 4.1 | The opening of legal migration channels must be in response to emigration and immigration needs, whereas asylum channels must be kept solely for asylum purposes and take full account of protection needs and the need to re-establish a life of normality and dignity for refugees, independent of the durable economic, social or environmental cooperation and assistance measures for third countries put in place by the European Union to complement but not replace individual international protection. The two issues must not be confused. Even if certain effects may have related causes, there is no systematic causal link between regions poorly integrated into the global economy and human rights violations. |
| --- | --- |

4.1

The opening of legal migration channels must be in response to emigration and immigration needs, whereas asylum channels must be kept solely for asylum purposes and take full account of protection needs and the need to re-establish a life of normality and dignity for refugees, independent of the durable economic, social or environmental cooperation and assistance measures for third countries put in place by the European Union to complement but not replace individual international protection. The two issues must not be confused. Even if certain effects may have related causes, there is no systematic causal link between regions poorly integrated into the global economy and human rights violations.

| 4.2 | Efforts to develop a common asylum policy are severely criticised from all angles: NGOs and unions at national and international level are becoming increasingly alarmed at the EU's failure to keep its promises. This is the context in which the Commission's Communication on framing and implementing durable solutions is set. |
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4.2

Efforts to develop a common asylum policy are severely criticised from all angles: NGOs and unions at national and international level are becoming increasingly alarmed at the EU's failure to keep its promises. This is the context in which the Commission's Communication on framing and implementing durable solutions is set.

| 4.3 | The Committee believes that the Commission and the Council must not ignore the disquiet caused by a situation in which the Tampere commitments have led to directives or regulatory measures favouring one approach over another. The Committee points out that European public opinion is made up of many different strands, that it is not uniform or monolithic, and that this is characteristic of an open and democratic society based on the rule of law. The Commission's approach and the Council's decisions should therefore interpret the Tampere commitment to create an area of freedom and justice with an emphasis on the rights of citizens and individuals as set out in the Charter of Fundamental Rights and with all the obligations on States that such an approach entails. |
| --- | --- |

4.3

The Committee believes that the Commission and the Council must not ignore the disquiet caused by a situation in which the Tampere commitments have led to directives or regulatory measures favouring one approach over another. The Committee points out that European public opinion is made up of many different strands, that it is not uniform or monolithic, and that this is characteristic of an open and democratic society based on the rule of law. The Commission's approach and the Council's decisions should therefore interpret the Tampere commitment to create an area of freedom and justice with an emphasis on the rights of citizens and individuals as set out in the Charter of Fundamental Rights and with all the obligations on States that such an approach entails.

| 4.4 | The results of various national and European elections (marked by a steadily declining turnout), armed conflicts that have descended into chronic civil wars, and violations of universal human rights reveal all too clearly the limits to the security interpretation of the attacks of 11 September 2001. |
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4.4

The results of various national and European elections (marked by a steadily declining turnout), armed conflicts that have descended into chronic civil wars, and violations of universal human rights reveal all too clearly the limits to the security interpretation of the attacks of 11 September 2001.

| 4.5 | For ten years the various EU Member States have received and recognised different numbers of refugees, but whatever the EU's share of refugees world-wide, real needs are such that support programmes in the regions of origin (Africa, Caswaname, for example) or resettlement schemes in the EU itself could help to improve the situation for refugees and asylum-seekers who are entitled to receive international protection. |
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4.5

For ten years the various EU Member States have received and recognised different numbers of refugees, but whatever the EU's share of refugees world-wide, real needs are such that support programmes in the regions of origin (Africa, Caswaname, for example) or resettlement schemes in the EU itself could help to improve the situation for refugees and asylum-seekers who are entitled to receive international protection.

| 4.6 | The Committee supports the proposed Communication subject to the following clarifications:






  — | improved processing of asylum claims throughout the territory of the Member States and an end to the practices of refusal of entry without an examination of the individual application in violation of the principle of non-refoulement, by means of the transposition and rapid implementation by the Member States of directives, procedures and qualifications, with the option of applying standards which are higher than the minimum required; |
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4.6

The Committee supports the proposed Communication subject to the following clarifications:

—

improved processing of asylum claims throughout the territory of the Member States and an end to the practices of refusal of entry without an examination of the individual application in violation of the principle of non-refoulement, by means of the transposition and rapid implementation by the Member States of directives, procedures and qualifications, with the option of applying standards which are higher than the minimum required;

| — | improvements in the working conditions for NGOs and refugee support groups operating in reception centres through partnership agreements with the authorities of host countries or, at the very least, clarification of the rights of such groups; |
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—

improvements in the working conditions for NGOs and refugee support groups operating in reception centres through partnership agreements with the authorities of host countries or, at the very least, clarification of the rights of such groups;

| — | re-examination of the principle of categorising certain States of origin or transit as ‘safe third countries’, thereby depriving asylum-seekers of the possibility of an examination of their individual circumstances and rights; |
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—

re-examination of the principle of categorising certain States of origin or transit as ‘safe third countries’, thereby depriving asylum-seekers of the possibility of an examination of their individual circumstances and rights;

| — | clarification of the primacy of the Geneva Convention, procedurally and in law, over subsidiary protection status (6); |
| --- | --- |

—

clarification of the primacy of the Geneva Convention, procedurally and in law, over subsidiary protection status (6);

| — | clarification that beneficiaries of resettlement schemes will be granted refugee status under the Geneva Convention and refugee, or subsidiary protection status as defined in the Qualification Directive, guaranteeing respect for their fundamental rights under all circumstances and clarification that a population of ‘undecided case’s without specific rights in the EU or third countries where they are resettled will not be established de facto. |
| --- | --- |

—

clarification that beneficiaries of resettlement schemes will be granted refugee status under the Geneva Convention and refugee, or subsidiary protection status as defined in the Qualification Directive, guaranteeing respect for their fundamental rights under all circumstances and clarification that a population of ‘undecided case’s without specific rights in the EU or third countries where they are resettled will not be established de facto.

Brussels, 15 December 2004.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  See Directive No. 2004/83/EC, adopted by the Council on 29.4.2004.

1

(2)  See European Parliament report A5-0304/2001 (rapporteur: Mr Evans) on the Communication from the Commission Towards a common asylum procedure and a uniform status, valid throughout the Union, for persons granted asylum (COM(2000) 755 final) and report A5-0291/2001 (rapporteur: Mr Watson) on the Directive on minimum standards on procedures in Member States for granting and withdrawing refugee status. Report of the European Parliament A5-0144/2004 (Rapporteur: Luis Marinho) on the Communication from the Commission to the Council and the European Parliament: Towards more accessible, equitable and managed asylum systems (COM(2003) 315 final).

2

(3)  See EESC Opinion on the Communication from the Commission ‘Towards a common asylum procedure and a uniform status, valid throughout the Union, for persons granted asylum’ (COM(2000) 755 final) in OJ C 260, 17.9.2001 (rapporteurs: Mr Mengozzi and Mr Pariza Castaños), and EESC Opinion on the Directive on minimum standards on procedures in Member States for granting and withdrawing refugee status in OJ C 193, 10.7.2001 (rapporteur: Mr Melicías).

3

(4)  In particular, the Office of the United Nations High Commissioner for Refugees, the European Council on Refugees and Exiles (ECRE) and Caritas Europe.

4

(5)  Directive 2001/55/EC.

5

(6)  See Communication from the Commission COM(2004) 503 final and the corresponding Committee Opinion (SOC/185).

6

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| 28.6.2005 | EN | Official Journal of the European Union | C 157/96 |
| --- | --- | --- | --- |

28.6.2005

EN

Official Journal of the European Union

C 157/96

---

Opinion of the European Economic and Social Committee on the ‘Communication from the Commission to the Council and the European Parliament — “A more efficient Common European Asylum System: The single procedure as the next step”’

(COM(2004) 503 final — SEC(2004) 937)

(2005/C 157/17)

On 15 October 2004, the Commission decided to consult the European Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on the abovementioned communication.

The Section for Employment, Social Affairs and Citizenship, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 25 November 2004. The rapporteur was Ms Le Nouail-Marlière.

At its 413th plenary session of 15 and 16 December 2004 (meeting of 15 December), the European Economic and Social Committee adopted the following opinion by 133 votes, with ten abstentions:

1.   Gist of the Commission Communication

| 1.1 | The communication referred to the EESC recommends improving and speeding up the procedures for granting status as a refugee or as a beneficiary of international protection. |
| --- | --- |

1.1

The communication referred to the EESC recommends improving and speeding up the procedures for granting status as a refugee or as a beneficiary of international protection.

| 1.2 | It considers the potential advantages of a single asylum procedure that is quicker and more efficient, and of simplified procedures for asylum seekers: the Commission seems concerned to improve public perception of the way in which requests for asylum are processed and the circumstances in which individuals are returned to their country of origin. |
| --- | --- |

1.2

It considers the potential advantages of a single asylum procedure that is quicker and more efficient, and of simplified procedures for asylum seekers: the Commission seems concerned to improve public perception of the way in which requests for asylum are processed and the circumstances in which individuals are returned to their country of origin.

| 1.3 | The Commission then makes the case for the added value of such changes, resulting from closer cooperation between Member States and a joint methodology, based on two interdependent approaches to be undertaken in this order: an initial ‘preparatory’ phase followed by Community legislation. |
| --- | --- |

1.3

The Commission then makes the case for the added value of such changes, resulting from closer cooperation between Member States and a joint methodology, based on two interdependent approaches to be undertaken in this order: an initial ‘preparatory’ phase followed by Community legislation.

| 1.4 | The preparatory phase would be a period of consultation, debate and preparation on what Member States need to do to unify the procedures that lead to the two types of status set out in the Qualification Directive (1). |
| --- | --- |

1.4

The preparatory phase would be a period of consultation, debate and preparation on what Member States need to do to unify the procedures that lead to the two types of status set out in the Qualification Directive (1).

| 1.5 | The preparatory phase would begin in January 2005 and run in tandem with the implementation of the first stage legislation of the Common European Asylum System (2). |
| --- | --- |

1.5

The preparatory phase would begin in January 2005 and run in tandem with the implementation of the first stage legislation of the Common European Asylum System (2).

| 1.6 | The Commission will present its ‘One-Stop Shop Action Plan’ by the end of 2004. |
| --- | --- |

1.6

The Commission will present its ‘One-Stop Shop Action Plan’ by the end of 2004.

| 1.7 | The recommended preparatory phase has four aims:






  — | to steer and inform the discussion on how the EU should move towards the adoption of a single procedure; |
| --- | --- | --- |

1.7

The recommended preparatory phase has four aims:

—

to steer and inform the discussion on how the EU should move towards the adoption of a single procedure;

| — | to identify the changes which need to take place; |
| --- | --- |

—

to identify the changes which need to take place;

| — | to initiate those changes by adopting operational practices before or in parallel with a legislative approach; |
| --- | --- |

—

to initiate those changes by adopting operational practices before or in parallel with a legislative approach;

| — | lastly, the preparatory phase would also serve as a platform for the consultative process. |
| --- | --- |

—

lastly, the preparatory phase would also serve as a platform for the consultative process.

| 1.8 | Community legislation would be the second phase of creating a single procedure for processing applications for refugee status in accordance with the 1951 Geneva Convention and the New York Protocol of 1967, and for subsidiary protection in accordance with the Qualification Directive. (3) |
| --- | --- |

1.8

Community legislation would be the second phase of creating a single procedure for processing applications for refugee status in accordance with the 1951 Geneva Convention and the New York Protocol of 1967, and for subsidiary protection in accordance with the Qualification Directive. (3)

| 1.9 | The communication sets out the practical details of the legislative approach: level of ambition, timescale of legislation, scope, appeals procedure, safeguarding the integrity of the Geneva Convention, maintaining the quality of decisions, return procedures and read-across to other instruments. |
| --- | --- |

1.9

The communication sets out the practical details of the legislative approach: level of ambition, timescale of legislation, scope, appeals procedure, safeguarding the integrity of the Geneva Convention, maintaining the quality of decisions, return procedures and read-across to other instruments.

| 1.10 | In short, the single procedure studied is a single procedure for a request for asylum or international protection whatever the status of the applicant, whether:






  — | a refugee in accordance with the 1951 Geneva Convention and with the 1967 New York Protocol; or |
| --- | --- | --- |

1.10

In short, the single procedure studied is a single procedure for a request for asylum or international protection whatever the status of the applicant, whether:

—

a refugee in accordance with the 1951 Geneva Convention and with the 1967 New York Protocol; or

| — | a beneficiary of subsidiary protection in accordance with Directive 2004/83/EC adopted by the Council on 29 April 2004 (4). |
| --- | --- |

—

a beneficiary of subsidiary protection in accordance with Directive 2004/83/EC adopted by the Council on 29 April 2004 (4).

2.   General comments

| 2.1 | The Committee welcomes the Commission's ambitious objectives and shares its concern that a single procedure should safeguard the integrity of the 1951 Geneva Convention. To this end and, in line with the provisions of the Qualification Directive, refugees' rights should firstly be considered on the basis of the procedures set out in the 1951 Convention — with consideration of subsidiary protection being the second course of action if the conditions required under that Convention status are not fulfilled. |
| --- | --- |

2.1

The Committee welcomes the Commission's ambitious objectives and shares its concern that a single procedure should safeguard the integrity of the 1951 Geneva Convention. To this end and, in line with the provisions of the Qualification Directive, refugees' rights should firstly be considered on the basis of the procedures set out in the 1951 Convention — with consideration of subsidiary protection being the second course of action if the conditions required under that Convention status are not fulfilled.

| 2.2 | The Committee recommends that this priority should be explicit, whatever happens with regard to introducing a single procedure. |
| --- | --- |

2.2

The Committee recommends that this priority should be explicit, whatever happens with regard to introducing a single procedure.

| 2.3 | The Committee recommends that reasons should be given for any rejection of a request for international protection and particularly for any refusal to grant refugee status in accordance with the 1951 Geneva Convention, even where subsidiary protection is granted. The Committee believes these guarantees to be crucial to safeguarding the integrity of the 1951 Geneva Convention, as stated by the Commission. |
| --- | --- |

2.3

The Committee recommends that reasons should be given for any rejection of a request for international protection and particularly for any refusal to grant refugee status in accordance with the 1951 Geneva Convention, even where subsidiary protection is granted. The Committee believes these guarantees to be crucial to safeguarding the integrity of the 1951 Geneva Convention, as stated by the Commission.

| 2.4 | As regards the need for subsidiary protection, the Committee recognises that asylum seekers cannot determine which statuses arise from the Convention and which are subsidiary and that they face further problems in the country where they have to resubmit an application on other grounds after being refused the status provided for in the 1951 Geneva Convention, leading to confusion, discouragement and intolerable delays. |
| --- | --- |

2.4

As regards the need for subsidiary protection, the Committee recognises that asylum seekers cannot determine which statuses arise from the Convention and which are subsidiary and that they face further problems in the country where they have to resubmit an application on other grounds after being refused the status provided for in the 1951 Geneva Convention, leading to confusion, discouragement and intolerable delays.

| 2.5 | The Committee calls on the Commission to take account, in its communication and when it launches the preparatory and legislative phases, of the non-refoulement principle (Article 33 of the Geneva Convention) and of the need to provide a judicial right of appeal against negative decisions. A possible ex officio examination of subsidiary protection grounds should be undertaken once the conditions for granting refugee status provided for under the Geneva Convention have been examined, and the applicant should be granted the right of appeal against involuntary return, in accordance with international and European human rights conventions. |
| --- | --- |

2.5

The Committee calls on the Commission to take account, in its communication and when it launches the preparatory and legislative phases, of the non-refoulement principle (Article 33 of the Geneva Convention) and of the need to provide a judicial right of appeal against negative decisions. A possible ex officio examination of subsidiary protection grounds should be undertaken once the conditions for granting refugee status provided for under the Geneva Convention have been examined, and the applicant should be granted the right of appeal against involuntary return, in accordance with international and European human rights conventions.

| 2.6 | To this end, NGOs and the UNHCR should not be excluded from administrative appeals committees where these exist and, where they do not exist, should have unrestricted access to asylum seekers and their applications, in order to facilitate access to and use of this right. |
| --- | --- |

2.6

To this end, NGOs and the UNHCR should not be excluded from administrative appeals committees where these exist and, where they do not exist, should have unrestricted access to asylum seekers and their applications, in order to facilitate access to and use of this right.

| 2.7 | The Committee urges the Commission, in its amendments to the Directive on Procedures adopted by the Council on 19 November 2004 and to be re-submitted to the European Parliament, to extend the scope to include subsidiary protection, under the terms of the Qualification Directive and to review its classification of ‘safe’ third countries of origin or of transit ‘from safe third countries’, which denies asylum seekers the chance to have their individual situation and rights examined. |
| --- | --- |

2.7

The Committee urges the Commission, in its amendments to the Directive on Procedures adopted by the Council on 19 November 2004 and to be re-submitted to the European Parliament, to extend the scope to include subsidiary protection, under the terms of the Qualification Directive and to review its classification of ‘safe’ third countries of origin or of transit ‘from safe third countries’, which denies asylum seekers the chance to have their individual situation and rights examined.

| 2.8 | The EESC recommends that any current errors and problems in existing procedures for determining the status of refugees be addressed in the preparatory phase. |
| --- | --- |

2.8

The EESC recommends that any current errors and problems in existing procedures for determining the status of refugees be addressed in the preparatory phase.

| 2.9 | Where bilateral readmission agreements are concerned, in order to allow all Member States to comply with their international obligations and with European directives (5); the Council should ensure that it has the means, in the preparatory phase, to create a harmonised system of solidarity between Member States, such as resettlement schemes and burden-sharing. |
| --- | --- |

2.9

Where bilateral readmission agreements are concerned, in order to allow all Member States to comply with their international obligations and with European directives (5); the Council should ensure that it has the means, in the preparatory phase, to create a harmonised system of solidarity between Member States, such as resettlement schemes and burden-sharing.

| 2.10 | The Committee also calls on the Commission to review the so-called ‘accelerated procedure’, which denies asylum seekers the benefits of a thorough assessment of their individual situation and their associated rights, in particular the suspensive effect of legal proceedings, which puts them in danger of being returned to their country of origin before their case is heard by a competent court. |
| --- | --- |

2.10

The Committee also calls on the Commission to review the so-called ‘accelerated procedure’, which denies asylum seekers the benefits of a thorough assessment of their individual situation and their associated rights, in particular the suspensive effect of legal proceedings, which puts them in danger of being returned to their country of origin before their case is heard by a competent court.

| 2.11 | With regard to the possibilities and grounds for return to the country of origin, the EESC calls upon the Commission to take account of the fact that this may not be possible in certain cases because of obstacles not related to the refugee's status or for humanitarian reasons (e.g. illness). |
| --- | --- |

2.11

With regard to the possibilities and grounds for return to the country of origin, the EESC calls upon the Commission to take account of the fact that this may not be possible in certain cases because of obstacles not related to the refugee's status or for humanitarian reasons (e.g. illness).

Brussels, 15 December 2004.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  Cf: Directive 2004/83/EC on minimum standards for the qualification and status of third country nationals and stateless persons as refugees or as persons who otherwise need international protection, adopted by the Council on 29.04.2004, and the related EESC opinion in OJ C 221 of 17.09.2002 (rapporteur: Ms Le Nouail Marlière).

1

(2)  Cf. Decision 2000/596/EC creating a European Refugee Fund and related opinions in OJ C 168 of 16.6.2000 (rapporteur: Ms zu Eulenburg; Directive 2001/55/EC on giving temporary protection in the event of a mass influx of displaced persons and the EESC opinion in OJ C 155 of 29.5.2001 (rapporteur: Ms Cassina); Directive on minimum standards on procedures in Member States for granting and withdrawing refugee status, on which the Council reached agreement on 19.11.2004, and the EESC opinion in OJ C 193 of 10.7.2001, (rapporteur: Ms Melicías); Directive 2003/9/EC on minimum standards on the reception of applicants for asylum in Member States and the EESC opinion in OJ C 48 of 21.2.2001 (rapporteurs: Mr Mengozzi and Mr Pariza Castaños); Regulation No. 343/2003 on the criteria and mechanisms for examining an asylum application (Dublin II) and the EESC opinion in OJ C 125 of 27.5.2002 (rapporteur: Mr Sharma); Directive 2004/83/EC on minimum standards for the qualification and status of third country nationals and stateless persons as refugees or as persons who otherwise need international protection, adopted by the Council on 29.4.2004, and the related EESC opinion in OJ C 221 of 17.9.2002 (rapporteur: Ms Le Nouail Marlière); Council Decision establishing the European Refugee Fund for the period 2005-2010 of 8.6.2004 and the opinion of the EESC – OJ C 241 of 28.9.2004.

2

(3)  Cf: Directive 2004/83/EC on minimum standards for the qualification and status of third country nationals and stateless persons as refugees or as persons who otherwise need international protection, adopted by the Council on 29.04.2004, and the related EESC opinion in OJ C 221 of 17.09.2002 (rapporteur: Ms Le Nouail Marlière).

3

(4)  Cf: the Council Directive on minimum standards for the qualification and status of third country nationals and stateless persons as refugees or as persons who otherwise need international protection, adopted by the Council on 29.04.2004.

4

(5)  Cf point 3.13.1 of the EESC opinion on the Commission Communication ‘Study on the links between legal and illegal migration’ (COM(2004) 412 final) adopted on 15/16 December 2004 (rapporteur: Mr Pariza Castaños).

5

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| 28.6.2005 | EN | Official Journal of the European Union | C 157/99 |
| --- | --- | --- | --- |

28.6.2005

EN

Official Journal of the European Union

C 157/99

---

Opinion of the European Economic and Social Committee on the ‘Proposal for a Regulation of the European Parliament and of the Council on the access to Community External Assistance’

(COM(2004) 313 final — 2004/0099 (COD))

(2005/C 157/18)

On 15 August 2004, 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 External Relations, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 9 November 2004. The rapporteur was Mr Zufiaur Narvaiza.

At its 413th plenary session on 15 and 16 December 2004 (meeting of 15 December 2004), the European Economic and Social Committee adopted the following opinion by 145 votes in favour with five abstentions.

1.   Introduction

| 1.1 | The aim of making development aid more effective by reducing the transaction costs involved has prompted the donor community to engage in a constant process of adjustment. This is reflected in the positions of the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD), a body which brings donors together and attempts to harmonise their policies. |
| --- | --- |

1.1

The aim of making development aid more effective by reducing the transaction costs involved has prompted the donor community to engage in a constant process of adjustment. This is reflected in the positions of the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD), a body which brings donors together and attempts to harmonise their policies.

| 1.2 | A clear consensus has emerged following several decades of experience that the practice of directly or indirectly tying aid to the purchase of goods or services from the donor is not only inconsistent with the objectives of promoting development, but also reduces its effectiveness. The obligation to buy goods or services from public or private enterprises in the donor country, with the obvious lack of competition, entailed higher costs and also encouraged corruption. Such practices gave rise to a series of internal market distortions and infringed EU rules on competition, mainly with regard to the principles of equal treatment and non-discrimination. |
| --- | --- |

1.2

A clear consensus has emerged following several decades of experience that the practice of directly or indirectly tying aid to the purchase of goods or services from the donor is not only inconsistent with the objectives of promoting development, but also reduces its effectiveness. The obligation to buy goods or services from public or private enterprises in the donor country, with the obvious lack of competition, entailed higher costs and also encouraged corruption. Such practices gave rise to a series of internal market distortions and infringed EU rules on competition, mainly with regard to the principles of equal treatment and non-discrimination.

| 1.3 | As a result, this concern has been on the donor agenda over recent years, leading to the adoption by the OECD/DAC in March 2001 of a recommendation to untie aid to the least developed countries, which has since become a benchmark in the field. The underlying purpose of the DAC recommendation is to cut aid transaction costs by 15-30 %. According to World Bank data, complete untying of aid could reduce these costs by 25 %. |
| --- | --- |

1.3

As a result, this concern has been on the donor agenda over recent years, leading to the adoption by the OECD/DAC in March 2001 of a recommendation to untie aid to the least developed countries, which has since become a benchmark in the field. The underlying purpose of the DAC recommendation is to cut aid transaction costs by 15-30 %. According to World Bank data, complete untying of aid could reduce these costs by 25 %.

| 1.4 | In the Community context, this approach was adopted at the March 2002 General Affairs Council held in parallel with the Barcelona European Council in preparation for the Monterrey international conference on financing for development. It concluded that the European Union would implement the DAC recommendation on untying developing aid to the least developed countries, while maintaining the existing system of price preference under the EU-ACP framework. The Council, and subsequently the Parliament (Report on the Communication from the Commission to the Council and to the European Parliament on Untying: Enhancing the effectiveness of aid COM(2002) 639 final — 2002/2284 (INI) A5-0190/2003) support untying on the basis of three conditions to be met: regional and interregional integration, institutional and capacity building in the recipient countries and avoidance of distortion of competition between donor and recipient countries. To this must be added the principles of reciprocity and cooperation with international organisations. |
| --- | --- |

1.4

In the Community context, this approach was adopted at the March 2002 General Affairs Council held in parallel with the Barcelona European Council in preparation for the Monterrey international conference on financing for development. It concluded that the European Union would implement the DAC recommendation on untying developing aid to the least developed countries, while maintaining the existing system of price preference under the EU-ACP framework. The Council, and subsequently the Parliament (Report on the Communication from the Commission to the Council and to the European Parliament on Untying: Enhancing the effectiveness of aid COM(2002) 639 final — 2002/2284 (INI) A5-0190/2003) support untying on the basis of three conditions to be met: regional and interregional integration, institutional and capacity building in the recipient countries and avoidance of distortion of competition between donor and recipient countries. To this must be added the principles of reciprocity and cooperation with international organisations.

| 1.5 | This position has been progressively fleshed out in a number of subsequent communications from Community bodies, which are cited in the draft regulation. It still remained to establish and give more practical form to the conditions for access to the various Community external assistance instruments. The present proposal comes in response to this need. |
| --- | --- |

1.5

This position has been progressively fleshed out in a number of subsequent communications from Community bodies, which are cited in the draft regulation. It still remained to establish and give more practical form to the conditions for access to the various Community external assistance instruments. The present proposal comes in response to this need.

| 1.6 | Since the instruments under the European Development Fund (EDF) and the Community budget are still of differing legal natures, it seems logical to establish two parallel processes. The Commission's recent Communication on Building our common future: Policy challenges and budgetary means in the enlarged Union 2007-2013 (1) provides the framework for the present proposal for a regulation. It must, however, be borne in mind that the EDF budgeting procedure will have a future impact, should the fund come under the EC budget. Therefore, this present proposal for a regulation only covers the scope of the instruments within the EC budget. When the EDF is included in the EC budget, it too will be governed by the present draft regulation (2). |
| --- | --- |

1.6

Since the instruments under the European Development Fund (EDF) and the Community budget are still of differing legal natures, it seems logical to establish two parallel processes. The Commission's recent Communication on Building our common future: Policy challenges and budgetary means in the enlarged Union 2007-2013 (1) provides the framework for the present proposal for a regulation. It must, however, be borne in mind that the EDF budgeting procedure will have a future impact, should the fund come under the EC budget. Therefore, this present proposal for a regulation only covers the scope of the instruments within the EC budget. When the EDF is included in the EC budget, it too will be governed by the present draft regulation (2).

| 1.7 | The proposal for a regulation on access to Community external assistance therefore appears both relevant and fully justified, on the grounds of both the commitments of the Community institutions referred to above and the criteria of subsidiarity and proportionality cited in the explanatory memorandum to the draft regulation. |
| --- | --- |

1.7

The proposal for a regulation on access to Community external assistance therefore appears both relevant and fully justified, on the grounds of both the commitments of the Community institutions referred to above and the criteria of subsidiarity and proportionality cited in the explanatory memorandum to the draft regulation.

2.   Specific comments

Article 1 — Scope

| 2.1 | The EESC has no objection to make. The scope of the regulation is appropriate, it being clear that certain instruments, such as budgetary support, are excluded from it. The list contained in Annex I is accurate. |
| --- | --- |

2.1

The EESC has no objection to make. The scope of the regulation is appropriate, it being clear that certain instruments, such as budgetary support, are excluded from it. The list contained in Annex I is accurate.

Article 2 — Definition

| 2.2 | The EESC agrees with the position set out in the regulation, that it should be interpreted on the basis of the financial regulation and the other instruments applicable to the general budget of the European Communities. |
| --- | --- |

2.2

The EESC agrees with the position set out in the regulation, that it should be interpreted on the basis of the financial regulation and the other instruments applicable to the general budget of the European Communities.

Article 3 — Rules of eligibility

| 2.3 | The establishment of different categories according to the various instruments seems logical. The specification regarding instruments of geographical scope is also appropriate as a means of strengthening regional integration and capacity-building. In view of what is a decades-old tradition in the area of tied aid and the inertia it has produced, the EESC would emphasise the need to foster the involvement of natural and legal persons from the developing or transition countries appearing on the OECD/DAC lists. Application of the principle of non-tied aid and the opening up of public procurement must not be prejudicial to countries receiving Community assistance. |
| --- | --- |

2.3

The establishment of different categories according to the various instruments seems logical. The specification regarding instruments of geographical scope is also appropriate as a means of strengthening regional integration and capacity-building. In view of what is a decades-old tradition in the area of tied aid and the inertia it has produced, the EESC would emphasise the need to foster the involvement of natural and legal persons from the developing or transition countries appearing on the OECD/DAC lists. Application of the principle of non-tied aid and the opening up of public procurement must not be prejudicial to countries receiving Community assistance.

Article 4 — Rules of origin

| 2.4 | In keeping with the previous article, the EESC welcomes all clarification concerning supply of materials and rules of origin. The EESC would highlight the need for very strict compliance with all internationally-approved labour, environmental and human rights rules and standards, as it has done previously (3). Untying aid and opening up markets must be compatible with high standards of social and environmental protection. |
| --- | --- |

2.4

In keeping with the previous article, the EESC welcomes all clarification concerning supply of materials and rules of origin. The EESC would highlight the need for very strict compliance with all internationally-approved labour, environmental and human rights rules and standards, as it has done previously (3). Untying aid and opening up markets must be compatible with high standards of social and environmental protection.

Article 5 — Reciprocity with third countries

| 2.5 | The EESC fully supports the approach taken by the article in appreciating real, and not only official, reciprocity. Previous experience in this area argues in favour of this basic precaution and of granting reciprocity according to criteria of transparency, consistency and proportionality. The expression ‘to the maximum extent’ with regard to the beneficiary countries in paragraph 5 undermines this. The EESC would propose including a reference to the partnership principle, which is a basic pillar of Community development policy, as well as of the DAC, in order to underscore the importance of beneficiary country involvement. |
| --- | --- |

2.5

The EESC fully supports the approach taken by the article in appreciating real, and not only official, reciprocity. Previous experience in this area argues in favour of this basic precaution and of granting reciprocity according to criteria of transparency, consistency and proportionality. The expression ‘to the maximum extent’ with regard to the beneficiary countries in paragraph 5 undermines this. The EESC would propose including a reference to the partnership principle, which is a basic pillar of Community development policy, as well as of the DAC, in order to underscore the importance of beneficiary country involvement.

Article 6 — Derogations from the rules of eligibility and origin

| 2.6 | In the EESC's view, it is reasonable for a regulation of this type to contain exceptions in order to allow the necessary flexibility in application. This is justified on the grounds given in the regulation — urgency, or unavailability on the market of certain products and services — in duly substantiated cases. |
| --- | --- |

2.6

In the EESC's view, it is reasonable for a regulation of this type to contain exceptions in order to allow the necessary flexibility in application. This is justified on the grounds given in the regulation — urgency, or unavailability on the market of certain products and services — in duly substantiated cases.

Article 7 — Operations involving international institutions or third countries

| 2.7 | A reference of this kind is made necessary by the fact that a large proportion of assistance is channelled through multilateral or other mechanisms, and that many operations are co-financed. It is therefore appropriate. Care must be taken, especially in such cases, to ensure equal treatment of between donors, and reciprocity. |
| --- | --- |

2.7

A reference of this kind is made necessary by the fact that a large proportion of assistance is channelled through multilateral or other mechanisms, and that many operations are co-financed. It is therefore appropriate. Care must be taken, especially in such cases, to ensure equal treatment of between donors, and reciprocity.

Article 8 — Humanitarian aid

| 2.8 | The particular nature of humanitarian aid, of increasing importance in the international arena, explains why a number of derogations from Community legislation were acknowledged as far back as Regulation 1257/96. The new framework partnership contract which the Humanitarian Aid Office (ECHO) enters into with financial bodies maintains this approach. This seems right, in the interests of speed and effectiveness in responding to emergencies; and it also seems appropriate that the present regulation should apply in cases where the award of procurement contracts is required. |
| --- | --- |

2.8

The particular nature of humanitarian aid, of increasing importance in the international arena, explains why a number of derogations from Community legislation were acknowledged as far back as Regulation 1257/96. The new framework partnership contract which the Humanitarian Aid Office (ECHO) enters into with financial bodies maintains this approach. This seems right, in the interests of speed and effectiveness in responding to emergencies; and it also seems appropriate that the present regulation should apply in cases where the award of procurement contracts is required.

Article 9 — Rapid Reaction Mechanism

| 2.9 | As in the previous article, it is reasonable that such mechanisms should contain exceptional procedures and criteria. The article amended is 6(4)(b). |
| --- | --- |

2.9

As in the previous article, it is reasonable that such mechanisms should contain exceptional procedures and criteria. The article amended is 6(4)(b).

Article 10 — Implementation of the regulation

| 2.10 | In pursuit of its aim, the regulation amends specific parts of the earlier regulations set out in the Annex. This specific action is justified in view of the proliferation of regulations in the 1990s and the diversity of the instruments created by them. However, the expression ‘from time to time’ does not seem right. |
| --- | --- |

2.10

In pursuit of its aim, the regulation amends specific parts of the earlier regulations set out in the Annex. This specific action is justified in view of the proliferation of regulations in the 1990s and the diversity of the instruments created by them. However, the expression ‘from time to time’ does not seem right.

Article 11 — Entry into force

| 2.11 | No comment. |
| --- | --- |

2.11

No comment.

3.   General comments

| 3.1 | The present proposal for a regulation on access to Community external assistance follows the established doctrine of donor organisations and the previous positions taken by the Community institutions and the Member States. Consequently, the EESC sees nothing inappropriate or prejudicial to the Union's development cooperation or external action. On the contrary, it considers that it will help enhance the effectiveness of Community cooperation and its famous ‘three Cs’: coherence — complementarity — coordination. |
| --- | --- |

3.1

The present proposal for a regulation on access to Community external assistance follows the established doctrine of donor organisations and the previous positions taken by the Community institutions and the Member States. Consequently, the EESC sees nothing inappropriate or prejudicial to the Union's development cooperation or external action. On the contrary, it considers that it will help enhance the effectiveness of Community cooperation and its famous ‘three Cs’: coherence — complementarity — coordination.

| 3.2 | The EESC would however wish to emphasise certain key ideas and recommend a number of aspects where the regulation could be more rigorous and precise: |
| --- | --- |

3.2

The EESC would however wish to emphasise certain key ideas and recommend a number of aspects where the regulation could be more rigorous and precise:

| 3.3 | There should be greater insistence on the pro-active role which the recipient countries ought to play as key actors in development. Untying must not be detrimental to their interests, and greater involvement of these countries must be facilitated, as recommended in the above-mentioned international documents and the positions of the Community institutions themselves. The EESC would nevertheless recommend to recipient countries that they adopt and apply the principles of transparency, equality, reciprocal recognition and proportionality in their procurement procedures, as well as good governance practices which will enable them to progress politically as well as economically and socially. |
| --- | --- |

3.3

There should be greater insistence on the pro-active role which the recipient countries ought to play as key actors in development. Untying must not be detrimental to their interests, and greater involvement of these countries must be facilitated, as recommended in the above-mentioned international documents and the positions of the Community institutions themselves. The EESC would nevertheless recommend to recipient countries that they adopt and apply the principles of transparency, equality, reciprocal recognition and proportionality in their procurement procedures, as well as good governance practices which will enable them to progress politically as well as economically and socially.

| 3.4 | In the interests of more effective and efficient application of the present regulation, aspects of the Community aid process such as supply costs, real transport costs or deployment of resources need to be analysed in depth, so as to locate more accurately any bottlenecks and inefficiencies in the system. Although both in letter and in spirit, the thrust of the regulation seems to be for simplification and improvement, the EESC is concerned that new and rigid rules may be introduced leading to more red tape and preventing aid from being supplied rapidly. |
| --- | --- |

3.4

In the interests of more effective and efficient application of the present regulation, aspects of the Community aid process such as supply costs, real transport costs or deployment of resources need to be analysed in depth, so as to locate more accurately any bottlenecks and inefficiencies in the system. Although both in letter and in spirit, the thrust of the regulation seems to be for simplification and improvement, the EESC is concerned that new and rigid rules may be introduced leading to more red tape and preventing aid from being supplied rapidly.

| 3.5 | The entire regulation should be geared to complying with international socio-occupational and environmental standards, and care must be taken to ensure that nothing in it facilitates labour, social or environmental dumping practices. While respecting the active role of partners in the Community aid recipient countries, and fostering the principle of association, compliance with other labour, environmental or social standards must not be overlooked. Article 4 of the regulation should contain an explicit statement to this effect. |
| --- | --- |

3.5

The entire regulation should be geared to complying with international socio-occupational and environmental standards, and care must be taken to ensure that nothing in it facilitates labour, social or environmental dumping practices. While respecting the active role of partners in the Community aid recipient countries, and fostering the principle of association, compliance with other labour, environmental or social standards must not be overlooked. Article 4 of the regulation should contain an explicit statement to this effect.

| 3.6 | The dead weight of tied assistance is universally considered as one of the constraints imposed by the prevailing model of development cooperation, reducing its effectiveness and undermining its credibility by giving priority to ‘donor’ goods and services. Untying is not an end in itself; it is to be seen as a tool, a means for achieving greater impact at lower cost. From this point of view, more involvement on the part of the beneficiary countries is vital if they are to take charge of their own development by fostering the participation of a wide range of social, labour and business organisations in the process. |
| --- | --- |

3.6

The dead weight of tied assistance is universally considered as one of the constraints imposed by the prevailing model of development cooperation, reducing its effectiveness and undermining its credibility by giving priority to ‘donor’ goods and services. Untying is not an end in itself; it is to be seen as a tool, a means for achieving greater impact at lower cost. From this point of view, more involvement on the part of the beneficiary countries is vital if they are to take charge of their own development by fostering the participation of a wide range of social, labour and business organisations in the process.

Brussels, 15 December 2004.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  COM(2004) 101 final of 10.2.2004.

1

(2)  It is currently difficult to predict when the process through which the EDF would become part of the EC budget could be completed.

2

(3)  See the EESC Opinion on Human rights in the Workplace. Rapporteurs: Mr Putzhammer and Mr Gafo Fernandez, DOC 260 of 17/09/2001, p. 79-85. Also see the EESC Opinion on Generalised system of preferences (GSP). Rapporteur: Mr. Pezzini, OJ C 112, 30.4.2004.

3

Human rights in the Workplace

Generalised system of preferences (GSP).

---

| 28.6.2005 | EN | Official Journal of the European Union | C 157/102 |
| --- | --- | --- | --- |

28.6.2005

EN

Official Journal of the European Union

C 157/102

---

Opinion of the European Economic and Social Committee on the ‘Communication from the Commission to the Council and the European Parliament — accomplishing a sustainable agricultural model for Europe through the reformed cap — sugar sector reform’

(COM(2004) 499 final)

(2005/C 157/19)

On 15 July 2004 the Commission decided to consult the European Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on the abovementioned communication.

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 16 November 2004. The rapporteur was Mr Bastian. The co-rapporteur was Mr Strasser.

At its 413th plenary session of 15 and 16 December 2004 (meeting of 15 December 2004) the European Economic and Social Committee adopted the following opinion by 137 votes to 21, with 11 abstentions:

1.   Introduction

| 1.1 | Twenty-one EU countries produce sugar beet. The French overseas departments and Spain are minor sugar cane producers (280,000 tonnes). In general, annual European sugar production fluctuates between 17 and 20 million tonnes, whereas European demand for sugar is estimated at 16 million tonnes a year. |
| --- | --- |

1.1

Twenty-one EU countries produce sugar beet. The French overseas departments and Spain are minor sugar cane producers (280,000 tonnes). In general, annual European sugar production fluctuates between 17 and 20 million tonnes, whereas European demand for sugar is estimated at 16 million tonnes a year.

| 1.2 | Beet cultivation on crop rotation extends over 2.2 million hectares of land and involves 350,000 farmers (i.e. slightly more than 6 hectares per beet farmer). Beet is processed at 200 sugar factories employing 60,000 workers directly. |
| --- | --- |

1.2

Beet cultivation on crop rotation extends over 2.2 million hectares of land and involves 350,000 farmers (i.e. slightly more than 6 hectares per beet farmer). Beet is processed at 200 sugar factories employing 60,000 workers directly.

| 1.3 | The European Union also produces 500,000 tonnes of isoglucose and 250,000 tonnes of inuline syrup and has a refining industry for raw sugar cane (most of which — 1.5 Mt — is imported from the ACP countries (1)). |
| --- | --- |

1.3

The European Union also produces 500,000 tonnes of isoglucose and 250,000 tonnes of inuline syrup and has a refining industry for raw sugar cane (most of which — 1.5 Mt — is imported from the ACP countries (1)).

| 1.4 | In the sugar, isoglucose and inuline syrup sector, the production quota system arising from Regulation 1785/81 has been rolled forward several times. The last roll-forward, in 2001, covered five marketing years — from 2001/2002 to 2005/2006. The regulation involved here (1260/2001) made a number of important changes to its predecessor. These include fixing prices until 30 June 2006, abolishing the storage scheme, ending the financing of storage costs for carried-over sugar, cutting quotas by 115,000 tonnes and making beet planters and sugar manufacturers bear the cost of all production refunds to the chemical industry. |
| --- | --- |

1.4

In the sugar, isoglucose and inuline syrup sector, the production quota system arising from Regulation 1785/81 has been rolled forward several times. The last roll-forward, in 2001, covered five marketing years — from 2001/2002 to 2005/2006. The regulation involved here (1260/2001) made a number of important changes to its predecessor. These include fixing prices until 30 June 2006, abolishing the storage scheme, ending the financing of storage costs for carried-over sugar, cutting quotas by 115,000 tonnes and making beet planters and sugar manufacturers bear the cost of all production refunds to the chemical industry.

| 1.5 | On 14 July 2004, the Commission submitted a communication on sugar sector reform [COM(2004) 499 final] as a further step in the establishment of its sustainable agricultural model for Europe. |
| --- | --- |

1.5

On 14 July 2004, the Commission submitted a communication on sugar sector reform [COM(2004) 499 final] as a further step in the establishment of its sustainable agricultural model for Europe.

| 1.6 | In this document, the Commission proposes radical changes to the sugar regime, prices and quotas from 1 July 2005 and anticipates making further proposals on quotas and prices in 2008, if need be. The Commission is thus seeking to bring the sugar regime into line with the CAP reform, make the European sugar market less attractive for imports, substantially cut quota sugar exports involving refunds, and abolish production refunds for sugar sold to the chemical industry. |
| --- | --- |

1.6

In this document, the Commission proposes radical changes to the sugar regime, prices and quotas from 1 July 2005 and anticipates making further proposals on quotas and prices in 2008, if need be. The Commission is thus seeking to bring the sugar regime into line with the CAP reform, make the European sugar market less attractive for imports, substantially cut quota sugar exports involving refunds, and abolish production refunds for sugar sold to the chemical industry.

| 1.7 | The Commission proposes merging the A and B quotas into a single quota and cutting the sugar quota by 1.3 million tonnes and by a further 500,000 tonnes per year for the following three years (thereby securing an overall reduction of 2.8 million tonnes or 16 %). |
| --- | --- |

1.7

The Commission proposes merging the A and B quotas into a single quota and cutting the sugar quota by 1.3 million tonnes and by a further 500,000 tonnes per year for the following three years (thereby securing an overall reduction of 2.8 million tonnes or 16 %).

| 1.8 | In tandem with this cut in sugar quotas, the Commission is proposing increasing the isoglucose quotas by 100,000 tonnes a year for three years (i.e. a rise of 60 %) and maintaining insulin quotas. |
| --- | --- |

1.8

In tandem with this cut in sugar quotas, the Commission is proposing increasing the isoglucose quotas by 100,000 tonnes a year for three years (i.e. a rise of 60 %) and maintaining insulin quotas.

| 1.9 | In order to bring about what it sees as the necessary restructuring of the sugar sector, the Commission proposes making quotas freely transferable at European level. The Commission also makes provision for a co-financing scheme with the Member States, for granting aid — to the tune of €250 per tonne of quota sugar — to sugar manufacturers who are unable to sell their quota and wish to withdraw from sugar production. The purpose of this aid would be to help the sugar manufacturers concerned meet their social and environmental commitments. |
| --- | --- |

1.9

In order to bring about what it sees as the necessary restructuring of the sugar sector, the Commission proposes making quotas freely transferable at European level. The Commission also makes provision for a co-financing scheme with the Member States, for granting aid — to the tune of €250 per tonne of quota sugar — to sugar manufacturers who are unable to sell their quota and wish to withdraw from sugar production. The purpose of this aid would be to help the sugar manufacturers concerned meet their social and environmental commitments.

| 1.10 | The Commission proposes a private storage scheme (2) and a mandatory carry-over mechanism for quota sugar to replace the intervention regime and the declassification mechanism. The purpose of this proposal is to guarantee prices through market balance and to ensure compliance with WTO commitments. |
| --- | --- |

1.10

The Commission proposes a private storage scheme (2) and a mandatory carry-over mechanism for quota sugar to replace the intervention regime and the declassification mechanism. The purpose of this proposal is to guarantee prices through market balance and to ensure compliance with WTO commitments.

| 1.11 | On prices, the Commission proposes replacing the intervention price for sugar by a reference price which will serve to calculate the minimum price for imports from the ACP and least developed countries (LDCs) and as a trigger for private storage measures and the carrying-over of any surplus volume to the following year. The institutional support prices would be reduced in two stages. To that end, the Commission is proposing a reference price of €506 per tonne of white sugar in 2005/2006 and 2006/2007 and €421 per tonne in 2007/2008. This compares with a current intervention price of €631.9 per tonne and a weighted A+B market price estimated by the Commission at €655. |
| --- | --- |

1.11

On prices, the Commission proposes replacing the intervention price for sugar by a reference price which will serve to calculate the minimum price for imports from the ACP and least developed countries (LDCs) and as a trigger for private storage measures and the carrying-over of any surplus volume to the following year. The institutional support prices would be reduced in two stages. To that end, the Commission is proposing a reference price of €506 per tonne of white sugar in 2005/2006 and 2006/2007 and €421 per tonne in 2007/2008. This compares with a current intervention price of €631.9 per tonne and a weighted A+B market price estimated by the Commission at €655.

| 1.11.1 | At the same time, the minimum weighted price for A+B quota sugar beet would drop from €43.6 per tonne at the moment to €32.8 per tonne in 2005/2006 and 2006/2007 (-25 %) and to €27.4 per tonne in 2007/2008 (-37 %). The basic beet price is currently €47.67 per tonne. The Committee believes that price-cutting will be greater in some Member States than in others due to the differing proportions of the A and B quotas. |
| --- | --- |

1.11.1

At the same time, the minimum weighted price for A+B quota sugar beet would drop from €43.6 per tonne at the moment to €32.8 per tonne in 2005/2006 and 2006/2007 (-25 %) and to €27.4 per tonne in 2007/2008 (-37 %). The basic beet price is currently €47.67 per tonne. The Committee believes that price-cutting will be greater in some Member States than in others due to the differing proportions of the A and B quotas.

| 1.11.2 | The Commission considers that up to 60 % of the income lost as a result of the drop in the weighed price of quota beet should be offset through direct income support decoupled from production (in line with the provisions of the 2003 CAP reform). |
| --- | --- |

1.11.2

The Commission considers that up to 60 % of the income lost as a result of the drop in the weighed price of quota beet should be offset through direct income support decoupled from production (in line with the provisions of the 2003 CAP reform).

| 1.11.3 | The Commission estimates the cost to the budget of decoupled compensation at €895 million in 2005/2006 and 2006/2007 and €1.340 billion a year from 2007/2008. |
| --- | --- |

1.11.3

The Commission estimates the cost to the budget of decoupled compensation at €895 million in 2005/2006 and 2006/2007 and €1.340 billion a year from 2007/2008.

| 1.12 | The Commission proposes abolishing production refunds for the chemical and pharmaceutical industries (3) and allowing these industries to take supplies of C sugar, as happens in the alcohol and yeast sector. |
| --- | --- |

1.12

The Commission proposes abolishing production refunds for the chemical and pharmaceutical industries (3) and allowing these industries to take supplies of C sugar, as happens in the alcohol and yeast sector.

| 1.13 | With regard to relations with suppliers of preferential ACP sugar, the Commission proposes pressing ahead with the ACP sugar protocol — which involves import quotas — but with a reduction in the guaranteed price that matches the reduction in the price of beet. The Commission proposes initiating dialogue with the ACP countries to help them adapt to the new conditions, on the basis of an action plan to be submitted before the end of 2004. |
| --- | --- |

1.13

With regard to relations with suppliers of preferential ACP sugar, the Commission proposes pressing ahead with the ACP sugar protocol — which involves import quotas — but with a reduction in the guaranteed price that matches the reduction in the price of beet. The Commission proposes initiating dialogue with the ACP countries to help them adapt to the new conditions, on the basis of an action plan to be submitted before the end of 2004.

| 1.13.1 | The Commission proposes abolishing refining aid for sugar from the ACP countries and the French overseas departments and, in time, dispensing with the concept of Maximum Supply Needs. |
| --- | --- |

1.13.1

The Commission proposes abolishing refining aid for sugar from the ACP countries and the French overseas departments and, in time, dispensing with the concept of Maximum Supply Needs.

| 1.14 | For the least developed countries (LDCs), the Commission makes no proposals on managing import levels. It asks that the import prices for LDC sugar be no lower than the ACP minimum price. With regard to the Balkans, the Commission plans to negotiate an import quota. Under the EBA (Everything but Arms) arrangement, sugar from 49 LDCs will be allowed onto the European market tariff- and quota-free from 2009. |
| --- | --- |

1.14

For the least developed countries (LDCs), the Commission makes no proposals on managing import levels. It asks that the import prices for LDC sugar be no lower than the ACP minimum price. With regard to the Balkans, the Commission plans to negotiate an import quota. Under the EBA (Everything but Arms) arrangement, sugar from 49 LDCs will be allowed onto the European market tariff- and quota-free from 2009.

2.   General comments

| 2.1 | The European Economic and Social Committee (EESC) notes that changes and adaptations to the Common Market Organisation (CMO) in sugar have become necessary because of:






  — | the 2001 Everything but Arms initiative aimed at the least developed countries (LDCs), the impact of which on sugar was not properly gauged by the Commission at the time; |
| --- | --- | --- |

2.1

The European Economic and Social Committee (EESC) notes that changes and adaptations to the Common Market Organisation (CMO) in sugar have become necessary because of:

—

the 2001 Everything but Arms initiative aimed at the least developed countries (LDCs), the impact of which on sugar was not properly gauged by the Commission at the time;

| — | the overall trend towards more open European agricultural markets as a result of World Trade Organisation negotiations; |
| --- | --- |

—

the overall trend towards more open European agricultural markets as a result of World Trade Organisation negotiations;

| — | threats to European sugar exports arising from the WTO sugar panel and Doha Round trade negotiations; and |
| --- | --- |

—

threats to European sugar exports arising from the WTO sugar panel and Doha Round trade negotiations; and

| — | CAP reform. |
| --- | --- |

—

CAP reform.

It is not therefore a question of assessing the need for reform, but of examining what kind of reform is needed, its scope and the date it is to become operative.

| 2.2 | The Commission favours a radical revamp of the sugar regulation. It justifies its proposal by stating that the current regime is criticised ‘for a lack of competition, distortions in the market, high prices for the consumers and users, and its effect on the world market, particularly in relation to developing countries’. The European Economic and Social Committee regrets that the Commission should base its thinking on blanket criticism of this sort without seeking verification for it in reliable studies. In that regard, the Committee would point to its own opinion of 30 November 2000 (4). |
| --- | --- |

2.2

The Commission favours a radical revamp of the sugar regulation. It justifies its proposal by stating that the current regime is criticised ‘for a lack of competition, distortions in the market, high prices for the consumers and users, and its effect on the world market, particularly in relation to developing countries’. The European Economic and Social Committee regrets that the Commission should base its thinking on blanket criticism of this sort without seeking verification for it in reliable studies. In that regard, the Committee would point to its own opinion of 30 November 2000 (4).

| 2.3 | The EESC notes that the Commission proposal largely pre-empts the upcoming international agenda and undermines the WTO negotiating remit. That is unwise and detrimental to safeguarding the legitimate interests of the EU sugar industry and its preferential suppliers. Furthermore, it does not enable the Commission to deal with issues relating to sugar outside the quota system. |
| --- | --- |

2.3

The EESC notes that the Commission proposal largely pre-empts the upcoming international agenda and undermines the WTO negotiating remit. That is unwise and detrimental to safeguarding the legitimate interests of the EU sugar industry and its preferential suppliers. Furthermore, it does not enable the Commission to deal with issues relating to sugar outside the quota system.

| 2.4 | The EESC is concerned about the impact of the proposed cuts in prices and quotas on levels of EU beet and sugar production, the incomes of many family farms, the sustainability of industrial and trading activities in the sugar sector, sugar industry and rural employment, and multifunctionality, not least in less-favoured or outlying regions and in the new Member States where major restructuring investments are needed. The EESC has its doubts as to whether the Commission's reform proposals are in keeping with the European agricultural model, the multifunctional approach and the sustainability principle as unanimously defined by the Luxembourg European Council in December 1997 (5). The EESC also considers that the reform proposals run counter to the Lisbon strategy, which expressly cites job creation as one of its goals. |
| --- | --- |

2.4

The EESC is concerned about the impact of the proposed cuts in prices and quotas on levels of EU beet and sugar production, the incomes of many family farms, the sustainability of industrial and trading activities in the sugar sector, sugar industry and rural employment, and multifunctionality, not least in less-favoured or outlying regions and in the new Member States where major restructuring investments are needed. The EESC has its doubts as to whether the Commission's reform proposals are in keeping with the European agricultural model, the multifunctional approach and the sustainability principle as unanimously defined by the Luxembourg European Council in December 1997 (5). The EESC also considers that the reform proposals run counter to the Lisbon strategy, which expressly cites job creation as one of its goals.

| 2.5 | The EESC asks the Commission to conduct a detailed and verifiable study of the regions where beet production and the sugar industry will be threatened and on how many direct and indirect jobs in the agricultural and industrial sectors will be at risk overall. Last year's Commission impact assessment does not provide the requisite information. |
| --- | --- |

2.5

The EESC asks the Commission to conduct a detailed and verifiable study of the regions where beet production and the sugar industry will be threatened and on how many direct and indirect jobs in the agricultural and industrial sectors will be at risk overall. Last year's Commission impact assessment does not provide the requisite information.

| 2.6 | The EESC does not believe that the Commission's reform scenario — securing market balance by cutting prices — can meet its objective. Nor, in the long run, will this scenario maintain a strong European beet farming and sugar industry. It also fails to uphold European commitments towards developing countries supplying preferential sugar. In fact, these cuts will spell the end for many producers both in Europe and in the developing countries and will considerably weaken the position of those producers that do survive. At the same time, Brazil will be given the opportunity to increase its world market share and, from 2008/2009, will also be able to export — indirectly — more and more sugar to Europe through the swap (6) (triangular trade) arrangement with the least developed countries, which will not benefit themselves in terms of social and rural development. |
| --- | --- |

2.6

The EESC does not believe that the Commission's reform scenario — securing market balance by cutting prices — can meet its objective. Nor, in the long run, will this scenario maintain a strong European beet farming and sugar industry. It also fails to uphold European commitments towards developing countries supplying preferential sugar. In fact, these cuts will spell the end for many producers both in Europe and in the developing countries and will considerably weaken the position of those producers that do survive. At the same time, Brazil will be given the opportunity to increase its world market share and, from 2008/2009, will also be able to export — indirectly — more and more sugar to Europe through the swap (6) (triangular trade) arrangement with the least developed countries, which will not benefit themselves in terms of social and rural development.

| 2.7 | The EESC feels that such a reform of the sugar CMO will benefit only a few countries, primarily Brazil. In that connection, the Committee would stress that Brazilian sugar production — which is largely sustained by that country's bio-ethanol policy and monetary policy — is subject to social, environmental and land-ownership conditions which are unacceptable but which nonetheless account for the extremely low Brazilian production costs and thus the low prices on the world market. |
| --- | --- |

2.7

The EESC feels that such a reform of the sugar CMO will benefit only a few countries, primarily Brazil. In that connection, the Committee would stress that Brazilian sugar production — which is largely sustained by that country's bio-ethanol policy and monetary policy — is subject to social, environmental and land-ownership conditions which are unacceptable but which nonetheless account for the extremely low Brazilian production costs and thus the low prices on the world market.

| 2.8 | For that reason, the EESC fails to understand why the Commission did not adopt the idea of negotiating preferential import quotas with the LDCs, as those countries themselves are requesting. That would make it possible to satisfy the interests of the poorest developing countries in a more targeted way and to secure a balanced market supply at sustainable prices in Europe. The EESC would highlight the fundamental contradiction in the stance taken by the Commission which, on the one hand, cites the Everything but Arms initiative to justify the radical reform of the sugar CMO, but, on the other, refuses to act on the LDCs' explicit request for a preferential quota system. The EESC considers that import quotas for the Balkans should be established on an urgent basis. |
| --- | --- |

2.8

For that reason, the EESC fails to understand why the Commission did not adopt the idea of negotiating preferential import quotas with the LDCs, as those countries themselves are requesting. That would make it possible to satisfy the interests of the poorest developing countries in a more targeted way and to secure a balanced market supply at sustainable prices in Europe. The EESC would highlight the fundamental contradiction in the stance taken by the Commission which, on the one hand, cites the Everything but Arms initiative to justify the radical reform of the sugar CMO, but, on the other, refuses to act on the LDCs' explicit request for a preferential quota system. The EESC considers that import quotas for the Balkans should be established on an urgent basis.

| 2.9 | The EESC considers that the proposed cuts in prices and quotas go well beyond the WTO remit and are a major step towards full sugar market liberalisation. Such a move cannot provide beet planters, sugar sector workers and European consumers with the prospect of a sustainable future — despite the Commission's attempts to convince us otherwise. |
| --- | --- |

2.9

The EESC considers that the proposed cuts in prices and quotas go well beyond the WTO remit and are a major step towards full sugar market liberalisation. Such a move cannot provide beet planters, sugar sector workers and European consumers with the prospect of a sustainable future — despite the Commission's attempts to convince us otherwise.

| 2.10 | The EESC cannot agree with the Commission that the significant fall in sugar prices should benefit consumers in essence (7). As in earlier reforms, such reductions in the raw material price will hardly — if ever — be passed on. That is true in particular of processed goods, such as soft drinks and sweetened products (75 % of sugar in Europe is consumed in processed goods). The EESC believes that the Commission should carefully monitor the impact of the reform on the prices of goods containing sugar. |
| --- | --- |

2.10

The EESC cannot agree with the Commission that the significant fall in sugar prices should benefit consumers in essence (7). As in earlier reforms, such reductions in the raw material price will hardly — if ever — be passed on. That is true in particular of processed goods, such as soft drinks and sweetened products (75 % of sugar in Europe is consumed in processed goods). The EESC believes that the Commission should carefully monitor the impact of the reform on the prices of goods containing sugar.

| 2.11 | The EESC shares the ACP countries' concern about the detrimental impact of the reform proposals on incomes and jobs in the economic sectors directly affected and on the social balance and development prospects in those countries. |
| --- | --- |

2.11

The EESC shares the ACP countries' concern about the detrimental impact of the reform proposals on incomes and jobs in the economic sectors directly affected and on the social balance and development prospects in those countries.

| 2.12 | The EESC recognises the threats to European sugar exports. It fails to understand therefore why the 2005-2009 quota reductions planned by the Commission involve greater cuts than necessary in exports with refunds — on the assumption that the EU would lose the WTO panel dispute with Brazil, Australia and Thailand. On the contrary, the EESC feels that the EU should take appropriate steps to retain all the export opportunities that it claims and enjoys under international agreements, and that it should therefore propose a lower cut in quotas. |
| --- | --- |

2.12

The EESC recognises the threats to European sugar exports. It fails to understand therefore why the 2005-2009 quota reductions planned by the Commission involve greater cuts than necessary in exports with refunds — on the assumption that the EU would lose the WTO panel dispute with Brazil, Australia and Thailand. On the contrary, the EESC feels that the EU should take appropriate steps to retain all the export opportunities that it claims and enjoys under international agreements, and that it should therefore propose a lower cut in quotas.

| 2.13 | The EESC believes that the Commission should propose measures to ensure the development of alternative markets, particularly in the biofuel sector, to compensate for export and import initiatives that result in fewer outlets for European producers. |
| --- | --- |

2.13

The EESC believes that the Commission should propose measures to ensure the development of alternative markets, particularly in the biofuel sector, to compensate for export and import initiatives that result in fewer outlets for European producers.

| 2.14 | Overall, the EESC feels that the Commission has failed to gauge the impact of its proposal, which would result in a massive transfer of resources from the rural sector (farming and primary processing) in both Europe and the developing countries to large international food and marketing companies. It would also be the unmaking of much of the European and ACP sugar industry, with the latifundia that dominate Brazilian sugar production being virtually the sole beneficiaries. In several cases, the latter are in breach of fundamental human rights and labour laws (1998 Declaration of the ILO International Conference (8)) and principles of sustainability (deforestation of the Amazon). The EESC considers that access to the EU market should be conditioned by compliance with social and environmental norms. |
| --- | --- |

2.14

Overall, the EESC feels that the Commission has failed to gauge the impact of its proposal, which would result in a massive transfer of resources from the rural sector (farming and primary processing) in both Europe and the developing countries to large international food and marketing companies. It would also be the unmaking of much of the European and ACP sugar industry, with the latifundia that dominate Brazilian sugar production being virtually the sole beneficiaries. In several cases, the latter are in breach of fundamental human rights and labour laws (1998 Declaration of the ILO International Conference (8)) and principles of sustainability (deforestation of the Amazon). The EESC considers that access to the EU market should be conditioned by compliance with social and environmental norms.

3.   Specific comments

| 3.1 | The EESC notes that Regulation 1260/2001, adopted unanimously by the Council, remains in force until 1 July 2006 and provided a basis for accession negotiations with the ten new Member States. It thus fails to understand the Commission's proposal to bring the reform forward unnecessarily to 1 July 2005. Moreover, farmers have already organised their 2005/2006 crop rotations and, in some European countries, the autumn beet sowing is currently under way. On top of this, there has been heavy investment by farms and industry since 2001 on the assumption that Regulation 1260/2001 would remain in force until its due expiry date. |
| --- | --- |

3.1

The EESC notes that Regulation 1260/2001, adopted unanimously by the Council, remains in force until 1 July 2006 and provided a basis for accession negotiations with the ten new Member States. It thus fails to understand the Commission's proposal to bring the reform forward unnecessarily to 1 July 2005. Moreover, farmers have already organised their 2005/2006 crop rotations and, in some European countries, the autumn beet sowing is currently under way. On top of this, there has been heavy investment by farms and industry since 2001 on the assumption that Regulation 1260/2001 would remain in force until its due expiry date.

| 3.2 | The Committee therefore asks that the new sugar regulation should not take effect until 1 July 2006 at the earliest. Any other solution would rightly be seen as a breach of the principle of trust by the trade bodies concerned and the new Member States. |
| --- | --- |

3.2

The Committee therefore asks that the new sugar regulation should not take effect until 1 July 2006 at the earliest. Any other solution would rightly be seen as a breach of the principle of trust by the trade bodies concerned and the new Member States.

| 3.3 | The EESC notes that the Commission proposal leaves open the question of what is to happen to the CMO post-2008. However, the beet and sugar sectors need predictability for the requisite restructuring and investment operations. The Committee therefore asks the Commission to put forward a regulation covering the period from 1 July 2006 to 30 June 2012, which ties in with the timeframe of the revamped CAP. |
| --- | --- |

3.3

The EESC notes that the Commission proposal leaves open the question of what is to happen to the CMO post-2008. However, the beet and sugar sectors need predictability for the requisite restructuring and investment operations. The Committee therefore asks the Commission to put forward a regulation covering the period from 1 July 2006 to 30 June 2012, which ties in with the timeframe of the revamped CAP.

| 3.4 | The EESC feels that the Commission has not given any reasons for the massive cuts in institutional prices (33 % for sugar and 37 % for beet, in two stages). However, reliable calculations indicate that a maximum cut of 20 % would be enough to comply with the expected new WTO constraints. The EESC would like to see the Commission adopt that figure. It would also ask the Commission to bear in mind the LDCs' desire to negotiate preferential quotas as, in subsequent years, that would take much of the pressure off the European sugar market and create a satisfactory export environment for LDCs. |
| --- | --- |

3.4

The EESC feels that the Commission has not given any reasons for the massive cuts in institutional prices (33 % for sugar and 37 % for beet, in two stages). However, reliable calculations indicate that a maximum cut of 20 % would be enough to comply with the expected new WTO constraints. The EESC would like to see the Commission adopt that figure. It would also ask the Commission to bear in mind the LDCs' desire to negotiate preferential quotas as, in subsequent years, that would take much of the pressure off the European sugar market and create a satisfactory export environment for LDCs.

| 3.5 | The EESC condemns the weakness of the market organisation tools that have been put forward to replace the CMO intervention. Indeed, it is possible to foresee that private stockage and the carry-over mechanism will not adequately ensure that the market price respects the reference price. |
| --- | --- |

3.5

The EESC condemns the weakness of the market organisation tools that have been put forward to replace the CMO intervention. Indeed, it is possible to foresee that private stockage and the carry-over mechanism will not adequately ensure that the market price respects the reference price.

| 3.6 | The EESC takes note of the Commission's proposal to partially offset loss of farming income through compensation payments. However, it would point out that smaller price cuts — or restricting those cuts to the first stage only — would make it possible both to save on the budget and raise the compensation rate without exceeding the available budget. The Committee wonders how the national envelopes can be distributed in a fair and practical way so that the aid does in fact reach those farmers facing cuts in — or the loss of — beet income. It would be appropriate for the distribution of aid to take into account the reference granted to the farmer in the last two years before the regulation enters into force, as was the case for the 2003 CAP Reform for milk. The Committee stresses the need to keep such aid going in the long term and to maintain the sugar budget. |
| --- | --- |

3.6

The EESC takes note of the Commission's proposal to partially offset loss of farming income through compensation payments. However, it would point out that smaller price cuts — or restricting those cuts to the first stage only — would make it possible both to save on the budget and raise the compensation rate without exceeding the available budget. The Committee wonders how the national envelopes can be distributed in a fair and practical way so that the aid does in fact reach those farmers facing cuts in — or the loss of — beet income. It would be appropriate for the distribution of aid to take into account the reference granted to the farmer in the last two years before the regulation enters into force, as was the case for the 2003 CAP Reform for milk. The Committee stresses the need to keep such aid going in the long term and to maintain the sugar budget.

| 3.7 | The EESC feels that any quota cuts that do prove necessary should be kept to the bare minimum and should apply to the same extent to sugar and competing products under the quota system. The proposal set out in the communication to increase the isoglucose quota is thus unfair as it induces the Commission to propose bigger cuts in sugar quotas — to the detriment of beet planters and the sugar industry. |
| --- | --- |

3.7

The EESC feels that any quota cuts that do prove necessary should be kept to the bare minimum and should apply to the same extent to sugar and competing products under the quota system. The proposal set out in the communication to increase the isoglucose quota is thus unfair as it induces the Commission to propose bigger cuts in sugar quotas — to the detriment of beet planters and the sugar industry.

| 3.7.1 | The EESC thinks that any decision on the required scale of potential quota cuts should not be taken until the Commission has carried out a detailed study covering structural deficits and possible suspensions of quota sugar production or until it becomes clear how the WTO agreements pending and the outcome of the WTO panel will impact on the production of quota sugar and non-quota sugar and trade flows between the European Union and non-EU countries. |
| --- | --- |

3.7.1

The EESC thinks that any decision on the required scale of potential quota cuts should not be taken until the Commission has carried out a detailed study covering structural deficits and possible suspensions of quota sugar production or until it becomes clear how the WTO agreements pending and the outcome of the WTO panel will impact on the production of quota sugar and non-quota sugar and trade flows between the European Union and non-EU countries.

| 3.7.2 | The EESC feels that the Member States must be given enough scope to internally manage both the sugar and beet quota cuts — with due regard to the interests of all the parties concerned — in accordance with conditions of fairness and social benefits. Therefore, it asks the Commission to make specific provision for this possibility in the reform proposals and regulations. |
| --- | --- |

3.7.2

The EESC feels that the Member States must be given enough scope to internally manage both the sugar and beet quota cuts — with due regard to the interests of all the parties concerned — in accordance with conditions of fairness and social benefits. Therefore, it asks the Commission to make specific provision for this possibility in the reform proposals and regulations.

| 3.8 | Abolishing production refunds for supplying quota sugar to the chemical and pharmaceutical industry would also adversely impact sugar quota levels and introduce a risk factor into future arrangements for the supply of sugar to those industries. The EESC therefore calls for the retention of the rules currently in place. |
| --- | --- |

3.8

Abolishing production refunds for supplying quota sugar to the chemical and pharmaceutical industry would also adversely impact sugar quota levels and introduce a risk factor into future arrangements for the supply of sugar to those industries. The EESC therefore calls for the retention of the rules currently in place.

| 3.9 | The EESC feels that quota such transfers — and cross-borders transfers in particular — could sound the death knell, in many regions, for profitable beet farming. That would have grave economic consequences for beet planters' families and the employment situation. It would also be harmful to the environment — from the point of view of crop rotation — and would adversely impact the agricultural markets in replacement crops. The EESC requests that the management of quotas should remain subject to Member State control and that all restructuring decisions should first be subject to an inter-branch agreement. |
| --- | --- |

3.9

The EESC feels that quota such transfers — and cross-borders transfers in particular — could sound the death knell, in many regions, for profitable beet farming. That would have grave economic consequences for beet planters' families and the employment situation. It would also be harmful to the environment — from the point of view of crop rotation — and would adversely impact the agricultural markets in replacement crops. The EESC requests that the management of quotas should remain subject to Member State control and that all restructuring decisions should first be subject to an inter-branch agreement.

| 3.9.1 | Instead of quota trading, the EESC feels that the Commission should explore the possibility of setting up a European restructuring fund for the sugar industry which, paying particular attention to the reconversion needs of farmers and workers within the sector, would indemnify the quotas that had become available once the regulation came into force, — following an inter-branch agreement between the sugar manufacturer and the beet planters concerned and reducing all the more the need to cut quotas. |
| --- | --- |

3.9.1

Instead of quota trading, the EESC feels that the Commission should explore the possibility of setting up a European restructuring fund for the sugar industry which, paying particular attention to the reconversion needs of farmers and workers within the sector, would indemnify the quotas that had become available once the regulation came into force, — following an inter-branch agreement between the sugar manufacturer and the beet planters concerned and reducing all the more the need to cut quotas.

4.   Conclusions

| 4.1 | The EESC recognises the need to reform the sugar CMO but believes that the reform proposals go too far and that their implementation will have considerable repercussions for the European sugar sector, particularly in employment. It is unfortunate that the proposals are not adequately substantiated and that their consequences have not been subjected to appropriate analysis, as would have been expected. |
| --- | --- |

4.1

The EESC recognises the need to reform the sugar CMO but believes that the reform proposals go too far and that their implementation will have considerable repercussions for the European sugar sector, particularly in employment. It is unfortunate that the proposals are not adequately substantiated and that their consequences have not been subjected to appropriate analysis, as would have been expected.

| 4.2 | The EESC recommends that the regulation's date of entry into force be postponed to 1 July 2006 and that farmers should receive immediate notification of this decision to enable them to confirm their 2005 crop rotations. |
| --- | --- |

4.2

The EESC recommends that the regulation's date of entry into force be postponed to 1 July 2006 and that farmers should receive immediate notification of this decision to enable them to confirm their 2005 crop rotations.

| 4.3 | The Committee considers that the regulation should cover a minimum six-year period to provide the sector with an adequate perspective. |
| --- | --- |

4.3

The Committee considers that the regulation should cover a minimum six-year period to provide the sector with an adequate perspective.

| 4.4 | The Committee requests that the Union negotiate import quotas for sugar from the least developed countries, as these countries have requested. Swap practices should, under no circumstances, be admitted and social and environmental sustainability and food sovereignty criteria should be established for access to the EU market. |
| --- | --- |

4.4

The Committee requests that the Union negotiate import quotas for sugar from the least developed countries, as these countries have requested. Swap practices should, under no circumstances, be admitted and social and environmental sustainability and food sovereignty criteria should be established for access to the EU market.

| 4.5 | The EESC calls for import quotas for the Balkans to be established as soon as possible. |
| --- | --- |

4.5

The EESC calls for import quotas for the Balkans to be established as soon as possible.

| 4.6 | It considers that any changes to prices and production quotas should be strictly in line with international commitments and should apply equally to all sweeteners (sugar and competing products under quota). Sugar must be treated as a sensitive product in the context of the Doha Development Agency (DDA) negotiations. |
| --- | --- |

4.6

It considers that any changes to prices and production quotas should be strictly in line with international commitments and should apply equally to all sweeteners (sugar and competing products under quota). Sugar must be treated as a sensitive product in the context of the Doha Development Agency (DDA) negotiations.

| 4.7 | It recommends that the current CMO intervention mechanism be maintained to guarantee the price level. |
| --- | --- |

4.7

It recommends that the current CMO intervention mechanism be maintained to guarantee the price level.

| 4.8 | The EESC stresses that the price of the product (beet) should reflect planters' production costs. It takes note of the proposals to partially compensate planters for income lost as a result of beet price cuts. It calls for increases in this compensation, insofar as this may be possible. It emphasises the need to ensure sustainable aid and to maintain the sugar budget. |
| --- | --- |

4.8

The EESC stresses that the price of the product (beet) should reflect planters' production costs. It takes note of the proposals to partially compensate planters for income lost as a result of beet price cuts. It calls for increases in this compensation, insofar as this may be possible. It emphasises the need to ensure sustainable aid and to maintain the sugar budget.

| 4.9 | It asks that the current provisions for the supply of quota sugar to the chemical and pharmaceutical industries should remain in force. |
| --- | --- |

4.9

It asks that the current provisions for the supply of quota sugar to the chemical and pharmaceutical industries should remain in force.

| 4.10 | It believes that the Commission must not shirk its responsibilities but must launch a proper restructuring plan for the European sugar industry that reflects the interests of sugar manufacturers, beet planters and the workforce. |
| --- | --- |

4.10

It believes that the Commission must not shirk its responsibilities but must launch a proper restructuring plan for the European sugar industry that reflects the interests of sugar manufacturers, beet planters and the workforce.

| 4.11 | The Committee would request the Commission to clarify its intentions regarding sugar production that is not under quota. |
| --- | --- |

4.11

The Committee would request the Commission to clarify its intentions regarding sugar production that is not under quota.

Brussels, 15 December 2004.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  ACP countries: Developing African, Caribbean and Pacific States, signatories to the Cotonou agreement.

1

(2)  Private stockage makes it possible to withdraw a certain tonnage of sugar from the market temporarily without reducing quotas. The mandatory carry-over system and the transfer of sugar from campaign n to campaign n+I, with a corresponding reduction in quotas for the n+I campaign.

2

(3)  Council Regulation 1265/2001 grants a production refund (support that aims to narrow the gap between the intervention price and the world market price) for quota sugar and isoglucose products used in the chemical and pharmaceutical industries (approximately 400,000 tonnes a year).

3

(4)  OJ C 116 of 20 April 2001, p. 113-115. Committee opinion on the Proposal for a Council Regulation on the common organisation of the markets in the sugar sector. ‘The Committee asks to be involved in the study which the Commission intends to undertake to analyse inter alia the criticisms directed at the sugar CMO, concentration in the agri-food industry and the passing-on of price changes from the producer to the consumer’.

4

(5)  Presidency conclusions: SN 400/97, p.14, 13.12.1997

5

(6)  In this particular case, the export of Brazilian sugar to a least developed country and the consumption of said Brazilian sugar in the least developed country, which replaces local sugar. This least developed country's sugar, thus replaced, is exported to the European Union.

6

(7)  See Communication COM(2004) 499 final, start of point 3.2 Economic impact

7

Economic impact

(8)  ILO Declaration on fundamental principles and rights at work. International Labour Conference, 86th Session Geneva, June 1998

8

---

| 28.6.2005 | EN | Official Journal of the European Union | C 157/107 |
| --- | --- | --- | --- |

28.6.2005

EN

Official Journal of the European Union

C 157/107

---

Opinion of the European Economic and Social Committee on the ‘Communication from the Commission: Science and technology, the key to Europe's future — Guidelines for future European Union policy to support research’

(COM(2004) 353 final)

(2005/C 157/20)

On 17 June 2004, 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 communication.

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 10 November 2004. The rapporteur was Mr Wolf.

At its 413th plenary session of 15 and 16 December 2004 (meeting of 15 December) the European Economic and Social Committee adopted the following opinion by 83 votes to three with one abstention:

1.   Introduction

| 1.1 | Europe's economic, social and cultural future. A key determinant of Europe's future development and position on the world stage is the inexorable competition that exists on the global market, with its changing industrial and economic structures, labour market situation and raw material parameters. It is becoming increasingly clear that growth, success and economic strength — and the resultant capacity to provide social services and secure cultural development — are critically contingent on available knowledge and on investment in research and technological development. |
| --- | --- |

1.1

Europe's economic, social and cultural future. A key determinant of Europe's future development and position on the world stage is the inexorable competition that exists on the global market, with its changing industrial and economic structures, labour market situation and raw material parameters. It is becoming increasingly clear that growth, success and economic strength — and the resultant capacity to provide social services and secure cultural development — are critically contingent on available knowledge and on investment in research and technological development.

| 1.2 | Global competition. Europe is no longer competing only with now-traditional industrial nations such as the USA, Japan or Russia, but also with rapidly expanding economies across the whole of south-east Asia, including China, India and South Korea. On scientific and technological performance hinge not just economic competitiveness and the ‘pull’ that that exerts on investors, scientists and engineers, but also cultural and political standing and influence. Sufficient R&D investment can and must help safeguard Europe's position and secure sustainable development. |
| --- | --- |

1.2

Global competition. Europe is no longer competing only with now-traditional industrial nations such as the USA, Japan or Russia, but also with rapidly expanding economies across the whole of south-east Asia, including China, India and South Korea. On scientific and technological performance hinge not just economic competitiveness and the ‘pull’ that that exerts on investors, scientists and engineers, but also cultural and political standing and influence. Sufficient R&D investment can and must help safeguard Europe's position and secure sustainable development.

| 1.3 | The European Research Area (ERA)
   (1)
  . The European Research Area was conceived to meet that challenge. Following the Lisbon Council decisions of March 2000, the ERA became the key concept and reference framework for Community research policy, not least against the backdrop of the well-known and ambitious objectives set out in Lisbon, Gothenburg and Barcelona. Community-backed research and development is designed to generate European added value and, under the subsidiarity principle, to take on tasks that are beyond the capacity of individual Member States on their own. It is also designed to harness, boost and exploit Europe's scientific potential, and to foster competitiveness and sustainability. Science and research are substantive elements of European culture. |
| --- | --- |

1.3

The European Research Area (ERA)
   (1)
  . The European Research Area was conceived to meet that challenge. Following the Lisbon Council decisions of March 2000, the ERA became the key concept and reference framework for Community research policy, not least against the backdrop of the well-known and ambitious objectives set out in Lisbon, Gothenburg and Barcelona. Community-backed research and development is designed to generate European added value and, under the subsidiarity principle, to take on tasks that are beyond the capacity of individual Member States on their own. It is also designed to harness, boost and exploit Europe's scientific potential, and to foster competitiveness and sustainability. Science and research are substantive elements of European culture.

| 1.4 | Developing the ERA. The European Research Area is a useful concept that has been used to underpin all subsequent communications, decisions and initiatives relating to European research policy. The Committee would draw particular attention to the Sixth Framework Programme, the EURATOM programme and related tools to promote research, as well as to the 3 % objective (2) and many others initiatives covering fields such as research as a profession, the importance of basic research, energy supply, space research, biotechnology, and the interplay between science, individuals and society. |
| --- | --- |

1.4

Developing the ERA. The European Research Area is a useful concept that has been used to underpin all subsequent communications, decisions and initiatives relating to European research policy. The Committee would draw particular attention to the Sixth Framework Programme, the EURATOM programme and related tools to promote research, as well as to the 3 % objective (2) and many others initiatives covering fields such as research as a profession, the importance of basic research, energy supply, space research, biotechnology, and the interplay between science, individuals and society.

| 1.5 | Committee opinions to date. In its earlier opinions (3), the Committee has consistently expressed strong support for each of the Commission initiatives set out above. It has underscored the crucial importance of research and development for the Lisbon, and later the Gothenburg and Barcelona objectives, and for sustainable economic, social, environmental and cultural prosperity within the EU. On many key details, the Committee has made suggestions and put forward its own proposals. Often, it has even recommended considerably stepping up activities in this field, but it has also repeatedly urged corrections and expressed misgivings, mainly about the trend towards inefficiency, confusion and disquiet generated by overregulation, restrictive requirements and bureaucratic procedures, and overhasty, precipitous changes to the processes and support instruments involved. |
| --- | --- |

1.5

Committee opinions to date. In its earlier opinions (3), the Committee has consistently expressed strong support for each of the Commission initiatives set out above. It has underscored the crucial importance of research and development for the Lisbon, and later the Gothenburg and Barcelona objectives, and for sustainable economic, social, environmental and cultural prosperity within the EU. On many key details, the Committee has made suggestions and put forward its own proposals. Often, it has even recommended considerably stepping up activities in this field, but it has also repeatedly urged corrections and expressed misgivings, mainly about the trend towards inefficiency, confusion and disquiet generated by overregulation, restrictive requirements and bureaucratic procedures, and overhasty, precipitous changes to the processes and support instruments involved.

2.   The Commission communication

| 2.1 | The Commission communication is a logical extension of what is, in essence, a highly positive development. It brings together objectives and considerations to be used in drawing up the proposals for the Seventh R&D Framework Programme and the EURATOM programme, in order both to reflect EU enlargement to 25 Member States and to take on board the experience that has been gained so far with the Sixth R&D Framework Programme. |
| --- | --- |

2.1

The Commission communication is a logical extension of what is, in essence, a highly positive development. It brings together objectives and considerations to be used in drawing up the proposals for the Seventh R&D Framework Programme and the EURATOM programme, in order both to reflect EU enlargement to 25 Member States and to take on board the experience that has been gained so far with the Sixth R&D Framework Programme.

| 2.2 | First of all, the communication again summarises the existing objectives and measures. In particular, it compares the 3 % objective in the light of EU enlargement against the current position and the state-of-play in the EU's competitor countries, and in doing so, makes a very impressive case for pursuing this goal. The communication stresses the leverage effect of public spending on private research investment, and the need to make research more attractive as a profession so as to be able to compete globally for the best brains. |
| --- | --- |

2.2

First of all, the communication again summarises the existing objectives and measures. In particular, it compares the 3 % objective in the light of EU enlargement against the current position and the state-of-play in the EU's competitor countries, and in doing so, makes a very impressive case for pursuing this goal. The communication stresses the leverage effect of public spending on private research investment, and the need to make research more attractive as a profession so as to be able to compete globally for the best brains.

| 2.3 | That is also the reason why the EU needs to substantially step up and extend support for research — a move that must be accompanied by a corresponding increase (and under no circumstances a scaling-down) of Member States' own efforts on this front. |
| --- | --- |

2.3

That is also the reason why the EU needs to substantially step up and extend support for research — a move that must be accompanied by a corresponding increase (and under no circumstances a scaling-down) of Member States' own efforts on this front.

| 2.4 | Drawing, among other things, on the experience gained in formulating and implementing the earlier framework programmes, the Commission lays down six major objectives:






  — | creating European centres of excellence (4) through collaboration between laboratories; |
| --- | --- | --- |

2.4

Drawing, among other things, on the experience gained in formulating and implementing the earlier framework programmes, the Commission lays down six major objectives:

—

creating European centres of excellence (4) through collaboration between laboratories;

| — | launching European technological initiatives; |
| --- | --- |

—

launching European technological initiatives;

| — | stimulating competition in basic research at European level; |
| --- | --- |

—

stimulating competition in basic research at European level;

| — | making Europe attractive to the best researchers; |
| --- | --- |

—

making Europe attractive to the best researchers;

| — | developing research infrastructures of European interest; and |
| --- | --- |

—

developing research infrastructures of European interest; and

| — | improving the coordination of national research programmes. |
| --- | --- |

—

improving the coordination of national research programmes.

| 2.5 | Other points and proposals made in the Commission communication include:






  — | realising the potential of a Europe of 25; |
| --- | --- | --- |

2.5

Other points and proposals made in the Commission communication include:

—

realising the potential of a Europe of 25;

| — | taking full advantage of complementarity with the Structural Funds; |
| --- | --- |

—

taking full advantage of complementarity with the Structural Funds;

| — | identifying topics of major European interest; |
| --- | --- |

—

identifying topics of major European interest;

| — | bringing in two new key areas: space and security; |
| --- | --- |

—

bringing in two new key areas: space and security;

| — | using the most effective means of implementation; and |
| --- | --- |

—

using the most effective means of implementation; and

| — | improving the operation of the framework programme. |
| --- | --- |

—

improving the operation of the framework programme.

3.   The Committee's general comments

| 3.1 | The Lisbon, Gothenburg and Barcelona objectives. The Committee welcomes and supports the aims and initiatives set out by the communication, and considers the Commission's proposals to be key measures for attaining the ambitious Lisbon, Gothenburg and Barcelona objectives. The Committee is very pleased that the communication takes on board many of the specific recommendations it had made in earlier opinions. |
| --- | --- |

3.1

The Lisbon, Gothenburg and Barcelona objectives. The Committee welcomes and supports the aims and initiatives set out by the communication, and considers the Commission's proposals to be key measures for attaining the ambitious Lisbon, Gothenburg and Barcelona objectives. The Committee is very pleased that the communication takes on board many of the specific recommendations it had made in earlier opinions.

| 3.2 | The 3 % objective
   (5)
  . In particular, the Committee supports the 3 % objective — an overarching goal geared towards global competitors' current R&D investment. In line with the Lisbon objectives and taking account of the new, enlarged, 25-strong European Union, this requires a massive EU-level increase in the resources available for the framework programme and the EURATOM programme. |
| --- | --- |

3.2

The 3 % objective
   (5)
  . In particular, the Committee supports the 3 % objective — an overarching goal geared towards global competitors' current R&D investment. In line with the Lisbon objectives and taking account of the new, enlarged, 25-strong European Union, this requires a massive EU-level increase in the resources available for the framework programme and the EURATOM programme.

| 3.2.1 | Doubling the requisite EU resources. Taking all activities together, therefore, the budget should be doubled, as the Commission proposes. This also ties in with the Committee's own recommendation on this issue in its opinion on the Sixth Framework Programme (6). |
| --- | --- |

3.2.1

Doubling the requisite EU resources. Taking all activities together, therefore, the budget should be doubled, as the Commission proposes. This also ties in with the Committee's own recommendation on this issue in its opinion on the Sixth Framework Programme (6).

| 3.2.2 | Member States and industry. In order to meet the 3 % objective, however, this doubling of resources must also be accompanied by a corresponding increase in national R&D budgets and in R&D spending by industry. On both these fronts, the Committee is very concerned that nothing — or, at any rate, not enough — is being done. In many cases, industrial R&D investment is even shifting outside the EU. The Committee recommends exploring the reasons for this unfortunate trend so that steps can be taken to ensure that industrial R&D in Europe also moves closer to the 3 % objective. |
| --- | --- |

3.2.2

Member States and industry. In order to meet the 3 % objective, however, this doubling of resources must also be accompanied by a corresponding increase in national R&D budgets and in R&D spending by industry. On both these fronts, the Committee is very concerned that nothing — or, at any rate, not enough — is being done. In many cases, industrial R&D investment is even shifting outside the EU. The Committee recommends exploring the reasons for this unfortunate trend so that steps can be taken to ensure that industrial R&D in Europe also moves closer to the 3 % objective.

| 3.2.3 | The Committee's call. The Committee therefore again calls on the Council, the Parliament, Member State governments and, in particular, industry to factor this objective into their decision-making and thus to comply with it in their public- and/or private-sector R&D budgets. The Committee recognises that this is no easy undertaking given current overall financial constraints. However, the R&D investments proposed by the Commission are not only modest, but, given the international competitive environment, long overdue. Words now need to be backed up by deeds. |
| --- | --- |

3.2.3

The Committee's call. The Committee therefore again calls on the Council, the Parliament, Member State governments and, in particular, industry to factor this objective into their decision-making and thus to comply with it in their public- and/or private-sector R&D budgets. The Committee recognises that this is no easy undertaking given current overall financial constraints. However, the R&D investments proposed by the Commission are not only modest, but, given the international competitive environment, long overdue. Words now need to be backed up by deeds.

| 3.2.4 | Dynamic development. It is important not to regard the situation as simply static. In the face of global competition, European policy must be prepared to meet upcoming developments outside Europe (7). If the 3 % objective is not attained on schedule, then the Lisbon objectives will not be achieved either. Indeed, in the longer term, R&D investment must go higher still. |
| --- | --- |

3.2.4

Dynamic development. It is important not to regard the situation as simply static. In the face of global competition, European policy must be prepared to meet upcoming developments outside Europe (7). If the 3 % objective is not attained on schedule, then the Lisbon objectives will not be achieved either. Indeed, in the longer term, R&D investment must go higher still.

| 3.3 | European centres of excellence. The Committee also supports the overall objective of establishing and promoting European centres of excellence, thereby generating pan-European added value, setting qualitative yardsticks and making European R&D more attractive. The cross-border co-operation between research centres, universities and private companies that such an approach seeks to achieve must, in future too, be the essential element of support policy under the R&D framework programme (and EURATOM), with the main emphasis on the thematic priorities. |
| --- | --- |

3.3

European centres of excellence. The Committee also supports the overall objective of establishing and promoting European centres of excellence, thereby generating pan-European added value, setting qualitative yardsticks and making European R&D more attractive. The cross-border co-operation between research centres, universities and private companies that such an approach seeks to achieve must, in future too, be the essential element of support policy under the R&D framework programme (and EURATOM), with the main emphasis on the thematic priorities.

| 3.3.1 | Prerequisite. This objective can only be attained if bodies or teams of excellence are already in place, which, if they work together, may be expected to produce first-rate results (8). |
| --- | --- |

3.3.1

Prerequisite. This objective can only be attained if bodies or teams of excellence are already in place, which, if they work together, may be expected to produce first-rate results (8).

| 3.3.2 | No new support instrument. Furthermore, the point should be made more clearly that the term ‘centre of excellence’ does not denote a new support instrument (see below). On the contrary, this is an generic term covering support instruments designed to further the desired objective, including Networks of Excellence (NoE), Integrated Projects (IP) and Specific Targeted Research Projects (STREPs). |
| --- | --- |

3.3.2

No new support instrument. Furthermore, the point should be made more clearly that the term ‘centre of excellence’ does not denote a new support instrument (see below). On the contrary, this is an generic term covering support instruments designed to further the desired objective, including Networks of Excellence (NoE), Integrated Projects (IP) and Specific Targeted Research Projects (STREPs).

| 3.4 | Tools to promote research
   (9)
  (project structure). Bearing in mind the Commission's laudable intention of establishing effective means of implementation, the Committee reiterates (10) its call for clarity, simplicity, continuity and, above all, flexibility in tools to promote research. Flexibility means that applicants must be able to adjust the structure and size of projects to best suit the task at hand. Otherwise, projects will be established whose size and structure are determined by the prescribed policy tools rather than by optimum scientific and technical requirements. The tools must serve R&D working methods and objectives — never the reverse. The application process and administrative effort involved must be worthwhile. |
| --- | --- |

3.4

Tools to promote research
   (9)
  (project structure). Bearing in mind the Commission's laudable intention of establishing effective means of implementation, the Committee reiterates (10) its call for clarity, simplicity, continuity and, above all, flexibility in tools to promote research. Flexibility means that applicants must be able to adjust the structure and size of projects to best suit the task at hand. Otherwise, projects will be established whose size and structure are determined by the prescribed policy tools rather than by optimum scientific and technical requirements. The tools must serve R&D working methods and objectives — never the reverse. The application process and administrative effort involved must be worthwhile.

| 3.5 | Basic research and European competition. Reiterating the key message of its recent opinion (11) on this subject, the Committee would also stress the clear need to promote basic research as the fundamental element of all further R&D activities. This must be done within the context of European competition, and applicants must be free to choose the subjects they wish to research. European competition generates European added value. |
| --- | --- |

3.5

Basic research and European competition. Reiterating the key message of its recent opinion (11) on this subject, the Committee would also stress the clear need to promote basic research as the fundamental element of all further R&D activities. This must be done within the context of European competition, and applicants must be free to choose the subjects they wish to research. European competition generates European added value.

| 3.6 | The international dimension of research. It must be remembered, however, that the international dimension of research — stretching beyond the confines of the EU — is just as important. Today, excellence in R&D flourishes on a global, international (12) playing field of open, worldwide cooperation — and also worldwide competition. Appropriate measures should also be put in place to promote and take account of this aspect (for instance, mobility programme, cooperation agreements etc.) |
| --- | --- |

3.6

The international dimension of research. It must be remembered, however, that the international dimension of research — stretching beyond the confines of the EU — is just as important. Today, excellence in R&D flourishes on a global, international (12) playing field of open, worldwide cooperation — and also worldwide competition. Appropriate measures should also be put in place to promote and take account of this aspect (for instance, mobility programme, cooperation agreements etc.)

| 3.7 | Interplay and balance between research categories.
   (13) The Committee would again draw attention to the interplay required for innovation and progress, and to the need for effective interaction and easy cross-over between the various research categories, i.e. basic research, applied research and development (project and process development). This interplay — which is vital both for the Community's competitiveness and for attaining the Lisbon objectives — is also a factor in cooperation and complementarity between industrial R&D and research undertaken in universities and state-supported research organisations. This interplay must therefore also be reflected both in the balance of support in the individual categories and in the specific remits and ‘sub-issue’s of the thematic priorities/actions. Hence, the above-mentioned research categories must be given access to all the relevant research parameters under the framework programme. Ultimately, this also underpins the leverage effect between public- and private-sector R&D spending. |
| --- | --- |

3.7

Interplay and balance between research categories.
   (13) The Committee would again draw attention to the interplay required for innovation and progress, and to the need for effective interaction and easy cross-over between the various research categories, i.e. basic research, applied research and development (project and process development). This interplay — which is vital both for the Community's competitiveness and for attaining the Lisbon objectives — is also a factor in cooperation and complementarity between industrial R&D and research undertaken in universities and state-supported research organisations. This interplay must therefore also be reflected both in the balance of support in the individual categories and in the specific remits and ‘sub-issue’s of the thematic priorities/actions. Hence, the above-mentioned research categories must be given access to all the relevant research parameters under the framework programme. Ultimately, this also underpins the leverage effect between public- and private-sector R&D spending.

| 3.8 | Effective means of implementation: Last but not least, the Committee welcomes and supports the Commission's plan to use the most effective means of implementation and to improve the operation of the framework programme. The Committee therefore feels there is an urgent need for measures that require less red tape and are better coordinated with the scientific community and industry — and also reflect their internal rules, experiences and working conditions. The most important stakeholders in the European Research Area are researchers with their passion for discovery. They need scope to develop and an optimum environment in which to operate. It is essential to bear that in mind. |
| --- | --- |

3.8

Effective means of implementation: Last but not least, the Committee welcomes and supports the Commission's plan to use the most effective means of implementation and to improve the operation of the framework programme. The Committee therefore feels there is an urgent need for measures that require less red tape and are better coordinated with the scientific community and industry — and also reflect their internal rules, experiences and working conditions. The most important stakeholders in the European Research Area are researchers with their passion for discovery. They need scope to develop and an optimum environment in which to operate. It is essential to bear that in mind.

4.   Specific comments by the Committee

| 4.1 | Recent opinions. Many of the following observations have already been put forward in recent opinions on European research policy (14). |
| --- | --- |

4.1

Recent opinions. Many of the following observations have already been put forward in recent opinions on European research policy (14).

| 4.2 | Guiding principle. In order for the EU to achieve or maintain a leading position vis-à-vis its global competitors, the guiding principle in selecting projects and supporting research should be scientific and technological excellence. This is the only way of achieving the objectives of Excellence and innovation: the key to European competitiveness and (Stimulating) the creativity of basic research through competition between teams at European level, put forward in the Commission's Communication. |
| --- | --- |

4.2

Guiding principle. In order for the EU to achieve or maintain a leading position vis-à-vis its global competitors, the guiding principle in selecting projects and supporting research should be scientific and technological excellence. This is the only way of achieving the objectives of Excellence and innovation: the key to European competitiveness and (Stimulating) the creativity of basic research through competition between teams at European level, put forward in the Commission's Communication.

| 4.2.1 | Excellence. Excellence and outstanding achievements are the outcomes of a complex, laborious and lengthy development and selection process. The rules governing this process, which are laid down by the scientific community itself, need to take into account many significant and inter-connected considerations. |
| --- | --- |

4.2.1

Excellence. Excellence and outstanding achievements are the outcomes of a complex, laborious and lengthy development and selection process. The rules governing this process, which are laid down by the scientific community itself, need to take into account many significant and inter-connected considerations.

| 4.2.2 | Society and policy. Society and policy must ensure that the conditions exist, or are created for the emergence and maintenance of excellence. |
| --- | --- |

4.2.2

Society and policy. Society and policy must ensure that the conditions exist, or are created for the emergence and maintenance of excellence.

| 4.2.3 | Extraneous criteria. Other extraneous or speculative influences simply result in more red tape and mismanagement, with adverse consequences not only for the Lisbon Objectives but also for European research as a whole. |
| --- | --- |

4.2.3

Extraneous criteria. Other extraneous or speculative influences simply result in more red tape and mismanagement, with adverse consequences not only for the Lisbon Objectives but also for European research as a whole.

| 4.3 | Realising the potential of a Europe of 25. At the same time, it is important to develop and make full use of the potential of an enlarged Europe. The Committee fully supports the Commission's objectives in this respect. Therefore, unless they already exist, conditions for excellence need to be created in the research institutes of the enlarged EU and in regions with insufficient research resources. |
| --- | --- |

4.3

Realising the potential of a Europe of 25. At the same time, it is important to develop and make full use of the potential of an enlarged Europe. The Committee fully supports the Commission's objectives in this respect. Therefore, unless they already exist, conditions for excellence need to be created in the research institutes of the enlarged EU and in regions with insufficient research resources.

| 4.3.1 | Subsidiarity. In keeping with the subsidiarity principle, national scientific and technological capacity building and basic funding to promote excellence is the responsibility of individual Member States. |
| --- | --- |

4.3.1

Subsidiarity. In keeping with the subsidiarity principle, national scientific and technological capacity building and basic funding to promote excellence is the responsibility of individual Member States.

| 4.3.2 | Structural Funds and the European Investment Fund. However, such activities can be given effective and targeted support through the EU's Structural Funds and the European Investment Fund, if such an approach is necessary and appropriate. For this reason, and also with the concerns of cohesion policy in mind, the Committee supports the Commission's intention to take full advantage of complementarity between the Framework Fund and the Structural Funds, but also recommends that this should be extended to include the European Investment Fund. Some of the funds from these sources could be used to build up research capacity and infrastructure. |
| --- | --- |

4.3.2

Structural Funds and the European Investment Fund. However, such activities can be given effective and targeted support through the EU's Structural Funds and the European Investment Fund, if such an approach is necessary and appropriate. For this reason, and also with the concerns of cohesion policy in mind, the Committee supports the Commission's intention to take full advantage of complementarity between the Framework Fund and the Structural Funds, but also recommends that this should be extended to include the European Investment Fund. Some of the funds from these sources could be used to build up research capacity and infrastructure.

| 4.3.3 | For this to happen, sufficient funding will have to be provided to kick-start R&D measures in the new Member States, as scientific institutions in these countries are not yet in a position to come up with their share of funding for EU-supported projects. However, appropriate national schemes for supporting research and development activity should also be provided in addition. |
| --- | --- |

4.3.3

For this to happen, sufficient funding will have to be provided to kick-start R&D measures in the new Member States, as scientific institutions in these countries are not yet in a position to come up with their share of funding for EU-supported projects. However, appropriate national schemes for supporting research and development activity should also be provided in addition.

| 4.4 | Research infrastructure. With this in mind, the Committee also welcomes the Commission's proposal to develop research infrastructures (15) of European relevance. In this context, substantial funding of selected large apparatus on a ‘variable geometry’ basis has worked well so far and should therefore be continued. Through its consultative role, the European Strategy Forum for Research infrastructures (ESFRI) is a key partner in this process. On this basis, infrastructures can be developed which take European needs into account. |
| --- | --- |

4.4

Research infrastructure. With this in mind, the Committee also welcomes the Commission's proposal to develop research infrastructures (15) of European relevance. In this context, substantial funding of selected large apparatus on a ‘variable geometry’ basis has worked well so far and should therefore be continued. Through its consultative role, the European Strategy Forum for Research infrastructures (ESFRI) is a key partner in this process. On this basis, infrastructures can be developed which take European needs into account.

| 4.4.1 | Medium-sized infrastructures. Depending on what resources are available and whether a case can be made for projects at Community level, such measures should not be exclusively restricted to funding large apparatus, given that medium-sized complex research infrastructures are also needed in many research fields and can serve the research objectives of several Member States at the same time. |
| --- | --- |

4.4.1

Medium-sized infrastructures. Depending on what resources are available and whether a case can be made for projects at Community level, such measures should not be exclusively restricted to funding large apparatus, given that medium-sized complex research infrastructures are also needed in many research fields and can serve the research objectives of several Member States at the same time.

| 4.5 | Reinforcing thematic priorities and enhancing mobility. As already mentioned, the Committee supports the Commission's proposal to double the funding available for the Seventh Framework Programme and the EURATOM Programme (relative to current levels under the Sixth Framework Programme). This increase should mainly (16) benefit thematic priorities/activities/projects (including those covered by EURATOM) and the mobility programme (17) (including support both for leading researchers and for those embarking on scientific careers). |
| --- | --- |

4.5

Reinforcing thematic priorities and enhancing mobility. As already mentioned, the Committee supports the Commission's proposal to double the funding available for the Seventh Framework Programme and the EURATOM Programme (relative to current levels under the Sixth Framework Programme). This increase should mainly (16) benefit thematic priorities/activities/projects (including those covered by EURATOM) and the mobility programme (17) (including support both for leading researchers and for those embarking on scientific careers).

| 4.6 | Instruments to support research. In order to clarify the recommendations which have already been put forward by the Committee, the following principles should be applied:






  — | The number of instruments should be kept within reasonable limits. |
| --- | --- | --- |

4.6

Instruments to support research. In order to clarify the recommendations which have already been put forward by the Committee, the following principles should be applied:

—

The number of instruments should be kept within reasonable limits.

| — | Instruments need to be well defined, with clear objectives. |
| --- | --- |

—

Instruments need to be well defined, with clear objectives.

| — | The instruments should be as simple to manage as possible. |
| --- | --- |

—

The instruments should be as simple to manage as possible.

| — | They should concentrate on direct support of R&D activities and the researchers involved in them. |
| --- | --- |

—

They should concentrate on direct support of R&D activities and the researchers involved in them.

| — | The choice of instrument should not be bound by particular aspects of the thematic priorities; rather, applicants should be able to select one or more instruments for a particular plan or project (18). At the same time, the Commission should offer applicants advice and explain to them why particular instruments are preferable for particular themes. |
| --- | --- |

—

The choice of instrument should not be bound by particular aspects of the thematic priorities; rather, applicants should be able to select one or more instruments for a particular plan or project (18). At the same time, the Commission should offer applicants advice and explain to them why particular instruments are preferable for particular themes.

| — | To ensure that instruments are reasonably manageable for all parties, there needs to be sufficient continuity, and abrupt paradigm shifts should be avoided. |
| --- | --- |

—

To ensure that instruments are reasonably manageable for all parties, there needs to be sufficient continuity, and abrupt paradigm shifts should be avoided.

| — | Preference should be given to the allocation of grants or Specific Targeted Research Projects (STREPS), with an emphasis on easily understandable and manageable research projects. In this context reference should be made to the Committee's earlier proposals and its subsequent observations on SMEs. |
| --- | --- |

—

Preference should be given to the allocation of grants or Specific Targeted Research Projects (STREPS), with an emphasis on easily understandable and manageable research projects. In this context reference should be made to the Committee's earlier proposals and its subsequent observations on SMEs.

One of the recommendations that can be made with these principles in mind is to extend support for NoEs (Networks of Excellence) from assistance for coordination activities to direct participation in R&D expenditure (as is, for example, already the case for associations participating in the Euratom Fusion Programme).

| 4.6.1 | Marimon Report
   (19). The Committee is pleased to note that there is very close agreement between the recommendations of the recently published Marimon Report and its own recommendations on this subject, and strongly endorses the conclusions of the Report. |
| --- | --- |

4.6.1

Marimon Report
   (19). The Committee is pleased to note that there is very close agreement between the recommendations of the recently published Marimon Report and its own recommendations on this subject, and strongly endorses the conclusions of the Report.

| 4.6.2 | Continuity. Once again, it should be emphasised that special attention needs to be paid to this aspect. Generally speaking, there should be as much continuity as possible in the transition from the Sixth to the Seventh Framework Programme. The changes in eligibility criteria, application procedures, assessment criteria, legal conditions, instruments and cost models which have previously accompanied transitions between successive Framework Programmes have tended to obstruct scientific and industrial activity, particularly in the case of SMEs. In order to ensure continuity, radical innovations in instruments and procedures should be avoided. Instead, existing instruments and procedures should be simplified and fine-tuned on the basis of previous experience and recommendations. The main objectives should therefore be continuity, simplification, clarity and flexibility for applicants in the choice of instruments. |
| --- | --- |

4.6.2

Continuity. Once again, it should be emphasised that special attention needs to be paid to this aspect. Generally speaking, there should be as much continuity as possible in the transition from the Sixth to the Seventh Framework Programme. The changes in eligibility criteria, application procedures, assessment criteria, legal conditions, instruments and cost models which have previously accompanied transitions between successive Framework Programmes have tended to obstruct scientific and industrial activity, particularly in the case of SMEs. In order to ensure continuity, radical innovations in instruments and procedures should be avoided. Instead, existing instruments and procedures should be simplified and fine-tuned on the basis of previous experience and recommendations. The main objectives should therefore be continuity, simplification, clarity and flexibility for applicants in the choice of instruments.

| 4.7 | Technology Platforms. The Committee is strongly in favour of initiatives by the Commission and industry to set up ‘technology platforms’ bringing together companies, research institutions, the financial world and regulatory authorities at European level to define a common research agenda which should mobilise a critical mass of — national and European — public and private resources. |
| --- | --- |

4.7

Technology Platforms. The Committee is strongly in favour of initiatives by the Commission and industry to set up ‘technology platforms’ bringing together companies, research institutions, the financial world and regulatory authorities at European level to define a common research agenda which should mobilise a critical mass of — national and European — public and private resources.

| 4.7.1 | Development projects at Community level. The Committee feels that a Community-level approach is an appropriate means of achieving concerted action by partners in the case of extensive and costly scientific or technical development projects with well-defined objectives, such as the GALILEO Project. The framework for such projects can take the form of ‘Integrated Projects’ (IPs) or of ‘joint undertakings’ within the meaning of Article 171 of the EC Treaty (20). However, this is another area where careful reflection is needed (21) in order to avoid excessive red tape and organisational complexity, and to ensure that SMEs and smaller research institutes and groups of researchers are able to participate appropriately. |
| --- | --- |

4.7.1

Development projects at Community level. The Committee feels that a Community-level approach is an appropriate means of achieving concerted action by partners in the case of extensive and costly scientific or technical development projects with well-defined objectives, such as the GALILEO Project. The framework for such projects can take the form of ‘Integrated Projects’ (IPs) or of ‘joint undertakings’ within the meaning of Article 171 of the EC Treaty (20). However, this is another area where careful reflection is needed (21) in order to avoid excessive red tape and organisational complexity, and to ensure that SMEs and smaller research institutes and groups of researchers are able to participate appropriately.

| 4.7.2 | Administrative and organisational issues. In view of the complexity of organisational/administrative and legal issues (e.g. in the field of intellectual property), it is important to use ‘technology platforms’ which are currently in the development stage as a means of gaining experience before new platforms are set up, possibly on the basis of ‘variable geometry’. Objectives need to be clearly defined, and procedures should be reviewed, and if necessary simplified or supplemented with simpler procedures, in order to avoid additional confusion and excessive coordination as a result of continuing growth in the number of partly overlapping instruments. If possible, simpler instruments should be used. |
| --- | --- |

4.7.2

Administrative and organisational issues. In view of the complexity of organisational/administrative and legal issues (e.g. in the field of intellectual property), it is important to use ‘technology platforms’ which are currently in the development stage as a means of gaining experience before new platforms are set up, possibly on the basis of ‘variable geometry’. Objectives need to be clearly defined, and procedures should be reviewed, and if necessary simplified or supplemented with simpler procedures, in order to avoid additional confusion and excessive coordination as a result of continuing growth in the number of partly overlapping instruments. If possible, simpler instruments should be used.

| 4.8 | Small and medium-sized enterprises (SMEs). SMEs are either already making a substantial contribution to the process of innovation, or have the potential to do so in future. The conditions for participation by SMEs in thematic priorities should therefore be simplified and made more flexible, for example through flexible classification and selection of themes and instruments (CRAFT, Collective Research, EUREKA). Generally, in the fields of both high and low technology, programming and adaptation of aid instruments should be more geared than previously to enabling eligible SMEs to participate. Aid instruments such as Specific Targeted Research Projects (STREPs) are a particularly appropriate means of achieving this, as they are more accessible to smaller groups and projects, and are conducive to a bottom-up approach. |
| --- | --- |

4.8

Small and medium-sized enterprises (SMEs). SMEs are either already making a substantial contribution to the process of innovation, or have the potential to do so in future. The conditions for participation by SMEs in thematic priorities should therefore be simplified and made more flexible, for example through flexible classification and selection of themes and instruments (CRAFT, Collective Research, EUREKA). Generally, in the fields of both high and low technology, programming and adaptation of aid instruments should be more geared than previously to enabling eligible SMEs to participate. Aid instruments such as Specific Targeted Research Projects (STREPs) are a particularly appropriate means of achieving this, as they are more accessible to smaller groups and projects, and are conducive to a bottom-up approach.

| 4.8.1 | SMEs and knowledge transfer. Another key issue which should be tackled separately is how to give researchers and engineers working in industry, particularly in SMEs, access to new and potentially relevant basic research findings from universities and government-funded research institutes, and thus to accelerate the knowledge transfer process, which is vital for industrial innovation and competitiveness. This too is a subject which the Committee has discussed on several occasions (22), particularly with regard to the transfer (mobility) of researchers between industry and the academic world, an area in which there is considerable scope for improvement and for creation of more attractive conditions. |
| --- | --- |

4.8.1

SMEs and knowledge transfer. Another key issue which should be tackled separately is how to give researchers and engineers working in industry, particularly in SMEs, access to new and potentially relevant basic research findings from universities and government-funded research institutes, and thus to accelerate the knowledge transfer process, which is vital for industrial innovation and competitiveness. This too is a subject which the Committee has discussed on several occasions (22), particularly with regard to the transfer (mobility) of researchers between industry and the academic world, an area in which there is considerable scope for improvement and for creation of more attractive conditions.

| 4.8.2 | Entrepreneurship and industrial policy. Start-ups of small companies are a powerful engine for innovation and economic growth. The problems facing new companies usually have less to do with insufficient support for research and development than with management and marketing issues, and especially the lack of financial resources to adequately bridge the initial loss-making period. This, then, is an area where coordination between industrial policy and research policy is needed, in order to stimulate European business activity and to give it a better chance of success. |
| --- | --- |

4.8.2

Entrepreneurship and industrial policy. Start-ups of small companies are a powerful engine for innovation and economic growth. The problems facing new companies usually have less to do with insufficient support for research and development than with management and marketing issues, and especially the lack of financial resources to adequately bridge the initial loss-making period. This, then, is an area where coordination between industrial policy and research policy is needed, in order to stimulate European business activity and to give it a better chance of success.

| 4.8.3 | The SBIR Programme in the USA. The Committee also recommends referring to the experiences of the USA with the Small Business Innovation Research (SBIR) programme (23), which has been used by the United States government to support commercial R&D activity in small and medium-sized enterprises through various agencies. |
| --- | --- |

4.8.3

The SBIR Programme in the USA. The Committee also recommends referring to the experiences of the USA with the Small Business Innovation Research (SBIR) programme (23), which has been used by the United States government to support commercial R&D activity in small and medium-sized enterprises through various agencies.

| 4.9 | Open coordination. The Committee has called on the Commission to apply the method of open coordination on several previous occasions; at the same time, it maintains the view that this can only happen on a voluntary basis, with the consent of Member States. |
| --- | --- |

4.9

Open coordination. The Committee has called on the Commission to apply the method of open coordination on several previous occasions; at the same time, it maintains the view that this can only happen on a voluntary basis, with the consent of Member States.

| 4.10 | Self-organisation and self-coordination. As the Committee has also noted on several occasions, there is a bottom-up, autonomous approach to organisation and coordination in European scientific and technological circles. Actors get to know one another within their respective fields through publications, conferences and workshops, they become involved in programme development on their own initiative, and thus contribute to coordination — a process which is influenced by the interplay of cooperation and competition (see below). Major research initiatives, programmes and institutes have arisen in this way, achieving international prominence and preparing the way for the concept of the European Research Area. This process should be acknowledged and made use of. |
| --- | --- |

4.10

Self-organisation and self-coordination. As the Committee has also noted on several occasions, there is a bottom-up, autonomous approach to organisation and coordination in European scientific and technological circles. Actors get to know one another within their respective fields through publications, conferences and workshops, they become involved in programme development on their own initiative, and thus contribute to coordination — a process which is influenced by the interplay of cooperation and competition (see below). Major research initiatives, programmes and institutes have arisen in this way, achieving international prominence and preparing the way for the concept of the European Research Area. This process should be acknowledged and made use of.

| 4.11 | Promoting competition. In this context, the Committee welcomes the fact that the Commission has chosen competition as one of its six major objectives. It shares the Commission's belief that added value can be generated at European level through competition. The Committee reiterates its previous statement (24) that science and research depend on competition for the best ideas, procedures and findings, on independent confirmation (or disproving) — i.e. ‘certification’ — of new findings, and on their dissemination, deepening and extension. Thus it is necessary to facilitate and foster diverse, interdisciplinary research approaches and structures, in order to stimulate and utilise the resulting competition for the best ideas and findings. |
| --- | --- |

4.11

Promoting competition. In this context, the Committee welcomes the fact that the Commission has chosen competition as one of its six major objectives. It shares the Commission's belief that added value can be generated at European level through competition. The Committee reiterates its previous statement (24) that science and research depend on competition for the best ideas, procedures and findings, on independent confirmation (or disproving) — i.e. ‘certification’ — of new findings, and on their dissemination, deepening and extension. Thus it is necessary to facilitate and foster diverse, interdisciplinary research approaches and structures, in order to stimulate and utilise the resulting competition for the best ideas and findings.

| 4.12 | Competition, cooperation and coordination. The objectives of competition, cooperation and coordination are not always in harmony with one another; conflicts are particularly likely to arise in connection with product development. The optimal scope of each objective should be defined and appropriate instruments for each one should be selected accordingly. The principle should be as much competition as possible, and only as much cooperation as necessary. |
| --- | --- |

4.12

Competition, cooperation and coordination. The objectives of competition, cooperation and coordination are not always in harmony with one another; conflicts are particularly likely to arise in connection with product development. The optimal scope of each objective should be defined and appropriate instruments for each one should be selected accordingly. The principle should be as much competition as possible, and only as much cooperation as necessary.

| 4.13 | Critical mass and global competition. Some research and development activities, such as large infrastructures and certain large technological projects, exceed the capacity of individual Member States, even when taken in isolation from other activities, and therefore are generally only feasible through joint European action; such activities are particularly exposed to global competition (cf. the section on the International Dimension), and need to measure up to international standards. The previous comments on technological platforms also apply here. |
| --- | --- |

4.13

Critical mass and global competition. Some research and development activities, such as large infrastructures and certain large technological projects, exceed the capacity of individual Member States, even when taken in isolation from other activities, and therefore are generally only feasible through joint European action; such activities are particularly exposed to global competition (cf. the section on the International Dimension), and need to measure up to international standards. The previous comments on technological platforms also apply here.

| 4.14 | European Research Council (ERC). As previously mentioned in its recent opinion (25), the Committee supports the Commission's plans to set up a European Research Council (ERC) to coordinate and support basic research, with the support of the scientific community. The Council should have full autonomy and operate on similar lines to successful counterparts in Member States and the USA. In order to exploit the interplay between research categories, the Committee recommends that leading industrial researchers should be included in the Council. |
| --- | --- |

4.14

European Research Council (ERC). As previously mentioned in its recent opinion (25), the Committee supports the Commission's plans to set up a European Research Council (ERC) to coordinate and support basic research, with the support of the scientific community. The Council should have full autonomy and operate on similar lines to successful counterparts in Member States and the USA. In order to exploit the interplay between research categories, the Committee recommends that leading industrial researchers should be included in the Council.

| 4.15 | Peer review. The main assessment method used by the Council should be peer review. To compensate for the familiar and inherent shortcomings of even this method (e.g. conflicts of interest), experienced scientists with a track record of scientific achievements and in-depth knowledge of the specialised subjects referred to them should be employed by the ERC (and generally by all support organisations (26)). |
| --- | --- |

4.15

Peer review. The main assessment method used by the Council should be peer review. To compensate for the familiar and inherent shortcomings of even this method (e.g. conflicts of interest), experienced scientists with a track record of scientific achievements and in-depth knowledge of the specialised subjects referred to them should be employed by the ERC (and generally by all support organisations (26)).

| 4.16 | Career support. The Committee strongly supports the objective of making science, research and development a more attractive career option, of stimulating enthusiasm among talented potential recruits and providing appropriate career support. A recent EESC opinion (27) went into the subject in depth and endorsed the Commission's work in this field. |
| --- | --- |

4.16

Career support. The Committee strongly supports the objective of making science, research and development a more attractive career option, of stimulating enthusiasm among talented potential recruits and providing appropriate career support. A recent EESC opinion (27) went into the subject in depth and endorsed the Commission's work in this field.

| 4.16.1 | Unsatisfactory pay and conditions for scientists. One of the problems associated with scientific careers is that pay and conditions, particularly for young scientists, are less favourable than those offered in the private sector or even in otherwise comparable public sector employment. The Committee reiterates its call for urgent action, particularly by Member States. |
| --- | --- |

4.16.1

Unsatisfactory pay and conditions for scientists. One of the problems associated with scientific careers is that pay and conditions, particularly for young scientists, are less favourable than those offered in the private sector or even in otherwise comparable public sector employment. The Committee reiterates its call for urgent action, particularly by Member States.

| 4.17 | Preventing overlap and parallelism of administration and governing bodies. Research activity involves planning, entrepreneurial, administrative and assessment tasks, which can only be performed by experienced scientists. In view of the proliferation of application, assessment/review and monitoring procedures, the Committee reiterates its recommendation (28) that the Commission look into this question and work towards effective, coordinated procedures (especially procedures coordinated between the Commission and the various participating bodies in the Member States, and between these latter bodies among themselves) in order to prevent the emergence of too many separate vertical (as well as horizontal/parallel) approval, governing, review and monitoring bodies (and procedures) and the resulting unproductive activity. |
| --- | --- |

4.17

Preventing overlap and parallelism of administration and governing bodies. Research activity involves planning, entrepreneurial, administrative and assessment tasks, which can only be performed by experienced scientists. In view of the proliferation of application, assessment/review and monitoring procedures, the Committee reiterates its recommendation (28) that the Commission look into this question and work towards effective, coordinated procedures (especially procedures coordinated between the Commission and the various participating bodies in the Member States, and between these latter bodies among themselves) in order to prevent the emergence of too many separate vertical (as well as horizontal/parallel) approval, governing, review and monitoring bodies (and procedures) and the resulting unproductive activity.

| 4.18 | Selection procedures for experts/assessors. At the same time, and while keeping in mind the need to reduce current burdens on experts/assessors, it is important to secure the most experienced and distinguished specialists in the relevant fields for this purpose, thus reducing the risk of errors. However, successful scientists are particularly likely to be put off by excessively rigid and bureaucratic selection procedures; for this to change, there is a need to cut through the red tape enveloping such procedures. |
| --- | --- |

4.18

Selection procedures for experts/assessors. At the same time, and while keeping in mind the need to reduce current burdens on experts/assessors, it is important to secure the most experienced and distinguished specialists in the relevant fields for this purpose, thus reducing the risk of errors. However, successful scientists are particularly likely to be put off by excessively rigid and bureaucratic selection procedures; for this to change, there is a need to cut through the red tape enveloping such procedures.

| 4.19 | Assessment procedures. The intentions behind some of the procedures which have met with criticism from the scientific community may well have been good; however, they impose standardised assessment criteria in a complex and sensitive area, instead of judging on the basis of personal/human experience. The Committee acknowledges the aim of guarding against abuse and possible disputes by making assessments more objective and transparent, and leaving as little scope for subjectivity as possible; however, the situation poses an impossible dilemma. Evaluation of scientific achievements and creativity cannot be made an automatic process, and it should not be entrusted to inexperienced individuals. |
| --- | --- |

4.19

Assessment procedures. The intentions behind some of the procedures which have met with criticism from the scientific community may well have been good; however, they impose standardised assessment criteria in a complex and sensitive area, instead of judging on the basis of personal/human experience. The Committee acknowledges the aim of guarding against abuse and possible disputes by making assessments more objective and transparent, and leaving as little scope for subjectivity as possible; however, the situation poses an impossible dilemma. Evaluation of scientific achievements and creativity cannot be made an automatic process, and it should not be entrusted to inexperienced individuals.

| 4.20 | Two new research themes: space and security. The Communication from the Commission makes no mention of thematic priorities, with the sole exception of basic research (29) and the two new themes of space and security. The Committee welcomes the Commission's proposal to tackle these subjects at European level, and in doing so it reaffirms its previous recommendations on space policy (30). However, the Committee recommends that, in view of their special character and incompatibility with Framework Programme procedures, these two areas should be approached separately from the thematic priorities and outside the proposed budget for the Seventh Framework Programme. |
| --- | --- |

4.20

Two new research themes: space and security. The Communication from the Commission makes no mention of thematic priorities, with the sole exception of basic research (29) and the two new themes of space and security. The Committee welcomes the Commission's proposal to tackle these subjects at European level, and in doing so it reaffirms its previous recommendations on space policy (30). However, the Committee recommends that, in view of their special character and incompatibility with Framework Programme procedures, these two areas should be approached separately from the thematic priorities and outside the proposed budget for the Seventh Framework Programme.

| 4.20.1 | In the case of space research, a very strong and successful programme already exists. The programme involves collaboration between the ESA and European space and aviation industries, with substantial contributions from research institutes in Member States. Participation by the Commission, which the Committee strongly recommends, should therefore come under the existing cooperation agreement between the ESA and the Commission, but should be run and financed separately from the Framework Programme. The Committee would be interested to find out more details of this. |
| --- | --- |

4.20.1

In the case of space research, a very strong and successful programme already exists. The programme involves collaboration between the ESA and European space and aviation industries, with substantial contributions from research institutes in Member States. Participation by the Commission, which the Committee strongly recommends, should therefore come under the existing cooperation agreement between the ESA and the Commission, but should be run and financed separately from the Framework Programme. The Committee would be interested to find out more details of this.

| 4.20.2 | In the case of security research, a European approach is very much in the joint interests of Member States, as repeatedly discussed and emphasised at the Committee. The Committee is therefore strongly in favour of action in this area. However, the approach would differ to that of the Framework Programme's Thematic Priorities (which, for example, require transparency), given that issues of confidentiality and possibly also domestic and external defence activities are involved. In view of this, financing and instruments in this area should also be planned separately from the Framework Programme. |
| --- | --- |

4.20.2

In the case of security research, a European approach is very much in the joint interests of Member States, as repeatedly discussed and emphasised at the Committee. The Committee is therefore strongly in favour of action in this area. However, the approach would differ to that of the Framework Programme's Thematic Priorities (which, for example, require transparency), given that issues of confidentiality and possibly also domestic and external defence activities are involved. In view of this, financing and instruments in this area should also be planned separately from the Framework Programme.

5.   Summary

| 5.1 | The Committee emphasises that research and development are vital for European competitiveness, and consequently also for the Lisbon objectives. The Committee therefore supports the objectives and measures put forward in the Commission's Communication. |
| --- | --- |

5.1

The Committee emphasises that research and development are vital for European competitiveness, and consequently also for the Lisbon objectives. The Committee therefore supports the objectives and measures put forward in the Commission's Communication.

| 5.2 | This particularly applies to the 3 % objective, as well as the twofold increase in the EU budget for R&D (through the Framework Programme and EURATOM) which has been proposed as a means of achieving it. The Committee calls on the Council and the Parliament to act on this proposal; in addition, government spending and private investment in research and development (in Europe) should be increased accordingly. |
| --- | --- |

5.2

This particularly applies to the 3 % objective, as well as the twofold increase in the EU budget for R&D (through the Framework Programme and EURATOM) which has been proposed as a means of achieving it. The Committee calls on the Council and the Parliament to act on this proposal; in addition, government spending and private investment in research and development (in Europe) should be increased accordingly.

| 5.3 | The Committee points out that the 3 % objective is in line with current spending by competitors, and in future will have to be revised to keep up with growth trends, e.g. in the USA and South-East Asia. |
| --- | --- |

5.3

The Committee points out that the 3 % objective is in line with current spending by competitors, and in future will have to be revised to keep up with growth trends, e.g. in the USA and South-East Asia.

| 5.4 | The Committee supports the Commission's plan to fully realise the potential of an enlarged Europe, and also to reflect the transitional situation in the new Member States, by devoting some of the resources from the Structural Funds to building up research capacity and research infrastructures. In addition, the Committee recommends using the European Investment Fund for this purpose. |
| --- | --- |

5.4

The Committee supports the Commission's plan to fully realise the potential of an enlarged Europe, and also to reflect the transitional situation in the new Member States, by devoting some of the resources from the Structural Funds to building up research capacity and research infrastructures. In addition, the Committee recommends using the European Investment Fund for this purpose.

| 5.5 | The Committee supports the Commission's intention to improve practical implementation of the programme and to streamline implementation procedures. It therefore recommends simplifying instruments and making them more flexible, while maintaining continuity. Applicants must be able to adapt instruments so that the structure and scale of projects are suited to the relevant tasks. The same applies to setting up ‘technology platforms’. The Committee endorses the Marimon Report. |
| --- | --- |

5.5

The Committee supports the Commission's intention to improve practical implementation of the programme and to streamline implementation procedures. It therefore recommends simplifying instruments and making them more flexible, while maintaining continuity. Applicants must be able to adapt instruments so that the structure and scale of projects are suited to the relevant tasks. The same applies to setting up ‘technology platforms’. The Committee endorses the Marimon Report.

| 5.6 | The Committee recommends closer involvement of relevant SMEs than hitherto in research, development and innovation. In this connection, it refers to the SBIR programme in the United States. The Committee also recommends closer coordination of policies in the fields of enterprise and research, in order to develop and fully realise the potential of SMEs and new start-ups for stimulating innovation and economic growth. |
| --- | --- |

5.6

The Committee recommends closer involvement of relevant SMEs than hitherto in research, development and innovation. In this connection, it refers to the SBIR programme in the United States. The Committee also recommends closer coordination of policies in the fields of enterprise and research, in order to develop and fully realise the potential of SMEs and new start-ups for stimulating innovation and economic growth.

| 5.7 | The Commission supports the Commission's plan to adopt research into space and security as new thematic priorities, and it explains why these should be financed and run separately from the Framework Programme. |
| --- | --- |

5.7

The Commission supports the Commission's plan to adopt research into space and security as new thematic priorities, and it explains why these should be financed and run separately from the Framework Programme.

| 5.8 | The Committee supports the Commission's plans for basic research as such to be covered by the Framework Programme and to be stimulated through European competition, and it is in favour of setting up an independent European Research Council. |
| --- | --- |

5.8

The Committee supports the Commission's plans for basic research as such to be covered by the Framework Programme and to be stimulated through European competition, and it is in favour of setting up an independent European Research Council.

| 5.9 | The Committee emphasises that the interplay between the categories of basic research, applied research and development is of vital importance, and that therefore a balance should be struck in providing support for each one. |
| --- | --- |

5.9

The Committee emphasises that the interplay between the categories of basic research, applied research and development is of vital importance, and that therefore a balance should be struck in providing support for each one.

| 5.10 | The Committee supports the Commission's plans to enhance the attractiveness of Europe for top scientists and to persuade talented young people to take up scientific careers, while providing support for such careers. This will require action by all concerned, and by Member States in particular.
  For many other key arguments, recommendations and criticisms, the Committee refers to the detailed comments in Sections 3 and 4. |
| --- | --- |

5.10

The Committee supports the Commission's plans to enhance the attractiveness of Europe for top scientists and to persuade talented young people to take up scientific careers, while providing support for such careers. This will require action by all concerned, and by Member States in particular.

For many other key arguments, recommendations and criticisms, the Committee refers to the detailed comments in Sections 3 and 4.

Brussels, 15 December 2004.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  ERA: European Research Area. For further details, see in particular OJ C 110, 30.4.2004 (CES 319/2004) and OJ C 95, 23.4.2003 (CESE 288/2003).

1

(2)  At the March 2002 Barcelona European Council, the European Union set itself the objective of increasing overall European research spending with the aim of approaching 3 % of EU GDP by 2010. Two-thirds of this investment should come from the private sector and one-third from the public sector (the EU and its Member States). See also OJ C 95, 23.4.2003.

2

(3)  OJ C 204, 18.7.2000; OJ C 221, 7.8.2001; OJ C 260, 17.9.2001; OJ C 94, 18.4.2002; OJ C 221, 17.9.2002; OJ C 61, 14.3.2003; OJ C 95, 23.4.2003; OJ C 234, 30.9.2003; OJ C 32, 5.2.2004 ; OJ C 110, 30.4.2004; OJ C 302, 7.12.2004.

3

(4)  See point 3.3 below.

4

(5)  OJ C 112 of 30.4.2004.

5

(6)  (The budget increase recommended in that opinion referred to the needs of the EU15 and thus needs to be extrapolated for the EU 25.) OJ C 260, 17.9.2001.

6

(7)  See point 1.2.

7

(8)  See also point 4.2 et seq.

8

(9)  See also point 4.6.

9

(10)  See also point 5.4 (OJ C 95, 3.4.2003).

10

(11)  OJ C 110, 30.4.2004.

11

(12)  e.g. Canada, China, India, Japan, Korea, Russia and the USA.

12

(13)  This issue and some of the fundamental difficulties it throws up were also discussed in detail in section 7 (Research and technological innovation) of the EESC opinion on the European research area.

13

(14)  OJ C 95, 23.4.2003; OJ C 110, 30.4.2004.

14

(15)  See also point 5.4 (OJ C 95, 23.4.2003).

15

(16)  See also recommendations in point 3.5.

16

(17)  The Communication recommends a stronger role for the Marie Curie Programme, which has made a particularly important contribution here.

17

(18)  The Committee reiterates its disappointment that its earlier recommendations to this effect were ignored.

18

(19)  Report of an expert panel chaired by Prof. Marimon, 21 June 2004, Sixth Framework Programme.

19

(20)  ‘The Community may set up joint undertakings or any other structure necessary for the efficient execution of Community research, technological development and demonstration programmes.’

20

(21)  See also point 4.7.2.

21

(22)  See, for example, points 7 and 8 (OJ C 204, 18.7.2000).

22

(23)  See http://sbir.us/pm.html and http://www.zyn.com/sbir/funding.htm.

23

(24)  Points 4.2.2, 4.2.3 and 4.2.4 (OJ C 95, 23.04.2003).

24

(25)  OJ C 110 of 30.4.2004

25

(26)  The Committee has repeatedly recommended following a similar procedure in the Commission's activities to support research.

26

(27)  OJ C 110, 30.4.2004 (CESE 305/2004) and CESE 1086/2004.

27

(28)  CESE 305/2004, point 5.18 (OJ C110, 30.4.2004).

28

(29)  See point 3.5.

29

(30)  OJ C 112, 30.4.2004.

30

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| 28.6.2005 | EN | Official Journal of the European Union | C 157/115 |
| --- | --- | --- | --- |

28.6.2005

EN

Official Journal of the European Union

C 157/115

---

Opinion of the European Economic and Social Committee on the ‘Proposal for a Directive of the European Parliament and of the Council on statutory audit of annual accounts and consolidated accounts and amending Council Directives 78/660/EEC and 83/349/EEC’

(COM(2004) 177 final — 2004/0065 (COD))

(2005/C 157/21)

On 21 April 2004 the Council decided to consult the European Economic and Social Committee, under Article 44(2)(g) 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 8 September 2004. The rapporteur was Mr Frank von Fürstenwerth.

At its 413th plenary session on 15 and 16 December 2004 (meeting of 15 December 2004), the European Economic and Social Committee adopted the following opinion by 86 votes to three, with one abstention:

1.   Introduction

| 1.1 | The proposal of the European Commission for a Directive of the European Parliament and of the Council on statutory audit of annual accounts and consolidated accounts and amending Council Directives 78/660/EEC and 83/349/EEC should be seen in the wider context of EU actions included in the Financial Services Action Plan. Particularly important in this respect are the Commission Communication on Modernising Company Law and Enhancing Corporate Governance in the EU — A plan to Move forward (COM(2003) 284), the move to international accounting standards from 2005 onwards, and the market abuse and prospectus Directives. |
| --- | --- |

1.1

The proposal of the European Commission for a Directive of the European Parliament and of the Council on statutory audit of annual accounts and consolidated accounts and amending Council Directives 78/660/EEC and 83/349/EEC should be seen in the wider context of EU actions included in the Financial Services Action Plan. Particularly important in this respect are the Commission Communication on Modernising Company Law and Enhancing Corporate Governance in the EU — A plan to Move forward (COM(2003) 284), the move to international accounting standards from 2005 onwards, and the market abuse and prospectus Directives.

| 1.2 | Since 1996 the European Commission has been working towards the objective of improving and harmonising the quality of statutory auditing in the European Union. In May 2003, a step towards this objective was taken with the presentation of a ten-point action plan (Commission Communication on reinforcing the statutory audit in the EU; COM/2003/286). One of the points in the action plan concerns modernising the Eighth Directive on Company Law, 84/253/EEC. The current proposal for a directive is intended to replace the Eighth Directive on Company Law. |
| --- | --- |

1.2

Since 1996 the European Commission has been working towards the objective of improving and harmonising the quality of statutory auditing in the European Union. In May 2003, a step towards this objective was taken with the presentation of a ten-point action plan (Commission Communication on reinforcing the statutory audit in the EU; COM/2003/286). One of the points in the action plan concerns modernising the Eighth Directive on Company Law, 84/253/EEC. The current proposal for a directive is intended to replace the Eighth Directive on Company Law.

| 1.3 | The measures proposed in the directive are intended to restore confidence in accounting procedures and financial markets. Although the proposal is a reflection of policies on statutory audit which have been in place since 1996 and not a direct response to the recent accounting scandals, these were taken into consideration. |
| --- | --- |

1.3

The measures proposed in the directive are intended to restore confidence in accounting procedures and financial markets. Although the proposal is a reflection of policies on statutory audit which have been in place since 1996 and not a direct response to the recent accounting scandals, these were taken into consideration.

2.   Proposals of the Commission

| 2.1 | The proposal for a directive contains provisions on the approval, continuous education, and mutual international recognition of statutory auditors and audit firms. |
| --- | --- |

2.1

The proposal for a directive contains provisions on the approval, continuous education, and mutual international recognition of statutory auditors and audit firms.

| 2.2 | All statutory auditors and audit firms must be subject to principles of professional ethics, which should cover the overall responsibility of the statutory auditor or audit firm towards the public, their integrity and objectivity, and their professional competence and due care. |
| --- | --- |

2.2

All statutory auditors and audit firms must be subject to principles of professional ethics, which should cover the overall responsibility of the statutory auditor or audit firm towards the public, their integrity and objectivity, and their professional competence and due care.

| 2.3 | Member States should ensure that statutory auditors and audit firms which have been approved are registered in a public register. |
| --- | --- |

2.3

Member States should ensure that statutory auditors and audit firms which have been approved are registered in a public register.

| 2.4 | A statutory auditor or an audit firm must be independent from the audited entity and cannot be involved in any way in management decisions of the audited entity. A statutory auditor or an audit firm should not carry out a statutory audit if there is any financial, business, employment or other relationship with the audited entity that might compromise the statutory auditor's or audit firm's independence. |
| --- | --- |

2.4

A statutory auditor or an audit firm must be independent from the audited entity and cannot be involved in any way in management decisions of the audited entity. A statutory auditor or an audit firm should not carry out a statutory audit if there is any financial, business, employment or other relationship with the audited entity that might compromise the statutory auditor's or audit firm's independence.

| 2.5 | All statutory audits prescribed by Community law should be carried out in accordance with international auditing standards, when these standards are adopted by Community law. |
| --- | --- |

2.5

All statutory audits prescribed by Community law should be carried out in accordance with international auditing standards, when these standards are adopted by Community law.

| 2.6 | Member States should organise effective public oversight of statutory auditors and audit firms. Oversight should comply with certain principles (e.g. in relation to appointment of suitable individuals, responsibility, and transparency). |
| --- | --- |

2.6

Member States should organise effective public oversight of statutory auditors and audit firms. Oversight should comply with certain principles (e.g. in relation to appointment of suitable individuals, responsibility, and transparency).

| 2.7 | The statutory auditor or audit firm should be appointed by the general meeting of shareholders of the audited entity. In accordance with national law, Member States may provide that such appointment is subject to prior approval by a competent supervisory authority or that the appointment is made by a court or another organisation designated by national law. |
| --- | --- |

2.7

The statutory auditor or audit firm should be appointed by the general meeting of shareholders of the audited entity. In accordance with national law, Member States may provide that such appointment is subject to prior approval by a competent supervisory authority or that the appointment is made by a court or another organisation designated by national law.

| 2.8 | Statutory auditors or audit firms may only be dismissed where there are proper grounds; divergence of opinions on accounting treatments or audit procedures cannot be a proper ground for dismissal. |
| --- | --- |

2.8

Statutory auditors or audit firms may only be dismissed where there are proper grounds; divergence of opinions on accounting treatments or audit procedures cannot be a proper ground for dismissal.

| 2.9 | The Commission proposes that Member States should ensure that adequate rules are in place which provide for an effective communication between the statutory auditor or audit firm and the audited entity, and that such communication is properly recorded by the audited entity. |
| --- | --- |

2.9

The Commission proposes that Member States should ensure that adequate rules are in place which provide for an effective communication between the statutory auditor or audit firm and the audited entity, and that such communication is properly recorded by the audited entity.

| 2.10 | The proposal for a directive envisages special provisions for the statutory audit of public interest entities. Public interest entities are companies which, due to the nature of their business, size, or number of employees are of significant public relevance, in particular companies whose securities are admitted to trading on a regulated market of a Member State, such as banks, other financial companies, and insurance undertakings. One of the requirements for these companies is to set up an audit committee composed of non-executive members of the administrative body or members of the supervisory body of the audited entity with at least one independent member with competence in accounting and/or auditing. In addition, there are more stringent requirements for independence, quality assurance, public oversight, and appointment of the statutory auditor or audit firm. |
| --- | --- |

2.10

The proposal for a directive envisages special provisions for the statutory audit of public interest entities. Public interest entities are companies which, due to the nature of their business, size, or number of employees are of significant public relevance, in particular companies whose securities are admitted to trading on a regulated market of a Member State, such as banks, other financial companies, and insurance undertakings. One of the requirements for these companies is to set up an audit committee composed of non-executive members of the administrative body or members of the supervisory body of the audited entity with at least one independent member with competence in accounting and/or auditing. In addition, there are more stringent requirements for independence, quality assurance, public oversight, and appointment of the statutory auditor or audit firm.

| 2.11 | On the condition of reciprocity, the competent authorities of a Member State may approve an auditor from a third country as statutory auditor if the person has furnished proof of being approved as an auditor, theoretical knowledge, practical skills and integrity equivalent to the provisions of the Directive, and legal knowledge relevant for the statutory audit in the Member State. Other possibilities for international collaboration and exchange of information are also proposed. |
| --- | --- |

2.11

On the condition of reciprocity, the competent authorities of a Member State may approve an auditor from a third country as statutory auditor if the person has furnished proof of being approved as an auditor, theoretical knowledge, practical skills and integrity equivalent to the provisions of the Directive, and legal knowledge relevant for the statutory audit in the Member State. Other possibilities for international collaboration and exchange of information are also proposed.

| 2.12 | A committee composed of representatives of the Member States (the audit regulatory committee) is to be set up to assist the Commission in establishing implementing measures. |
| --- | --- |

2.12

A committee composed of representatives of the Member States (the audit regulatory committee) is to be set up to assist the Commission in establishing implementing measures.

| 2.13 | Directives 78/660/EEC and 83/349/EEC are amended to require disclosure of the fees for the financial year paid to the statutory auditor or audit firm for the statutory audit of annual accounts and the fees paid for other assurance services, tax advisory services and other non-audit services. |
| --- | --- |

2.13

Directives 78/660/EEC and 83/349/EEC are amended to require disclosure of the fees for the financial year paid to the statutory auditor or audit firm for the statutory audit of annual accounts and the fees paid for other assurance services, tax advisory services and other non-audit services.

| 2.14 | Member States are to adopt and publish before 1 January 2006 the provisions necessary to comply with the Directive. |
| --- | --- |

2.14

Member States are to adopt and publish before 1 January 2006 the provisions necessary to comply with the Directive.

3.   General comments

| 3.1 | The European Economic and Social Committee welcomes the proposed directive, which ensures that investors and other interested parties can place reliance on the accuracy of audited accounts. |
| --- | --- |

3.1

The European Economic and Social Committee welcomes the proposed directive, which ensures that investors and other interested parties can place reliance on the accuracy of audited accounts.

| 3.2 | The new directive creates a unified European legal framework for statutory audit. The Committee welcomes this development. |
| --- | --- |

3.2

The new directive creates a unified European legal framework for statutory audit. The Committee welcomes this development.

| 3.3 | The Committee acknowledges that the Commission is taking further initiatives in response to the Parmalat case. These initiatives concern speedier implementation of the proposals submitted in the May 2003 action plan to modernise company law and enhance corporate governance. These proposals relate to (1) defining the role of non-executive directors, (2) clarifying the responsibility of board members for financial and non-financial information, (3) improved disclosure of intra-group transactions and transactions with associated entities, and (4) full disclosure of offshore companies in annual accounts and much more stringent monitoring of such companies by auditors dealing with consolidated accounts. |
| --- | --- |

3.3

The Committee acknowledges that the Commission is taking further initiatives in response to the Parmalat case. These initiatives concern speedier implementation of the proposals submitted in the May 2003 action plan to modernise company law and enhance corporate governance. These proposals relate to (1) defining the role of non-executive directors, (2) clarifying the responsibility of board members for financial and non-financial information, (3) improved disclosure of intra-group transactions and transactions with associated entities, and (4) full disclosure of offshore companies in annual accounts and much more stringent monitoring of such companies by auditors dealing with consolidated accounts.

| 3.4 | The Committee again picks up on the view expressed by the Commission in its communication on reinforcing the statutory audit that auditor liability is a driver for audit quality. (1) However, it continues to maintain (2) that liability should be proportionate, as regards any losses incurred by the company being audited and by the shareholders. The Commission's intention to review the economic impact of auditor liability regimes is to be welcomed. The Committee would therefore encourage the Commission to press ahead with the studies it has launched on this issue without delay. |
| --- | --- |

3.4

The Committee again picks up on the view expressed by the Commission in its communication on reinforcing the statutory audit that auditor liability is a driver for audit quality. (1) However, it continues to maintain (2) that liability should be proportionate, as regards any losses incurred by the company being audited and by the shareholders. The Commission's intention to review the economic impact of auditor liability regimes is to be welcomed. The Committee would therefore encourage the Commission to press ahead with the studies it has launched on this issue without delay.

4.   Specific comments

| 4.1 | One of the aims of the proposed provisions for the approval and continuous education of statutory auditors or audit firms is to ensure that the auditing profession has the necessary expertise. For this reason, the provisions are to be welcomed. |
| --- | --- |

4.1

One of the aims of the proposed provisions for the approval and continuous education of statutory auditors or audit firms is to ensure that the auditing profession has the necessary expertise. For this reason, the provisions are to be welcomed.

| 4.2 | The proposals on professional ethics are generally seen as positive. The Commission proposes that it should be able to adopt implementing measures on professional ethics. These should be of the highest quality and, in the Committee's view, be in line with recognised international norms (Code of Ethics of the International Federation of Accountants) or European declarations (European Commission Recommendation of 16 May 2002 on statutory auditors' independence in the EU (3)). |
| --- | --- |

4.2

The proposals on professional ethics are generally seen as positive. The Commission proposes that it should be able to adopt implementing measures on professional ethics. These should be of the highest quality and, in the Committee's view, be in line with recognised international norms (Code of Ethics of the International Federation of Accountants) or European declarations (European Commission Recommendation of 16 May 2002 on statutory auditors' independence in the EU (3)).

| 4.3 | In the opinion of the Committee, the independence of the statutory auditor or the audit firm is crucial. It therefore supports, in principle, the Commission's proposal to ensure the independence of the statutory auditor or audit firm by laying down standards for all companies being audited, with particular reference to those of general interest, bearing in mind that these companies are also obliged to be more transparent vis-à-vis their shareholders and their future investors. |
| --- | --- |

4.3

In the opinion of the Committee, the independence of the statutory auditor or the audit firm is crucial. It therefore supports, in principle, the Commission's proposal to ensure the independence of the statutory auditor or audit firm by laying down standards for all companies being audited, with particular reference to those of general interest, bearing in mind that these companies are also obliged to be more transparent vis-à-vis their shareholders and their future investors.

| 4.4 | The fact that the Commission refers to International Standards on Auditing is to be welcomed. In view of the obligation from 2005 of publicly traded companies to prepare consolidated financial statements based on the IAS (International Accounting Standards) or IFRS (International Financial Reporting Standards) (4), application of the International Standards on Auditing is a logical next step. International auditing standards should be developed in compliance with certain principles, and the quality of such standards should meet rigorous requirements. The Committee is therefore generally in favour of the procedure suggested by the Commission for endorsement of standards. However, in order to develop internationally recognised audit standards, the interests of all stakeholders and of the general public need to be taken into account through a transparent ‘due process’ for setting standards. Therefore, the Commission must act firmly and at an early stage to bring its proposals to bear in the standardisation process. |
| --- | --- |

4.4

The fact that the Commission refers to International Standards on Auditing is to be welcomed. In view of the obligation from 2005 of publicly traded companies to prepare consolidated financial statements based on the IAS (International Accounting Standards) or IFRS (International Financial Reporting Standards) (4), application of the International Standards on Auditing is a logical next step. International auditing standards should be developed in compliance with certain principles, and the quality of such standards should meet rigorous requirements. The Committee is therefore generally in favour of the procedure suggested by the Commission for endorsement of standards. However, in order to develop internationally recognised audit standards, the interests of all stakeholders and of the general public need to be taken into account through a transparent ‘due process’ for setting standards. Therefore, the Commission must act firmly and at an early stage to bring its proposals to bear in the standardisation process.

| 4.5 | The Committee is generally in favour of the Commission's proposal for Member States to organise public oversight of statutory auditors and audit firms based on certain principles. |
| --- | --- |

4.5

The Committee is generally in favour of the Commission's proposal for Member States to organise public oversight of statutory auditors and audit firms based on certain principles.

| 4.6 | Concerning the dismissal of statutory auditors or audit firms, the Commission proposes that divergence of opinions on accounting treatments or audit procedures should not be a proper ground for dismissal. However, it is conceivable that a company might use a recognised accounting treatment which is not accepted by an auditor. The question arises of how to proceed in such cases, if statutory auditors or audit firms cannot be dismissed. |
| --- | --- |

4.6

Concerning the dismissal of statutory auditors or audit firms, the Commission proposes that divergence of opinions on accounting treatments or audit procedures should not be a proper ground for dismissal. However, it is conceivable that a company might use a recognised accounting treatment which is not accepted by an auditor. The question arises of how to proceed in such cases, if statutory auditors or audit firms cannot be dismissed.

| 4.7 | The Committee is generally in favour of the proposed provision for communication between the audited entity and the statutory auditor or audit company. |
| --- | --- |

4.7

The Committee is generally in favour of the proposed provision for communication between the audited entity and the statutory auditor or audit company.

| 4.8 | The Committee is in favour of the Commission's proposal to introduce special provisions for the statutory audit of public interest entities. However, the special requirements must be proportionate to the accompanying additional costs, which are ultimately borne by the company's clients and shareholders. |
| --- | --- |

4.8

The Committee is in favour of the Commission's proposal to introduce special provisions for the statutory audit of public interest entities. However, the special requirements must be proportionate to the accompanying additional costs, which are ultimately borne by the company's clients and shareholders.

| 4.9 | The Commission proposes that fees for the financial year paid to the statutory auditor or audit firm for the statutory audit of annual accounts and the fees paid for other assurance services, tax advisory services and other non-audit services should be disclosed. In principle, an increase in transparency is to be welcomed. However, it should also be borne in mind that compulsory disclosures of this kind do not necessarily imply higher quality audits. It is possible that increased transparency could increase pressure to adjust fees for statutory auditing services. |
| --- | --- |

4.9

The Commission proposes that fees for the financial year paid to the statutory auditor or audit firm for the statutory audit of annual accounts and the fees paid for other assurance services, tax advisory services and other non-audit services should be disclosed. In principle, an increase in transparency is to be welcomed. However, it should also be borne in mind that compulsory disclosures of this kind do not necessarily imply higher quality audits. It is possible that increased transparency could increase pressure to adjust fees for statutory auditing services.

| 4.10 | The Commission proposes that individual Member States should be responsible for ensuring that adequate rules are in place which provide that fees for statutory audits are adequate to allow proper audit quality, are not influenced by the provision of additional services to the audited entity and are not based on any form of contingency. The Committee acknowledges that this provision is designed as a key approach to preventing ‘dumping prices’ being charged for audit services. However, the question arises of how this provision should be implemented. The Committee strongly feels that this provision should not result in audit fees being set by the Member States. |
| --- | --- |

4.10

The Commission proposes that individual Member States should be responsible for ensuring that adequate rules are in place which provide that fees for statutory audits are adequate to allow proper audit quality, are not influenced by the provision of additional services to the audited entity and are not based on any form of contingency. The Committee acknowledges that this provision is designed as a key approach to preventing ‘dumping prices’ being charged for audit services. However, the question arises of how this provision should be implemented. The Committee strongly feels that this provision should not result in audit fees being set by the Member States.

| 4.11 | The Committee is in favour of the procedure proposed by the Commission for adopting implementing measures and setting up an audit regulatory committee, provided that such implementing measures do not run counter to the international and European norms and declarations mentioned in point 4.2. |
| --- | --- |

4.11

The Committee is in favour of the procedure proposed by the Commission for adopting implementing measures and setting up an audit regulatory committee, provided that such implementing measures do not run counter to the international and European norms and declarations mentioned in point 4.2.

5.   International aspects

| 5.1 | The Commission's proposals to regulate international cooperation are seen in a positive light, particularly in relation to cooperation with the United States. The Committee would, however, emphasise the need for compliance with existing national rules on confidentiality and data protection. |
| --- | --- |

5.1

The Commission's proposals to regulate international cooperation are seen in a positive light, particularly in relation to cooperation with the United States. The Committee would, however, emphasise the need for compliance with existing national rules on confidentiality and data protection.

| 5.2 | The proposal for a directive envisages approving auditors from third countries on the basis of reciprocity, provided that they furnish certain proofs. A requirement for cooperation with third countries is equivalence of the system of public oversight in the third country with the European system. Equivalence is to be assessed by the Commission in cooperation with Member States and decided upon according to the procedure for adopting implementing measures. The Committee trusts that approval of statutory auditors from third countries will be subject to the same conditions as for auditors from EU Member States. |
| --- | --- |

5.2

The proposal for a directive envisages approving auditors from third countries on the basis of reciprocity, provided that they furnish certain proofs. A requirement for cooperation with third countries is equivalence of the system of public oversight in the third country with the European system. Equivalence is to be assessed by the Commission in cooperation with Member States and decided upon according to the procedure for adopting implementing measures. The Committee trusts that approval of statutory auditors from third countries will be subject to the same conditions as for auditors from EU Member States.

| 5.3 | It is difficult to say conclusively whether the proposed model for international cooperation adequately addresses all the relevant issues, and the Committee therefore feels that there is a need for further reflection by the Commission as to how acceptable the proposed model might be, for the competent United States authorities in particular. |
| --- | --- |

5.3

It is difficult to say conclusively whether the proposed model for international cooperation adequately addresses all the relevant issues, and the Committee therefore feels that there is a need for further reflection by the Commission as to how acceptable the proposed model might be, for the competent United States authorities in particular.

6.   Conclusions

| 6.1 | The Committee supports the Commission's proposal for a directive on statutory audit of annual accounts and consolidated accounts and amending Council Directives 78/660/EEC and 83/349/EEC. It believes that the proposal covers almost all the important aspects of statutory auditing. The full implementation of the directive will go a considerable way to meeting the Commission's objective of reinforcing and harmonising statutory audit. |
| --- | --- |

6.1

The Committee supports the Commission's proposal for a directive on statutory audit of annual accounts and consolidated accounts and amending Council Directives 78/660/EEC and 83/349/EEC. It believes that the proposal covers almost all the important aspects of statutory auditing. The full implementation of the directive will go a considerable way to meeting the Commission's objective of reinforcing and harmonising statutory audit.

| 6.2 | The Committee has touched on selected aspects of the proposed directive in order, among other things, to give the Commission specific pointers and suggestions for further deliberations and analysis. In view of the importance which the Committee attaches to the proposed directive, it calls for a rapid legislative process. |
| --- | --- |

6.2

The Committee has touched on selected aspects of the proposed directive in order, among other things, to give the Commission specific pointers and suggestions for further deliberations and analysis. In view of the importance which the Committee attaches to the proposed directive, it calls for a rapid legislative process.

Brussels, 15 December 2004

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  OJ C 236/2-8, 2.10.2003, point 3.10.

1

(2)  Cf. opinion of the European Economic and Social Committee of 10 December 2003 on the Communication from the Commission to the European Parliament and the Council on reinforcing the statutory audit in the EU (COM(2003) 286 final) (2004/C 80/06); OJ C 80/17-19, 30.3.2004, point 4.7.

2

Communication from the Commission to the European Parliament and the Council on reinforcing the statutory audit in the EU

(3)  OJ L 191, 19.07.2002.

3

(4)  In the opinion of the Committee, a consistent approach in interpreting the IAS and IFRS is essential for high-quality audits.

4

---

APPENDIX

to the opinion of the European Economic and Social Committee

Over a quarter of votes were cast in favour of the following extract from the section opinion, which was replaced by an amendment adopted at the plenary session:

Point 4.3

‘However, the Committee is of the opinion that the introduction of external rotation of audit firms carrying out the statutory audit of public interest entities is not conducive to raising the quality of the audits, as the transfer of specific information on a client to a new auditor necessarily involves a loss of expertise and therefore a lower standard of audit than would be the case with an auditor who has several years' experience of working with the client. There is also a risk that such a requirement would result in a concentration of the market on big audit firms to the detriment of medium-sized companies.’

Result of vote:

Votes in favour: 50

Votes against: 21

Abstentions: 4

---

| 28.6.2005 | EN | Official Journal of the European Union | C 157/120 |
| --- | --- | --- | --- |

28.6.2005

EN

Official Journal of the European Union

C 157/120

---

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 on increasing the employment of older workers and delaying the exit from the labour market’

(COM(2004) 146 final)

(2005/C 157/22)

Procedure

On 3 March 2004, the Commission decided to consult the European Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on the abovementioned communication.

The Section for Employment, Social Affairs and Citizenship, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 24 November 2004. The rapporteur was Mr Dantin.

At its 413th plenary session held on 15 and 16 December 2004 (meeting of 15 December), the European Economic and Social Committee adopted the following opinion by 125 votes in favour, 1 against and 5 abstentions.

Preamble

| I. | In October 2000, the EESC commented in an own-initiative opinion that: ‘The Committee feels that the issue of older workers is of such importance that it warrants an own-initiative opinion addressing the different aspects of the problem. With this opinion the Committee has also sought to stress the need for a positive approach to older workers, insofar as the way they are currently treated not only reflects a discriminatory conception of society lacking in solidarity, but in many cases results in the loss of highly qualified staff and a consequent fall in the overall level of competitiveness. Furthermore, the Committee is of the view that if scientific progress now allows more time to enjoy life, by the same token, our society should seek to organise itself so that we get more out of life for longer’ (1). |
| --- | --- |

I.

In October 2000, the EESC commented in an own-initiative opinion that: ‘The Committee feels that the issue of older workers is of such importance that it warrants an own-initiative opinion addressing the different aspects of the problem. With this opinion the Committee has also sought to stress the need for a positive approach to older workers, insofar as the way they are currently treated not only reflects a discriminatory conception of society lacking in solidarity, but in many cases results in the loss of highly qualified staff and a consequent fall in the overall level of competitiveness. Furthermore, the Committee is of the view that if scientific progress now allows more time to enjoy life, by the same token, our society should seek to organise itself so that we get more out of life for longer’ (1).

| II. | The contents of this own-initiative opinion, which was adopted virtually unanimously at the plenary session, sets out the Committee's thinking on this subject, reflecting the state of its ideas and standpoints. |
| --- | --- |

II.

The contents of this own-initiative opinion, which was adopted virtually unanimously at the plenary session, sets out the Committee's thinking on this subject, reflecting the state of its ideas and standpoints.

| III. | The Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions on increasing the employment of older workers and delaying the exit from the labour market, which is the subject of this opinion, will therefore be examined in the light of the expectations, analyses, recommendations, and conclusions of the above-mentioned own-initiative opinion. It will integrate those elements which could be considered as new. |
| --- | --- |

III.

The Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions on increasing the employment of older workers and delaying the exit from the labour market, which is the subject of this opinion, will therefore be examined in the light of the expectations, analyses, recommendations, and conclusions of the above-mentioned own-initiative opinion. It will integrate those elements which could be considered as new.

1.   Introduction

| 1.1 | The Lisbon European Council set the European Union an ambitious objective for the employment rate, which was to be raised ‘as close as possible to 70 % by 2010’ and to 60 % for women. This target is justified for both social and economic reasons, as employment provides the best protection against social exclusion. For individual companies and the economy as a whole it is vital to increase employment rates of older workers, so that labour shortages can be averted or mitigated by making full use of the available workforce. In view of the forecast decline in the working age population, achieving this objective will stimulate economic growth, boost taxation revenues and support social security systems. |
| --- | --- |

1.1

The Lisbon European Council set the European Union an ambitious objective for the employment rate, which was to be raised ‘as close as possible to 70 % by 2010’ and to 60 % for women. This target is justified for both social and economic reasons, as employment provides the best protection against social exclusion. For individual companies and the economy as a whole it is vital to increase employment rates of older workers, so that labour shortages can be averted or mitigated by making full use of the available workforce. In view of the forecast decline in the working age population, achieving this objective will stimulate economic growth, boost taxation revenues and support social security systems.

| 1.2 | For the majority of Member States, gradual achievement of this target inevitably presents the particular challenge of raising the employment rate of older workers. |
| --- | --- |

1.2

For the majority of Member States, gradual achievement of this target inevitably presents the particular challenge of raising the employment rate of older workers.

| 1.2.1 | It is precisely for this reason that promotion of active ageing is reflected in the two complementary targets that the European Union has set itself. Indeed, the Stockholm European Council of 2001 concluded that half of the EU population in the 55-64 age group should be in employment by 2010. As for the Barcelona European Council of 2002, it concluded that ‘a progressive increase of about 5 years in the effective average age at which people stop working in the European Union should be sought by 2010’. |
| --- | --- |

1.2.1

It is precisely for this reason that promotion of active ageing is reflected in the two complementary targets that the European Union has set itself. Indeed, the Stockholm European Council of 2001 concluded that half of the EU population in the 55-64 age group should be in employment by 2010. As for the Barcelona European Council of 2002, it concluded that ‘a progressive increase of about 5 years in the effective average age at which people stop working in the European Union should be sought by 2010’.

| 1.3 | In its synthesis report to the 2004 European Spring Council (2) the Commission has identified active ageing as one of the three priority areas for which swift action is needed to deliver the Lisbon strategy. |
| --- | --- |

1.3

In its synthesis report to the 2004 European Spring Council (2) the Commission has identified active ageing as one of the three priority areas for which swift action is needed to deliver the Lisbon strategy.

| 1.4 | The purpose of the Communication under review is to inform the debate about progress towards the Stockholm and Barcelona targets and to highlight the role of governments and social partners in promoting active ageing. The Communication also responds to the request of the Barcelona European Council to analyse progress in this field annually before every Spring Council. |
| --- | --- |

1.4

The purpose of the Communication under review is to inform the debate about progress towards the Stockholm and Barcelona targets and to highlight the role of governments and social partners in promoting active ageing. The Communication also responds to the request of the Barcelona European Council to analyse progress in this field annually before every Spring Council.

| 1.5 | The present opinion is the contribution of the European Economic and Social Committee to the debate on the employment rate of older workers, a debate which the Communication under review has contributed to, and which should be brought to an interim conclusion next December. |
| --- | --- |

1.5

The present opinion is the contribution of the European Economic and Social Committee to the debate on the employment rate of older workers, a debate which the Communication under review has contributed to, and which should be brought to an interim conclusion next December.

2.   The Communication

| 2.1 | The Communication states that with the ageing and the expected shrinking of the working age population, older workers must be recognised for what they are: a core component of labour supply and a key factor for the sustainable development of the European Union. |
| --- | --- |

2.1

The Communication states that with the ageing and the expected shrinking of the working age population, older workers must be recognised for what they are: a core component of labour supply and a key factor for the sustainable development of the European Union.

| 2.2 | According to the Communication, it follows that there is an essential need for policies to maintain labour supply and secure employability even in periods of overall sluggish employment growth. |
| --- | --- |

2.2

According to the Communication, it follows that there is an essential need for policies to maintain labour supply and secure employability even in periods of overall sluggish employment growth.

| 2.3 | To achieve this, it suggests that a preventative approach based on mobilising the full potential of people of all ages in a life-cycle perspective should be the main thrust of policy measures. |
| --- | --- |

2.3

To achieve this, it suggests that a preventative approach based on mobilising the full potential of people of all ages in a life-cycle perspective should be the main thrust of policy measures.

| 2.3.1 | It therefore proposes that Member States should formulate and implement comprehensive strategies for active ageing, which may include:






  — | financial incentives to discourage early retirement, and to make employment financially more attractive; |
| --- | --- | --- |

2.3.1

It therefore proposes that Member States should formulate and implement comprehensive strategies for active ageing, which may include:

—

financial incentives to discourage early retirement, and to make employment financially more attractive;

| — | access to training strategies and to lifelong learning; |
| --- | --- |

—

access to training strategies and to lifelong learning;

| — | effective active labour market policies; |
| --- | --- |

—

effective active labour market policies;

| — | good working conditions conducive to job retention, particularly in terms of health and safety, and flexible employment solutions. |
| --- | --- |

—

good working conditions conducive to job retention, particularly in terms of health and safety, and flexible employment solutions.

| 2.3.2 | The Communication also points out that much stronger participation and commitment of the social partners are needed in designing and implementing comprehensive active ageing strategies. It emphasises the importance of the role played by the social partners through collective agreements. |
| --- | --- |

2.3.2

The Communication also points out that much stronger participation and commitment of the social partners are needed in designing and implementing comprehensive active ageing strategies. It emphasises the importance of the role played by the social partners through collective agreements.

| 2.4 | To return to the background of the present opinion, it may be noted that, although the Communication offers a precise and detailed description of situations and their outcomes, it does not concern itself with analysis of the causes, and nor does it enter into the decisions of the Barcelona Council in any great depth. |
| --- | --- |

2.4

To return to the background of the present opinion, it may be noted that, although the Communication offers a precise and detailed description of situations and their outcomes, it does not concern itself with analysis of the causes, and nor does it enter into the decisions of the Barcelona Council in any great depth.

3.   The facts

| 3.1 | By 2030 there will be 110 million people aged over 65 in the EU25, up from 71 million in 2000, and the working age population will stand at 280 million compared to 303 million today. As a result, the ratio of the total working population to persons aged over 65 will fall from 4.27 to 2.55. |
| --- | --- |

3.1

By 2030 there will be 110 million people aged over 65 in the EU25, up from 71 million in 2000, and the working age population will stand at 280 million compared to 303 million today. As a result, the ratio of the total working population to persons aged over 65 will fall from 4.27 to 2.55.

| 3.2 | Parallel to these developments, the distribution of work over the course of a lifetime has undergone major upheavals over the last twenty years. |
| --- | --- |

3.2

Parallel to these developments, the distribution of work over the course of a lifetime has undergone major upheavals over the last twenty years.

| 3.2.1 | Young people are entering the labour market later because of longer periods spent in full-time education, training, and difficulties in finding suitable work (3). |
| --- | --- |

3.2.1

Young people are entering the labour market later because of longer periods spent in full-time education, training, and difficulties in finding suitable work (3).

| 3.2.2 | The employment rate of the total population aged over 55 has fallen considerably in Europe during the last three decades, but also, to a lesser extent, across the Atlantic: in 1999, it was 37 % in the 55-64 age group in the European Union and 55 % in the United States (4). In 2002, in Europe, there was a marked difference between the figures for men (50.1 %) and for women (30.25 %), giving a total of 40.1 %. |
| --- | --- |

3.2.2

The employment rate of the total population aged over 55 has fallen considerably in Europe during the last three decades, but also, to a lesser extent, across the Atlantic: in 1999, it was 37 % in the 55-64 age group in the European Union and 55 % in the United States (4). In 2002, in Europe, there was a marked difference between the figures for men (50.1 %) and for women (30.25 %), giving a total of 40.1 %.

| 3.2.3 | The employment rate has declined continuously since the 1970s up till recently, and on a large scale, particularly between 1980 and 1985 (5). For example, between 1971 and 1999 the figure fell by 47.4 % in France, 45.8 % in the Netherlands, 39 % in Spain, 38.7 % in Germany, 30 % in Ireland, and 29 % in Portugal and the United Kingdom. In 2002 the employment rate for the 55-64 age group was 40.1 % in the EU 15 and 38.7 % in the EU 25, (for an overview of the trends for each Member State in the 1997-2002 period, refer to the appendices) (6). It would probably be fair to speak of an individualisation of career paths. However, this does not always reflect greater choice for the individual as early departure from the labour market in some Member States is in general more often imposed than chosen. The new flexibility at the end of a career is instead a reflection of labour market pressures, the human resource strategies of companies and public authorities in response to them, (7) and, in many cases, the way pension schemes are designed. |
| --- | --- |

3.2.3

The employment rate has declined continuously since the 1970s up till recently, and on a large scale, particularly between 1980 and 1985 (5). For example, between 1971 and 1999 the figure fell by 47.4 % in France, 45.8 % in the Netherlands, 39 % in Spain, 38.7 % in Germany, 30 % in Ireland, and 29 % in Portugal and the United Kingdom. In 2002 the employment rate for the 55-64 age group was 40.1 % in the EU 15 and 38.7 % in the EU 25, (for an overview of the trends for each Member State in the 1997-2002 period, refer to the appendices) (6). It would probably be fair to speak of an individualisation of career paths. However, this does not always reflect greater choice for the individual as early departure from the labour market in some Member States is in general more often imposed than chosen. The new flexibility at the end of a career is instead a reflection of labour market pressures, the human resource strategies of companies and public authorities in response to them, (7) and, in many cases, the way pension schemes are designed.

| 3.3 | Working life has therefore tended to become shorter at both ends of the age spectrum, and at present it is dominated by age groups situated in the middle of this spectrum. |
| --- | --- |

3.3

Working life has therefore tended to become shorter at both ends of the age spectrum, and at present it is dominated by age groups situated in the middle of this spectrum.

| 3.4 | The 50-64 age group is of particular importance for employment policy. At the level of the EU15, the proportion of the total population in this age group will increase from 25 % in 1995 to 34.40 % in 2025. This increase will occur much more quickly in the Scandinavian countries (8). |
| --- | --- |

3.4

The 50-64 age group is of particular importance for employment policy. At the level of the EU15, the proportion of the total population in this age group will increase from 25 % in 1995 to 34.40 % in 2025. This increase will occur much more quickly in the Scandinavian countries (8).

| 3.5 | This development is particularly worrying in the context of the acute demographic ageing which the European Union will experience (9). The fact that the number of persons aged over 60 is likely to overtake that of under-20s by the end of the first decade of the new century is a prospect whose symbolic significance should not distract us from its worrying implications. Indeed, this is only one stage in a process which over the next 50 years could lead to a doubling of the ratio between the number of retirees and the working age population (from 4:10 to 8:10) (10). |
| --- | --- |

3.5

This development is particularly worrying in the context of the acute demographic ageing which the European Union will experience (9). The fact that the number of persons aged over 60 is likely to overtake that of under-20s by the end of the first decade of the new century is a prospect whose symbolic significance should not distract us from its worrying implications. Indeed, this is only one stage in a process which over the next 50 years could lead to a doubling of the ratio between the number of retirees and the working age population (from 4:10 to 8:10) (10).

| 3.6 | However, the Communication under review points out that some progress has been made recently towards achieving the Stockholm and Barcelona targets. In 2002 employment of older workers increased by 5.4 %, corresponding to a rise of 1.3 points in the employment rate to 40.1 %, while the average exit age from the labour market increased from 60.4 years in 2001 to 60.8 in 2002. |
| --- | --- |

3.6

However, the Communication under review points out that some progress has been made recently towards achieving the Stockholm and Barcelona targets. In 2002 employment of older workers increased by 5.4 %, corresponding to a rise of 1.3 points in the employment rate to 40.1 %, while the average exit age from the labour market increased from 60.4 years in 2001 to 60.8 in 2002.

| 3.6.1 | However, the Communication points out that it would be premature to interpret the increase in the exit age as a strong indication of a positive trend, as there are only two years of data. |
| --- | --- |

3.6.1

However, the Communication points out that it would be premature to interpret the increase in the exit age as a strong indication of a positive trend, as there are only two years of data.

| 3.6.2 | Although there have been difficulties connected with recent implementation of certain reforms, it would be useful to go into more detail than the Communication does as to the reasons behind this recovery, in order to establish possible approaches. |
| --- | --- |

3.6.2

Although there have been difficulties connected with recent implementation of certain reforms, it would be useful to go into more detail than the Communication does as to the reasons behind this recovery, in order to establish possible approaches.

| 3.6.3 | In this context, it would also be helpful to see how much of this recovery is, on the one hand, due to the introduction of measures whose primary, if not sole objective was to increase the employment rate of older workers, and, on the other, the direct or indirect result of changes made to social protection systems, intended primarily to ensure their economic viability, under threat from demographic trends and forecasts. |
| --- | --- |

3.6.3

In this context, it would also be helpful to see how much of this recovery is, on the one hand, due to the introduction of measures whose primary, if not sole objective was to increase the employment rate of older workers, and, on the other, the direct or indirect result of changes made to social protection systems, intended primarily to ensure their economic viability, under threat from demographic trends and forecasts.

| 3.7 | The fact remains that in the 55-64 age group, the average proportion of employees exiting the labour market at the legal retirement age during 1995-2002 was a mere 35 %, whereas 22 % took early retirement, 17 % were invalided out, 13 % left as a result of individual or collective redundancies, and a further 13 % for other reasons (11). |
| --- | --- |

3.7

The fact remains that in the 55-64 age group, the average proportion of employees exiting the labour market at the legal retirement age during 1995-2002 was a mere 35 %, whereas 22 % took early retirement, 17 % were invalided out, 13 % left as a result of individual or collective redundancies, and a further 13 % for other reasons (11).

| 3.7.1 | Although these figures have improved over the last few years, they are still revealing. One might think that in the 1980s the high number of employees taking early retirement, and of those leaving due to illness or disability — which are sometimes considered as substitutes for early retirement — was connected with the intensive corporate restructuring of the period. However, in view of the persistence of the phenomenon, with only 35 % of employees exiting the labour market at the legal age of retirement, it now seems that this is an inadequate explanation. |
| --- | --- |

3.7.1

Although these figures have improved over the last few years, they are still revealing. One might think that in the 1980s the high number of employees taking early retirement, and of those leaving due to illness or disability — which are sometimes considered as substitutes for early retirement — was connected with the intensive corporate restructuring of the period. However, in view of the persistence of the phenomenon, with only 35 % of employees exiting the labour market at the legal age of retirement, it now seems that this is an inadequate explanation.

4.   Finding solutions: the proposals made in the Communication

| 4.1 | The first step towards readjusting the balance between active and inactive workers, increasing the average age of exiting the labour market, and maintaining an optimally sized workforce with regard to the demographic forecasts for the European Union, involves raising the employment rate in the over-55 age group. Of course, the employment rate also needs to strike a good balance between employment and retirement, leisure time and work, which is one of the values of the European social model. |
| --- | --- |

4.1

The first step towards readjusting the balance between active and inactive workers, increasing the average age of exiting the labour market, and maintaining an optimally sized workforce with regard to the demographic forecasts for the European Union, involves raising the employment rate in the over-55 age group. Of course, the employment rate also needs to strike a good balance between employment and retirement, leisure time and work, which is one of the values of the European social model.

| 4.2 | Such a step must be planned on a medium-term basis by introducing a policy of maintaining life-long employability and retraining employees — women as well as men — over the age of 40. Indeed, it is difficult to imagine a spontaneously harmonious scenario, in which the reversal of labour market trends would be sufficient to convince companies to retain their older workers. |
| --- | --- |

4.2

Such a step must be planned on a medium-term basis by introducing a policy of maintaining life-long employability and retraining employees — women as well as men — over the age of 40. Indeed, it is difficult to imagine a spontaneously harmonious scenario, in which the reversal of labour market trends would be sufficient to convince companies to retain their older workers.

| 4.2.1 | In addition to the practical measures which need to be taken, it is essential for perceptions to change and for everything possible to be done to bring about a change in attitudes and to raise awareness among both companies and employees. Working beyond the age of 55 must be viewed as rewarding by employees, while companies and public services must be aware of the benefits which older workers can bring (experience, know-how, passing on knowledge, etc.). It is essential that collective awareness of the issue be raised in order to ensure that the specific measures adopted are fully effective. |
| --- | --- |

4.2.1

In addition to the practical measures which need to be taken, it is essential for perceptions to change and for everything possible to be done to bring about a change in attitudes and to raise awareness among both companies and employees. Working beyond the age of 55 must be viewed as rewarding by employees, while companies and public services must be aware of the benefits which older workers can bring (experience, know-how, passing on knowledge, etc.). It is essential that collective awareness of the issue be raised in order to ensure that the specific measures adopted are fully effective.

| 4.2.2 | In its own-initiative opinion of October 2000 (12) on this subject the Committee therefore urged the Commission to promote, in cooperation with the Member States, an extensive information and enlightenment campaign to help generate a positive attitude to the role played by older workers in companies and the public services. |
| --- | --- |

4.2.2

In its own-initiative opinion of October 2000 (12) on this subject the Committee therefore urged the Commission to promote, in cooperation with the Member States, an extensive information and enlightenment campaign to help generate a positive attitude to the role played by older workers in companies and the public services.

| 4.2.2.1 | The EESC is pleased to note that its proposals have been taken up by the Report of the High Level Group on the future of social policy in an enlarged European Union, which appeared towards the end of the first half of 2004. |
| --- | --- |

4.2.2.1

The EESC is pleased to note that its proposals have been taken up by the Report of the High Level Group on the future of social policy in an enlarged European Union, which appeared towards the end of the first half of 2004.

| 4.2.3 | Also, there should be greater recognition of their role in the social economy, in the family as well as in civil society, democratic institutions, NGOs, and voluntary work in general, which provides a direct demonstration of their dynamism, initiative and effectiveness. |
| --- | --- |

4.2.3

Also, there should be greater recognition of their role in the social economy, in the family as well as in civil society, democratic institutions, NGOs, and voluntary work in general, which provides a direct demonstration of their dynamism, initiative and effectiveness.

| 4.3 | In its Communication, the Commission presents its key conditions for fostering the employment of older workers. |
| --- | --- |

4.3

In its Communication, the Commission presents its key conditions for fostering the employment of older workers.

4.3.1   Early retirement and financial incentives

Having noted that over 20 % of employees, or some 3 million older workers, leave their last job in order to take up early retirement, the Communication proposes a review of ‘financial incentives’ to ensure that the option of staying in the labour market is financially rewarding.

| 4.3.1.1 | The Committee believes that this proposal, which should be seen in conjunction with the Communication on Modernising social protection: making work pay
   (13)
  , is to be welcomed in view of the type and quality of the measures which it suggests. However, although this approach offers some constructive suggestions, it is unlikely to outweigh the decisive importance of such factors in the objective employment situation of workers as employability, management of human resources throughout their working lives and particularly during the second half, and, more generally, their situation arising from the policies of a company. Regarding the private lives of employees, the individual's own plans can also have an effect on early retirement. |
| --- | --- |

4.3.1.1

The Committee believes that this proposal, which should be seen in conjunction with the Communication on Modernising social protection: making work pay
   (13)
  , is to be welcomed in view of the type and quality of the measures which it suggests. However, although this approach offers some constructive suggestions, it is unlikely to outweigh the decisive importance of such factors in the objective employment situation of workers as employability, management of human resources throughout their working lives and particularly during the second half, and, more generally, their situation arising from the policies of a company. Regarding the private lives of employees, the individual's own plans can also have an effect on early retirement.

| 4.3.1.2 | In the context of continual and rapid changes to the production system and manufacturing processes, and in a continually evolving economy and market, companies must adapt and restructure if they are to succeed in a global environment at the same time as striking a balance between social and economic concerns, as this is the only way of ensuring company dynamism and growth. It follows that companies need room for manœuvre, a breathing space. |
| --- | --- |

4.3.1.2

In the context of continual and rapid changes to the production system and manufacturing processes, and in a continually evolving economy and market, companies must adapt and restructure if they are to succeed in a global environment at the same time as striking a balance between social and economic concerns, as this is the only way of ensuring company dynamism and growth. It follows that companies need room for manœuvre, a breathing space.

| 4.3.1.3 | This room for manoeuvre resides in the quantity and quality of jobs, in particular those of older workers. This is particularly the case with regard to ‘social plans’ introduced after restructuring operations. |
| --- | --- |

4.3.1.3

This room for manoeuvre resides in the quantity and quality of jobs, in particular those of older workers. This is particularly the case with regard to ‘social plans’ introduced after restructuring operations.

| 4.3.1.4 | Irrespective of such ‘social plans’, the introduction of early retirement enables companies to replace older workers, who they view as relatively unproductive and as having obsolete skills, with younger and fewer workers. They view this as helping to improve their competitiveness as well as lightening their pay roll and rebalancing their age structure. Even if such situations are difficult to avoid, this approach sometimes reflects shortcomings in human resource management and an absence of forward-looking management of jobs and qualifications. However, all such schemes have been made possible by government measures and/or the social security systems of individual Member States. |
| --- | --- |

4.3.1.4

Irrespective of such ‘social plans’, the introduction of early retirement enables companies to replace older workers, who they view as relatively unproductive and as having obsolete skills, with younger and fewer workers. They view this as helping to improve their competitiveness as well as lightening their pay roll and rebalancing their age structure. Even if such situations are difficult to avoid, this approach sometimes reflects shortcomings in human resource management and an absence of forward-looking management of jobs and qualifications. However, all such schemes have been made possible by government measures and/or the social security systems of individual Member States.

| 4.3.1.5 | But this should not obscure the real wishes of employees. Among those who took up early retirement, only 4 out of 10 would have preferred to continue working (14). Indeed, apart from those employees who are genuinely incapacitated, the widespread desire to share in a new and attractive distribution of the benefits of growth must not be underestimated, as well as the weariness that comes from doing an unrewarding job in which there is little or no variety, and few opportunities to switch jobs, sometimes for more than forty years, causing people to aspire to a different lifestyle. It is often with the feeling of having already ‘contributed a lot’, and in the absence of prospects of finding a new and more suitable job, that voluntary retirement is taken up. |
| --- | --- |

4.3.1.5

But this should not obscure the real wishes of employees. Among those who took up early retirement, only 4 out of 10 would have preferred to continue working (14). Indeed, apart from those employees who are genuinely incapacitated, the widespread desire to share in a new and attractive distribution of the benefits of growth must not be underestimated, as well as the weariness that comes from doing an unrewarding job in which there is little or no variety, and few opportunities to switch jobs, sometimes for more than forty years, causing people to aspire to a different lifestyle. It is often with the feeling of having already ‘contributed a lot’, and in the absence of prospects of finding a new and more suitable job, that voluntary retirement is taken up.

| 4.3.1.6 | Under the present conditions it can be said that a convergence of interests often exists between the employee and his company, in other words an objective alliance which is generally carried over into the collective agreements reached by the social partners at different negotiating levels, including that of companies. |
| --- | --- |

4.3.1.6

Under the present conditions it can be said that a convergence of interests often exists between the employee and his company, in other words an objective alliance which is generally carried over into the collective agreements reached by the social partners at different negotiating levels, including that of companies.

| 4.3.1.7 | These circumstances and the problematic issues described above feature prominently in attempts to justify early retirement. In order to achieve changes, both this situation and the factors outlined in point 4.3.2 need to be addressed. |
| --- | --- |

4.3.1.7

These circumstances and the problematic issues described above feature prominently in attempts to justify early retirement. In order to achieve changes, both this situation and the factors outlined in point 4.3.2 need to be addressed.

4.3.2   Reform of early retirement

The Communication also refers in general terms to the need for reform of early retirement arrangements. The EESC is in favour of this general approach, provided that it means encouraging older workers to stay at work and not making them unemployed, as the objective is to increase the employment rate. As the Commission rightly emphasises, ‘incentives for older workers to remain in the labour force must be reflected in real prospects for employment’, whereas up till now, early retirement has generally speaking been merely a means at the disposal of the labour market for alleviating the social costs engendered by long-term unemployment and exclusion. In other words, early retirement has been used as an instrument of ‘employment policy’ or more precisely as an instrument to combat unemployment. In many Member States it is clear that these instruments have often become, and are considered by companies, as a human resource management tool and by employees as a social benefit and entitlement.

| 4.3.2.1 | The Committee is of the view that two sets of examples of early retirement are, however, worth consideration, and merit attention and above all caution:






  — | early retirement in cases of large restructuring operations, since it is true that, in terms of social cohesion, a ‘young’ pensioner is preferable to a long-term unemployed person with no prospect of finding a job again; it should be borne in mind that we can still expect industrial changes, particularly in view of enlargement; |
| --- | --- | --- |

4.3.2.1

The Committee is of the view that two sets of examples of early retirement are, however, worth consideration, and merit attention and above all caution:

—

early retirement in cases of large restructuring operations, since it is true that, in terms of social cohesion, a ‘young’ pensioner is preferable to a long-term unemployed person with no prospect of finding a job again; it should be borne in mind that we can still expect industrial changes, particularly in view of enlargement;

| — | total or partial early retirement offset by the recruitment of a corresponding number of job-seekers, since it is also true that it is better to have one person retired than to keep another unemployed with no prospects of integration into working life. |
| --- | --- |

—

total or partial early retirement offset by the recruitment of a corresponding number of job-seekers, since it is also true that it is better to have one person retired than to keep another unemployed with no prospects of integration into working life.

| 4.3.2.2 | Furthermore, early retirement may be part of a strategy for dealing with older workers who have endured particularly difficult working conditions. Indeed, even though life expectancy is generally increasing, individuals are affected differently. There are considerable disparities between different social groups, in particular between ‘white-collar’ and ‘blue-collar’ employees. For example, in 1999 the average life expectancy of a white-collar employee at the age of 35 was 44.5 years compared to 38 years for a blue-collar worker (15). Any discussion on the duration of working life needs to take these data into consideration. Reducing these inequalities is a major concern. |
| --- | --- |

4.3.2.2

Furthermore, early retirement may be part of a strategy for dealing with older workers who have endured particularly difficult working conditions. Indeed, even though life expectancy is generally increasing, individuals are affected differently. There are considerable disparities between different social groups, in particular between ‘white-collar’ and ‘blue-collar’ employees. For example, in 1999 the average life expectancy of a white-collar employee at the age of 35 was 44.5 years compared to 38 years for a blue-collar worker (15). Any discussion on the duration of working life needs to take these data into consideration. Reducing these inequalities is a major concern.

4.3.3   Good health and safety conditions at work

The Communication rightly emphasises the fact that the second reason which causes employees to exit the labour market is long-term illness or disability, which affects 15 % of the relevant population.

| 4.3.3.1 | However, these figures need to be seen in the light of a tendency in certain Member States to re-classify some unemployed workers as disabled or to use disability as a substitute for early retirement (16). |
| --- | --- |

4.3.3.1

However, these figures need to be seen in the light of a tendency in certain Member States to re-classify some unemployed workers as disabled or to use disability as a substitute for early retirement (16).

| 4.3.3.2 | Be that as it may, it is obvious that improved working conditions which are conducive to preservation of health and physical well-being throughout working lives are a factor which contributes to retention of employees. Also, achieving the objective of high-quality jobs throughout the working lives of employees by means of an emphasis on ergonomics, on defining tasks, on research into the nature of working conditions associated with particular positions and on efforts to improve them, is of crucial significance for retaining older workers in employment towards the end of their careers. |
| --- | --- |

4.3.3.2

Be that as it may, it is obvious that improved working conditions which are conducive to preservation of health and physical well-being throughout working lives are a factor which contributes to retention of employees. Also, achieving the objective of high-quality jobs throughout the working lives of employees by means of an emphasis on ergonomics, on defining tasks, on research into the nature of working conditions associated with particular positions and on efforts to improve them, is of crucial significance for retaining older workers in employment towards the end of their careers.

| 4.3.3.3 | However, generally speaking, disability should not be seen as something which necessarily entails leaving the labour market. Indeed, employees who become disabled in the course of their working lives represent a human asset with considerable potential value. After the necessary process of readjustment and with the help of additional training, they can become extremely able at work of a different type than the job which their disability prevents them from doing. With this in mind, and in order to promote efficiency, it might be useful to consider the cumulative impact of disability pension income and salary income. |
| --- | --- |

4.3.3.3

However, generally speaking, disability should not be seen as something which necessarily entails leaving the labour market. Indeed, employees who become disabled in the course of their working lives represent a human asset with considerable potential value. After the necessary process of readjustment and with the help of additional training, they can become extremely able at work of a different type than the job which their disability prevents them from doing. With this in mind, and in order to promote efficiency, it might be useful to consider the cumulative impact of disability pension income and salary income.

4.3.4   Flexible forms of work organisation

| 4.3.4.1 | Flexible forms of work organisation prior to the legal retirement age are another component of working conditions that can foster job retention for older workers. National surveys often show that a significant number of older workers would prefer a gradual process of retirement, mainly due to health reasons related to ageing, but also to provide a smooth transition from working life to life without work. Early retirement should become a process rather than a fixed date, in the course of which the employees concerned can choose to reduce their working hours gradually over time. |
| --- | --- |

4.3.4.1

Flexible forms of work organisation prior to the legal retirement age are another component of working conditions that can foster job retention for older workers. National surveys often show that a significant number of older workers would prefer a gradual process of retirement, mainly due to health reasons related to ageing, but also to provide a smooth transition from working life to life without work. Early retirement should become a process rather than a fixed date, in the course of which the employees concerned can choose to reduce their working hours gradually over time.

| 4.3.4.2 | A widespread and almost exclusive focus on the issue of retirement age means that working conditions for older employees are not taken into account. Positive measures relating to the end of working life such as gradual early retirement have, for the most part, been undermined by the continuance of total early retirement, and as a result have failed to develop as intended. This situation needs to be changed. Rather than retirement being an event which one would like to bring forward as early as possible, it should become an individually chosen and gradual process whereby employees, protected by a set of collective guarantees, gradually reduce their working time. |
| --- | --- |

4.3.4.2

A widespread and almost exclusive focus on the issue of retirement age means that working conditions for older employees are not taken into account. Positive measures relating to the end of working life such as gradual early retirement have, for the most part, been undermined by the continuance of total early retirement, and as a result have failed to develop as intended. This situation needs to be changed. Rather than retirement being an event which one would like to bring forward as early as possible, it should become an individually chosen and gradual process whereby employees, protected by a set of collective guarantees, gradually reduce their working time.

4.3.5   Continuing access to training

It should be remembered that, as the International Adult Literacy Survey has pointed out, the productivity potential of older workers is not impaired by age but by skills obsolescence — something that can be corrected through training (17).

In view of the preceding comments, it should be noted that a policy for age groups over 40-50 does not go far enough. As the Belgian ‘Conseil supérieur de l'emploi’ (Higher Employment Council) has rightly pointed out, a policy which seeks to address the issue of older workers comes too late if it is only applied to this category of workers. Instead what is needed is a human resource policy which takes age into account as soon as employees enter the labour market (18).

| 4.3.5.1 | While the idea of lifelong learning has found widespread acceptance in principle and is a core element of European employment policy, it is very worrying to note the figures for participation by the workforce in education and training: the average for the 25-29 age group is a mere 14 %, decreasing with age to about 5 % for the 55-64 age group (19). There has been very little growth, or indeed none, in this area over the last few years. |
| --- | --- |

4.3.5.1

While the idea of lifelong learning has found widespread acceptance in principle and is a core element of European employment policy, it is very worrying to note the figures for participation by the workforce in education and training: the average for the 25-29 age group is a mere 14 %, decreasing with age to about 5 % for the 55-64 age group (19). There has been very little growth, or indeed none, in this area over the last few years.

| 4.3.5.2 | In a production system in which jobs require an increasingly high level of technical skills and know-how, this situation is of continued concern, not only with regard to the employment rate of older workers but also more generally to European competitiveness. It is desirable, if not imperative, to find a means of addressing this situation:






  — | companies need to make training part of their strategy, as a mid-term and long-term investment, and should not expect short-term or immediate returns; |
| --- | --- | --- |

4.3.5.2

In a production system in which jobs require an increasingly high level of technical skills and know-how, this situation is of continued concern, not only with regard to the employment rate of older workers but also more generally to European competitiveness. It is desirable, if not imperative, to find a means of addressing this situation:

—

companies need to make training part of their strategy, as a mid-term and long-term investment, and should not expect short-term or immediate returns;

| — | employees often experience difficulties in training, either due to lack of enthusiasm, as is often the case of employees with few skills or no skills, or because they do not feel capable on account of their lack of educational achievement, or because they do not feel any need as retirement is imminent. |
| --- | --- |

—

employees often experience difficulties in training, either due to lack of enthusiasm, as is often the case of employees with few skills or no skills, or because they do not feel capable on account of their lack of educational achievement, or because they do not feel any need as retirement is imminent.

| 4.3.5.3 | Of course, in this situation the social partners can play a decisive role at all levels of negotiation. In view of this, the Framework of actions for the development of lifelong competences and qualifications adopted by the European social partners is a major endeavour to promote lifelong learning for all age groups. At the same time, public authorities, which should ensure that an environment conducive to lifelong learning is in place, also play a very important role. |
| --- | --- |

4.3.5.3

Of course, in this situation the social partners can play a decisive role at all levels of negotiation. In view of this, the Framework of actions for the development of lifelong competences and qualifications adopted by the European social partners is a major endeavour to promote lifelong learning for all age groups. At the same time, public authorities, which should ensure that an environment conducive to lifelong learning is in place, also play a very important role.

| 4.3.5.4 | However, vocational training, and lifelong learning should not be considered in isolation, but should be incorporated into the management of employees' careers. It is important to ensure motivation through training at all ages to enhance skills and boost career paths. From this perspective, skill audits and validation of professional achievements are tools which should be developed through individual career plans linked to corporate objectives. |
| --- | --- |

4.3.5.4

However, vocational training, and lifelong learning should not be considered in isolation, but should be incorporated into the management of employees' careers. It is important to ensure motivation through training at all ages to enhance skills and boost career paths. From this perspective, skill audits and validation of professional achievements are tools which should be developed through individual career plans linked to corporate objectives.

| 4.3.5.5 | Much depends on how the European Union responds to this challenge, including, to some extent, the success of the Lisbon strategy. A general increase in participation by employees in vocational training is needed, which would also enhance the general level of skills and knowledge of older workers. |
| --- | --- |

4.3.5.5

Much depends on how the European Union responds to this challenge, including, to some extent, the success of the Lisbon strategy. A general increase in participation by employees in vocational training is needed, which would also enhance the general level of skills and knowledge of older workers.

4.3.6   Effective active labour market policies

| 4.3.6.1 | The EESC shares the view expressed in the Communication that ‘to ensure that people can remain longer in employment, it is essential to anticipate change and manage economic restructuring successfully’. This comment ties in with one of the causes of the situations discussed in this opinion, i.e. ‘above all an absence of forward-looking management of jobs and qualifications’ (point 4.3.1.4). |
| --- | --- |

4.3.6.1

The EESC shares the view expressed in the Communication that ‘to ensure that people can remain longer in employment, it is essential to anticipate change and manage economic restructuring successfully’. This comment ties in with one of the causes of the situations discussed in this opinion, i.e. ‘above all an absence of forward-looking management of jobs and qualifications’ (point 4.3.1.4).

| 4.3.6.2 | The EESC also agrees that ‘personalised approaches to meet individual needs, including through guidance services, specific training and outplacement systems are particularly crucial in this respect.’ To this end it would be helpful to consider, as envisaged in the Communication and practised in certain Member States, bringing the unemployment benefit systems into play by providing training and qualifications to assist unemployed older workers in finding work, while maintaining entitlement to unemployment benefits and providing guidance to encourage transition to other work or self-employment. |
| --- | --- |

4.3.6.2

The EESC also agrees that ‘personalised approaches to meet individual needs, including through guidance services, specific training and outplacement systems are particularly crucial in this respect.’ To this end it would be helpful to consider, as envisaged in the Communication and practised in certain Member States, bringing the unemployment benefit systems into play by providing training and qualifications to assist unemployed older workers in finding work, while maintaining entitlement to unemployment benefits and providing guidance to encourage transition to other work or self-employment.

| 4.3.6.3 | Implementation of effective active labour market policies affects both supply and demand on labour markets. The Committee is therefore pleased to note that the recommendations made by the Communication keep this principle in mind, as a balanced approach is one of the preconditions for achieving tangible results. |
| --- | --- |

4.3.6.3

Implementation of effective active labour market policies affects both supply and demand on labour markets. The Committee is therefore pleased to note that the recommendations made by the Communication keep this principle in mind, as a balanced approach is one of the preconditions for achieving tangible results.

4.3.7   Improved quality in work

| 4.3.7.1 | The Communication rightly emphasises the crucial importance of the quality of work in retaining older workers or encouraging them to return to the labour market. Over the same period, the number of older workers in jobs of mediocre quality leaving the labour market is up to four times higher than that of older workers in higher quality jobs, and twice as high as that of young workers in jobs of mediocre quality (20). This section of the Communication would be more accurate and thought-provoking if it had attempted to define the concept of ‘quality in work’, and to outline the basis of a possible solution. At the very least, a review of previous documents on this subject, such as COM(2003) 728 of 26.11.2003 or the report on Employment in Europe 2002, would have been helpful. |
| --- | --- |

4.3.7.1

The Communication rightly emphasises the crucial importance of the quality of work in retaining older workers or encouraging them to return to the labour market. Over the same period, the number of older workers in jobs of mediocre quality leaving the labour market is up to four times higher than that of older workers in higher quality jobs, and twice as high as that of young workers in jobs of mediocre quality (20). This section of the Communication would be more accurate and thought-provoking if it had attempted to define the concept of ‘quality in work’, and to outline the basis of a possible solution. At the very least, a review of previous documents on this subject, such as COM(2003) 728 of 26.11.2003 or the report on Employment in Europe 2002, would have been helpful.

4.4   Other proposals and observations

| — | Generally speaking, as in the case of other policy guidelines of the Lisbon strategy, the strategy for Extending the age of exit from the labour market could be more effectively implemented if accompanied by steady growth, which would benefit employment. |
| --- | --- |

—

Generally speaking, as in the case of other policy guidelines of the Lisbon strategy, the strategy for Extending the age of exit from the labour market could be more effectively implemented if accompanied by steady growth, which would benefit employment.

| — | The open method of coordination is used for various areas connected with retirement. However, as far as ‘active ageing’ is concerned, the Communication refers to a ‘peer review programme’ organised within the context of the European Employment Strategy. It is difficult to understand why two different processes are needed. For practical reasons and for the sake of efficiency it might be worth concentrating on the idea of the ‘age of exit from the labour marke’t, i.e. retirement in general, and thus to favour the open method of coordination. |
| --- | --- |

—

The open method of coordination is used for various areas connected with retirement. However, as far as ‘active ageing’ is concerned, the Communication refers to a ‘peer review programme’ organised within the context of the European Employment Strategy. It is difficult to understand why two different processes are needed. For practical reasons and for the sake of efficiency it might be worth concentrating on the idea of the ‘age of exit from the labour marke’t, i.e. retirement in general, and thus to favour the open method of coordination.

| — | As far as the policy guidelines of the Stockholm European Council are concerned, and in view of the considerations set out in the preceding chapters, the EESC supports the courses of action outlined in the Communication. As far as the proposals of the Employment Taskforce are concerned, we refer to the relevant Committee opinion (21). |
| --- | --- |

—

As far as the policy guidelines of the Stockholm European Council are concerned, and in view of the considerations set out in the preceding chapters, the EESC supports the courses of action outlined in the Communication. As far as the proposals of the Employment Taskforce are concerned, we refer to the relevant Committee opinion (21).

However, other proposals and observations may be put forward or outlined in greater detail.

4.4.1   Recruitment

Recruitment is of strategic significance for the employment rate of older workers (22), but has been neglected in general discussions on the subject. This aspect, which has to do with the psychological dimension of the issue, discrimination and consequently compliance with the European Union's Charter of Fundamental Rights, is not one of the main topics of the Communication.

| 4.4.1.1 | Nevertheless, it is vital to oppose all forms of discrimination which occur in the recruitment process, including age discrimination against employees as discussed by the Communication under review. Recruitment methods should not be allowed to make age a selection criterion. Rather, they should focus more closely on identifying and making the most of the skills acquired by individuals in the course of their career. There is definitely a need to take the aspirations and choices of employees into account, and particularly their desire for variable working conditions (working hours, duration, breakdown of tasks, etc.). |
| --- | --- |

4.4.1.1

Nevertheless, it is vital to oppose all forms of discrimination which occur in the recruitment process, including age discrimination against employees as discussed by the Communication under review. Recruitment methods should not be allowed to make age a selection criterion. Rather, they should focus more closely on identifying and making the most of the skills acquired by individuals in the course of their career. There is definitely a need to take the aspirations and choices of employees into account, and particularly their desire for variable working conditions (working hours, duration, breakdown of tasks, etc.).

| 4.4.1.2 | In this context it is interesting to note that in certain Member States there are many civil service exams for which the age limit is often in the region of 40, which means that jobseekers from the private sector aged over 40 cannot apply. This kind of discrimination is unacceptable, as it bars an unemployed worker, even one who is qualified or highly qualified, with qualities matching those required for a position, from taking up employment, and deprives the civil service of the experience of a former employee of the competitive sector. The Member States bear full responsibility for this situation. As far as the European Union is concerned, we would like to point out that the Commission only agreed to remove age limits in its own recruitment procedures in April 2002, after intervention by the European Ombudsman. More recently, in July 2004, the Ombudsman requested the Commission to remove the age limit for recruitment of trainees, after a complaint had been lodged. He considered this to be a case of unjustified discrimination, while the complainant argued that it was in breach of the European Union's Charter of Fundamental Rights. |
| --- | --- |

4.4.1.2

In this context it is interesting to note that in certain Member States there are many civil service exams for which the age limit is often in the region of 40, which means that jobseekers from the private sector aged over 40 cannot apply. This kind of discrimination is unacceptable, as it bars an unemployed worker, even one who is qualified or highly qualified, with qualities matching those required for a position, from taking up employment, and deprives the civil service of the experience of a former employee of the competitive sector. The Member States bear full responsibility for this situation. As far as the European Union is concerned, we would like to point out that the Commission only agreed to remove age limits in its own recruitment procedures in April 2002, after intervention by the European Ombudsman. More recently, in July 2004, the Ombudsman requested the Commission to remove the age limit for recruitment of trainees, after a complaint had been lodged. He considered this to be a case of unjustified discrimination, while the complainant argued that it was in breach of the European Union's Charter of Fundamental Rights.

| 4.4.1.3 | It should also be pointed out that the large increase in people leaving the labour market early has contributed to the devaluing of older workers on the labour market and hence their recruitment. The lowering of age thresholds with a view to facilitating early departure from the labour market has had a major impact on these workers as it has changed, in the mind of employers, the age at which workers may be considered to be ‘too old’. |
| --- | --- |

4.4.1.3

It should also be pointed out that the large increase in people leaving the labour market early has contributed to the devaluing of older workers on the labour market and hence their recruitment. The lowering of age thresholds with a view to facilitating early departure from the labour market has had a major impact on these workers as it has changed, in the mind of employers, the age at which workers may be considered to be ‘too old’.

| 4.4.1.4 | Furthermore, from a psychological perspective, steeped in corporate behaviour, the older or ageing worker implicitly feels that he is no longer viewed in a privileged way as someone approaching the age at which he has the legitimate right to retire and relax. Instead he has become someone defined as ‘incapable’ of working or as ‘unemployable’. When nearly half of those drawing their pension have left work before retirement age on the grounds of ‘disability’, as in certain European Union countries, the subsequent time spent in inactivity tends to be viewed not as time during which one is entitled to take things easy, but as the inability to work. This perception of age and its labelling effects inevitably has an impact on behaviour in that it promotes a feeling of marginalisation — both in the mind of the employee and in reality — with regard to their position in the company, on the labour market and ultimately in society itself. |
| --- | --- |

4.4.1.4

Furthermore, from a psychological perspective, steeped in corporate behaviour, the older or ageing worker implicitly feels that he is no longer viewed in a privileged way as someone approaching the age at which he has the legitimate right to retire and relax. Instead he has become someone defined as ‘incapable’ of working or as ‘unemployable’. When nearly half of those drawing their pension have left work before retirement age on the grounds of ‘disability’, as in certain European Union countries, the subsequent time spent in inactivity tends to be viewed not as time during which one is entitled to take things easy, but as the inability to work. This perception of age and its labelling effects inevitably has an impact on behaviour in that it promotes a feeling of marginalisation — both in the mind of the employee and in reality — with regard to their position in the company, on the labour market and ultimately in society itself.

| 4.4.1.5 | In keeping with the spirit of the European Union's Charter of Fundamental Rights, Directive 2000/78/EC established a general framework for equal treatment in employment and occupation, which under certain circumstances prohibits discrimination, including discrimination on the basis of age. This directive should have been transposed by December 2003 at the latest. It would be worth reviewing implementation of the directive and assessing its effectiveness in the near future. |
| --- | --- |

4.4.1.5

In keeping with the spirit of the European Union's Charter of Fundamental Rights, Directive 2000/78/EC established a general framework for equal treatment in employment and occupation, which under certain circumstances prohibits discrimination, including discrimination on the basis of age. This directive should have been transposed by December 2003 at the latest. It would be worth reviewing implementation of the directive and assessing its effectiveness in the near future.

4.4.2   Flexibility

We have discussed the idea of a flexible retirement age as well as the introduction of flexible organisation of working time prior to early retirement (cf. 4.3.2). The same arguments apply to retirement at the legal retirement age. After all, four out of ten employees would have preferred to continue working (23), for professional reasons, for family reasons, or because of personal interests (24). It is therefore important to offer more flexible options for retirement in order to meet such aspirations.

| 4.4.2.1 | Workers should be permitted to withdraw gradually from employment, instead of being forced to abruptly sever all connections with their job at the legal retirement age as usually happens at present. There should be provisions allowing employees to work three-quarters, one-third, or half time towards the end of their working lives. It would be helpful to examine the potential impact of setting salaries at a higher rate than the percentage of hours worked, as an incentive for such arrangements. |
| --- | --- |

4.4.2.1

Workers should be permitted to withdraw gradually from employment, instead of being forced to abruptly sever all connections with their job at the legal retirement age as usually happens at present. There should be provisions allowing employees to work three-quarters, one-third, or half time towards the end of their working lives. It would be helpful to examine the potential impact of setting salaries at a higher rate than the percentage of hours worked, as an incentive for such arrangements.

| 4.4.2.2 | This time spent at work could be used, for example, to share their experience with younger employees, in particular through mentoring, support, or assistance with apprenticeship (25) and various work experience schemes. This would be a win-win situation for all concerned, providing employees with a rewarding task, companies with the opportunity to retain and pass on know-how through individuals with the relevant experience, and benefiting society as a whole through an increase in the employment rate. |
| --- | --- |

4.4.2.2

This time spent at work could be used, for example, to share their experience with younger employees, in particular through mentoring, support, or assistance with apprenticeship (25) and various work experience schemes. This would be a win-win situation for all concerned, providing employees with a rewarding task, companies with the opportunity to retain and pass on know-how through individuals with the relevant experience, and benefiting society as a whole through an increase in the employment rate.

4.4.3   Women and equal opportunities

The Communication draws attention to the significant gap between the employment rates of older women and men, 30.5 % and 50.1 % respectively. However, the gap between the average ages of exiting the labour market is only a small one (cf. table in Appendix 3) (26).

| 4.4.3.1 | The gap between the employment rates of men and women in this age group is related to a cohort effect, mirroring the general make-up of the labour market. It is interesting that this gap does not have any impact on the average age of exiting the labour market. |
| --- | --- |

4.4.3.1

The gap between the employment rates of men and women in this age group is related to a cohort effect, mirroring the general make-up of the labour market. It is interesting that this gap does not have any impact on the average age of exiting the labour market.

| 4.4.3.2 | Increasing the employment rate of women is an essential condition for achieving the Stockholm targets. The employment rate for this age group basically reflects employment rates for younger age groups, which means that the employment rate for women in general, and not their age of exit from the labour market, is the key issue. |
| --- | --- |

4.4.3.2

Increasing the employment rate of women is an essential condition for achieving the Stockholm targets. The employment rate for this age group basically reflects employment rates for younger age groups, which means that the employment rate for women in general, and not their age of exit from the labour market, is the key issue.

| 4.4.3.3 | Apart from the economic effects which arise from this situation, it also raises the issue of equality repeatedly highlighted by the Committee, whether in relation to education, training, equal pay, or the responsibilities assigned to employees with the same qualifications. |
| --- | --- |

4.4.3.3

Apart from the economic effects which arise from this situation, it also raises the issue of equality repeatedly highlighted by the Committee, whether in relation to education, training, equal pay, or the responsibilities assigned to employees with the same qualifications.

| 4.4.3.4 | Increasing employment rates for women necessarily involves improving their access to the labour market. To this end, provisions should be implemented to put men and women on an equal footing in finding a life/work balance, by developing a network of social services capable of meeting private needs for care of minors (e.g. by providing crèche facilities for infants; cf. table in Appendix 3), dependants (e.g. the sick and the elderly), etc. |
| --- | --- |

4.4.3.4

Increasing employment rates for women necessarily involves improving their access to the labour market. To this end, provisions should be implemented to put men and women on an equal footing in finding a life/work balance, by developing a network of social services capable of meeting private needs for care of minors (e.g. by providing crèche facilities for infants; cf. table in Appendix 3), dependants (e.g. the sick and the elderly), etc.

4.4.4   Collective bargaining

According to the Communication, ‘despite the recent developments, social partners should broaden and intensify their efforts both at national and EU level to establish a new culture on ageing and management of change. Far too often, employers continue to give priority to early retirement schemes.’

| 4.4.4.1 | The EESC welcomes the line taken by the Communication in recognising the key role of social dialogue in contributing to substantial progress. The Committee agrees with and supports the Commission's approach and its aims, though it would take them a stage further. If social dialogue and especially collective bargaining are to be intensified at national and EU levels, they need to be sufficiently wide-ranging to encompass customised solutions, as there are fewer and fewer all-purpose, universally valid solutions. In view of this, various professions on a European and national level, and consequently also companies, should participate in collective bargaining, in order to ensure that the specific features of professions such as working conditions, organisation of work, how demanding the work is, the level of qualifications required, etc. are taken into account. Only then can general provisions be fully effective. |
| --- | --- |

4.4.4.1

The EESC welcomes the line taken by the Communication in recognising the key role of social dialogue in contributing to substantial progress. The Committee agrees with and supports the Commission's approach and its aims, though it would take them a stage further. If social dialogue and especially collective bargaining are to be intensified at national and EU levels, they need to be sufficiently wide-ranging to encompass customised solutions, as there are fewer and fewer all-purpose, universally valid solutions. In view of this, various professions on a European and national level, and consequently also companies, should participate in collective bargaining, in order to ensure that the specific features of professions such as working conditions, organisation of work, how demanding the work is, the level of qualifications required, etc. are taken into account. Only then can general provisions be fully effective.

5.   Strategy for raising the age of exit from the labour market

| 5.1 | One of the points made by paragraph 32 of the presidency conclusions of the Barcelona European Council in regard to current employment policies is that:






  — | ‘a progressive increase of about 5 years in the effective average age at which people stop working in the European Union should be sought by 2010’. |
| --- | --- | --- |

5.1

One of the points made by paragraph 32 of the presidency conclusions of the Barcelona European Council in regard to current employment policies is that:

—

‘a progressive increase of about 5 years in the effective average age at which people stop working in the European Union should be sought by 2010’.

| 5.2 | Taken as a whole, the analyses and the proposals discussed in the preceding paragraphs, which relate in particular to the decisions of the Stockholm European Council to raise the employment rate in the 55-64 age group to 50 %, can contribute to implementation of the Barcelona guidelines. After all, each individual worker in the 55-64 age group who postpones his or her exit from the labour market contributes to an increase in the effective average age at which people stop working in the European Union. |
| --- | --- |

5.2

Taken as a whole, the analyses and the proposals discussed in the preceding paragraphs, which relate in particular to the decisions of the Stockholm European Council to raise the employment rate in the 55-64 age group to 50 %, can contribute to implementation of the Barcelona guidelines. After all, each individual worker in the 55-64 age group who postpones his or her exit from the labour market contributes to an increase in the effective average age at which people stop working in the European Union.

| 5.3 | Implementation of the decisions made by the Stockholm European Council is essential for achieving progress as envisaged by the Barcelona guidelines. Thus, it is not possible either to analyse or to evaluate ‘the progressive increase of the effective average age at which people stop working’ separately from the ‘increase in the employment rate in the 55-64 age group’. |
| --- | --- |

5.3

Implementation of the decisions made by the Stockholm European Council is essential for achieving progress as envisaged by the Barcelona guidelines. Thus, it is not possible either to analyse or to evaluate ‘the progressive increase of the effective average age at which people stop working’ separately from the ‘increase in the employment rate in the 55-64 age group’.

| 5.4 | Indeed, given the difficulties which have been encountered in raising the employment rate in this age group, it would not be reasonable to approach the Barcelona target in isolation, as this might lead to a proposal that it be achieved by raising the legal retirement age. |
| --- | --- |

5.4

Indeed, given the difficulties which have been encountered in raising the employment rate in this age group, it would not be reasonable to approach the Barcelona target in isolation, as this might lead to a proposal that it be achieved by raising the legal retirement age.

| 5.5 | It would hardly be logical to suggest such an option when at present many employees who would like to complete the term of their working lives are still unable to do so. |
| --- | --- |

5.5

It would hardly be logical to suggest such an option when at present many employees who would like to complete the term of their working lives are still unable to do so.

6.   Conclusions and recommendations

| 6.1 | The Committee reiterates the general approach of its own-initiative opinion of October 2000 on Older workers, which stresses ‘the need for a positive approach to older workers, insofar as the way they are currently treated not only reflects a discriminatory conception of society lacking in solidarity, but in many cases results in the loss of highly qualified staff and a consequent fall in the overall level of competitiveness’. |
| --- | --- |

6.1

The Committee reiterates the general approach of its own-initiative opinion of October 2000 on Older workers, which stresses ‘the need for a positive approach to older workers, insofar as the way they are currently treated not only reflects a discriminatory conception of society lacking in solidarity, but in many cases results in the loss of highly qualified staff and a consequent fall in the overall level of competitiveness’.

| 6.1.1 | With this in mind, the Committee is pleased to note that the 2004 Spring European Council has identified active ageing as one of the three priority areas in which swift action is needed to deliver the Lisbon strategy. The Committee is therefore pleased to note that the Commission has chosen, by means of the Communication under review, to contribute to the debate on the progress made towards the Barcelona and Stockholm targets, and to examine the role of governments and the social partners in promoting active ageing. |
| --- | --- |

6.1.1

With this in mind, the Committee is pleased to note that the 2004 Spring European Council has identified active ageing as one of the three priority areas in which swift action is needed to deliver the Lisbon strategy. The Committee is therefore pleased to note that the Commission has chosen, by means of the Communication under review, to contribute to the debate on the progress made towards the Barcelona and Stockholm targets, and to examine the role of governments and the social partners in promoting active ageing.

| 6.2 | The EESC generally agrees with the main thrust of the Communication's proposals for action. These represent possible solutions and are to be welcomed subject to the observations made in this opinion and the type and quality of the measures chosen as regards early retirement and financial incentives, reform of arrangements for early retirement, flexible working-time arrangements, health and safety at work, as well as upgrading the quality of employment. |
| --- | --- |

6.2

The EESC generally agrees with the main thrust of the Communication's proposals for action. These represent possible solutions and are to be welcomed subject to the observations made in this opinion and the type and quality of the measures chosen as regards early retirement and financial incentives, reform of arrangements for early retirement, flexible working-time arrangements, health and safety at work, as well as upgrading the quality of employment.

| 6.2.1 | However, the Committee believes that, in addition to the main areas of action chosen and the specific measures undertaken, it is essential for perceptions to change and for everything possible to be done to bring about a change in attitudes and to raise awareness among both companies and employees. Working beyond the age of 55 must be viewed as rewarding by employees, while companies and public services must be aware of the benefits which older workers can bring. It is essential that collective awareness of the issue be raised in order to ensure that the specific measures adopted are fully effective. |
| --- | --- |

6.2.1

However, the Committee believes that, in addition to the main areas of action chosen and the specific measures undertaken, it is essential for perceptions to change and for everything possible to be done to bring about a change in attitudes and to raise awareness among both companies and employees. Working beyond the age of 55 must be viewed as rewarding by employees, while companies and public services must be aware of the benefits which older workers can bring. It is essential that collective awareness of the issue be raised in order to ensure that the specific measures adopted are fully effective.

| 6.2.2 | The Committee therefore reiterates the call made in its own-initiative opinion of October 2000 for the Commission to promote, in cooperation with the Member States, an extensive information and enlightenment campaign, targeted at the main actors and society in general, to help generate a positive attitude to the role played by older workers in companies, the public services, and society as a whole. |
| --- | --- |

6.2.2

The Committee therefore reiterates the call made in its own-initiative opinion of October 2000 for the Commission to promote, in cooperation with the Member States, an extensive information and enlightenment campaign, targeted at the main actors and society in general, to help generate a positive attitude to the role played by older workers in companies, the public services, and society as a whole.

| 6.2.2.1 | The EESC is pleased to note that its proposals have been taken on board by the Report of the High Level Group on the future of social policy in an enlarged European Union, which appeared towards the end of the first half of 2004. |
| --- | --- |

6.2.2.1

The EESC is pleased to note that its proposals have been taken on board by the Report of the High Level Group on the future of social policy in an enlarged European Union, which appeared towards the end of the first half of 2004.

| 6.3 | The European Economic and Social Committee also considers that: |
| --- | --- |

6.3

The European Economic and Social Committee also considers that:

| 6.3.1 | Any measures taken to achieve progress towards the Stockholm and Barcelona objectives should be aimed solely at retaining older employees or encouraging them to return to work. Given that the objective is to increase employment rates and to extend the age of exiting the labour market, the current situation, particularly in regard to early retirement, should not be changed in such a way as to lead to unemployment. As the Communication rightly points out, ‘obviously, incentives for older workers to remain in the labour force must be reflected in real prospects for employment’. |
| --- | --- |

6.3.1

Any measures taken to achieve progress towards the Stockholm and Barcelona objectives should be aimed solely at retaining older employees or encouraging them to return to work. Given that the objective is to increase employment rates and to extend the age of exiting the labour market, the current situation, particularly in regard to early retirement, should not be changed in such a way as to lead to unemployment. As the Communication rightly points out, ‘obviously, incentives for older workers to remain in the labour force must be reflected in real prospects for employment’.

| 6.3.2 | If employment rates, whether of the 55-64 age group or of the workforce as a whole, are to rise, the EESC feels that there is a need for increased employment among groups of potential employees who are under-represented. Thus sweeping measures should be adopted to tap into all labour reserves in the European Union, whether of younger workers — who are in the discouraging situation of being unemployed, a circumstance which bodes ill for future overall employment rates — or of women and the disabled. |
| --- | --- |

6.3.2

If employment rates, whether of the 55-64 age group or of the workforce as a whole, are to rise, the EESC feels that there is a need for increased employment among groups of potential employees who are under-represented. Thus sweeping measures should be adopted to tap into all labour reserves in the European Union, whether of younger workers — who are in the discouraging situation of being unemployed, a circumstance which bodes ill for future overall employment rates — or of women and the disabled.

| 6.3.3 | Vocational training and lifelong learning should not be considered in isolation, but should be incorporated into the management of employees' careers. It is important to ensure motivation through training at all ages to enhance skills and boost career paths. Otherwise, it will not be possible to ensure that older employees are sufficiently skilled to be employable. |
| --- | --- |

6.3.3

Vocational training and lifelong learning should not be considered in isolation, but should be incorporated into the management of employees' careers. It is important to ensure motivation through training at all ages to enhance skills and boost career paths. Otherwise, it will not be possible to ensure that older employees are sufficiently skilled to be employable.

| 6.3.3.1 | Generally speaking, it should be emphasised that the application of any measures, not only those concerning training, intended to increase employment of older workers, should not be delayed until the age of 40-50. Policies designed to have an impact on older workers will come too late if they only cover this age group. Human resource management should therefore take age into account from the moment that employees join the workforce. |
| --- | --- |

6.3.3.1

Generally speaking, it should be emphasised that the application of any measures, not only those concerning training, intended to increase employment of older workers, should not be delayed until the age of 40-50. Policies designed to have an impact on older workers will come too late if they only cover this age group. Human resource management should therefore take age into account from the moment that employees join the workforce.

| 6.3.4 | Recruitment needs to be made a priority issue. All forms of discrimination based on age should be opposed. In view of this, it would be worth reviewing the implementation of Directive 2000/78/EC, which established a general framework for equal treatment in employment, and, under certain circumstances, prohibited all forms of discrimination, including discrimination on the basis of age. This applies to all age groups, whether old or young. |
| --- | --- |

6.3.4

Recruitment needs to be made a priority issue. All forms of discrimination based on age should be opposed. In view of this, it would be worth reviewing the implementation of Directive 2000/78/EC, which established a general framework for equal treatment in employment, and, under certain circumstances, prohibited all forms of discrimination, including discrimination on the basis of age. This applies to all age groups, whether old or young.

| 6.3.5 | In the case of both retirement and early retirement, there should be the option of gradually leaving employment. The end of working life should not be an abrupt severance, an event which employees often try to bring forward as early as possible, but an individually chosen and gradual process whereby employees, protected by a set of collective guarantees, gradually reduce their working time. As an area for research and action, this idea could be given priority in the 2005 Employment Guidelines. |
| --- | --- |

6.3.5

In the case of both retirement and early retirement, there should be the option of gradually leaving employment. The end of working life should not be an abrupt severance, an event which employees often try to bring forward as early as possible, but an individually chosen and gradual process whereby employees, protected by a set of collective guarantees, gradually reduce their working time. As an area for research and action, this idea could be given priority in the 2005 Employment Guidelines.

| 6.3.6 | Social dialogue and especially collective bargaining should be intensified at national and EU levels. They need to be sufficiently wide-ranging to encompass customised solutions, as there are fewer and fewer all-purpose, universally valid solutions. In view of this, various professions on a European and national level, and consequently also companies, should participate in collective bargaining, in order to ensure that the specific features of professions such as working conditions, organisation of work, how demanding the work is, the level of qualifications required, etc. are taken into account. |
| --- | --- |

6.3.6

Social dialogue and especially collective bargaining should be intensified at national and EU levels. They need to be sufficiently wide-ranging to encompass customised solutions, as there are fewer and fewer all-purpose, universally valid solutions. In view of this, various professions on a European and national level, and consequently also companies, should participate in collective bargaining, in order to ensure that the specific features of professions such as working conditions, organisation of work, how demanding the work is, the level of qualifications required, etc. are taken into account.

| 6.3.6.1 | It would be helpful to make active aging one of the priorities of the new Social Policy Agenda after 2006. |
| --- | --- |

6.3.6.1

It would be helpful to make active aging one of the priorities of the new Social Policy Agenda after 2006.

| 6.3.7 | The Committee believes that implementation of the decisions made at Stockholm is of central importance for achieving the targets set by the Barcelona Council. At the same time, it is convinced that ‘the increase of the effective average age at which people stop working’ cannot be analysed or evaluated separately from the ‘increase in the employment rate in the 55-64 age group’. |
| --- | --- |

6.3.7

The Committee believes that implementation of the decisions made at Stockholm is of central importance for achieving the targets set by the Barcelona Council. At the same time, it is convinced that ‘the increase of the effective average age at which people stop working’ cannot be analysed or evaluated separately from the ‘increase in the employment rate in the 55-64 age group’.

Brussels, 15 December 2004.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  Own-initiative opinion on Older workers, point 1.5, OJ C 14 of 16.1.2001, rapporteur: Mr Dantin.

1

Older workers

(2)  COM(2004) 29, Delivering Lisbon - Reforms for the Enlarged Union, Report from the Commission to the Spring European Council.

2

(3)  EESC opinion on Youth Unemployment, OJ C 18 of 22.1.1996, Rapporteur: Mr Rupp.

3

(4)  Contribution by the European Commission to the Lisbon Social Affairs Council. Source: Eurostat.

4

(5)  Source: Eurostat study of the active population, 1999.

5

(6)  See Appendix 1.

6

(7)  Guillemard 1986; Casey and Laczko 1989.

7

(8)  Eurostat, 1997 population forecasts (base scenario).

8

(9)  Demographic situation and prospects of the European Union, rapporteur: Mr Burnel.

9

(10)  ‘Ages and employment in 2010’, French Economic and Social Council, October 2001, rapporteur: Mr Quintreau.

10

(11)  Source: Eurostat, Labour Force Survey, spring 2003 results.

11

(12)  Older workers (rapporteur: Mr Dantin); OJ C 14 of 16.1.2001.

12

Older workers

(13)  Cf. SOC/162 – rapporteur Ms St-Hill.

13

(14)  European Foundation for the Improvement of Living and Working Conditions: ‘Combating age barriers in employment’, 1999.

14

(15)  Ibid 9.

15

(16)  Ibid 1, paragraph 3.3.3.

16

(17)  OECD, International Adult Literacy Survey (IALS).

17

(18)  Ibid, 1 (4.3.2).

18

(19)  Ibid, 10.

19

(20)  COM(2003) 728, ‘Improving quality in work: a review of recent progress’.

20

(21)  EESC opinion on Employment support measures, rapporteur Ms Hornung-Draus, co-rapporteur Mr Greif ; OJ C 110, 30.04.2004.

21

Employment support measures

(22)  Ibid 11.

22

(23)  Ibid 11

23

‘Age and Attitudes-Main Results from a Eurobarometer Survey’- Commission of the EC, 1993.

(24)  Ibid 1, paragraph 3.3.5.

24

(25)  Ibid 1, paragraph 4.3.4.

25

(26)  See Appendix 2.

26

---

| 28.6.2005 | EN | Official Journal of the European Union | C 157/130 |
| --- | --- | --- | --- |

28.6.2005

EN

Official Journal of the European Union

C 157/130

---

Opinion of the European Economic and Social Committee on the ‘White Paper on the review of Regulation No. 4056/86, applying the EC competition rules to maritime transport’

(COM(2004) 675 final)

(2005/C 157/23)

On 13 October 2004 the European Commission decided to consult the European Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on the ‘White Paper on the review of Regulation 4056/86, applying the EC competition rules to maritime transport’.

The Section for Transport, Energy, Infrastructure and the Information Society was instructed to prepare the Committee's work on the subject.

At its 413th plenary session of 15 and 16 December 2004 (meeting of 16 December), and in view of the urgency of the matter, the European Economic and Social Committee appointed Dr Bredima-Savopoulou as rapporteur-general and adopted the following opinion by 148 votes to 12 with 10 abstentions:

1.   Introduction

| 1.1 | Maritime transport, an international and globalised activity ‘par excellence’, is basically provided according to two types of services: liner and tramp. Since 1875, liner shipping has been organised in liner conferences, i.e., associations of maritime carriers providing cargo transportation of scheduled, advertised services upon uniform or common rates on particular geographical routes. In the tramp sector, transportation of bulk cargoes dry or liquid is provided under non-scheduled, non-advertised sailings and rates are freely negotiated ad hoc case by case according to conditions of supply and demand. As has most ingenuously been observed, liner services operate like buses whilst tramp-shipping services are the taxis of the seas, i.e. liner conferences offer scheduled services with fixed departures and arrivals whilst tramp shipping offers close knit services depending on the specific demand. |
| --- | --- |

1.1

Maritime transport, an international and globalised activity ‘par excellence’, is basically provided according to two types of services: liner and tramp. Since 1875, liner shipping has been organised in liner conferences, i.e., associations of maritime carriers providing cargo transportation of scheduled, advertised services upon uniform or common rates on particular geographical routes. In the tramp sector, transportation of bulk cargoes dry or liquid is provided under non-scheduled, non-advertised sailings and rates are freely negotiated ad hoc case by case according to conditions of supply and demand. As has most ingenuously been observed, liner services operate like buses whilst tramp-shipping services are the taxis of the seas, i.e. liner conferences offer scheduled services with fixed departures and arrivals whilst tramp shipping offers close knit services depending on the specific demand.

| 1.2 | In 1974, the United Nations Conference on Trade and Development (UNCTAD) adopted the Code of Conduct for Liner Conferences to meet the aspirations of developing countries for greater participation of their carriers in the transportation of liner cargoes. The Liner Code provided the cargo sharing formula of 40 %-40 % in the transportation of liner cargoes between carriers of exporter and importer countries leaving 20 % of liner cargoes controlled by liner conferences to carriers of third countries. The Liner Code was ratified by several EU Member States as well as other developed (OECD) and developing countries and entered into force on 6 October 1983. Therefore, the Liner Code is the basic legal instrument governing the liner trades worldwide. The EU adopted Regulation 954/79 (1) providing the conditions for application of the Liner Code to be compatible with the EC Treaty. Regulation 954/79 (2) (the ‘Brussels package’) in the Commission's view (at the time of adoption) strikes a balance between the wishes of developing countries for access to liner conferences but also maintains commercial principles between OECD countries and complies with the basic principles of the EC Treaty. |
| --- | --- |

1.2

In 1974, the United Nations Conference on Trade and Development (UNCTAD) adopted the Code of Conduct for Liner Conferences to meet the aspirations of developing countries for greater participation of their carriers in the transportation of liner cargoes. The Liner Code provided the cargo sharing formula of 40 %-40 % in the transportation of liner cargoes between carriers of exporter and importer countries leaving 20 % of liner cargoes controlled by liner conferences to carriers of third countries. The Liner Code was ratified by several EU Member States as well as other developed (OECD) and developing countries and entered into force on 6 October 1983. Therefore, the Liner Code is the basic legal instrument governing the liner trades worldwide. The EU adopted Regulation 954/79 (1) providing the conditions for application of the Liner Code to be compatible with the EC Treaty. Regulation 954/79 (2) (the ‘Brussels package’) in the Commission's view (at the time of adoption) strikes a balance between the wishes of developing countries for access to liner conferences but also maintains commercial principles between OECD countries and complies with the basic principles of the EC Treaty.

| 1.3 | In 1986, the EU adopted Regulation 4056/86 concerning the application of Articles 85-86 EC to maritime transport. The Regulation makes express reference to Regulation 954/79 and to the UNCTAD Liner Code; its recitals are revealing in that respect. Liner conferences were distinguished between open and closed, depending on whether access was automatic to new entrants or whether acceptance by the conference members was necessary. By Regulation 4056/86 the EC adopted the system of closed conferences coupled with open trades, meaning that effective competition by outsiders was safeguarded and other restrictions of competition by liner conferences were not allowed. Regulation 4056/86 was a Council Regulation, which was an oddity for a competition Regulation. This was basically provided as a recognition of the special features of maritime transport and its international character. |
| --- | --- |

1.3

In 1986, the EU adopted Regulation 4056/86 concerning the application of Articles 85-86 EC to maritime transport. The Regulation makes express reference to Regulation 954/79 and to the UNCTAD Liner Code; its recitals are revealing in that respect. Liner conferences were distinguished between open and closed, depending on whether access was automatic to new entrants or whether acceptance by the conference members was necessary. By Regulation 4056/86 the EC adopted the system of closed conferences coupled with open trades, meaning that effective competition by outsiders was safeguarded and other restrictions of competition by liner conferences were not allowed. Regulation 4056/86 was a Council Regulation, which was an oddity for a competition Regulation. This was basically provided as a recognition of the special features of maritime transport and its international character.

| 1.4 | According to Regulation 4056/86 liner conferences were granted a block exemption under certain conditions and obligations. Conferences were allowed to perform several activities (e.g. cargo and revenue allocation among members, coordination of timetables, allocation of sailings among members) which are compatible with EU competition law as well as two hard core restrictions of competition: horizontal price fixing and capacity utilisation. The block exemption of the hard core restrictions was justified on the grounds that conferences had a stabilising effect on liner rates, provided indispensable and efficient services to shippers and were subject to effective competition from outsiders. Regulation 4056/86 is the most generous block exemption Regulation afforded to any industry sector in the European Union. No other industry sector has an exemption from European competition rules for price fixing. Regulation 4056/86 is also unique in that it grants a block exemption of indefinite duration. |
| --- | --- |

1.4

According to Regulation 4056/86 liner conferences were granted a block exemption under certain conditions and obligations. Conferences were allowed to perform several activities (e.g. cargo and revenue allocation among members, coordination of timetables, allocation of sailings among members) which are compatible with EU competition law as well as two hard core restrictions of competition: horizontal price fixing and capacity utilisation. The block exemption of the hard core restrictions was justified on the grounds that conferences had a stabilising effect on liner rates, provided indispensable and efficient services to shippers and were subject to effective competition from outsiders. Regulation 4056/86 is the most generous block exemption Regulation afforded to any industry sector in the European Union. No other industry sector has an exemption from European competition rules for price fixing. Regulation 4056/86 is also unique in that it grants a block exemption of indefinite duration.

| 1.5 | Since 1986, the Commission and the European Court of First Instance, in a number of cases (3), considered several aspects of the conference activities. The Court adopted a number of legal principles in the application of Regulation 4056/86. These principles were emulated by the conferences operating in EU liner trades. Over the years conference activities have been reduced dramatically in both size and scope, due to the changing market conditions. More particularly:






  a) | Conferences can no longer exercise inland price fixing for the land leg of multimodal transport. |
| --- | --- | --- |

1.5

Since 1986, the Commission and the European Court of First Instance, in a number of cases (3), considered several aspects of the conference activities. The Court adopted a number of legal principles in the application of Regulation 4056/86. These principles were emulated by the conferences operating in EU liner trades. Over the years conference activities have been reduced dramatically in both size and scope, due to the changing market conditions. More particularly:

a)

Conferences can no longer exercise inland price fixing for the land leg of multimodal transport.

| b) | Tariffs must not only be common or uniform between the conference members but also with regard to all shippers of the same commodity. |
| --- | --- |

b)

Tariffs must not only be common or uniform between the conference members but also with regard to all shippers of the same commodity.

| c) | Conferences cannot place restrictions on members wishing to enter into individual service contracts with shippers |
| --- | --- |

c)

Conferences cannot place restrictions on members wishing to enter into individual service contracts with shippers

| d) | Capacity management is allowed only on condition that it will not create an artificial peak season in conjunction with any rate increases. |
| --- | --- |

d)

Capacity management is allowed only on condition that it will not create an artificial peak season in conjunction with any rate increases.

| 1.6 | Moreover, Regulation 4056/86 provided that tramp services and cabotage services were activities to which it did not apply. In the absence of a special Regulation, the EC Treaty Articles 85-86 were directly applicable on these activities. The tramp sector was considered as one of the very rare examples of perfect competition worldwide and cabotage services were considered as not producing any significant anti-competitive result in EC trade. |
| --- | --- |

1.6

Moreover, Regulation 4056/86 provided that tramp services and cabotage services were activities to which it did not apply. In the absence of a special Regulation, the EC Treaty Articles 85-86 were directly applicable on these activities. The tramp sector was considered as one of the very rare examples of perfect competition worldwide and cabotage services were considered as not producing any significant anti-competitive result in EC trade.

| 1.6.1 | The basic characteristics of tramp shipping can be summarized in ten key points:






  — | globally competitive markets; |
| --- | --- | --- |

1.6.1

The basic characteristics of tramp shipping can be summarized in ten key points:

—

globally competitive markets;

| — | close to perfect competition model; |
| --- | --- |

—

close to perfect competition model;

| — | different sub-market segments in response to customer needs; |
| --- | --- |

—

different sub-market segments in response to customer needs;

| — | competition between sub-markets for cargo; |
| --- | --- |

—

competition between sub-markets for cargo;

| — | volatile and unpredictable demand; |
| --- | --- |

—

volatile and unpredictable demand;

| — | many small entrepreneurial companies; |
| --- | --- |

—

many small entrepreneurial companies;

| — | global trade patterns; |
| --- | --- |

—

global trade patterns;

| — | ease of entry and exit; |
| --- | --- |

—

ease of entry and exit;

| — | very cost effective; |
| --- | --- |

—

very cost effective;

| — | responsive to development of markets and shippers' needs. |
| --- | --- |

—

responsive to development of markets and shippers' needs.

| 1.6.2 | Overall, the tramp services market is highly fragmented (4). In the past thirty years, bulk pools and specialized trades have emerged to fulfil specific needs of shippers and charterers. Therefore, in the vast majority of cases this market has worked to the satisfaction of charterers/shippers without presenting major problems with competition rules either internationally or in the EU context. |
| --- | --- |

1.6.2

Overall, the tramp services market is highly fragmented (4). In the past thirty years, bulk pools and specialized trades have emerged to fulfil specific needs of shippers and charterers. Therefore, in the vast majority of cases this market has worked to the satisfaction of charterers/shippers without presenting major problems with competition rules either internationally or in the EU context.

| 1.7 | Currently, there are 150 liner conferences worldwide out of which 28 operate in trades to and from the EU. They basically operate on the three main trades to and from the EU, i.e. the transatlantic trade, the Europe-Eastern Asia trade and the Europe-Australia/New Zealand trade. Their members include both European and non-European liner shipping carriers. Moreover, other conferences ply in the EU/South America trade, the EU/West Africa trade and other areas. |
| --- | --- |

1.7

Currently, there are 150 liner conferences worldwide out of which 28 operate in trades to and from the EU. They basically operate on the three main trades to and from the EU, i.e. the transatlantic trade, the Europe-Eastern Asia trade and the Europe-Australia/New Zealand trade. Their members include both European and non-European liner shipping carriers. Moreover, other conferences ply in the EU/South America trade, the EU/West Africa trade and other areas.

| 1.8 | Most OECD countries recognize the liner conference system and have granted some form of anti-trust immunity. The US recognize the open conference system under the Ocean Shipping Reform Act (5) (OSRA) 1999. Australia provides for a limited exemption for liner conferences under the Australian Trade Practices Act 1974 (Part X) reviewed in 1999, which is currently under re-examination. Canada, Japan and China are similarly recognizing the liner conference system and granting anti-trust immunity or exemptions under conditions. |
| --- | --- |

1.8

Most OECD countries recognize the liner conference system and have granted some form of anti-trust immunity. The US recognize the open conference system under the Ocean Shipping Reform Act (5) (OSRA) 1999. Australia provides for a limited exemption for liner conferences under the Australian Trade Practices Act 1974 (Part X) reviewed in 1999, which is currently under re-examination. Canada, Japan and China are similarly recognizing the liner conference system and granting anti-trust immunity or exemptions under conditions.

| 1.9 | In the meantime, the Liner Code, as the basic international instrument governing liner shipping between developed and developing countries, and the liner conference system, as the basic international system for coordination of liner activities, have been consecrated in several legal instruments adopted by the EU.






  — | The Europe Agreements (most of which are now redundant following the 2004 enlargement) provided a standard clause referring to the principles of the Liner Code and the liner conferences as the basic yardsticks to be followed in the liner trades. |
| --- | --- | --- |

1.9

In the meantime, the Liner Code, as the basic international instrument governing liner shipping between developed and developing countries, and the liner conference system, as the basic international system for coordination of liner activities, have been consecrated in several legal instruments adopted by the EU.

—

The Europe Agreements (most of which are now redundant following the 2004 enlargement) provided a standard clause referring to the principles of the Liner Code and the liner conferences as the basic yardsticks to be followed in the liner trades.

| — | The EU/Russia Agreement (Art. 39(1) a) and the EU/Ukraine Agreement are couched in similar terms. |
| --- | --- |

—

The EU/Russia Agreement (Art. 39(1) a) and the EU/Ukraine Agreement are couched in similar terms.

| — | Finally, in the ongoing WTO negotiations on services ‘offers’ between the EU and other countries were based on the understanding that the Liner Code is an applicable instrument. |
| --- | --- |

—

Finally, in the ongoing WTO negotiations on services ‘offers’ between the EU and other countries were based on the understanding that the Liner Code is an applicable instrument.

| 1.10 | Recent liner regulatory developments indicate that most developed countries (US, Australia, Canada, Japan) have approached the EU system and regulated the liner conference system under similar terms to the EU. Market developments are significant: since the 1980s, independent liner operators (outsiders) have increased their market shares on the main trades to and from Europe to the detriment of conferences. This can be proved by an analysis on a trade-by-trade basis but overall the trades remained open to effective competition. Other practices in the framework of conferences have emerged e.g. liner carriers members of conferences offer services on the basis of service contracts with shippers whereby the shipper agrees to commit a quantity of cargo over a certain period of time to be carried under individually agreed rates with the carrier. |
| --- | --- |

1.10

Recent liner regulatory developments indicate that most developed countries (US, Australia, Canada, Japan) have approached the EU system and regulated the liner conference system under similar terms to the EU. Market developments are significant: since the 1980s, independent liner operators (outsiders) have increased their market shares on the main trades to and from Europe to the detriment of conferences. This can be proved by an analysis on a trade-by-trade basis but overall the trades remained open to effective competition. Other practices in the framework of conferences have emerged e.g. liner carriers members of conferences offer services on the basis of service contracts with shippers whereby the shipper agrees to commit a quantity of cargo over a certain period of time to be carried under individually agreed rates with the carrier.

| 1.10.1 | The practice of service contracts has been regulated by EU jurisprudence as well as by US legislation (OSRA 1999) as providing services to shippers. Indeed, in the transatlantic trade 90 % of liner cargo and in the Europe/Australia/New Zealand trade 75 %-80 % of liner cargo are transported through service contracts. Service contracts are strictly confidential between the carrier and the shipper. |
| --- | --- |

1.10.1

The practice of service contracts has been regulated by EU jurisprudence as well as by US legislation (OSRA 1999) as providing services to shippers. Indeed, in the transatlantic trade 90 % of liner cargo and in the Europe/Australia/New Zealand trade 75 %-80 % of liner cargo are transported through service contracts. Service contracts are strictly confidential between the carrier and the shipper.

| 1.10.2 | Containerisation brought about significant developments in the liner trades. Liner operators have been cooperating increasingly in consortia which perform several liner services but do not engage in price fixing, in the context of consortia. Container shipping is a capital intensive business but provides economies of scale. Under certain conditions, consortia have been granted a block exemption under Regulations 479/1992 (6) and 870/1995 (7) amended by Regulation 823/2000 (8) which will expire on 25 April 2005. Liner consortia constitute a form of cooperation widely applied in liner shipping. |
| --- | --- |

1.10.2

Containerisation brought about significant developments in the liner trades. Liner operators have been cooperating increasingly in consortia which perform several liner services but do not engage in price fixing, in the context of consortia. Container shipping is a capital intensive business but provides economies of scale. Under certain conditions, consortia have been granted a block exemption under Regulations 479/1992 (6) and 870/1995 (7) amended by Regulation 823/2000 (8) which will expire on 25 April 2005. Liner consortia constitute a form of cooperation widely applied in liner shipping.

| 1.10.3 | Another form of cooperation are the so-called discussion agreements which emerged in the 1980s and are recognized in other jurisdictions (US, Asia, Australia and South America). |
| --- | --- |

1.10.3

Another form of cooperation are the so-called discussion agreements which emerged in the 1980s and are recognized in other jurisdictions (US, Asia, Australia and South America).

| 1.11 | In 2003, the European Commission repealed the procedural part of Regulation 4056/86 and substituted it by Regulation 1/2003 (9) which is nowadays the implementing Regulation applicable on all sectors of economic activities. Hence, the same provisions on decentralisation of competition procedures apply to the liner sector as in all other sectors. However, Article 32 of Regulation 1/2003 provided an exception from its scope for tramp and cabotage services to and from EU ports. |
| --- | --- |

1.11

In 2003, the European Commission repealed the procedural part of Regulation 4056/86 and substituted it by Regulation 1/2003 (9) which is nowadays the implementing Regulation applicable on all sectors of economic activities. Hence, the same provisions on decentralisation of competition procedures apply to the liner sector as in all other sectors. However, Article 32 of Regulation 1/2003 provided an exception from its scope for tramp and cabotage services to and from EU ports.

| 1.12 | In the meantime, the OECD secretariat in a report 2002 (10) concluded that anti-trust exemptions to liner conferences for price fixing activities should be reviewed with the aim to be removed, except where specifically and exceptionally justified but left it to the discretion of individual Member States. The correctness of the OECD report was strongly contested. Hence, it was published as a report of the OECD secretariat only. Moreover, key players (Canada, US, Japan, Australia) declared that they had no intention to change their regimes at this stage. |
| --- | --- |

1.12

In the meantime, the OECD secretariat in a report 2002 (10) concluded that anti-trust exemptions to liner conferences for price fixing activities should be reviewed with the aim to be removed, except where specifically and exceptionally justified but left it to the discretion of individual Member States. The correctness of the OECD report was strongly contested. Hence, it was published as a report of the OECD secretariat only. Moreover, key players (Canada, US, Japan, Australia) declared that they had no intention to change their regimes at this stage.

2.   The European Commission's White Paper 2004

| 2.1 | The European Commission, prompted by the Lisbon European Council 2000 undertook a review of Regulation 4056/86. The Lisbon Council called the Commission ‘to speed up liberalisation in areas such as gas, electricity, postal services and transport’. The review process started in March 2003 with a publication of a consultation paper and 36 submissions from stakeholders (shippers, carriers, Member States, consumers). The Erasmus University Rotterdam assisted the Commission in processing the replies. Thereafter, a public hearing was conducted in December 2003 and a discussion paper was issued in May 2004 addressed to Member States. On 13 October 2004, the Commission released a White Paper accompanied by an Annex in which it considers repealing the block exemption from liner conferences. It analyses whether to maintain, modify or repeal the current Regulation and whether to replace it by optional regimes such as the proposal of the European Liner Affairs Association (ELAA). For tramp shipping some form of guidance is suggested. The Commission also invites the Committee to submit comments, within a period of two months. |
| --- | --- |

2.1

The European Commission, prompted by the Lisbon European Council 2000 undertook a review of Regulation 4056/86. The Lisbon Council called the Commission ‘to speed up liberalisation in areas such as gas, electricity, postal services and transport’. The review process started in March 2003 with a publication of a consultation paper and 36 submissions from stakeholders (shippers, carriers, Member States, consumers). The Erasmus University Rotterdam assisted the Commission in processing the replies. Thereafter, a public hearing was conducted in December 2003 and a discussion paper was issued in May 2004 addressed to Member States. On 13 October 2004, the Commission released a White Paper accompanied by an Annex in which it considers repealing the block exemption from liner conferences. It analyses whether to maintain, modify or repeal the current Regulation and whether to replace it by optional regimes such as the proposal of the European Liner Affairs Association (ELAA). For tramp shipping some form of guidance is suggested. The Commission also invites the Committee to submit comments, within a period of two months.

| 2.2 | The White Paper addresses several basic questions: whether there is still a justification for price fixing/capacity utilisation by liner conferences being granted a block exemption under Article 81(3) EC. The Commission concludes that in the present market circumstances there is no justification to maintain the block exemption to liner conferences because stability of prices can be achieved by other less restrictive forms of cooperation and that the four cumulative conditions of Article 81 (3) to justify it are no longer fulfilled. |
| --- | --- |

2.2

The White Paper addresses several basic questions: whether there is still a justification for price fixing/capacity utilisation by liner conferences being granted a block exemption under Article 81(3) EC. The Commission concludes that in the present market circumstances there is no justification to maintain the block exemption to liner conferences because stability of prices can be achieved by other less restrictive forms of cooperation and that the four cumulative conditions of Article 81 (3) to justify it are no longer fulfilled.

| 2.2.1 | The White Paper examines whether another legal instrument covering a new business framework of cooperation in the liner trades is appropriate. It concludes that suggestions from stakeholders are invited on an appropriate legal instrument and on an alternative cooperation framework among liners. |
| --- | --- |

2.2.1

The White Paper examines whether another legal instrument covering a new business framework of cooperation in the liner trades is appropriate. It concludes that suggestions from stakeholders are invited on an appropriate legal instrument and on an alternative cooperation framework among liners.

| 2.3 | The White Paper examines whether there is still a justification for the exclusion of tramp services and cabotage from the competition implementing rules in Regulation 1/2003. It concludes that no credible consideration has been put forward for a different treatment of those services from all other sectors of the economy. It, therefore, proposes to bring these services under the scope of procedural Regulation 1/2003. It also proposes that for the sake of legal certainty it will consider issuing some form of guidance to facilitate the self assessment of pool agreements by carriers. |
| --- | --- |

2.3

The White Paper examines whether there is still a justification for the exclusion of tramp services and cabotage from the competition implementing rules in Regulation 1/2003. It concludes that no credible consideration has been put forward for a different treatment of those services from all other sectors of the economy. It, therefore, proposes to bring these services under the scope of procedural Regulation 1/2003. It also proposes that for the sake of legal certainty it will consider issuing some form of guidance to facilitate the self assessment of pool agreements by carriers.

| 2.4. | It is noteworthy that the newly established (2003) European Liner Affairs Association (ELAA) to deal with this topic proposed a new business framework for liner shipping cooperation. Namely, it proposes a new business framework of discussion between lines regarding capacity utilisation, market shares, cargo developments by trade, a price index publicly available, discussion of surcharges/ancillary charges. |
| --- | --- |

2.4.

It is noteworthy that the newly established (2003) European Liner Affairs Association (ELAA) to deal with this topic proposed a new business framework for liner shipping cooperation. Namely, it proposes a new business framework of discussion between lines regarding capacity utilisation, market shares, cargo developments by trade, a price index publicly available, discussion of surcharges/ancillary charges.

3.   General comments

| 3.1 | The EESC has been following closely developments regarding this issue since the 1980s and adopted two Opinions in 1982 (11) and in 1985 (12) the gist of which was given a follow-up in Regulation 4056/86. Hence, it welcomes the White Paper and the brainstorming exercise launched by the Commission and hopes to contribute significantly towards arriving at a meaningful competition regime in the EU and worldwide. |
| --- | --- |

3.1

The EESC has been following closely developments regarding this issue since the 1980s and adopted two Opinions in 1982 (11) and in 1985 (12) the gist of which was given a follow-up in Regulation 4056/86. Hence, it welcomes the White Paper and the brainstorming exercise launched by the Commission and hopes to contribute significantly towards arriving at a meaningful competition regime in the EU and worldwide.

| 3.1.1 | The Annex to the White Paper provides an analysis regarding the compatibility of liner conferences with the four cumulative criteria of Article 81(3) EC. However, in recent years where capacity utilization under EU jurisprudence is allowed only on condition that it will not create an artificial peak season in connection with rate increases and conference power to fix prices has largely disappeared (13) one can argue whether the four cumulative criteria of Article 81(3) can still be fulfilled. |
| --- | --- |

3.1.1

The Annex to the White Paper provides an analysis regarding the compatibility of liner conferences with the four cumulative criteria of Article 81(3) EC. However, in recent years where capacity utilization under EU jurisprudence is allowed only on condition that it will not create an artificial peak season in connection with rate increases and conference power to fix prices has largely disappeared (13) one can argue whether the four cumulative criteria of Article 81(3) can still be fulfilled.

| 3.1.2 | The EESC wishes to see more analysis regarding the increasing role of outsiders since the 1980's. Data available indicate that conferences have not hampered the emergence of outsiders which have acquired significant shares. Hence, effective competition exists and the fourth cumulative criterion of Article 81(3) EC is fulfilled (no elimination of competition). Similarly, data available concerning the transport cost elements in shelf price of consumer goods indicate that it has reached marginal level of percentage. Therefore, one can argue about whether there is a negative price setting by conferences upon consumers. |
| --- | --- |

3.1.2

The EESC wishes to see more analysis regarding the increasing role of outsiders since the 1980's. Data available indicate that conferences have not hampered the emergence of outsiders which have acquired significant shares. Hence, effective competition exists and the fourth cumulative criterion of Article 81(3) EC is fulfilled (no elimination of competition). Similarly, data available concerning the transport cost elements in shelf price of consumer goods indicate that it has reached marginal level of percentage. Therefore, one can argue about whether there is a negative price setting by conferences upon consumers.

| 3.1.3 | Regulation 4056/86 was the offspring of the market conditions prevailing in the 1980s. It is part of the package of four maritime regulations adopted in 1986 setting the cornerstones of the common shipping policy of the EU. The conferences enjoyed a generous legal treatment for 18 years under EU law. |
| --- | --- |

3.1.3

Regulation 4056/86 was the offspring of the market conditions prevailing in the 1980s. It is part of the package of four maritime regulations adopted in 1986 setting the cornerstones of the common shipping policy of the EU. The conferences enjoyed a generous legal treatment for 18 years under EU law.

| 3.2 | The EESC remarks that whilst the Commission refers to the international position of liner conferences and to the regulatory context in the US, Australia, it does not address its legal implications. Fourteen EU Member States and Norway have signed or acceded to the Liner Code: if Regulation 4056/86 is repealed they will have to denounce the Code. It is noteworthy that according to Article 50 of the Liner Code denunciation of its provisions takes effect one year or later following receipt by the depositary. Regulation 954/79 will have to be repealed. ‘Offers’ to the WTO would have to be modified accordingly. The White Paper does not address the treaty law problems emanating from an eventual abolition of the liner conferences system. The EU will have to address the renegotiation of the EU/Ukraine, EU/Russia agreements. |
| --- | --- |

3.2

The EESC remarks that whilst the Commission refers to the international position of liner conferences and to the regulatory context in the US, Australia, it does not address its legal implications. Fourteen EU Member States and Norway have signed or acceded to the Liner Code: if Regulation 4056/86 is repealed they will have to denounce the Code. It is noteworthy that according to Article 50 of the Liner Code denunciation of its provisions takes effect one year or later following receipt by the depositary. Regulation 954/79 will have to be repealed. ‘Offers’ to the WTO would have to be modified accordingly. The White Paper does not address the treaty law problems emanating from an eventual abolition of the liner conferences system. The EU will have to address the renegotiation of the EU/Ukraine, EU/Russia agreements.

| 3.3 | Conferences may still remain and develop legitimate activities instead of being abolished. A conference organizes the liner trade between developed and developing countries. If a conference is abolished in the EU end of the trade, what will happen to the other end of the trade? For instance, conferences exist between EU/South America and EU/West Africa and the Liner Code is applicable to them. The White Paper has not addressed these problems. |
| --- | --- |

3.3

Conferences may still remain and develop legitimate activities instead of being abolished. A conference organizes the liner trade between developed and developing countries. If a conference is abolished in the EU end of the trade, what will happen to the other end of the trade? For instance, conferences exist between EU/South America and EU/West Africa and the Liner Code is applicable to them. The White Paper has not addressed these problems.

| 3.4 | If a conference can exercise activities which are not restrictive of competition why should the conference system be abolished? This alternative is not explored in the White Paper. Activities such as cargo/revenue allocation, coordination of schedules/sailings may be passing the test of the four cumulative criteria. The Dutch and German Governments in a recent discussion paper (14) explore possible forms of cooperation and possible legal instruments. This initiative should be taken into account. Moreover, some other activities proposed by ELAA and by the German and Dutch discussion paper may also be passing the test of the four cumulative criteria. Therefore, it is not the lifting of the existing block exemption that is a source of concern; it is the unilateral abolition of the liner conference system by the EU without consultation with other major industrialized countries (OECD) or developing countries. |
| --- | --- |

3.4

If a conference can exercise activities which are not restrictive of competition why should the conference system be abolished? This alternative is not explored in the White Paper. Activities such as cargo/revenue allocation, coordination of schedules/sailings may be passing the test of the four cumulative criteria. The Dutch and German Governments in a recent discussion paper (14) explore possible forms of cooperation and possible legal instruments. This initiative should be taken into account. Moreover, some other activities proposed by ELAA and by the German and Dutch discussion paper may also be passing the test of the four cumulative criteria. Therefore, it is not the lifting of the existing block exemption that is a source of concern; it is the unilateral abolition of the liner conference system by the EU without consultation with other major industrialized countries (OECD) or developing countries.

| 3.5 | It is obvious from the above that, whilst abolition of the block exemption may be envisaged, abolition of the liner conferences entails a host of legal problems which should be addressed first. Moreover, the compatibility of the new EU regime with the international regulatory framework has to be achieved. A unilateral EU action is unthinkable since liner conferences are a system existing all over the world. The White Paper does not analyze sufficiently the international implications on the regulatory level (i.e., the international commitments of the EU and its Member States) nor the treaty law problems created from the abolition of liner conferences. |
| --- | --- |

3.5

It is obvious from the above that, whilst abolition of the block exemption may be envisaged, abolition of the liner conferences entails a host of legal problems which should be addressed first. Moreover, the compatibility of the new EU regime with the international regulatory framework has to be achieved. A unilateral EU action is unthinkable since liner conferences are a system existing all over the world. The White Paper does not analyze sufficiently the international implications on the regulatory level (i.e., the international commitments of the EU and its Member States) nor the treaty law problems created from the abolition of liner conferences.

| 3.6 | The EESC maintains that irrespective of their shortcomings and outdating, the Liner Code (and the conference system consecrated by it) remain the cornerstones of the 1986 package of four maritime Regulations constituting phase I of the EU common shipping policy. Three out of the four regulations are based on the Liner Code and make direct reference to it. Namely, Regulation 4055/86, Regulation 4056/86 and Regulation 4058/86 (15). The above package was the result of painstaking negotiations for several years and created a delicate balance of mutual concessions between Member States. Before proceeding to the repeal of Regulation 4056/86, Regulations 4055/86 and 4058/86 would also have to be amended. |
| --- | --- |

3.6

The EESC maintains that irrespective of their shortcomings and outdating, the Liner Code (and the conference system consecrated by it) remain the cornerstones of the 1986 package of four maritime Regulations constituting phase I of the EU common shipping policy. Three out of the four regulations are based on the Liner Code and make direct reference to it. Namely, Regulation 4055/86, Regulation 4056/86 and Regulation 4058/86 (15). The above package was the result of painstaking negotiations for several years and created a delicate balance of mutual concessions between Member States. Before proceeding to the repeal of Regulation 4056/86, Regulations 4055/86 and 4058/86 would also have to be amended.

| 3.7 | Since the conference system is currently under revision in other jurisdictions it would be more sensible for the EU — instead of proceeding unilaterally — to liaise with these jurisdictions with a view to adopting a new international regime compatible worldwide. Otherwise, whilst the US and Australia have approached the EU system, the EU will abolish it without consultation and coordination. This issue could also be raised in the International Competition Network (ICN) of which the Commission is a founding member (2001). The ICN constitutes a leading forum for the discussion of international competition policy at the multilateral level. The impact of such an abolition would be very damaging and penalizing for European operators who, despite fierce competition from non-EU (mainly Asian) companies, are top-listed in the world maritime companies ranking (the first four companies of this list being European). For the abovementioned reasons, the review of Regulation 4056/86 should be discussed at the level of the ICN. |
| --- | --- |

3.7

Since the conference system is currently under revision in other jurisdictions it would be more sensible for the EU — instead of proceeding unilaterally — to liaise with these jurisdictions with a view to adopting a new international regime compatible worldwide. Otherwise, whilst the US and Australia have approached the EU system, the EU will abolish it without consultation and coordination. This issue could also be raised in the International Competition Network (ICN) of which the Commission is a founding member (2001). The ICN constitutes a leading forum for the discussion of international competition policy at the multilateral level. The impact of such an abolition would be very damaging and penalizing for European operators who, despite fierce competition from non-EU (mainly Asian) companies, are top-listed in the world maritime companies ranking (the first four companies of this list being European). For the abovementioned reasons, the review of Regulation 4056/86 should be discussed at the level of the ICN.

| 3.8 | The EESC is aware of the fact that such an exercise may be time consuming. Therefore, until another system be agreed internationally to replace the Liner Code and until a coordination between various jurisdictions takes place regarding the replacement of the liner conference system in the regulatory field, it proposes to repeal Regulation 4056/86 by introducing a new Commission Regulation. The new Regulation should provide a block exemption under strict terms complying with the specific yardsticks of EU jurisprudence (e.g. TACA case and other cases). |
| --- | --- |

3.8

The EESC is aware of the fact that such an exercise may be time consuming. Therefore, until another system be agreed internationally to replace the Liner Code and until a coordination between various jurisdictions takes place regarding the replacement of the liner conference system in the regulatory field, it proposes to repeal Regulation 4056/86 by introducing a new Commission Regulation. The new Regulation should provide a block exemption under strict terms complying with the specific yardsticks of EU jurisprudence (e.g. TACA case and other cases).

| 3.9 | A total deregulation without a new legal instrument in place is not an advisable course of action for additional reasons: Under the newly created European Competition Network (ECN) (16) there will be a decentralisation of the handling of competition cases by national authorities. With the EU enlargement, the ten new Member States may require advice both on substance and procedure. There will be need for an educational period to familiarize them with market economies especially taking into account the absence of competition authorities in some of them. There will be need for a Regulation providing specific yardsticks on eventual anticompetitive practices of various forms of cooperation in the liner trades. Otherwise, it will become a lawyers' paradise entailing a diverging application of EU law in its Member States. |
| --- | --- |

3.9

A total deregulation without a new legal instrument in place is not an advisable course of action for additional reasons: Under the newly created European Competition Network (ECN) (16) there will be a decentralisation of the handling of competition cases by national authorities. With the EU enlargement, the ten new Member States may require advice both on substance and procedure. There will be need for an educational period to familiarize them with market economies especially taking into account the absence of competition authorities in some of them. There will be need for a Regulation providing specific yardsticks on eventual anticompetitive practices of various forms of cooperation in the liner trades. Otherwise, it will become a lawyers' paradise entailing a diverging application of EU law in its Member States.

| 3.10 | The EESC believes that decentralization of competition procedures should not coincide with deregulation of the liner system. For all these reasons, deregulation is not advisable at this stage. Moreover, deregulation may increase concentration and reduce the number of carriers in the market. |
| --- | --- |

3.10

The EESC believes that decentralization of competition procedures should not coincide with deregulation of the liner system. For all these reasons, deregulation is not advisable at this stage. Moreover, deregulation may increase concentration and reduce the number of carriers in the market.

| 3.11 | The White Paper proposal regarding the treatment of the tramp and cabotage services can be accepted. It is anticipated that the vast majority of cases would not raise competition problems (17). For the sake of legal certainty, however, it is sensible for the Commission to provide legal guidance regarding bulk pools and specialized trades in their self assessment regarding their compatibility with Article 81 EC bearing in mind that notifications of agreements and opposition procedure are not allowed anymore. |
| --- | --- |

3.11

The White Paper proposal regarding the treatment of the tramp and cabotage services can be accepted. It is anticipated that the vast majority of cases would not raise competition problems (17). For the sake of legal certainty, however, it is sensible for the Commission to provide legal guidance regarding bulk pools and specialized trades in their self assessment regarding their compatibility with Article 81 EC bearing in mind that notifications of agreements and opposition procedure are not allowed anymore.

4.   Specific comments

| 4.1 | The White Paper fails to address the regulatory safeguarding of the position of outsiders. It takes for granted that there has been an increase of their market share since the 1980s and supposes that this will continue in the future. Yet, the specific safeguards provided in Regulation 4056/86 have to be maintained in any new Regulation to avoid curtailing of their activities and maintain open trades. |
| --- | --- |

4.1

The White Paper fails to address the regulatory safeguarding of the position of outsiders. It takes for granted that there has been an increase of their market share since the 1980s and supposes that this will continue in the future. Yet, the specific safeguards provided in Regulation 4056/86 have to be maintained in any new Regulation to avoid curtailing of their activities and maintain open trades.

| 4.2 | The White Paper accepts that the repeal of the anti-trust immunity may lead to more concentration, i.e., mergers and acquisitions which in turn may entail a unilateral increase of market power or greater risk of collusion due to a reduction of market players (page 19 para. 73,74, Annex to the White Paper). Given that there are no new entrants in the liner trades, due to the high costs involved and the volatility of the market, which do not guarantee results, how can the current EU merger control Regulation safeguard the trades? It is unrealistic to expect small and medium-size carriers struggling for survival to undertake protracted and costly legal proceedings under the merger Regulation to prevent mergers creating big carriers. There should be safeguards in law. |
| --- | --- |

4.2

The White Paper accepts that the repeal of the anti-trust immunity may lead to more concentration, i.e., mergers and acquisitions which in turn may entail a unilateral increase of market power or greater risk of collusion due to a reduction of market players (page 19 para. 73,74, Annex to the White Paper). Given that there are no new entrants in the liner trades, due to the high costs involved and the volatility of the market, which do not guarantee results, how can the current EU merger control Regulation safeguard the trades? It is unrealistic to expect small and medium-size carriers struggling for survival to undertake protracted and costly legal proceedings under the merger Regulation to prevent mergers creating big carriers. There should be safeguards in law.

| 4.3 | The Commission argues (p. 17 para. 64, Annex to the White Paper) that if the cyclical nature of the container market remains free from collective action, it might generate a continuous flow of companies entering and exiting the market. Inefficient carriers sell their vessels and new efficient companies enter the market. This is a rather simplistic assessment of the market. Today, we can hardly find new entrants in the liner trades, particularly in the deep sea ones, because of the huge costs involved and the volatility of the trades which do not guarantee returns. Moreover, the distinction between efficient and inefficient carriers is not correct. Inefficient carriers cannot survive in the highly competitive liner trades. |
| --- | --- |

4.3

The Commission argues (p. 17 para. 64, Annex to the White Paper) that if the cyclical nature of the container market remains free from collective action, it might generate a continuous flow of companies entering and exiting the market. Inefficient carriers sell their vessels and new efficient companies enter the market. This is a rather simplistic assessment of the market. Today, we can hardly find new entrants in the liner trades, particularly in the deep sea ones, because of the huge costs involved and the volatility of the trades which do not guarantee returns. Moreover, the distinction between efficient and inefficient carriers is not correct. Inefficient carriers cannot survive in the highly competitive liner trades.

| 4.4 | For the reasons explained in Chapter 3, the conflict of laws provision in Regulation 4056/86 should be maintained in the new regulation. |
| --- | --- |

4.4

For the reasons explained in Chapter 3, the conflict of laws provision in Regulation 4056/86 should be maintained in the new regulation.

5.   Conclusions

| 5.1 | The EESC welcomes the White Paper initiative and the brainstorming exercise launched by the Commission subject to its comments. |
| --- | --- |

5.1

The EESC welcomes the White Paper initiative and the brainstorming exercise launched by the Commission subject to its comments.

| 5.2 | Any future legal framework should be compatible with Article 81 EC and balanced, i.e., meet the demands of both shippers and carriers. It should cater equally for the demand and the supply side of the liner-shipping business. It should be transparent and provide for the existence of open liner trades (i.e., outsiders). |
| --- | --- |

5.2

Any future legal framework should be compatible with Article 81 EC and balanced, i.e., meet the demands of both shippers and carriers. It should cater equally for the demand and the supply side of the liner-shipping business. It should be transparent and provide for the existence of open liner trades (i.e., outsiders).

| 5.3 | The EESC believes that any new regulation should not be a Council regulation but a Commission regulation in order to bring it in line with other EU regulations on competition law. However, if this is accepted, the Commission should be entrusted with checking more carefully the specificities of maritime transport and the international implications of the new legal regime. The EESC considers as positive that the White Paper invites views on alternative systems. |
| --- | --- |

5.3

The EESC believes that any new regulation should not be a Council regulation but a Commission regulation in order to bring it in line with other EU regulations on competition law. However, if this is accepted, the Commission should be entrusted with checking more carefully the specificities of maritime transport and the international implications of the new legal regime. The EESC considers as positive that the White Paper invites views on alternative systems.

| 5.4 | Traditionally in all jurisdictions, conferences have been granted some form of immunity from the competition rules and none of the competent authorities reviewing it (e.g. USA, Canada, Australia, Japan) have removed that immunity so far. The liner market is currently going through profound changes and will continue to do so. The market shares of conferences have declined considerably and the majority of contracts concluded are individual service contracts which are preferred by shippers and acknowledged by other jurisdictions. Moreover, discussion agreements and consortia/alliances are proliferating worldwide. |
| --- | --- |

5.4

Traditionally in all jurisdictions, conferences have been granted some form of immunity from the competition rules and none of the competent authorities reviewing it (e.g. USA, Canada, Australia, Japan) have removed that immunity so far. The liner market is currently going through profound changes and will continue to do so. The market shares of conferences have declined considerably and the majority of contracts concluded are individual service contracts which are preferred by shippers and acknowledged by other jurisdictions. Moreover, discussion agreements and consortia/alliances are proliferating worldwide.

| 5.5 | If Regulation 4056/86 is repealed without being substituted by a new regulation granting a block exemption it will require a Herculean legal task of negotiations, renegotiations of agreements with several third countries as well as extensive EU legislative work to amend the acquis communautaire (i.e. Regulation 954/79, Regulation 4055/86, Regulation 4058/86). Moreover, EU Member States will have to denounce the Liner Code. The EESC urges the Commission to address all these legal problems before examining the alternative systems to liner conferences and the abolition of the current block exemption. |
| --- | --- |

5.5

If Regulation 4056/86 is repealed without being substituted by a new regulation granting a block exemption it will require a Herculean legal task of negotiations, renegotiations of agreements with several third countries as well as extensive EU legislative work to amend the acquis communautaire (i.e. Regulation 954/79, Regulation 4055/86, Regulation 4058/86). Moreover, EU Member States will have to denounce the Liner Code. The EESC urges the Commission to address all these legal problems before examining the alternative systems to liner conferences and the abolition of the current block exemption.

| 5.6 | In view of the host of legal problems to be created by the abolition of conferences, the EESC urges the Commission to undertake a legal study of the regulatory changes required, if conferences are to be abolished by the EU and retained in the rest of the world. Such a study will reveal that there may be no added value in a deregulation of the liner market at present all the more coinciding at a moment of decentralization of competition authority to the Member States. Otherwise, we will be left with a legal vacuum without specific rules in this sector. |
| --- | --- |

5.6

In view of the host of legal problems to be created by the abolition of conferences, the EESC urges the Commission to undertake a legal study of the regulatory changes required, if conferences are to be abolished by the EU and retained in the rest of the world. Such a study will reveal that there may be no added value in a deregulation of the liner market at present all the more coinciding at a moment of decentralization of competition authority to the Member States. Otherwise, we will be left with a legal vacuum without specific rules in this sector.

| 5.7 | In the meantime, the EESC believes that there is still a justification for maintaining the liner conferences in the EU until a new regulatory regime is put in place worldwide. The Conference system is therefore still necessary because it is the basis of the regulation of liner shipping worldwide. The effects on the international framework from an abolition of the EU block exemption, vis-à-vis developing countries as well as other OECD countries, will be complex and significant. |
| --- | --- |

5.7

In the meantime, the EESC believes that there is still a justification for maintaining the liner conferences in the EU until a new regulatory regime is put in place worldwide. The Conference system is therefore still necessary because it is the basis of the regulation of liner shipping worldwide. The effects on the international framework from an abolition of the EU block exemption, vis-à-vis developing countries as well as other OECD countries, will be complex and significant.

| 5.8 | The EESC maintains that Regulation 4056/86 should be repealed and substituted by a new Commission Regulation for liner conferences granting a block exemption. The new regime should strictly follow the yardsticks established under the jurisprudence of the European Court of First Instance and of the Commission (e.g. TACA case). The conference system should also be maintained in order to defend the competitiveness of Community shipowners worldwide. Whilst for the large carriers ‘alliances’ and other types of cooperation agreements may be appropriate, small and medium size carriers still need conferences in order to maintain their market shares especially in trades with developing countries. The abolition of the exemption may have anticompetitive effects for these small carriers enhancing the dominant position of the larger ones. |
| --- | --- |

5.8

The EESC maintains that Regulation 4056/86 should be repealed and substituted by a new Commission Regulation for liner conferences granting a block exemption. The new regime should strictly follow the yardsticks established under the jurisprudence of the European Court of First Instance and of the Commission (e.g. TACA case). The conference system should also be maintained in order to defend the competitiveness of Community shipowners worldwide. Whilst for the large carriers ‘alliances’ and other types of cooperation agreements may be appropriate, small and medium size carriers still need conferences in order to maintain their market shares especially in trades with developing countries. The abolition of the exemption may have anticompetitive effects for these small carriers enhancing the dominant position of the larger ones.

| 5.9 | This interim transitional period should be used by the Commission to monitor the liner market developments including trends of consolidation. Moreover, the Commission should undertake consultations with other jurisdictions (OECD) with a view to arriving at a suitable alternative system compatible worldwide. |
| --- | --- |

5.9

This interim transitional period should be used by the Commission to monitor the liner market developments including trends of consolidation. Moreover, the Commission should undertake consultations with other jurisdictions (OECD) with a view to arriving at a suitable alternative system compatible worldwide.

| 5.10 | The EESC endorses proposals of the White Paper regarding the treatment of tramp and cabotage services since the vast majority of cases in these sectors would not raise competition problems. For the sake of legal certainty, however, the Commission is requested to provide legal guidance regarding the self assessment of bulk pools and specialized trades regarding their compatibility with Article 81 EC. |
| --- | --- |

5.10

The EESC endorses proposals of the White Paper regarding the treatment of tramp and cabotage services since the vast majority of cases in these sectors would not raise competition problems. For the sake of legal certainty, however, the Commission is requested to provide legal guidance regarding the self assessment of bulk pools and specialized trades regarding their compatibility with Article 81 EC.

| 5.11 | The EESC hopes to provide its assistance in the follow-up to the brainstorming exercise launched by the White Paper. |
| --- | --- |

5.11

The EESC hopes to provide its assistance in the follow-up to the brainstorming exercise launched by the White Paper.

Brussels, 16 December 2004

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  15.5.1979 concerning the ratification of accession by the Member States to the UNCTAD Liner Code.

1

(2)  cf. Bredima-Savopoulou/Tzoannos ‘The Common Shipping Policy of the EC’, North Holland, Asser Institute 1990; L. Schmdt – O. Seiler ‘The Unctad Code of Conduct for Liner Conferences’, Hamburg 1979; A. Mc Intosh ‘Anti-trust implications of liner conferences’ Lloyds Maritime and Commercial Law Quarterly, May 1980 p. 139; Clough/Randolph ‘Shipping and EC Competition Law, Butterworths. 1991, Bellamy/Child’ Common Market Law of Competition ‘Sweet & Maxwell, 1993, 2001; P. Ruttley’ International Shipping and EEC Competition Law (1991) 2 ECLR, 5; Kreis ‘European Community Competition Policy and International Shipping’ (1989) Fordham International Law Journal, p. 411, vol. 13; J. Erdmenger, Conference on EEC Shipping Law, 4-5/2/1988, Rotterdam; Bredima ‘The Common Shipping Policy of the EEC’, 18 Common Market Law Review, 1981, p. 9-32.

2

(3)  e.g. Revised TACA (14.11.2002OJ L 26 of 31.1.2003, p. 53), TAA, FEFC, EATA, Eurocorde; CEWAL, COWAC, UKWAL (OJ L 34, 10.2.1993, p. 20), French-west African Shipowners Committees OJ L 134, 18.5.1992, p .1.

3

(4)  According to Clarkson Research Studies, ‘The Tramp Shipping Market’ (April, 2004) there are about 4,795 companies owning tramp vessels, only 4 have over 300 ships (i.e., 2 % market share) and the average number of ships owned is 5.

4

(5)  Amending the US Merchant Shipping Act 1984.

5

(6)  OJ L 55 of 29.2.1992. p.3.

6

(7)  OJ L 89 of 21.4.1995, p. 7.

7

(8)  OJ L 100 of 20.4.2000, p. 24.

8

(9)  OJ L 1 of 4.1.2003, p. 1

9

(10)  DSTI/DOT (2002) 2 of 16.4.2002.

10

(11)  OJ C 77 of 21.3.1983, p. 13.

11

(12)  OJ No. C 344 of 31.12.1985, p. 31

12

(13)  October 2004.

13

(14)  October 2004.

14

(15)  Regulation 4055/86 of 22.12.1986 (‘applying the freedom to provide services to maritime transport between Member States and between Member States and third countries’) is based on the UNCTAD Liner Code. Art. 4§1(a) (b) provides a phasing out of existing cargo sharing arrangements by direct reference to the Liner Code; Regulation 4058/86 of 22.12.86 (concerning ‘coordinated action to safeguard free access to cargoes in ocean trades’) is based on the Liner Code. Article 1 provides for action depending on Code trades and non-Code trades– OJ L 378 of 31.12.1986, p. 4.

15

(16)  Regulation 1/2003.

16

(17)  Indeed, the tramp services sector has been characterized as a model sector of perfect competition: William Boyes, Michael Melvin, ‘Microeconomics’, 1999 Houghton Mifflin College, 4th Edition.

17

th

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| 28.6.2005 | EN | Official Journal of the European Union | C 157/136 |
| --- | --- | --- | --- |

28.6.2005

EN

Official Journal of the European Union

C 157/136

---

Opinion of the European Economic and Social Committee on the ‘Proposal for a Decision of the European Parliament and of the Council on establishing a multiannual Community programme on promoting safer use of the internet and new online technologies’

(COM(2004) 91 final — 2004/0023 (COD))

(2005/C 157/24)

On 26 March 2004, the Council decided to consult the European Economic and Social Committee, under Article 153 of the Treaty establishing the European Community, on the abovementioned proposal.

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 5 October 2004. The rapporteur was Mr Retureau and the co-rapporteur, Ms Davison.

At its 413th plenary session on 15 and 16 December 2004 (meeting of 16 December 2004), the European Economic and Social Committee adopted the following opinion by 147 votes in favour with 1 abstention:

1.   Summary of the draft opinion

| 1.1 | The Commission proposes to launch a new Safer Internet Programme, which is to be enhanced to reflect the rapid development of the Information Society in terms of communications networks. It has therefore been named the Safer Internet Plus Action Plan (2005-2008). |
| --- | --- |

1.1

The Commission proposes to launch a new Safer Internet Programme, which is to be enhanced to reflect the rapid development of the Information Society in terms of communications networks. It has therefore been named the Safer Internet Plus Action Plan (2005-2008).

| 1.2 | Besides the proposal for a Decision of the European Parliament and of the Council submitted by the Commission, the Committee has examined the ex ante evaluation of Safer Internet Plus (2005-2008), set out in a Commission staff working paper (SEC(2004) 148), and in COM(2004) 91 final. It supports broadening the scope of the new action plan and its objectives to reflect the rapid development and diversification of Internet access and the very rapid growth of broadband connections. In its general and specific comments on the subject, the Committee offers some additional proposals for political and regulatory measures, in particular:






  — | technical and legal standards (compulsory and voluntary); |
| --- | --- | --- |

1.2

Besides the proposal for a Decision of the European Parliament and of the Council submitted by the Commission, the Committee has examined the ex ante evaluation of Safer Internet Plus (2005-2008), set out in a Commission staff working paper (SEC(2004) 148), and in COM(2004) 91 final. It supports broadening the scope of the new action plan and its objectives to reflect the rapid development and diversification of Internet access and the very rapid growth of broadband connections. In its general and specific comments on the subject, the Committee offers some additional proposals for political and regulatory measures, in particular:

—

technical and legal standards (compulsory and voluntary);

| — | education and training of users; |
| --- | --- |

—

education and training of users;

| — | obligations of Internet service providers and other operators (credit card companies, search engines, etc.); |
| --- | --- |

—

obligations of Internet service providers and other operators (credit card companies, search engines, etc.);

| — | the responsibility of software authors and Internet security providers; |
| --- | --- |

—

the responsibility of software authors and Internet security providers;

| — | the protection of vulnerable individuals against fraud and information from doubtful sources (various scams, uncontrolled sales of medicines, advice and treatment from persons without any medical authority, etc.). |
| --- | --- |

—

the protection of vulnerable individuals against fraud and information from doubtful sources (various scams, uncontrolled sales of medicines, advice and treatment from persons without any medical authority, etc.).

2.   Proposals of the Commission (summary)

| 2.1 | The aim of the proposed programme is to promote safer use of the Internet and online technologies for end users, and in particular for children and young people, at home or at school. To this end, it is planned to co-finance projects put forward by associations and other groups (research teams, software designers, educational institutions, etc.), with the aim of developing means of protection such as hotlines, spam and virus filters, and ‘smart’ navigation filters. |
| --- | --- |

2.1

The aim of the proposed programme is to promote safer use of the Internet and online technologies for end users, and in particular for children and young people, at home or at school. To this end, it is planned to co-finance projects put forward by associations and other groups (research teams, software designers, educational institutions, etc.), with the aim of developing means of protection such as hotlines, spam and virus filters, and ‘smart’ navigation filters.

| 2.2 | The previous Safer Internet Action Plan (1999-2002) was extended to the period 2003-2004. |
| --- | --- |

2.2

The previous Safer Internet Action Plan (1999-2002) was extended to the period 2003-2004.

| 2.3 | The website of the European Commission lists the projects which had already been completed under the Safer Internet Programme by the end of 2003. (1) |
| --- | --- |

2.3

The website of the European Commission lists the projects which had already been completed under the Safer Internet Programme by the end of 2003. (1)

| 2.4 | The current proposal (for 2005-2008) also covers new forms of online communication, for which it provides support in combating illegal and harmful content, including viruses and other harmful or unwanted content (e.g. spam). |
| --- | --- |

2.4

The current proposal (for 2005-2008) also covers new forms of online communication, for which it provides support in combating illegal and harmful content, including viruses and other harmful or unwanted content (e.g. spam).

| 2.5 | For the institutions of the European Union, the main reasons why measures need to be taken in this area are:






  — | rapid growth in the use of high-speed and broadband connections by individual users, businesses, government administration and private institutions (NGOs); |
| --- | --- | --- |

2.5

For the institutions of the European Union, the main reasons why measures need to be taken in this area are:

—

rapid growth in the use of high-speed and broadband connections by individual users, businesses, government administration and private institutions (NGOs);

| — | diversification of media and methods of access to the Internet and new online content, much of which is unwanted (e-mails, text messages), and increasingly attractive content (multimedia); |
| --- | --- |

—

diversification of media and methods of access to the Internet and new online content, much of which is unwanted (e-mails, text messages), and increasingly attractive content (multimedia);

| — | the dramatic increase in unwanted, potentially dangerous or inappropriate content has created new dangers for the general public (viruses: invade memory, abuse or destroy data, make unauthorised use of the victim's communication media; spam: clogs up bandwidth and memory, invades electronic mailboxes, with the result that effective use of the Internet and communication is either blocked or made more difficult, and causes significant costs, borne not by those are responsible but by end users); some significant categories of users, such as children, are at risk from sexually explicit spam, inappropriate messages and invitations by paedophiles to dates in online chat rooms; |
| --- | --- |

—

the dramatic increase in unwanted, potentially dangerous or inappropriate content has created new dangers for the general public (viruses: invade memory, abuse or destroy data, make unauthorised use of the victim's communication media; spam: clogs up bandwidth and memory, invades electronic mailboxes, with the result that effective use of the Internet and communication is either blocked or made more difficult, and causes significant costs, borne not by those are responsible but by end users); some significant categories of users, such as children, are at risk from sexually explicit spam, inappropriate messages and invitations by paedophiles to dates in online chat rooms;

| — | inappropriate content easily accessible to children, due to the limited effectiveness of current filtering systems available to those in charge of children. |
| --- | --- |

—

inappropriate content easily accessible to children, due to the limited effectiveness of current filtering systems available to those in charge of children.

| 2.6 | The main objective of the programme is to protect children and support those in charge of them (parents, teachers, educators, etc.) and those defending their interests and their moral health. The programme therefore concerns NGOs dealing with social issues, children's rights, racism, xenophobia (2) and all other forms of discrimination, consumer rights, the defence of civil liberties, etc. |
| --- | --- |

2.6

The main objective of the programme is to protect children and support those in charge of them (parents, teachers, educators, etc.) and those defending their interests and their moral health. The programme therefore concerns NGOs dealing with social issues, children's rights, racism, xenophobia (2) and all other forms of discrimination, consumer rights, the defence of civil liberties, etc.

| 2.7 | The programme also concerns governments, legislative, judicial and police bodies, and regulatory authorities. Changes need to be made both to laws and to legal procedures, and training and equipment need to be provided for a sufficient number of staff. |
| --- | --- |

2.7

The programme also concerns governments, legislative, judicial and police bodies, and regulatory authorities. Changes need to be made both to laws and to legal procedures, and training and equipment need to be provided for a sufficient number of staff.

| 2.8 | In addition, the programme concerns the industry, which needs a secure environment in order to boost consumer confidence. |
| --- | --- |

2.8

In addition, the programme concerns the industry, which needs a secure environment in order to boost consumer confidence.

| 2.9 | Universities and researchers can shed light on how children use the new media. The best approach to effective communication on the issue of security is to make the public aware of how criminals make use of the new media, to search for new technological solutions, and to provide an independent perspective on finding a balance between the interests affected by regulatory and self-regulatory procedures. |
| --- | --- |

2.9

Universities and researchers can shed light on how children use the new media. The best approach to effective communication on the issue of security is to make the public aware of how criminals make use of the new media, to search for new technological solutions, and to provide an independent perspective on finding a balance between the interests affected by regulatory and self-regulatory procedures.

| 2.10 | There are two dimensions to the programme. On the social front, it focuses on areas where regulation and the market are not sufficient in themselves to guarantee the safety of users. On the economic front, it aims to promote safer use of the Internet and online technologies by creating a climate of confidence. |
| --- | --- |

2.10

There are two dimensions to the programme. On the social front, it focuses on areas where regulation and the market are not sufficient in themselves to guarantee the safety of users. On the economic front, it aims to promote safer use of the Internet and online technologies by creating a climate of confidence.

| 2.11 | About €50 million of funding is planned to develop legal and technological measures, software and information in order to combat invasion or fraudulent use of networks or computers through unwanted content which has the potential to be morally, socially or economically harmful. |
| --- | --- |

2.11

About €50 million of funding is planned to develop legal and technological measures, software and information in order to combat invasion or fraudulent use of networks or computers through unwanted content which has the potential to be morally, socially or economically harmful.

3.   General comments by the Committee

| 3.1 | The Committee refers to its previous position on protection of children on the Internet and its first action plan. (3) It welcomes the proposal for a new action plan to deal with illegal and harmful content in online communication (see Section 1, Summary, at the beginning of this document), and it supports the objectives and priorities of the Safer Internet Plus Programme, as one of the strategies intended to make Internet use safer. However, the Committee emphasises the enormity of the problem and the need for international measures and legislation to deal with it. |
| --- | --- |

3.1

The Committee refers to its previous position on protection of children on the Internet and its first action plan. (3) It welcomes the proposal for a new action plan to deal with illegal and harmful content in online communication (see Section 1, Summary, at the beginning of this document), and it supports the objectives and priorities of the Safer Internet Plus Programme, as one of the strategies intended to make Internet use safer. However, the Committee emphasises the enormity of the problem and the need for international measures and legislation to deal with it.

| 3.2 | In the view of the Committee, the Internet and new technologies for online communication (for example, mobile telephones and palmtop computers with Internet and multimedia functions, currently undergoing rapid growth) are of fundamental importance for the development of the knowledge economy, the e-economy and e-government. They are flexible communication tools used for culture, work and free time. Therefore, it is vital to ensure that communications networks can function safely and smoothly, given that they are an essential public service which needs to remain open and accessible, and which needs to inspire the confidence of all users in order to fulfil its various functions in the best possible conditions. Including information on safer Internet use in the various e-Europe programmes, and training activities in particular, is one of the most promising ways forward, as a cost-effective means of reaching the largest possible number of people. |
| --- | --- |

3.2

In the view of the Committee, the Internet and new technologies for online communication (for example, mobile telephones and palmtop computers with Internet and multimedia functions, currently undergoing rapid growth) are of fundamental importance for the development of the knowledge economy, the e-economy and e-government. They are flexible communication tools used for culture, work and free time. Therefore, it is vital to ensure that communications networks can function safely and smoothly, given that they are an essential public service which needs to remain open and accessible, and which needs to inspire the confidence of all users in order to fulfil its various functions in the best possible conditions. Including information on safer Internet use in the various e-Europe programmes, and training activities in particular, is one of the most promising ways forward, as a cost-effective means of reaching the largest possible number of people.

| 3.3 | Conducive to the freedom of expression and communication prevailing on the Internet are the relatively low costs of Internet access, including broadband connections, which provide increasingly fast access to multimedia content. Only a few countries with significant democratic deficits seek to monitor the messages and contents available to their nationals, at the cost of permanent impairment to freedom. In the opinion of the Committee, it is important to guarantee increased security while at the same time preserving and promoting freedom of information, communication and expression. |
| --- | --- |

3.3

Conducive to the freedom of expression and communication prevailing on the Internet are the relatively low costs of Internet access, including broadband connections, which provide increasingly fast access to multimedia content. Only a few countries with significant democratic deficits seek to monitor the messages and contents available to their nationals, at the cost of permanent impairment to freedom. In the opinion of the Committee, it is important to guarantee increased security while at the same time preserving and promoting freedom of information, communication and expression.

| 3.4 | However, the Internet, as a global medium of free expression and information, is used for illegal activities such as paedophilia and the dissemination of racist or xenophobic content to an even greater extent than other forms of communication. Some types of content may also be harmful for particular groups of users, especially minors, such as pornography and gambling (which are actually prohibited in some countries) or those related to various criminal activities (abuse of bandwidth, or fraudulent use of data or servers). The Committee is therefore in favour of broadening the scope of the action plan to cover all forms of electronic communication which are capable of being used for unwanted or hostile external access. |
| --- | --- |

3.4

However, the Internet, as a global medium of free expression and information, is used for illegal activities such as paedophilia and the dissemination of racist or xenophobic content to an even greater extent than other forms of communication. Some types of content may also be harmful for particular groups of users, especially minors, such as pornography and gambling (which are actually prohibited in some countries) or those related to various criminal activities (abuse of bandwidth, or fraudulent use of data or servers). The Committee is therefore in favour of broadening the scope of the action plan to cover all forms of electronic communication which are capable of being used for unwanted or hostile external access.

| 3.5 | Regulation of this new and rapidly growing area has become complex due to the fact that the Internet is an international, open network accessible to everyone through any server or any personal computer, with unrestricted access from practically any country in the world. However, many countries still have weak or insufficient legislation permitting the operation of websites which are banned in the European Union. It is very important for the European Union, in cooperation with the main North American and Asian countries where broadband Internet use is widespread, to speak out and to campaign for international measures to protect those who are most vulnerable, to take more effective action against unsolicited messages (spam), which threaten the development of electronic mail, and against the proliferation of computer viruses, which undermine the digital economy. Necessary though such action is within the European Union, the measures need to be implemented as part of a global approach. |
| --- | --- |

3.5

Regulation of this new and rapidly growing area has become complex due to the fact that the Internet is an international, open network accessible to everyone through any server or any personal computer, with unrestricted access from practically any country in the world. However, many countries still have weak or insufficient legislation permitting the operation of websites which are banned in the European Union. It is very important for the European Union, in cooperation with the main North American and Asian countries where broadband Internet use is widespread, to speak out and to campaign for international measures to protect those who are most vulnerable, to take more effective action against unsolicited messages (spam), which threaten the development of electronic mail, and against the proliferation of computer viruses, which undermine the digital economy. Necessary though such action is within the European Union, the measures need to be implemented as part of a global approach.

| 3.6 | Given the lack of international agreements, prohibition of certain types of content by some countries may even be contested by complaints lodged with the WTO concerning TBTs (4); this is an issue which needs to be discussed during the current round of negotiations. |
| --- | --- |

3.6

Given the lack of international agreements, prohibition of certain types of content by some countries may even be contested by complaints lodged with the WTO concerning TBTs (4); this is an issue which needs to be discussed during the current round of negotiations.

| 3.7 | The territoriality of law and the diversity of national legislation make it difficult to deal with the problem. The current state of technology also permits individuals to send each other all kinds of files directly (P2P, peer-to-peer), including encoded files whose contents cannot be checked; any computer or online network can be used to store or send increasingly sophisticated content, and it is possible to connect to any server without revealing one's identity or leaving a trail, and to use encryption technologies which are very resistant or even impossible to crack. |
| --- | --- |

3.7

The territoriality of law and the diversity of national legislation make it difficult to deal with the problem. The current state of technology also permits individuals to send each other all kinds of files directly (P2P, peer-to-peer), including encoded files whose contents cannot be checked; any computer or online network can be used to store or send increasingly sophisticated content, and it is possible to connect to any server without revealing one's identity or leaving a trail, and to use encryption technologies which are very resistant or even impossible to crack.

| 3.8 | As a result of the fashion for personal websites and blogs, the development of online shopping and financial services, the multitude of educational, informative, scientific and technical websites, and also online pornography and gambling, there are hundreds of millions of websites all over the world. However, to some extent these can be checked during the compilation of key words by search engines. Internet service providers can also monitor direct connections and websites which automatically forward contents such as spam; advertising and other unwanted messages which these are used for can be generally harmful (clogging up bandwidth, viruses) or can affect particular users such as children (moral or psychological ill-effects). |
| --- | --- |

3.8

As a result of the fashion for personal websites and blogs, the development of online shopping and financial services, the multitude of educational, informative, scientific and technical websites, and also online pornography and gambling, there are hundreds of millions of websites all over the world. However, to some extent these can be checked during the compilation of key words by search engines. Internet service providers can also monitor direct connections and websites which automatically forward contents such as spam; advertising and other unwanted messages which these are used for can be generally harmful (clogging up bandwidth, viruses) or can affect particular users such as children (moral or psychological ill-effects).

| 3.9 | The Internet is used by gangs, racketeers, virus authors, those engaged in piracy and industrial espionage, and other criminals. Stamping out this kind of crime is difficult, even though many countries have specialised police departments to identify, track and stop such activities, and it usually requires international cooperation, which should be encouraged more strongly. |
| --- | --- |

3.9

The Internet is used by gangs, racketeers, virus authors, those engaged in piracy and industrial espionage, and other criminals. Stamping out this kind of crime is difficult, even though many countries have specialised police departments to identify, track and stop such activities, and it usually requires international cooperation, which should be encouraged more strongly.

| 3.10 | How can criminal activities such as paedophile websites be dealt with? Although prohibiting such activities is unlikely to pose a legal problem, it is important to put in place the resources for tracking down criminal networks. It is also important to protect children from paedophiles searching for dates in online chat rooms, which are especially popular with young people. The question that needs to be answered here is not whether it is legitimate to prohibit and prosecute such activities, but what resources are needed to do so. |
| --- | --- |

3.10

How can criminal activities such as paedophile websites be dealt with? Although prohibiting such activities is unlikely to pose a legal problem, it is important to put in place the resources for tracking down criminal networks. It is also important to protect children from paedophiles searching for dates in online chat rooms, which are especially popular with young people. The question that needs to be answered here is not whether it is legitimate to prohibit and prosecute such activities, but what resources are needed to do so.

| 3.11 | Internet service providers (ISPs) are unable to monitor and check all the websites hosted by them or messages between users (which are private correspondence). However, if they are called on to do so by an authorised judge, police department, or authority responsible for protecting children, ISPs are required to immediately respond to requests or rulings concerning closure of such websites and identification of the persons using them, which necessitates preserving publication details of websites and information about visits to websites for a certain period. |
| --- | --- |

3.11

Internet service providers (ISPs) are unable to monitor and check all the websites hosted by them or messages between users (which are private correspondence). However, if they are called on to do so by an authorised judge, police department, or authority responsible for protecting children, ISPs are required to immediately respond to requests or rulings concerning closure of such websites and identification of the persons using them, which necessitates preserving publication details of websites and information about visits to websites for a certain period.

| 3.12 | However, credit card companies, search engines and Internet service providers should, for example, carry out sample audits to track down websites offering paedophile or other criminal content, using clues such as key words and geographical areas. They could then report these to the police. The same techniques should be used to identify ‘customers’ ordering ‘customised’ child pornography and snuff movies (5) by credit card. If necessary, legislation should require such audits. Internet search engines should also make it harder for surfers to find child pornography and other criminal content through the use of key words and phrases. |
| --- | --- |

3.12

However, credit card companies, search engines and Internet service providers should, for example, carry out sample audits to track down websites offering paedophile or other criminal content, using clues such as key words and geographical areas. They could then report these to the police. The same techniques should be used to identify ‘customers’ ordering ‘customised’ child pornography and snuff movies (5) by credit card. If necessary, legislation should require such audits. Internet search engines should also make it harder for surfers to find child pornography and other criminal content through the use of key words and phrases.

| 3.13 | For this to happen, there is a need for public authorities to be provided with appropriate resources and trained staff, for wide-ranging international cooperation, and for regulation at national, European and international levels which strikes a balance between, on the one hand, preserving the rights of Internet users and, on the other, preventing individuals and groups from using the Internet to send illegal content, and enabling recipients to opt to block inappropriate or harmful content. |
| --- | --- |

3.13

For this to happen, there is a need for public authorities to be provided with appropriate resources and trained staff, for wide-ranging international cooperation, and for regulation at national, European and international levels which strikes a balance between, on the one hand, preserving the rights of Internet users and, on the other, preventing individuals and groups from using the Internet to send illegal content, and enabling recipients to opt to block inappropriate or harmful content.

| 3.14 | In addition, to be effective, this programme should directly involve all Internet users, who need to be trained and informed of the precautions to take and the resources to use in order to protect themselves from being sent harmful or unwanted content, or from being used to forward such content. In the view of the Committee, one of the priorities of the action plan in regard to information and training should be to gain the support of users and to make them responsible for themselves and their dependants. A problem is presented by unregulated health sites for example. To protect themselves, companies should also focus on staff training and making e-commerce networks and websites secure. In addition, government administration and private and state institutions should apply similar security policies to ensure absolute confidentiality of data, and personal data in particular. Awareness raising should be accompanied by promotion of quality online content, and also encouragement of offline activities as alternatives to prolonged surfing or certain role-playing games which can have long-term effects on immature individuals. |
| --- | --- |

3.14

In addition, to be effective, this programme should directly involve all Internet users, who need to be trained and informed of the precautions to take and the resources to use in order to protect themselves from being sent harmful or unwanted content, or from being used to forward such content. In the view of the Committee, one of the priorities of the action plan in regard to information and training should be to gain the support of users and to make them responsible for themselves and their dependants. A problem is presented by unregulated health sites for example. To protect themselves, companies should also focus on staff training and making e-commerce networks and websites secure. In addition, government administration and private and state institutions should apply similar security policies to ensure absolute confidentiality of data, and personal data in particular. Awareness raising should be accompanied by promotion of quality online content, and also encouragement of offline activities as alternatives to prolonged surfing or certain role-playing games which can have long-term effects on immature individuals.

| 3.15 | Facilities should be in place to make it easy for users to report illegal content which they find on networks to specialised emergency call centres, recognised organisations or specialised police departments, in order to alert the authorities and enable them to take suitable measures when necessary. Parents should be alerted in countries where children are frequently abused for pornographic purposes, whether online or through other media, for example on the external borders of the European Union; such measures could be included in some RELEX cooperation programmes. |
| --- | --- |

3.15

Facilities should be in place to make it easy for users to report illegal content which they find on networks to specialised emergency call centres, recognised organisations or specialised police departments, in order to alert the authorities and enable them to take suitable measures when necessary. Parents should be alerted in countries where children are frequently abused for pornographic purposes, whether online or through other media, for example on the external borders of the European Union; such measures could be included in some RELEX cooperation programmes.

| 3.16 | While lending its support to the specific objectives of the programme, i.e. to enable users to report illegal content (hotlines), to develop technologies for filtering out unwanted content, to classify content, to combat spam, to encourage self-regulation of the sector, and raise awareness of safe Internet use, the Committee suggests in its specific comments some additional objectives which are worth considering. |
| --- | --- |

3.16

While lending its support to the specific objectives of the programme, i.e. to enable users to report illegal content (hotlines), to develop technologies for filtering out unwanted content, to classify content, to combat spam, to encourage self-regulation of the sector, and raise awareness of safe Internet use, the Committee suggests in its specific comments some additional objectives which are worth considering.

4.   Specific comments by the Committee

| 4.1 | In the past, the Committee has already urged the Commission to cut red tape in EU-funded programmes, so that micro-projects and local NGOs have easier access to funding. The Committee supports monitoring which focuses on the tangible results achieved under the programme and the effectiveness of the proposed solutions. Solutions should be disseminated in a less confidential manner. |
| --- | --- |

4.1

In the past, the Committee has already urged the Commission to cut red tape in EU-funded programmes, so that micro-projects and local NGOs have easier access to funding. The Committee supports monitoring which focuses on the tangible results achieved under the programme and the effectiveness of the proposed solutions. Solutions should be disseminated in a less confidential manner.

| 4.2 | The Committee believes that it is worth considering legislative measures contributing to the protection of end users, if possible within the framework of the programme, or otherwise through a new initiative by the Commission. |
| --- | --- |

4.2

The Committee believes that it is worth considering legislative measures contributing to the protection of end users, if possible within the framework of the programme, or otherwise through a new initiative by the Commission.

| 4.3 | Authors of Internet access software, server operating systems and firewall programmes should bear full responsibility for their products; it should be guaranteed to users that authors of such software make use of state-of-the-art technology and regularly update their products. Customer guarantees should be backed up by self-regulation, or, in the absence of this, legislation at European level. |
| --- | --- |

4.3

Authors of Internet access software, server operating systems and firewall programmes should bear full responsibility for their products; it should be guaranteed to users that authors of such software make use of state-of-the-art technology and regularly update their products. Customer guarantees should be backed up by self-regulation, or, in the absence of this, legislation at European level.

| 4.4 | Internet access providers should offer (as many of them already do) easy-to-use anti-virus and spam filtering facilities for e-mail and attached files. This could confer a commercial advantage on providers who take protection of their customers seriously. Given that children are often more knowledgeable about Internet use than their parents, spam filters, virus screens, firewalls and parental control systems should be pre-installed, and sufficiently user-friendly not to require any specialised knowledge. |
| --- | --- |

4.4

Internet access providers should offer (as many of them already do) easy-to-use anti-virus and spam filtering facilities for e-mail and attached files. This could confer a commercial advantage on providers who take protection of their customers seriously. Given that children are often more knowledgeable about Internet use than their parents, spam filters, virus screens, firewalls and parental control systems should be pre-installed, and sufficiently user-friendly not to require any specialised knowledge.

| 4.5 | The programme should also promote research into specialised software and other means of checking how attack-resistant the code of various filtering and blocking software is, as well as encouraging or possibly requiring producers to promptly supply patches for all security flaws which have been identified or reported, and to develop the effectiveness of firewall hardware and software, and methods for filtering and identifying the actual origin of content. |
| --- | --- |

4.5

The programme should also promote research into specialised software and other means of checking how attack-resistant the code of various filtering and blocking software is, as well as encouraging or possibly requiring producers to promptly supply patches for all security flaws which have been identified or reported, and to develop the effectiveness of firewall hardware and software, and methods for filtering and identifying the actual origin of content.

| 4.6 | The Committee would have liked to see the evaluation of the effectiveness and results achieved by the previous Safer Internet Programme, classed according to the type of problems which the projects dealt with, disseminated more widely. All links to funded projects should be kept active, and those concerned should be made aware of them. The Commission website should also include information on initiatives in Member States and third countries in order to promote the transfer and exchange of knowledge and effective cooperation. |
| --- | --- |

4.6

The Committee would have liked to see the evaluation of the effectiveness and results achieved by the previous Safer Internet Programme, classed according to the type of problems which the projects dealt with, disseminated more widely. All links to funded projects should be kept active, and those concerned should be made aware of them. The Commission website should also include information on initiatives in Member States and third countries in order to promote the transfer and exchange of knowledge and effective cooperation.

| 4.7 | It is perfectly possible to take legal measures. Internet service providers, credit card companies and search engines are all capable of being regulated, and some have already introduced self-regulation. Rigorous criminal sanctions should act as an effective deterrent against websites promoting terrorism, racism, suicide or child pornography. International action should be undertaken on as wide a scale as possible to identify and trace such websites so that whenever possible they can be closed down; failing this, negotiations on closure can be initiated with host countries. |
| --- | --- |

4.7

It is perfectly possible to take legal measures. Internet service providers, credit card companies and search engines are all capable of being regulated, and some have already introduced self-regulation. Rigorous criminal sanctions should act as an effective deterrent against websites promoting terrorism, racism, suicide or child pornography. International action should be undertaken on as wide a scale as possible to identify and trace such websites so that whenever possible they can be closed down; failing this, negotiations on closure can be initiated with host countries.

5.   Conclusions

While supporting extension of the Safer Internet Plus Programme, and having initially called for its introduction, the Committee believes that the extent to which especially children are threatened with abuse, and the gravity of such threats, urgently necessitate additional legislative measures and appropriate practical steps in the following areas:

| — | there should be a general obligation incumbent on all operators to protect children and users in general, particularly those who are most at risk; |
| --- | --- |

—

there should be a general obligation incumbent on all operators to protect children and users in general, particularly those who are most at risk;

| — | filter systems should be installed by default; |
| --- | --- |

—

filter systems should be installed by default;

| — | safety warnings should be clearly displayed on all home pages and portals providing access to chat rooms; |
| --- | --- |

—

safety warnings should be clearly displayed on all home pages and portals providing access to chat rooms;

| — | there should be support for organisations setting up hot lines for reporting websites and online activities which are harmful to children; |
| --- | --- |

—

there should be support for organisations setting up hot lines for reporting websites and online activities which are harmful to children;

| — | the use of credit cards for ordering child pornography and other criminal content on the Internet and for money laundering operations should be prevented; |
| --- | --- |

—

the use of credit cards for ordering child pornography and other criminal content on the Internet and for money laundering operations should be prevented;

| — | parents, educators and authorities in countries where abuse of children for pornographic purposes has become a cause for concern should be alerted through targeted measures; |
| --- | --- |

—

parents, educators and authorities in countries where abuse of children for pornographic purposes has become a cause for concern should be alerted through targeted measures;

| — | more action is needed to tackle the links between exploitation of children for pornographic purposes and organised crime; |
| --- | --- |

—

more action is needed to tackle the links between exploitation of children for pornographic purposes and organised crime;

| — | systems should be set up to identify and provide information on harmful content, and to remove racist content; online scams and sales of substances which pose a health risk should be publicised in order to protect vulnerable or ill-informed individuals; |
| --- | --- |

—

systems should be set up to identify and provide information on harmful content, and to remove racist content; online scams and sales of substances which pose a health risk should be publicised in order to protect vulnerable or ill-informed individuals;

| — | there should be international cooperation and joint regulation to combat spam more effectively; |
| --- | --- |

—

there should be international cooperation and joint regulation to combat spam more effectively;

| — | there is a need for international cooperation (improving the early warning system) and deterrent criminal sanctions for creators of computer viruses and for illegal use of private and public networks for criminal purposes (intrusion with a view to using networks for industrial espionage, abuse of bandwidth, and other forms of abuse). |
| --- | --- |

—

there is a need for international cooperation (improving the early warning system) and deterrent criminal sanctions for creators of computer viruses and for illegal use of private and public networks for criminal purposes (intrusion with a view to using networks for industrial espionage, abuse of bandwidth, and other forms of abuse).

Brussels, 16 December 2004.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  http://www.europa.eu.int/information_society/programmes/iap/index_en.htm

1

(2)  Topics covered previously by the Committee

2

(3)  EESC opinions on A programme for child protection on the Internet, rapporteur: Ms Davison, O.J. C48, 21/02/2002, on the Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions - Network and Information Security: Proposal for a European Policy Approach, rapporteur: Mr Retureau, O.J. C48 of 21/02/2002 and the Green Paper on the protection of minors and human dignity in audiovisual and information services, rapporteur: Ms Barrow, O.J. C 287, 22/09/1997.

3

A programme for child protection on the Internet

Ms Davison

Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions - Network and Information Security: Proposal for a European Policy Approach

Mr Retureau

Green Paper on the protection of minors and human dignity in audiovisual and information services

Ms Barrow

(4)  ‘Technical Barriers to Trade’. Agreements on technical barriers to the exchange and provision of services. See e.g. USA vs. Antigua and Barbuda - offshore gambling; appeal against the WTO panel decision (http://www.wto.org/english/tratop_e/dispu_e/distabase_wto_members1_e.htm), Document 03-4429, page WT/DS285/3, 26/08/2003. Case pending.

4

(5)  Films in which actual violence, torture and murders are recorded.

5

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| 28.6.2005 | EN | Official Journal of the European Union | C 157/141 |
| --- | --- | --- | --- |

28.6.2005

EN

Official Journal of the European Union

C 157/141

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Opinion of the European Economic and Social Committee on ‘Europe's accessibility by sea in the future: developments and how to anticipate them’

(2005/C 157/25)

On 1 July 2004 the European Economic and Social Committee, acting under Rule 29(2) of its Rules of Procedure, decided to draw up an opinion on: ‘Europe's accessibility by sea in the future: developments and how to anticipate them’.

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 2004. The rapporteur was Mr Simons.

At its 413th plenary session on 15 and 16 December 2004 (meeting of 16 December 2004), the European Economic and Social Committee adopted the following opinion by 124 votes in favour, with two abstentions:

1.   Introduction

| 1.1 | Maritime transport to, from and between the countries of the European Union is of cardinal importance. Each year more than 3,500 million tonnes of cargo are imported and exported via the more than 1,000 seaports of the EU. In addition, about 350 million passengers travel annually by ferry and cruise ship. |
| --- | --- |

1.1

Maritime transport to, from and between the countries of the European Union is of cardinal importance. Each year more than 3,500 million tonnes of cargo are imported and exported via the more than 1,000 seaports of the EU. In addition, about 350 million passengers travel annually by ferry and cruise ship.

| 1.2 | More than 90 % of Europe's trade with the rest of the world is routed via its seaports. Moreover, 40 % of goods transported within Europe are likewise conveyed by sea. From the energy and environmental points of view, maritime transport is rated highly. Compared with road transport it can be 13 times less polluting as far as CO2 and particle emissions are concerned and even 19 times less so with regard to CHx (1). |
| --- | --- |

1.2

More than 90 % of Europe's trade with the rest of the world is routed via its seaports. Moreover, 40 % of goods transported within Europe are likewise conveyed by sea. From the energy and environmental points of view, maritime transport is rated highly. Compared with road transport it can be 13 times less polluting as far as CO2 and particle emissions are concerned and even 19 times less so with regard to CHx (1).

| 1.3 | Around 250,000 people are employed in the ports of Europe or in the directly related services sector. The entire maritime sector provides work for about 2.5 million people in Europe and generates approximately 111 billion euros in added value. The importance of maritime transport for Europe should therefore be obvious. |
| --- | --- |

1.3

Around 250,000 people are employed in the ports of Europe or in the directly related services sector. The entire maritime sector provides work for about 2.5 million people in Europe and generates approximately 111 billion euros in added value. The importance of maritime transport for Europe should therefore be obvious.

| 1.4 | The volume of maritime transport in, from and to Europe continues to grow each year. It is consequently of great importance that the EU should keep a close eye on the growth of these maritime flows and encourage — or where necessary itself take — appropriate measures at an early stage in order to be able to manage the growth. |
| --- | --- |

1.4

The volume of maritime transport in, from and to Europe continues to grow each year. It is consequently of great importance that the EU should keep a close eye on the growth of these maritime flows and encourage — or where necessary itself take — appropriate measures at an early stage in order to be able to manage the growth.

| 1.5 | Maritime transport can be divided into different types and categories, depending on: the purpose of the voyage (leisure or commercial); how it is organised (tramp or liner shipping); whether deep sea or short sea shipping; and the type of load (passenger or goods transport). Commercial transport and the four categories mentioned above have a particular impact on the single market and are the subject of this opinion. |
| --- | --- |

1.5

Maritime transport can be divided into different types and categories, depending on: the purpose of the voyage (leisure or commercial); how it is organised (tramp or liner shipping); whether deep sea or short sea shipping; and the type of load (passenger or goods transport). Commercial transport and the four categories mentioned above have a particular impact on the single market and are the subject of this opinion.

| 1.6 | In passenger transport, the most obvious difference is between cruise ships and ferries/ roll- on/roll -off services. The transport of goods by sea can be sub-divided depending on type of load:






  — | Dry bulk cargo. Carried as bulk cargo in special bulk carriers, e.g. ore, coal and grain. |
| --- | --- | --- |

1.6

In passenger transport, the most obvious difference is between cruise ships and ferries/ roll- on/roll -off services. The transport of goods by sea can be sub-divided depending on type of load:

—

Dry bulk cargo. Carried as bulk cargo in special bulk carriers, e.g. ore, coal and grain.

| — | Liquid bulk cargo. Transported in tankers, e.g. crude oil, oil products and chemicals. |
| --- | --- |

—

Liquid bulk cargo. Transported in tankers, e.g. crude oil, oil products and chemicals.

| — | Mixed cargo. Divided into roll- on/roll -off cargo, other mixed cargo and containers. |
| --- | --- |

—

Mixed cargo. Divided into roll- on/roll -off cargo, other mixed cargo and containers.

2.   Outline of the market situation in the relevant categories

| 2.1 | Cruise and ferry roll -on/roll- off shipping are two radically different types of passenger transport. Cruising is a kind of tourism by ship. Ferries, on the other hand, provide transport from A to B and, as roll- on/roll- off services, may also be used to transport goods. A total of 350 million passengers travel by sea in the EU, including some 4 million by cruise ship. |
| --- | --- |

2.1

Cruise and ferry roll -on/roll- off shipping are two radically different types of passenger transport. Cruising is a kind of tourism by ship. Ferries, on the other hand, provide transport from A to B and, as roll- on/roll- off services, may also be used to transport goods. A total of 350 million passengers travel by sea in the EU, including some 4 million by cruise ship.

| 2.2 | The biggest European cruise ports are, Barcelona (832,000 passengers), Palma de Majorca (665,000), Venice (634,000), Naples (534,000) Southampton (533,000) and Civitavecchia (520,000).
  The biggest cruise ship is the Queen Mary 2, launched this year, which is 345 metres long and 41 metres broad, and has a 10.3 metre draught. The Queen Mary 2 is about as long as the biggest bulk carriers and container ships. However, cruise ships have more restricted draught than container and bulk ships. Larger ports have no real trouble in providing access for the small number of ships involved. |
| --- | --- |

2.2

The biggest European cruise ports are, Barcelona (832,000 passengers), Palma de Majorca (665,000), Venice (634,000), Naples (534,000) Southampton (533,000) and Civitavecchia (520,000).

The biggest cruise ship is the Queen Mary 2, launched this year, which is 345 metres long and 41 metres broad, and has a 10.3 metre draught. The Queen Mary 2 is about as long as the biggest bulk carriers and container ships. However, cruise ships have more restricted draught than container and bulk ships. Larger ports have no real trouble in providing access for the small number of ships involved.

| 2.3 | Ferries usually also provide roll- on/roll- off goods transport and are combined passenger-cargo ships. In the EU, ferries link the European mainland and the UK, Ireland, Scandinavia, the Baltic States and the Canary Islands, and the Mediterranean in particular has an extensive ferry network including destinations outside the EU. The biggest ferry/roll- on/roll-off ships are the Pride of Rotterdam and the Pride of Hull — sister ships of the P&O North Sea Ferries fleet. These ships are 215 metres long, 32 metres wide, but their draught is only 6.3 metres. |
| --- | --- |

2.3

Ferries usually also provide roll- on/roll- off goods transport and are combined passenger-cargo ships. In the EU, ferries link the European mainland and the UK, Ireland, Scandinavia, the Baltic States and the Canary Islands, and the Mediterranean in particular has an extensive ferry network including destinations outside the EU. The biggest ferry/roll- on/roll-off ships are the Pride of Rotterdam and the Pride of Hull — sister ships of the P&O North Sea Ferries fleet. These ships are 215 metres long, 32 metres wide, but their draught is only 6.3 metres.

| 2.4 | Apart from occasional local difficulties, physical access to Europe by vessels of this category does not, for the moment, require any further structural consideration at European level. These categories are thus already assured future European access, which enables further growth in this sector as well. |
| --- | --- |

2.4

Apart from occasional local difficulties, physical access to Europe by vessels of this category does not, for the moment, require any further structural consideration at European level. These categories are thus already assured future European access, which enables further growth in this sector as well.

| 2.5 | Dry and liquid bulk cargoes are of great importance for supplying European industries. Dry and liquid bulk transport in Europe experienced, especially in the 1960s and 1970s, a period of enormous growth in terms of expansion in load volumes and size of ship. |
| --- | --- |

2.5

Dry and liquid bulk cargoes are of great importance for supplying European industries. Dry and liquid bulk transport in Europe experienced, especially in the 1960s and 1970s, a period of enormous growth in terms of expansion in load volumes and size of ship.

| 2.6 | In the case of liquid bulk cargo, the closure of the Suez Canal following the Six-Day War and the continued growth in demand for crude oil resulted in an increase in maximum ship size from 85,000 DWT in 1968 to 560,000 DWT (2) in 1976. A number of European ports took steps to allow such ships to dock there. Once the first oil crisis struck in 1973, these ships ceased to be profitable and, ultimately, they were scrapped. The new-build tankers of the 1980s and 1990s did not continue the trend for bigger and bigger ships. The size of large tankers is stable at around 300,000 DWT. Not until 2002 were, once more, a few 400,000 DWT Ultra Large Crude Carriers (ULCCs) built; there is still adequate port capacity to cater for them. |
| --- | --- |

2.6

In the case of liquid bulk cargo, the closure of the Suez Canal following the Six-Day War and the continued growth in demand for crude oil resulted in an increase in maximum ship size from 85,000 DWT in 1968 to 560,000 DWT (2) in 1976. A number of European ports took steps to allow such ships to dock there. Once the first oil crisis struck in 1973, these ships ceased to be profitable and, ultimately, they were scrapped. The new-build tankers of the 1980s and 1990s did not continue the trend for bigger and bigger ships. The size of large tankers is stable at around 300,000 DWT. Not until 2002 were, once more, a few 400,000 DWT Ultra Large Crude Carriers (ULCCs) built; there is still adequate port capacity to cater for them.

| 2.7 | Dry bulk cargo transport experienced a similar development from the late 1960s onwards. Ships in this category grew in size, culminating in the 365,000 DWT Berge Stahl, which has been transporting iron ore from Brazil to Rotterdam for the past eighteen years and which, with its 23 metre (76 foot) draught, has no access anywhere else in the world. Since the 1980s, however, the vast majority of new bulk carriers have been between 150,000 and 175,000 DWT. Dry and liquid bulk transport operations have thus become fully developed markets and the European seaports they use have already adapted — even to the biggest dry bulk cargo ship in the world. No further significant expansion in loads or size of ship is now to be expected. These categories are thus also already assured future European access. |
| --- | --- |

2.7

Dry bulk cargo transport experienced a similar development from the late 1960s onwards. Ships in this category grew in size, culminating in the 365,000 DWT Berge Stahl, which has been transporting iron ore from Brazil to Rotterdam for the past eighteen years and which, with its 23 metre (76 foot) draught, has no access anywhere else in the world. Since the 1980s, however, the vast majority of new bulk carriers have been between 150,000 and 175,000 DWT. Dry and liquid bulk transport operations have thus become fully developed markets and the European seaports they use have already adapted — even to the biggest dry bulk cargo ship in the world. No further significant expansion in loads or size of ship is now to be expected. These categories are thus also already assured future European access.

| 2.8 | Mixed cargo is transported in general cargo and multi-purpose ships. Since the rise of the container, the mixed cargo market has declined steeply and is limited to niche markets such as Africa and reefers in the specialised fruit trade. The ships are restricted to around 40,000 DWT and ship size is no longer increasing. |
| --- | --- |

2.8

Mixed cargo is transported in general cargo and multi-purpose ships. Since the rise of the container, the mixed cargo market has declined steeply and is limited to niche markets such as Africa and reefers in the specialised fruit trade. The ships are restricted to around 40,000 DWT and ship size is no longer increasing.

| 2.9 | Container transport, on the other hand, is currently undergoing a period of unprecedented structural growth, in terms of both volume and ship size. In 1966, the Fairland was the first ship to transport intercontinental containers from the US to Europe. The Fairland — part of the Sea-Land fleet — was able to transport 266 35-foot containers. Today, with a capacity of 8,500 TEU (twenty-foot equivalent units), the CSCL Europe is the biggest container ship in the world;, although 9,200-TEU ships are already under construction. The CSCL Europe is 334 metres long and 42.8 metres broad and has a maximum draught of 14.5 metres.
  The following graph shows the biggest container ship built in the year in question. The spectacular growth — particularly since 1995 — is astounding. At the moment, orders have been placed for 156 ships with a capacity of more than 7,000 TEU. |
| --- | --- |

2.9

Container transport, on the other hand, is currently undergoing a period of unprecedented structural growth, in terms of both volume and ship size. In 1966, the Fairland was the first ship to transport intercontinental containers from the US to Europe. The Fairland — part of the Sea-Land fleet — was able to transport 266 35-foot containers. Today, with a capacity of 8,500 TEU (twenty-foot equivalent units), the CSCL Europe is the biggest container ship in the world;, although 9,200-TEU ships are already under construction. The CSCL Europe is 334 metres long and 42.8 metres broad and has a maximum draught of 14.5 metres.

The following graph shows the biggest container ship built in the year in question. The spectacular growth — particularly since 1995 — is astounding. At the moment, orders have been placed for 156 ships with a capacity of more than 7,000 TEU.

Image

| 2.10 | Shipyard orders are expected soon for 10,000-TEU and even as much as 12,000-TEU ships, which would still require only a single engine. Calculations have even been made (3) as to the potential upper limit. Because of the rock formations in the Malacca straits — a vital part of the Asia trade route — a figure of 18,000 TEU has been arrived at, although the vessels in question would be double-engined, significantly raising the transport price per container. Intercontinental container ships will therefore not necessarily grow to maximum technical and geographical capacity, as has been seen during the last few decades in the case of intercontinental transport by ship of dry and liquid bulk goods. |
| --- | --- |

2.10

Shipyard orders are expected soon for 10,000-TEU and even as much as 12,000-TEU ships, which would still require only a single engine. Calculations have even been made (3) as to the potential upper limit. Because of the rock formations in the Malacca straits — a vital part of the Asia trade route — a figure of 18,000 TEU has been arrived at, although the vessels in question would be double-engined, significantly raising the transport price per container. Intercontinental container ships will therefore not necessarily grow to maximum technical and geographical capacity, as has been seen during the last few decades in the case of intercontinental transport by ship of dry and liquid bulk goods.

| 2.11 | Transport of intercontinental containers to and from European ports has grown particularly fast over the last few years. One consequence of the increasing globalisation and associated rise of China as a producer country is that the north-west European container ports of the Hamburg — Le Havre range have experienced structural growth of more than 10 % per year over the past few years. Mediterranean ports have also expanded very fast. |
| --- | --- |

2.11

Transport of intercontinental containers to and from European ports has grown particularly fast over the last few years. One consequence of the increasing globalisation and associated rise of China as a producer country is that the north-west European container ports of the Hamburg — Le Havre range have experienced structural growth of more than 10 % per year over the past few years. Mediterranean ports have also expanded very fast.

| 2.12 | Big container ships, for instance from the Far East, only call at a limited number of European ports. On the one hand, this is because they are too big for many ports and, on the other, because these ships are so expensive that they do not want to waste too much time in port. In Europe, the biggest ships generally call at two or three Mediterranean ports and around four in the north west of the continent. The containers are then dispatched from these large container ports across Europe — by sea, using an extensive feeder network, or overland, increasingly by rail or inland waterway. |
| --- | --- |

2.12

Big container ships, for instance from the Far East, only call at a limited number of European ports. On the one hand, this is because they are too big for many ports and, on the other, because these ships are so expensive that they do not want to waste too much time in port. In Europe, the biggest ships generally call at two or three Mediterranean ports and around four in the north west of the continent. The containers are then dispatched from these large container ports across Europe — by sea, using an extensive feeder network, or overland, increasingly by rail or inland waterway.

| 2.13 | However, in the main European container ports (4) at any rate, congestion is increasingly becoming an issue in the handling of these growing container flows in port terminals and in subsequent transit. In addition to terminal-based measures to remedy this in the port itself (including expansion), efficient pre- and post-transport procedures are also needed, both at sea and on land. |
| --- | --- |

2.13

However, in the main European container ports (4) at any rate, congestion is increasingly becoming an issue in the handling of these growing container flows in port terminals and in subsequent transit. In addition to terminal-based measures to remedy this in the port itself (including expansion), efficient pre- and post-transport procedures are also needed, both at sea and on land.

| 2.14 | The new security requirements are also a major concern for container ports, in terms of keeping the transhipment and transport process as smooth as possible despite the increase in checks. |
| --- | --- |

2.14

The new security requirements are also a major concern for container ports, in terms of keeping the transhipment and transport process as smooth as possible despite the increase in checks.

| 2.15 | Given the increase in size described in points 2.9 and 2.10 above, deep sea container flows will not spread to other European harbours via the shipping market. This is largely due to physical features such as insufficient draught, inadequate facilities, excessive travelling times and insufficient load to make the extra port call economically viable (5). This is, nevertheless, not a permanent state of affairs, as economic dynamics can provide a boost for smaller harbours towards more activity. |
| --- | --- |

2.15

Given the increase in size described in points 2.9 and 2.10 above, deep sea container flows will not spread to other European harbours via the shipping market. This is largely due to physical features such as insufficient draught, inadequate facilities, excessive travelling times and insufficient load to make the extra port call economically viable (5). This is, nevertheless, not a permanent state of affairs, as economic dynamics can provide a boost for smaller harbours towards more activity.

3.   Links to fore- and hinterland

| 3.1 | Most containers shipped into European ports must be moved out of them again for onward transportation. Some are forwarded by sea in small vessels to other ports. The majority enter the European hinterland by road, inland waterway or railway. This means that the capacity of hinterland connections must keep pace with the growth in container traffic. While not ruling out road transport where necessary, everything possible must be done, in line with EU policy, to encourage the use of inland waterways, railways and short sea/feeder ships. |
| --- | --- |

3.1

Most containers shipped into European ports must be moved out of them again for onward transportation. Some are forwarded by sea in small vessels to other ports. The majority enter the European hinterland by road, inland waterway or railway. This means that the capacity of hinterland connections must keep pace with the growth in container traffic. While not ruling out road transport where necessary, everything possible must be done, in line with EU policy, to encourage the use of inland waterways, railways and short sea/feeder ships.

| 3.2 | Intra-European short sea transport in particular therefore receives strong support from the EU. As part of the new trans-European transport networks, this also includes the Motorways of the Sea programme that still requires further fleshing-out. More particularly, according to new proposals (16/7/2004) the TEN-T budget would amount to EUR 20.35 billion, whilst the MARCO POLO II Programme would include motorways of the sea and traffic avoidance measures with a budget up to EUR 740 million. |
| --- | --- |

3.2

Intra-European short sea transport in particular therefore receives strong support from the EU. As part of the new trans-European transport networks, this also includes the Motorways of the Sea programme that still requires further fleshing-out. More particularly, according to new proposals (16/7/2004) the TEN-T budget would amount to EUR 20.35 billion, whilst the MARCO POLO II Programme would include motorways of the sea and traffic avoidance measures with a budget up to EUR 740 million.

| 3.3 | The concept of ‘Motorways of the Sea’ (MotS) has been developed by the European Commission as a supplement to other modalities that are being supported within the trans-European network programme. A MotS provides a strong alternative to road traffic within Europe on an equal basis, eliminating unnecessary procedures and allowing for efficient inter-modal connections. The programme is focused on limiting congestion on the European transit routes and on connecting remote regions and island states. |
| --- | --- |

3.3

The concept of ‘Motorways of the Sea’ (MotS) has been developed by the European Commission as a supplement to other modalities that are being supported within the trans-European network programme. A MotS provides a strong alternative to road traffic within Europe on an equal basis, eliminating unnecessary procedures and allowing for efficient inter-modal connections. The programme is focused on limiting congestion on the European transit routes and on connecting remote regions and island states.

| 3.4 | In order to promote short sea shipping itself, improvements can be made in ports and in inter-port collaboration. The key to success is high frequency of services and thus high volume. Market potential and commercial exploration are therefore important for the viability of short-sea shipping connections. |
| --- | --- |

3.4

In order to promote short sea shipping itself, improvements can be made in ports and in inter-port collaboration. The key to success is high frequency of services and thus high volume. Market potential and commercial exploration are therefore important for the viability of short-sea shipping connections.

| 3.5 | Internal transport within the EU also requires a great deal of attention. This is already clear from European transport policy — which, in this context, also includes the appropriate infrastructure — as it strives to boost efficiency and effectiveness by establishing, within certain parameters, a free market that also reflects other social values such as sustainability. |
| --- | --- |

3.5

Internal transport within the EU also requires a great deal of attention. This is already clear from European transport policy — which, in this context, also includes the appropriate infrastructure — as it strives to boost efficiency and effectiveness by establishing, within certain parameters, a free market that also reflects other social values such as sustainability.

| 3.6 | To achieve that, appropriate rules are already in place — and are being applied — in the road transport and inland waterway sectors, and the process is now at last also starting to get under way across the entire European rail network. Speedier progress on this front would be welcome, not least given the container trends described above. |
| --- | --- |

3.6

To achieve that, appropriate rules are already in place — and are being applied — in the road transport and inland waterway sectors, and the process is now at last also starting to get under way across the entire European rail network. Speedier progress on this front would be welcome, not least given the container trends described above.

4.   Categories of port

| 4.1 | In the EU decision-making process (6), a distinction is made between three categories of TEN ports only:






  a: | international seaports with an annual transhipment volume of no less than 1.5 million tonnes or 200,000 passengers; |
| --- | --- | --- |

4.1

In the EU decision-making process (6), a distinction is made between three categories of TEN ports only:

a:

international seaports with an annual transhipment volume of no less than 1.5 million tonnes or 200,000 passengers;

| b: | seaports with an annual transhipment volume of no less than 0.5 million tonnes or between 100,000 and 199,000 passengers and equipped with installations for short sea traffic; |
| --- | --- |

b:

seaports with an annual transhipment volume of no less than 0.5 million tonnes or between 100,000 and 199,000 passengers and equipped with installations for short sea traffic;

| c: | regional seaports not fulfilling criteria A and B and situated on islands or in peripheral regions. |
| --- | --- |

c:

regional seaports not fulfilling criteria A and B and situated on islands or in peripheral regions.

| 4.2 | So far, this distinction has not resulted in any substantively different approaches being adopted. Indeed, the revamped TEN transport priority list makes no mention of ports, even in connection with the Motorways of the Sea priority. With some exceptions, there is, for the time being, no support among either the authorities or industry for the use of more detailed criteria when selecting ports for specific EU co-financing of the massive investments required by deep sea container ports — largely for transit cargo that adds relatively little to the value of the ports themselves.
  The EESC supports recent calls from the Conference of Peripheral Maritime Regions of Europe (20/7/2004) to balance the notions of Motorways of the Sea and accessibility by taking into account small and medium-sized ports as well in this exercise. |
| --- | --- |

4.2

So far, this distinction has not resulted in any substantively different approaches being adopted. Indeed, the revamped TEN transport priority list makes no mention of ports, even in connection with the Motorways of the Sea priority. With some exceptions, there is, for the time being, no support among either the authorities or industry for the use of more detailed criteria when selecting ports for specific EU co-financing of the massive investments required by deep sea container ports — largely for transit cargo that adds relatively little to the value of the ports themselves.

The EESC supports recent calls from the Conference of Peripheral Maritime Regions of Europe (20/7/2004) to balance the notions of Motorways of the Sea and accessibility by taking into account small and medium-sized ports as well in this exercise.

| 4.3 | In the light of the above, the EESC strongly urges the Commission to investigate the problem of congestion in EU ports and particularly container ports and explore possible ways to facilitate it. |
| --- | --- |

4.3

In the light of the above, the EESC strongly urges the Commission to investigate the problem of congestion in EU ports and particularly container ports and explore possible ways to facilitate it.

| 4.4 | Nonetheless, sustained growth is presenting a number of particular challenges to Europe's larger container ports (7) which are distributed fairly evenly over the Mediterranean and the north-west of the continent. These include both really large and medium-sized ports and they are, for the most part, not merely container ports, but often also important ports for the transhipment of bulk and other mixed cargo. These challenges are as follows:






  — | How soon can additional transhipment facilities be built, on both sea and land, while meeting the current stringent rules with respect to noise, the environment and external security? |
| --- | --- | --- |

4.4

Nonetheless, sustained growth is presenting a number of particular challenges to Europe's larger container ports (7) which are distributed fairly evenly over the Mediterranean and the north-west of the continent. These include both really large and medium-sized ports and they are, for the most part, not merely container ports, but often also important ports for the transhipment of bulk and other mixed cargo. These challenges are as follows:

—

How soon can additional transhipment facilities be built, on both sea and land, while meeting the current stringent rules with respect to noise, the environment and external security?

| — | How can ports adapt their accessibility by sea, the depth of quays and size of transhipment equipment to accommodate the upcoming increase in 8,000+-TEU ships? |
| --- | --- |

—

How can ports adapt their accessibility by sea, the depth of quays and size of transhipment equipment to accommodate the upcoming increase in 8,000+-TEU ships?

| — | How can it be ensured that connections between a port and its European hinterland have sufficient capacity to manage the increasing flow of container traffic? |
| --- | --- |

—

How can it be ensured that connections between a port and its European hinterland have sufficient capacity to manage the increasing flow of container traffic?

| — | How can logistical processes in ports be kept as flexible as possible with increasing security checks? |
| --- | --- |

—

How can logistical processes in ports be kept as flexible as possible with increasing security checks?

| 4.5 | In order to stay competitive on the world stage- one of the objectives of the Lisbon agenda- it is in Europe's interest that the ports in question really do take appropriate steps to tackle and resolve these challenges. The European Union should also seek to exert its influence on that front wherever possible. |
| --- | --- |

4.5

In order to stay competitive on the world stage- one of the objectives of the Lisbon agenda- it is in Europe's interest that the ports in question really do take appropriate steps to tackle and resolve these challenges. The European Union should also seek to exert its influence on that front wherever possible.

| 4.6 | Ports, and in particular those alluded to in this point, are also waterways to the EU, which has security implications. The EESC recalls its earlier opinions asking the European Commission to draw up an overall impact study on the cost of security for ports and to devise an EU scheme for their financing. |
| --- | --- |

4.6

Ports, and in particular those alluded to in this point, are also waterways to the EU, which has security implications. The EESC recalls its earlier opinions asking the European Commission to draw up an overall impact study on the cost of security for ports and to devise an EU scheme for their financing.

| 4.7 | Extra attention for the big container ports is not inconsistent with the promotion of short-sea routes and the Motorway of the Sea concept. Precisely the major container ports serving the deep sea routes are, in many cases, also the leading short sea ports. What is more, these ports possess the necessary volume, infrastructure and hinterland to be able to generate sufficient cargo and thus, thanks to the Motorways of the Sea, to help the other short sea ports grow. |
| --- | --- |

4.7

Extra attention for the big container ports is not inconsistent with the promotion of short-sea routes and the Motorway of the Sea concept. Precisely the major container ports serving the deep sea routes are, in many cases, also the leading short sea ports. What is more, these ports possess the necessary volume, infrastructure and hinterland to be able to generate sufficient cargo and thus, thanks to the Motorways of the Sea, to help the other short sea ports grow.

5.   Practical EU action

| 5.1 | Steps must be taken to ensure that the effectiveness and optimum impact of the major investments now being made — or shortly to be made — by larger container ports to tackle and resolve the challenges outlined in point 4.3 above are not compromised by distortions of competition, poor infrastructure or inefficient transport policy. Given the close connection between container ports and short sea shipping via the feeder lines, Motorways of the Sea and hinterland links, such an approach has far-reaching consequences and benefits the entire transport market. |
| --- | --- |

5.1

Steps must be taken to ensure that the effectiveness and optimum impact of the major investments now being made — or shortly to be made — by larger container ports to tackle and resolve the challenges outlined in point 4.3 above are not compromised by distortions of competition, poor infrastructure or inefficient transport policy. Given the close connection between container ports and short sea shipping via the feeder lines, Motorways of the Sea and hinterland links, such an approach has far-reaching consequences and benefits the entire transport market.

| 5.2 | First and foremost, therefore, the EU should also ensure that a sound environment is in place for fair competition, or what is also called a ‘level playing field’. Ports — by which we specifically mean the economic players of ports — must be able to compete with each other on a fair basis; this also applies to competition both within and between seaports. |
| --- | --- |

5.2

First and foremost, therefore, the EU should also ensure that a sound environment is in place for fair competition, or what is also called a ‘level playing field’. Ports — by which we specifically mean the economic players of ports — must be able to compete with each other on a fair basis; this also applies to competition both within and between seaports.

| 5.3 | In the light of the experience of the other goods transport sectors that have already taken steps in that direction, some degree of liberalisation in the seaport market would be beneficial and a good way to make the best possible use of the available options. At the very end of its term of office, the outgoing Commission, acting on a proposal of transport commissioner Ms de Palacio, submitted to the Council a new directive on access to the port services market. That will again (8) give the Committee the opportunity to issue a detailed opinion. Hence, this issue is not addressed in the present opinion. |
| --- | --- |

5.3

In the light of the experience of the other goods transport sectors that have already taken steps in that direction, some degree of liberalisation in the seaport market would be beneficial and a good way to make the best possible use of the available options. At the very end of its term of office, the outgoing Commission, acting on a proposal of transport commissioner Ms de Palacio, submitted to the Council a new directive on access to the port services market. That will again (8) give the Committee the opportunity to issue a detailed opinion. Hence, this issue is not addressed in the present opinion.

| 5.4 | There must be much more clarity about what is and what is not permissible, especially in the field of state aid. For instance, to what extent may a seaport's infrastructure — which is directly related to the increasing size of ships — be subsidised by the authorities? National governments and port managers need to know what the situation is. We urgently need clear guidelines on state aid. The EESC takes note of the Commission's intention to produce guidelines on state aid to ports and urges it to do so speedily irrespective of adoption of the proposed new Directive on ports. |
| --- | --- |

5.4

There must be much more clarity about what is and what is not permissible, especially in the field of state aid. For instance, to what extent may a seaport's infrastructure — which is directly related to the increasing size of ships — be subsidised by the authorities? National governments and port managers need to know what the situation is. We urgently need clear guidelines on state aid. The EESC takes note of the Commission's intention to produce guidelines on state aid to ports and urges it to do so speedily irrespective of adoption of the proposed new Directive on ports.

| 5.5 | Enforcement and implementation of the rules also require close attention. There is wide scope for interpretation in transposing EU legislation into national law. The EU should be much more careful to ensure uniform implementation of EU rules. This can also be seen with the enforcement of existing EU rules and regulations, which is patchy and inconsistent. There are clear differences of interpretation between the Member States as regards legislation on the environment, nature and safety. Competition between ports on these essential areas is not desirable. |
| --- | --- |

5.5

Enforcement and implementation of the rules also require close attention. There is wide scope for interpretation in transposing EU legislation into national law. The EU should be much more careful to ensure uniform implementation of EU rules. This can also be seen with the enforcement of existing EU rules and regulations, which is patchy and inconsistent. There are clear differences of interpretation between the Member States as regards legislation on the environment, nature and safety. Competition between ports on these essential areas is not desirable.

| 5.6 | To shed more light on how seaports are financed, their accounts must be transparent, especially when it comes to money flows from and to government (local, regional and national). The EU must also develop effective instruments to ensure this. In its 2001 opinion (9), the Committee expressed its firm belief that, in conjunction with the Treaty articles on competition and state aid, and the relevant European Court of Justice case law, applying the ‘transparency’ directive to all TEN ports is enough to provide the Commission with effective means of intervention. So far, there has been no practical follow-up to that statement. |
| --- | --- |

5.6

To shed more light on how seaports are financed, their accounts must be transparent, especially when it comes to money flows from and to government (local, regional and national). The EU must also develop effective instruments to ensure this. In its 2001 opinion (9), the Committee expressed its firm belief that, in conjunction with the Treaty articles on competition and state aid, and the relevant European Court of Justice case law, applying the ‘transparency’ directive to all TEN ports is enough to provide the Commission with effective means of intervention. So far, there has been no practical follow-up to that statement.

6.   Summary and conclusions

| 6.1 | The volume of maritime transport in, from and to Europe continues to grow each year. Given the major importance of this transport sector for the EU, the Union should keep a close eye on the growth of these maritime flows and encourage — or where necessary itself take — appropriate measures at an early stage in order to be able to manage the growth. |
| --- | --- |

6.1

The volume of maritime transport in, from and to Europe continues to grow each year. Given the major importance of this transport sector for the EU, the Union should keep a close eye on the growth of these maritime flows and encourage — or where necessary itself take — appropriate measures at an early stage in order to be able to manage the growth.

| 6.2 | Maritime transport can be divided into different types and categories, depending on: the purpose of the voyage (leisure or commercial); whether deep sea or short sea shipping; and the type of load (passenger or goods transport). These categories — and commercial transport — have a particular impact on the single market and are the subject of this opinion. |
| --- | --- |

6.2

Maritime transport can be divided into different types and categories, depending on: the purpose of the voyage (leisure or commercial); whether deep sea or short sea shipping; and the type of load (passenger or goods transport). These categories — and commercial transport — have a particular impact on the single market and are the subject of this opinion.

| 6.3 | EU passenger transport by sea is a very sizeable sector, with passenger figures running at 350 million. However, given trends in growth and ship size, the EU need not concern itself further with infrastructure in this sector, as opposed actual growth trends. That said, key consideration must be given to passenger security, especially on cruise ships. |
| --- | --- |

6.3

EU passenger transport by sea is a very sizeable sector, with passenger figures running at 350 million. However, given trends in growth and ship size, the EU need not concern itself further with infrastructure in this sector, as opposed actual growth trends. That said, key consideration must be given to passenger security, especially on cruise ships.

| 6.4 | Dry and liquid bulk transport in Europe also experienced a period of enormous growth in the 1960s and 1970s and appropriate measures were taken at the time to adapt ports to larger ships. These markets are now fully developed. Conventional mixed cargoes are clearly in decline. Roll- on/roll- off services are sometimes provided in conjunction with ferries and also represent an important, fully developed market. |
| --- | --- |

6.4

Dry and liquid bulk transport in Europe also experienced a period of enormous growth in the 1960s and 1970s and appropriate measures were taken at the time to adapt ports to larger ships. These markets are now fully developed. Conventional mixed cargoes are clearly in decline. Roll- on/roll- off services are sometimes provided in conjunction with ferries and also represent an important, fully developed market.

| 6.5 | Container transport, on the other hand, is currently experiencing unprecedented structural growth both in scale and in ship size. |
| --- | --- |

6.5

Container transport, on the other hand, is currently experiencing unprecedented structural growth both in scale and in ship size.

| 6.6 | Congestion is increasingly becoming an issue in the handling of these growing container flows in port terminals and in subsequent transit. In addition to terminal-based measures to remedy this in the port itself (including expansion), efficient pre- and post-transport procedures are also needed, both at sea and on land. |
| --- | --- |

6.6

Congestion is increasingly becoming an issue in the handling of these growing container flows in port terminals and in subsequent transit. In addition to terminal-based measures to remedy this in the port itself (including expansion), efficient pre- and post-transport procedures are also needed, both at sea and on land.

| 6.7 | Given the increase in size, deep-sea container flows will not necessarily spread to other European harbours via the shipping market. This does not, however, mean that the economic background is not conducive to the growth of smaller ports. |
| --- | --- |

6.7

Given the increase in size, deep-sea container flows will not necessarily spread to other European harbours via the shipping market. This does not, however, mean that the economic background is not conducive to the growth of smaller ports.

| 6.8 | In light of the above, the EESC strongly urges the Commission to investigate the problem of congestion in EU ports, and particularly container ports, and explore possible ways to facilitate it over and above what is actually being done in the TENs. |
| --- | --- |

6.8

In light of the above, the EESC strongly urges the Commission to investigate the problem of congestion in EU ports, and particularly container ports, and explore possible ways to facilitate it over and above what is actually being done in the TENs.

| 6.9 | Having already been successfully achieved in the road transport, inland waterway and shipping sectors, steps are at last also starting to be taken to boost the efficiency and effectiveness of the entire European rail network. Speedier progress on this front would be very welcome. |
| --- | --- |

6.9

Having already been successfully achieved in the road transport, inland waterway and shipping sectors, steps are at last also starting to be taken to boost the efficiency and effectiveness of the entire European rail network. Speedier progress on this front would be very welcome.

| 6.10 | In order to stay competitive on the world stage, it is in Europe's interest that the larger container ports really do take appropriate steps to tackle and resolve the challenges they face. The European Union too should seek to exert its influence on that front wherever possible. No consideration must, however, be given to proposals for any EU financial support mechanisms for ports other than those mechanisms already in place. However warranted such proposals may be in theory, not least for container transport, they do not at the moment enjoy enough support as neither the authorities nor industry want to see any further distinctions being introduced between European ports other than those already in place under the TEN. |
| --- | --- |

6.10

In order to stay competitive on the world stage, it is in Europe's interest that the larger container ports really do take appropriate steps to tackle and resolve the challenges they face. The European Union too should seek to exert its influence on that front wherever possible. No consideration must, however, be given to proposals for any EU financial support mechanisms for ports other than those mechanisms already in place. However warranted such proposals may be in theory, not least for container transport, they do not at the moment enjoy enough support as neither the authorities nor industry want to see any further distinctions being introduced between European ports other than those already in place under the TEN.

| 6.11 | Ports are also waterways to the EU, which has security implications. The EESC recalls its earlier opinions asking the European Commission to draw up an overall impact study on the cost of security for ports and to devise an EU scheme for their financing. |
| --- | --- |

6.11

Ports are also waterways to the EU, which has security implications. The EESC recalls its earlier opinions asking the European Commission to draw up an overall impact study on the cost of security for ports and to devise an EU scheme for their financing.

| 6.12 | The European Union is in a position to establish a level playing field for fair competition; promote a certain degree of liberalisation of the seaport market; shed light on state-aid issues by providing clear guidelines; give close consideration to implementing and enforcing the current rules; and secure transparency in money flows. |
| --- | --- |

6.12

The European Union is in a position to establish a level playing field for fair competition; promote a certain degree of liberalisation of the seaport market; shed light on state-aid issues by providing clear guidelines; give close consideration to implementing and enforcing the current rules; and secure transparency in money flows.

Brussels, 16 December 2004

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  Source: ESPO brochure: Ports creating opportunities - by connecting people, products and business – by connecting Europe.

1

Ports creating opportunities - by connecting people, products and business – by connecting Europe.

(2)  DWT= Deadweight Tonnage of a ship, that is the load capacity of a ship measured in tonnes. With container ships, the number of TEUs (Twenty Foot Equivalent Units) is used as a unit of capacity. That is the maximum number of containers measured in TEUs that the ship can transport. Since an empty container takes up as much space as a loaded one, DWT is not used with container ships.

2

(3)  Niko Wijnolst et al.: Malacca-Max, The Ultimate Container Carrier, Delft University Press, 1999.

3

Malacca-Max, The Ultimate Container Carrier

(4)  See appendix for a table and map of the key European container ports.

4

(5)  These are, for instance, the reasons why the very largest container ships do not call at ports in the north Adriatic Sea, the northern UK, Ireland and the Baltic Sea. Ultimately, cargo from these areas is transported by these ships by being ‘fed’ to and from ports that can cater for them.

5

(6)  TEN Guidelines (Decision No. 1692/96), incorporating seaports, inland ports and inter-modal terminals into the TEN.

6

(7)  See appendix, also mentioned in footnote 2.

7

(8)  The Committee issued an opinion on the proposal on market access to port services that was submitted in early 2001 and has now been rejected by the European Parliament in its role as co-legislator, TEN 075, rapporteur: Mr Retureau (OJ C 48, 21.2.2002, p. 122).

8

(9)  Reference: see footnote 8

9

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| 28.6.2005 | EN | Official Journal of the European Union | C 157/147 |
| --- | --- | --- | --- |

28.6.2005

EN

Official Journal of the European Union

C 157/147

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Opinion of the European Economic and Social Committee on the ‘Proposal for a Council Regulation amending Regulation (EC) No. 1260/1999 laying down general provisions on the Structural Funds concerning the extension of the duration of the PEACE programme and the granting of new commitment appropriations’

(COM(2004) 631 final)

(2005/C 157/26)

On 9 December 2004 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.

In view of the urgency of the work, the European Economic and Social Committee decided at its 413th plenary session of 15 and 16 December 2004 to appoint Mr Simpson as rapporteur-general and unanimously adopted the following opinion.

1.   Introduction

| 1.1 | The European Union has assisted peace and reconciliation activities in Northern Ireland and the Border Region of Ireland since 1995 through two distinctive peace programmes — the Special Support Programme for Peace and Reconciliation (‘PEACE I’) 1995/99 and the EU Programme for Peace and Reconciliation (‘PEACE II’) 2000/04. |
| --- | --- |

1.1

The European Union has assisted peace and reconciliation activities in Northern Ireland and the Border Region of Ireland since 1995 through two distinctive peace programmes — the Special Support Programme for Peace and Reconciliation (‘PEACE I’) 1995/99 and the EU Programme for Peace and Reconciliation (‘PEACE II’) 2000/04.

| 1.2 | These programmes have provided around €100 million per annum to the eligible region which includes all of Northern Ireland and the Border Region of Ireland. Both programmes share a common remit — to reinforce progress towards a peaceful and stable society and to promote reconciliation; both assist economic regeneration and social inclusion activities; and both are delivered through locally based implementing bodies. |
| --- | --- |

1.2

These programmes have provided around €100 million per annum to the eligible region which includes all of Northern Ireland and the Border Region of Ireland. Both programmes share a common remit — to reinforce progress towards a peaceful and stable society and to promote reconciliation; both assist economic regeneration and social inclusion activities; and both are delivered through locally based implementing bodies.

| 1.3 | The current value of the PEACE II Programme for five years is €531 million, or €106 million per annum. The annual value of the Northern Ireland element is approximately €85 million and for the Border Region of Ireland approximately €22 million. Both Member States provide 25 % matched funding and ensure that the additional requirements of the Programme are met. |
| --- | --- |

1.3

The current value of the PEACE II Programme for five years is €531 million, or €106 million per annum. The annual value of the Northern Ireland element is approximately €85 million and for the Border Region of Ireland approximately €22 million. Both Member States provide 25 % matched funding and ensure that the additional requirements of the Programme are met.

2.   Purpose of the Proposal for a Council Regulation

| 2.1 | A two-year extension of the PEACE II Programme is recommended because the level of political progress in Northern Ireland hoped for in 1998 has not been fully achieved and the political institutions have still not become stable. Peace-building and reconciliation remain critically important. |
| --- | --- |

2.1

A two-year extension of the PEACE II Programme is recommended because the level of political progress in Northern Ireland hoped for in 1998 has not been fully achieved and the political institutions have still not become stable. Peace-building and reconciliation remain critically important.

| 2.2 | An ex-post evaluation of PEACE I and a mid-term evaluation of PEACE II were carried out as a single exercise in 2003. The PEACE I ex-post evaluation concluded that the programme had successfully promoted inclusivity and reconciliation, while delivering clear and measurable benefits in terms of job creation, training and business development. The mid-term evaluation of PEACE II commended the programme's increased focus on peace and reconciliation criteria when projects were being selected and noted the high proportion of projects with cross-community dimensions. Both programmes have had significant impacts in terms of job creation and business development. |
| --- | --- |

2.2

An ex-post evaluation of PEACE I and a mid-term evaluation of PEACE II were carried out as a single exercise in 2003. The PEACE I ex-post evaluation concluded that the programme had successfully promoted inclusivity and reconciliation, while delivering clear and measurable benefits in terms of job creation, training and business development. The mid-term evaluation of PEACE II commended the programme's increased focus on peace and reconciliation criteria when projects were being selected and noted the high proportion of projects with cross-community dimensions. Both programmes have had significant impacts in terms of job creation and business development.

| 2.3 | The mid-term evaluation identified a clear need for further peace-building activities and recommended an increased focus on activities that directly promote reconciliation. The extension to 2006, proposed by the Commission, would give effect to the recommendations of the mid-term evaluation by supporting those existing Programme measures most in line with the current need for enhancing reconciliation. |
| --- | --- |

2.3

The mid-term evaluation identified a clear need for further peace-building activities and recommended an increased focus on activities that directly promote reconciliation. The extension to 2006, proposed by the Commission, would give effect to the recommendations of the mid-term evaluation by supporting those existing Programme measures most in line with the current need for enhancing reconciliation.

| 2.4 | On 18 May 2004, the United Kingdom Prime Minister and the Taoiseach (Prime Minister) of Ireland wrote to the President of the Commission noting the achievements of the two EU-funded PEACE programmes and the contributions they have made to the Northern Ireland peace process. They requested an extension of the PEACE II Programme until December 2006. |
| --- | --- |

2.4

On 18 May 2004, the United Kingdom Prime Minister and the Taoiseach (Prime Minister) of Ireland wrote to the President of the Commission noting the achievements of the two EU-funded PEACE programmes and the contributions they have made to the Northern Ireland peace process. They requested an extension of the PEACE II Programme until December 2006.

| 2.5 | On 16 June 2004 the President of the Commission responded that the Commission was keen to maintain these efforts. On 17/18 June 2004, at the request of the Prime Ministers of the United Kingdom and Ireland, the European Council took note of the current difficulties in the peace process in Northern Ireland and confirmed its support for the efforts of the two Governments in seeking to re-establish the devolved political institutions. In order to support these efforts, the European Council called on the Commission to examine the possibility of aligning interventions under the PEACE II Programme with the programmes of the Structural Funds, which come to an end in 2006. |
| --- | --- |

2.5

On 16 June 2004 the President of the Commission responded that the Commission was keen to maintain these efforts. On 17/18 June 2004, at the request of the Prime Ministers of the United Kingdom and Ireland, the European Council took note of the current difficulties in the peace process in Northern Ireland and confirmed its support for the efforts of the two Governments in seeking to re-establish the devolved political institutions. In order to support these efforts, the European Council called on the Commission to examine the possibility of aligning interventions under the PEACE II Programme with the programmes of the Structural Funds, which come to an end in 2006.

| 2.6 | Effectively, this would extend the PEACE II programme by two further years. |
| --- | --- |

2.6

Effectively, this would extend the PEACE II programme by two further years.

3.   Proposal for a Council Regulation

| 3.1 | Document COM(2004) 631 (final) is the Commission response to the Council's request. It proposes a two-year extension to the PEACE II Programme to the value of €60 million per annum, of which €41 million is intended for expenditure in Northern Ireland, and €19 million in the Border Region of Ireland. This is in line with the request made by the two Member States in September 2004, following public consultation. |
| --- | --- |

3.1

Document COM(2004) 631 (final) is the Commission response to the Council's request. It proposes a two-year extension to the PEACE II Programme to the value of €60 million per annum, of which €41 million is intended for expenditure in Northern Ireland, and €19 million in the Border Region of Ireland. This is in line with the request made by the two Member States in September 2004, following public consultation.

| 3.2 | To give effect to the extension of PEACE II and allocate to it the necessary additional finance, the Proposal for a Council Regulation would amend Regulation (EC) No. 1260/1999 which sets out general provisions on the Structural Funds, including the duration of the PEACE II Programme and total annual Structural Funds commitment appropriations until 2006. |
| --- | --- |

3.2

To give effect to the extension of PEACE II and allocate to it the necessary additional finance, the Proposal for a Council Regulation would amend Regulation (EC) No. 1260/1999 which sets out general provisions on the Structural Funds, including the duration of the PEACE II Programme and total annual Structural Funds commitment appropriations until 2006.

| 3.3 | The proposed Council Regulation, to enable this extension to be financed within the budget of the Structural Funds, amends the provision for the total resources available for commitment under the Structural Funds from €195 bn.to €195.1 bn. A related amendment increases the ceiling of the Structural Funds available for Objective 1 (including transitional support) from €135.9 bn.to €136 bn. (1) |
| --- | --- |

3.3

The proposed Council Regulation, to enable this extension to be financed within the budget of the Structural Funds, amends the provision for the total resources available for commitment under the Structural Funds from €195 bn.to €195.1 bn. A related amendment increases the ceiling of the Structural Funds available for Objective 1 (including transitional support) from €135.9 bn.to €136 bn. (1)

| 3.4 | The proposed Council Regulation amends the duration for the PEACE II Programme from 2000-2004 to the amended dates, 2000-2006. |
| --- | --- |

3.4

The proposed Council Regulation amends the duration for the PEACE II Programme from 2000-2004 to the amended dates, 2000-2006.

4.   Conclusion

| 4.1 | The Economic and Social Committee welcomes the contribution that the European Union is making to the enhancement of peace, stability and reconciliation on the island of Ireland. |
| --- | --- |

4.1

The Economic and Social Committee welcomes the contribution that the European Union is making to the enhancement of peace, stability and reconciliation on the island of Ireland.

| 4.2 | The Committee has noted with interest the progress that has been made since 1995 when PEACE I was approved. The Committee has also noted and welcomes the recommendations made to the Commission by the organisation responsible for the delivery and supervision of PEACE II, the Special EU Programmes Body, which should simplify the operations of the Programme and increase the focus on reconciliation activities. |
| --- | --- |

4.2

The Committee has noted with interest the progress that has been made since 1995 when PEACE I was approved. The Committee has also noted and welcomes the recommendations made to the Commission by the organisation responsible for the delivery and supervision of PEACE II, the Special EU Programmes Body, which should simplify the operations of the Programme and increase the focus on reconciliation activities.

| 4.3 | The Committee also acknowledges that peace-building through the involvement of people in the development of their own communities is a continuous process. The Committee therefore welcomes the positive contribution that the Local Strategy Partnerships (LSPs), set up in Northern Ireland as a result of Peace II, have made in promoting social partnership and civic society. The Committee is pleased with the success of the LSPs in establishing partnership between on the one hand local government and other public bodies and on the other hand the social partners. By this means LSPs, along with intermediary funding bodies, have promoted reconciliation across the divisions in NI society. The Committee is grateful for the way in which the institutions of the European Union have facilitated the development of these partnerships, which may serve as a model for civic society in other parts of the EU and other divided societies in the EU. |
| --- | --- |

4.3

The Committee also acknowledges that peace-building through the involvement of people in the development of their own communities is a continuous process. The Committee therefore welcomes the positive contribution that the Local Strategy Partnerships (LSPs), set up in Northern Ireland as a result of Peace II, have made in promoting social partnership and civic society. The Committee is pleased with the success of the LSPs in establishing partnership between on the one hand local government and other public bodies and on the other hand the social partners. By this means LSPs, along with intermediary funding bodies, have promoted reconciliation across the divisions in NI society. The Committee is grateful for the way in which the institutions of the European Union have facilitated the development of these partnerships, which may serve as a model for civic society in other parts of the EU and other divided societies in the EU.

| 4.4 | In line with the recommendation in the mid-term evaluation of Peace II for an increased focus on activities that promote directly reconciliation, the Committee hope that the extension of Peace II will be used for projects, which are related more to the specific aims of peace and reconciliation and which are less dependent on purely economic criteria which have little impact on sections of the community most affected by civil disturbances. It would also be the Committee's aspiration that the extension of Peace II would be used for projects which relate to the racism and other problems of migrant workers who seek to avail of the EU policies on freedom of movement. |
| --- | --- |

4.4

In line with the recommendation in the mid-term evaluation of Peace II for an increased focus on activities that promote directly reconciliation, the Committee hope that the extension of Peace II will be used for projects, which are related more to the specific aims of peace and reconciliation and which are less dependent on purely economic criteria which have little impact on sections of the community most affected by civil disturbances. It would also be the Committee's aspiration that the extension of Peace II would be used for projects which relate to the racism and other problems of migrant workers who seek to avail of the EU policies on freedom of movement.

| 4.5 | The Committee, therefore, supports the adoption of the proposed Regulation. |
| --- | --- |

4.5

The Committee, therefore, supports the adoption of the proposed Regulation.

Brussels, 16 December 2004.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  Technical correction: the draft regulation mistakenly quotes the current provision for Objective 1 as €135.6 bn. The original Regulation 1260/1999, Article 7, refers to €135.9 bn.

1

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| 28.6.2005 | EN | Official Journal of the European Union | C 157/149 |
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28.6.2005

EN

Official Journal of the European Union

C 157/149

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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 amending Regulation (EC) No. 1059/2003 of the European Parliament and of the Council on the establishment of a common classification of territorial units for statistics (NUTS) by reason of the accession of the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia to the European Union’

(COM(2004) 592 final — 2004/0202 (COD))

(2005/C 157/27)

On 10 December 2004 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.

In view of the urgency of the work, the European Economic and Social Committee decided at its 413th plenary session of 15 and 16 December 2004 to appoint Mr Tóth as rapporteur-general and adopted the following opinion unanimously.

| 1. | The Committee approves the Commission's initiative to amend the Regulation (EC) No. 1059/2003 of the European Parliament and of the Council on the establishment of a common classification of territorial units for statistics (NUTS) by reason of the accession of the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia to the European Union. |
| --- | --- |

1.

The Committee approves the Commission's initiative to amend the Regulation (EC) No. 1059/2003 of the European Parliament and of the Council on the establishment of a common classification of territorial units for statistics (NUTS) by reason of the accession of the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia to the European Union.

| 1.1 | The Committee advises the Commission to control country by country the Annex I, Annex II and Annex III to Regulation (EC) No. 1059/2003 to ensure the appropriate use of the terminology and language of the Member States regarding the NUTS 1, NUTS 2, NUTS 3 and existing administrative units and smaller administrative units. |
| --- | --- |

1.1

The Committee advises the Commission to control country by country the Annex I, Annex II and Annex III to Regulation (EC) No. 1059/2003 to ensure the appropriate use of the terminology and language of the Member States regarding the NUTS 1, NUTS 2, NUTS 3 and existing administrative units and smaller administrative units.

| 2. | The Committee believes that this exercise will help to integrate the classification of the territorial units of the new Member States into the statistical classification of the Community. |
| --- | --- |

2.

The Committee believes that this exercise will help to integrate the classification of the territorial units of the new Member States into the statistical classification of the Community.

Brussels, 16 December 2004.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

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| 28.6.2005 | EN | Official Journal of the European Union | C 157/150 |
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28.6.2005

EN

Official Journal of the European Union

C 157/150

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Opinion of the European Economic and Social Committee on ‘Relations between the generations’

(2005/C 157/28)

On 29 January 2004 the European Economic and Social Committee, acting under Rule 29(2) of its Rules of Procedure, decided to draw up an opinion on ‘Relations between the generations’.

The Section for Employment, Social Affairs and Citizenship, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 25 November 2004. The rapporteur was Mr Bloch-Lainé.

At its 413th plenary session, held on 15 and 16 December 2004 (meeting of 16 December), the European Economic and Social Committee adopted the following opinion by 143 votes to two with nine abstentions:

1.   Preamble

| 1.1 | Relations between the generations (1) are clearly one of the major factors which determine the degree of cohesion of all societies, our own in particular, and, therefore, of the evolving geopolitical entity formed by their UNION. |
| --- | --- |

1.1

Relations between the generations (1) are clearly one of the major factors which determine the degree of cohesion of all societies, our own in particular, and, therefore, of the evolving geopolitical entity formed by their UNION.

| 1.2 | One of the distinguishing characteristics of the European nations is their ageing populations. This phenomenon is having an extensive impact on their societies and presenting them with complex challenges which they have a responsibility to weigh up and address in as coordinated and far-sighted a way as possible. They have a responsibility to draw up and implement what could be called a ‘generations policy’ (2) in the field, consisting not of short-lived, fragmented, isolated measures but of a comprehensive, global, consistent strategy encouraging understanding and solidarity in the long-term between the growing number of generations which are now living side by side. |
| --- | --- |

1.2

One of the distinguishing characteristics of the European nations is their ageing populations. This phenomenon is having an extensive impact on their societies and presenting them with complex challenges which they have a responsibility to weigh up and address in as coordinated and far-sighted a way as possible. They have a responsibility to draw up and implement what could be called a ‘generations policy’ (2) in the field, consisting not of short-lived, fragmented, isolated measures but of a comprehensive, global, consistent strategy encouraging understanding and solidarity in the long-term between the growing number of generations which are now living side by side.

| 1.3 | Taking stock of the situation — irrespective of the different or specific circumstances in the different countries — it would appear that there is still a long way to go. The European Economic and Social Committee feels that the issue is crucial for Europe's future and intends to make it an ongoing priority in its future discussions and work programme. |
| --- | --- |

1.3

Taking stock of the situation — irrespective of the different or specific circumstances in the different countries — it would appear that there is still a long way to go. The European Economic and Social Committee feels that the issue is crucial for Europe's future and intends to make it an ongoing priority in its future discussions and work programme.

Hence the need for this opinion, the aim of which is:

| — | having set out a few key facts and observations (2); |
| --- | --- |

—

having set out a few key facts and observations (2);

| — | to propose some guidelines and recommendations (3). |
| --- | --- |

—

to propose some guidelines and recommendations (3).

2.   Facts and observations

| 2.1 | It is fair to say that our countries and their joint institutions have not fully exploited the unprecedented range of forecasting tools and techniques which have been available to them over the last 50 years to define and implement policies in the field in question; they have not employed the most appropriate means of addressing these different issues and factors. |
| --- | --- |

2.1

It is fair to say that our countries and their joint institutions have not fully exploited the unprecedented range of forecasting tools and techniques which have been available to them over the last 50 years to define and implement policies in the field in question; they have not employed the most appropriate means of addressing these different issues and factors.

| 2.1.1 | There are three extremes to be avoided when expressing an opinion of this kind. |
| --- | --- |

2.1.1

There are three extremes to be avoided when expressing an opinion of this kind.

| 2.1.1.1 | Firstly, to say that it should have been a very simple matter to make an accurate forecast would be wrong. Although the tried and tested methods of demographic research do allow meaningful predictions of medium- and long-term trends to be made, it is clear that such predictions can change according to economic, sociological and political factors which are quite random. Thus, for example, although birth rates, death rates and migration flows fluctuate according to their own rhythm, they are also affected by external, extraneous factors such as economic growth and slowdowns, poor welfare provision, changing customs, the political environment and the degree of public confidence in the future. Furthermore, the experts base their key forecasts, made using demographic data, on averages, and the averages chosen differ according to the expert. |
| --- | --- |

2.1.1.1

Firstly, to say that it should have been a very simple matter to make an accurate forecast would be wrong. Although the tried and tested methods of demographic research do allow meaningful predictions of medium- and long-term trends to be made, it is clear that such predictions can change according to economic, sociological and political factors which are quite random. Thus, for example, although birth rates, death rates and migration flows fluctuate according to their own rhythm, they are also affected by external, extraneous factors such as economic growth and slowdowns, poor welfare provision, changing customs, the political environment and the degree of public confidence in the future. Furthermore, the experts base their key forecasts, made using demographic data, on averages, and the averages chosen differ according to the expert.

| 2.1.1.2 | Another extreme would be to underestimate enlightened, long-term programmes implemented and success achieved over the past 50 years in areas such as health, social protection, solidarity, training, amenities and infrastructure, land-use planning, social dialogue and community life. |
| --- | --- |

2.1.1.2

Another extreme would be to underestimate enlightened, long-term programmes implemented and success achieved over the past 50 years in areas such as health, social protection, solidarity, training, amenities and infrastructure, land-use planning, social dialogue and community life.

| 2.1.1.3 | A third extreme would be to play down the importance of the promising, innovative forecasting initiatives completed or launched by the Council, the European Parliament and the Commission in many fields. |
| --- | --- |

2.1.1.3

A third extreme would be to play down the importance of the promising, innovative forecasting initiatives completed or launched by the Council, the European Parliament and the Commission in many fields.

| 2.1.2 | However, since the end of the Second World War, there has been a clear lack of discernment and far-sightedness when dealing with a number of consequences, harmful to society, of the ageing of our countries' populations. This demographic phenomenon has been brought about by the combination of two foreseeable and long-foreseen trends: greater life expectancy and falling birth rates. Despite any discrepancies or subtle differences in the diagnoses of forecasting experts, the fact that it is inevitable has never been called into question. |
| --- | --- |

2.1.2

However, since the end of the Second World War, there has been a clear lack of discernment and far-sightedness when dealing with a number of consequences, harmful to society, of the ageing of our countries' populations. This demographic phenomenon has been brought about by the combination of two foreseeable and long-foreseen trends: greater life expectancy and falling birth rates. Despite any discrepancies or subtle differences in the diagnoses of forecasting experts, the fact that it is inevitable has never been called into question.

| 2.1.3 | One would have to be blind to reality to deny that there have been a number of instances of neglect, error and omission in planning for a situation that is immediate, ongoing, sustained, and requires action: the increasingly frequent coexistence in EU countries of three or even four generations, rather than just two. |
| --- | --- |

2.1.3

One would have to be blind to reality to deny that there have been a number of instances of neglect, error and omission in planning for a situation that is immediate, ongoing, sustained, and requires action: the increasingly frequent coexistence in EU countries of three or even four generations, rather than just two.

| 2.1.4 | Regrettably, the areas affected by these failures to adapt are numerous, for example:






  — | the funding of pensions: in several Member States, the least that can be said is that there was too long a delay in addressing the issue, that it was addressed belatedly, under pressure, and in difficult conditions that could have been avoided; |
| --- | --- | --- |

2.1.4

Regrettably, the areas affected by these failures to adapt are numerous, for example:

—

the funding of pensions: in several Member States, the least that can be said is that there was too long a delay in addressing the issue, that it was addressed belatedly, under pressure, and in difficult conditions that could have been avoided;

| — | the respective roles of the increased number of active age groups in the running of businesses and administrations and their respective contributions thereto: the ad hoc measures taken to resolve staffing issues and reduce operating costs did not take into sufficient account the ‘collateral damage’ and harmful consequences of short-term expedients; |
| --- | --- |

—

the respective roles of the increased number of active age groups in the running of businesses and administrations and their respective contributions thereto: the ad hoc measures taken to resolve staffing issues and reduce operating costs did not take into sufficient account the ‘collateral damage’ and harmful consequences of short-term expedients;

| — | lifelong learning: concerns relating to prolonging working life have, in some cases, too often been overlooked where ‘older’ workers are concerned; |
| --- | --- |

—

lifelong learning: concerns relating to prolonging working life have, in some cases, too often been overlooked where ‘older’ workers are concerned;

| — | town planning, housing and the siting of community and commercial facilities: prevailing approaches in these areas have frequently overlooked the specific needs of the very young, the very old, and families, whether living together or not; |
| --- | --- |

—

town planning, housing and the siting of community and commercial facilities: prevailing approaches in these areas have frequently overlooked the specific needs of the very young, the very old, and families, whether living together or not;

| — | the inheritance of material goods: there has been no revision or adjustment of legal and fiscal provisions to take into account demographic change; |
| --- | --- |

—

the inheritance of material goods: there has been no revision or adjustment of legal and fiscal provisions to take into account demographic change;

| — | relations between the education sector and the world of work: here, a few countries only have made progress, while many more are lagging behind; |
| --- | --- |

—

relations between the education sector and the world of work: here, a few countries only have made progress, while many more are lagging behind;

| — | the preservation, enhancement, use and sharing of experience gained and memories: advances in technology, innovation in the field of management and a certain idolisation of the cult of youth have served to divert attention away from the danger of wasting knowledge, ability, experience and memory; |
| --- | --- |

—

the preservation, enhancement, use and sharing of experience gained and memories: advances in technology, innovation in the field of management and a certain idolisation of the cult of youth have served to divert attention away from the danger of wasting knowledge, ability, experience and memory;

| — | culture: there has, perhaps, at times been an excessive, complacent focus on emerging cultures (3) and a failure to discern adequately between fashion and inventions representing lasting progress; the different generations have been allowed to forget, despise, fear and reject each other and have thus become divided. |
| --- | --- |

—

culture: there has, perhaps, at times been an excessive, complacent focus on emerging cultures (3) and a failure to discern adequately between fashion and inventions representing lasting progress; the different generations have been allowed to forget, despise, fear and reject each other and have thus become divided.

| 2.1.5 | Validity of welfare indicators: The EESC welcomes the work carried out by the Indicators sub-committee of the Coordinating Committee for Welfare and, specifically, the definition (or the refinement of previous definitions) of the proposed indicators. This now makes it possible to break down by age group a series of indicators relating, among other things, to the risk of poverty. It emphasises the need for this work to continue, not least in order to complete and consolidate a range of indicators that will make it possible to evaluate ever more accurately the condition of different age groups, both from a qualitative and a quantitative point of view. |
| --- | --- |

2.1.5

Validity of welfare indicators: The EESC welcomes the work carried out by the Indicators sub-committee of the Coordinating Committee for Welfare and, specifically, the definition (or the refinement of previous definitions) of the proposed indicators. This now makes it possible to break down by age group a series of indicators relating, among other things, to the risk of poverty. It emphasises the need for this work to continue, not least in order to complete and consolidate a range of indicators that will make it possible to evaluate ever more accurately the condition of different age groups, both from a qualitative and a quantitative point of view.

3.   Guidelines and recommendations

| 3.1 | Why have genuine, crucial issues such as these been all too often overlooked in recent decades? That is a huge, key subject for sociological and political debate, and this opinion is not the place for a superficial exposition of the issue. Be that as it may, the EESC stands firm in its belief: the Committee is a consultative body and, as such, is less subject to the constraints and pressures of the immediate present than decision-makers. The diversity of its members, the way they work freely together over long periods of time, compare experiences, exchange knowledge, information and concerns and share ideas and evaluations, their ability to propose methods, the way they are rooted and actively involved in what is known as participatory democracy: potential assets and abilities which open up to the Committee areas in which it has both the freedom and the responsibility to be more active than it is at present. Relations between the generations is one such area. |
| --- | --- |

3.1

Why have genuine, crucial issues such as these been all too often overlooked in recent decades? That is a huge, key subject for sociological and political debate, and this opinion is not the place for a superficial exposition of the issue. Be that as it may, the EESC stands firm in its belief: the Committee is a consultative body and, as such, is less subject to the constraints and pressures of the immediate present than decision-makers. The diversity of its members, the way they work freely together over long periods of time, compare experiences, exchange knowledge, information and concerns and share ideas and evaluations, their ability to propose methods, the way they are rooted and actively involved in what is known as participatory democracy: potential assets and abilities which open up to the Committee areas in which it has both the freedom and the responsibility to be more active than it is at present. Relations between the generations is one such area.

| 3.1.1 | In order to speak on such a complex matter, one needs to be prudent and clear: |
| --- | --- |

3.1.1

In order to speak on such a complex matter, one needs to be prudent and clear:

| 3.1.1.1 | The EESC must stay within its remit and avoid setting itself goals that are disproportionate to its resources or incompatible with its mandate. |
| --- | --- |

3.1.1.1

The EESC must stay within its remit and avoid setting itself goals that are disproportionate to its resources or incompatible with its mandate.

| 3.1.1.2 | Foresight — or forecasting — must not be confused with planning or futurology. |
| --- | --- |

3.1.1.2

Foresight — or forecasting — must not be confused with planning or futurology.

| 3.1.1.3 | The most conscientious scientists willingly admit that their knowledge is no more than a set of theories waiting to be superseded. Economics is not an exact science, and sociology even less so, so there is no reason why socioeconomic forecasts should be free from the risk of error. |
| --- | --- |

3.1.1.3

The most conscientious scientists willingly admit that their knowledge is no more than a set of theories waiting to be superseded. Economics is not an exact science, and sociology even less so, so there is no reason why socioeconomic forecasts should be free from the risk of error.

| 3.1.1.4 | Work is being carried out in numerous areas in the field of relations between the generations. Some of these relate to remedial measures; some, to a shift in direction; while others call for a significant capacity for research and invention. It is important to identify these areas properly, to distinguish accurately between them and, in all cases, not to place trust in pipe dreams which might prove risky or fruitless. |
| --- | --- |

3.1.1.4

Work is being carried out in numerous areas in the field of relations between the generations. Some of these relate to remedial measures; some, to a shift in direction; while others call for a significant capacity for research and invention. It is important to identify these areas properly, to distinguish accurately between them and, in all cases, not to place trust in pipe dreams which might prove risky or fruitless.

| 3.1.2 | In seeking to achieve its goal in this area the EESC has decided to work as closely as possible with the EU institutions — the Council, the Parliament and the Commission. It was guided in this decision by the arguments set out in points 2.1.1.3 and 3.1.2 above, by the desire to adhere to both the letter and the spirit of the institutional texts and, quite simply, by common sense. |
| --- | --- |

3.1.2

In seeking to achieve its goal in this area the EESC has decided to work as closely as possible with the EU institutions — the Council, the Parliament and the Commission. It was guided in this decision by the arguments set out in points 2.1.1.3 and 3.1.2 above, by the desire to adhere to both the letter and the spirit of the institutional texts and, quite simply, by common sense.

| 3.1.2.1 | Relations between the generations is an extremely wide-ranging subject. It was not possible to attempt to do anything more than give a very general overview in this initial study of the matter. |
| --- | --- |

3.1.2.1

Relations between the generations is an extremely wide-ranging subject. It was not possible to attempt to do anything more than give a very general overview in this initial study of the matter.

| 3.1.2.2 | The Committee has decided to use this initial opinion to draw the attention of the EU institutions to a list of subjects for reflection which the Committee could address together with those institutions, if they so wished, by means of mutually-agreed procedures which will allow for coordination of work in these areas. The list is as follows (not in order of priority):






  — | the extent, burden and limits of roles and responsibilities that will fall to families in the future social order: children, adults, parents, grandparents; |
| --- | --- | --- |

3.1.2.2

The Committee has decided to use this initial opinion to draw the attention of the EU institutions to a list of subjects for reflection which the Committee could address together with those institutions, if they so wished, by means of mutually-agreed procedures which will allow for coordination of work in these areas. The list is as follows (not in order of priority):

—

the extent, burden and limits of roles and responsibilities that will fall to families in the future social order: children, adults, parents, grandparents;

| — | access for women to the job market and communal childcare facilities; |
| --- | --- |

—

access for women to the job market and communal childcare facilities;

| — | isolation and loneliness in European societies: the elderly (4), disadvantaged young people; child poverty; |
| --- | --- |

—

isolation and loneliness in European societies: the elderly (4), disadvantaged young people; child poverty;

| — | intergenerational contracts and solidarity between the generations: how to find fair solutions socially and politically — solutions which respect the future — given the constraints and pressures of the present and the fact that future stakeholders are not here to claim their rights; |
| --- | --- |

—

intergenerational contracts and solidarity between the generations: how to find fair solutions socially and politically — solutions which respect the future — given the constraints and pressures of the present and the fact that future stakeholders are not here to claim their rights;

| — | town-planning and housing models and relations between the generations: the approaches to and models of town planning and housing adopted in recent years have often overlooked the emergence of substantial requirements of specific generations, particularly the problems posed by:






  — | the (welcome) development of facilities allowing the elderly to live independently and of their relations with younger generations, children and adolescents; |
| --- | --- | --- |

—

town-planning and housing models and relations between the generations: the approaches to and models of town planning and housing adopted in recent years have often overlooked the emergence of substantial requirements of specific generations, particularly the problems posed by:

—

the (welcome) development of facilities allowing the elderly to live independently and of their relations with younger generations, children and adolescents;

| — | young single adults (students and young workers) being forced to share family accommodation not intended for this purpose; |
| --- | --- |

—

young single adults (students and young workers) being forced to share family accommodation not intended for this purpose;

| — | the need to house ‘difficult’ families in permanent, non-segregated accommodation. |
| --- | --- |

—

the need to house ‘difficult’ families in permanent, non-segregated accommodation.

| — | what useful roles can participatory democracy play in relations between the generations? |
| --- | --- |

—

what useful roles can participatory democracy play in relations between the generations?

| 3.2 | For the time being, the Committee has decided to focus, in the form of suggestions, on two aspects of the general topic that would also lend themselves to cooperation with the EU institutions, if these institutions so desire. |
| --- | --- |

3.2

For the time being, the Committee has decided to focus, in the form of suggestions, on two aspects of the general topic that would also lend themselves to cooperation with the EU institutions, if these institutions so desire.

| 3.2.1 | Length of working life: this issue is one of the best illustrations of the European countries' failure to take a clear-headed, far-sighted approach to the challenges posed by the ageing of their populations, despite the fact that this had long been foreseen. |
| --- | --- |

3.2.1

Length of working life: this issue is one of the best illustrations of the European countries' failure to take a clear-headed, far-sighted approach to the challenges posed by the ageing of their populations, despite the fact that this had long been foreseen.

| 3.2.1.1 | Earlier retirement leads to a loss of economic, social and cultural potential. It has not produced the expected effects in terms of job-sharing and increasing employment among young people but has, in many countries, been viewed and used as a short-term expedient. |
| --- | --- |

3.2.1.1

Earlier retirement leads to a loss of economic, social and cultural potential. It has not produced the expected effects in terms of job-sharing and increasing employment among young people but has, in many countries, been viewed and used as a short-term expedient.

| 3.2.1.2 | Prejudices and preconceptions wrongly led decision-makers in politics, business and society alike to believe that older workers were less able to adapt to changes in production techniques and management methods and held back progress in productivity. |
| --- | --- |

3.2.1.2

Prejudices and preconceptions wrongly led decision-makers in politics, business and society alike to believe that older workers were less able to adapt to changes in production techniques and management methods and held back progress in productivity.

| 3.2.1.3 | However, for a number of years, useful studies, strong warnings and sensible recommendations have been being produced. In this regard, the clear-sightedness, consistency and high quality of the Commission's work on this difficult subject must be stressed. The helpful work carried out by the OECD and by many research institutes, professional organisations and economic and social councils in various countries also deserves to be mentioned. |
| --- | --- |

3.2.1.3

However, for a number of years, useful studies, strong warnings and sensible recommendations have been being produced. In this regard, the clear-sightedness, consistency and high quality of the Commission's work on this difficult subject must be stressed. The helpful work carried out by the OECD and by many research institutes, professional organisations and economic and social councils in various countries also deserves to be mentioned.

| 3.2.1.4 | The range of measures that can be implemented to reverse the trend is now well established and well-known: making the oldest workers more employable by fine-tuning lifelong learning methods; improving the quality of jobs and making working hours more flexible in order to allow a better work-life balance; developing mixed age-group teams in companies and administrations; boosting the self-confidence of the oldest workers; increasing health protection measures for the oldest workers; improving career planning; creating incentives using the tax and pension system, etc. |
| --- | --- |

3.2.1.4

The range of measures that can be implemented to reverse the trend is now well established and well-known: making the oldest workers more employable by fine-tuning lifelong learning methods; improving the quality of jobs and making working hours more flexible in order to allow a better work-life balance; developing mixed age-group teams in companies and administrations; boosting the self-confidence of the oldest workers; increasing health protection measures for the oldest workers; improving career planning; creating incentives using the tax and pension system, etc.

| 3.2.1.5 | The Council of the European Union, at Lisbon, Stockholm and elsewhere, has called for measures to encourage the European public to work longer on a voluntary basis. |
| --- | --- |

3.2.1.5

The Council of the European Union, at Lisbon, Stockholm and elsewhere, has called for measures to encourage the European public to work longer on a voluntary basis.

| 3.2.1.6 | However, apart from in a very small number of countries:






  — | there are aspects of taxation and social security systems, collective bargaining agreements and company-level agreements which, either explicitly or implicitly, greatly encourage early retirement; |
| --- | --- | --- |

3.2.1.6

However, apart from in a very small number of countries:

—

there are aspects of taxation and social security systems, collective bargaining agreements and company-level agreements which, either explicitly or implicitly, greatly encourage early retirement;

| — | the declarations made and intentions expressed at Council meetings are not, in practice, properly passed on in the Member States themselves. |
| --- | --- |

—

the declarations made and intentions expressed at Council meetings are not, in practice, properly passed on in the Member States themselves.

| 3.2.1.7 | There is general agreement that a reversal of the trend and a change in current practices will not occur as the result of a miraculous, overnight conversion.
  Indeed, force of habit, the different types, sizes and cultures of businesses and administrations and the natural and legitimate problems of social dialogue mean that, in a matter such as this, where simply abolishing the social ‘acquis’ could not be advocated — as it would lead straight to disaster — the desired changes require the implementation of quite complex global strategies. The transition will inevitably take some time, and that is one more reason for not wasting time and drawing up and applying these strategies without further delay. |
| --- | --- |

3.2.1.7

There is general agreement that a reversal of the trend and a change in current practices will not occur as the result of a miraculous, overnight conversion.

Indeed, force of habit, the different types, sizes and cultures of businesses and administrations and the natural and legitimate problems of social dialogue mean that, in a matter such as this, where simply abolishing the social ‘acquis’ could not be advocated — as it would lead straight to disaster — the desired changes require the implementation of quite complex global strategies. The transition will inevitably take some time, and that is one more reason for not wasting time and drawing up and applying these strategies without further delay.

| 3.2.2 | The Committee urges the EU political decision-makers — i.e. the Parliament and the Council — to work more unequivocally, specifically and actively, in the Member States which have elected or appointed them, to bring about greater consistency between words and deeds. This should spur them, in the common interest of a European Union which has set itself the goal of becoming one of the world's leading economies, to:






  — | pinpoint measures in the legal or contractual systems in use in their respective countries which are explicit or implicit barriers to the voluntary extension of working life; |
| --- | --- | --- |

3.2.2

The Committee urges the EU political decision-makers — i.e. the Parliament and the Council — to work more unequivocally, specifically and actively, in the Member States which have elected or appointed them, to bring about greater consistency between words and deeds. This should spur them, in the common interest of a European Union which has set itself the goal of becoming one of the world's leading economies, to:

—

pinpoint measures in the legal or contractual systems in use in their respective countries which are explicit or implicit barriers to the voluntary extension of working life;

| — | to pass on more effectively and to a greater extent than is the case today the Commission's sound recommendations and to implement its directives more rapidly and more resolutely; |
| --- | --- |

—

to pass on more effectively and to a greater extent than is the case today the Commission's sound recommendations and to implement its directives more rapidly and more resolutely;

| — | to run campaigns to inform, encourage and persuade economic and social partners and decision makers, and to improve communication with the media of their respective countries. |
| --- | --- |

—

to run campaigns to inform, encourage and persuade economic and social partners and decision makers, and to improve communication with the media of their respective countries.

| 3.2.3 | Restoring the balance in the age structure of Europe's population: here, one need only recall the very alarming forecasts set out in a great number of reports of the effects that the drop in fertility and the birth rate will have on the demography of the European Union: an insufficient renewal of the generations, which will certainly not be compensated for by immigration, can only diminish Europe's position in the world and, within Europe, cause economic and financial difficulties and the risk of undesirable divisions and conflicts between the generations. |
| --- | --- |

3.2.3

Restoring the balance in the age structure of Europe's population: here, one need only recall the very alarming forecasts set out in a great number of reports of the effects that the drop in fertility and the birth rate will have on the demography of the European Union: an insufficient renewal of the generations, which will certainly not be compensated for by immigration, can only diminish Europe's position in the world and, within Europe, cause economic and financial difficulties and the risk of undesirable divisions and conflicts between the generations.

| 3.2.3.1 | If we believe that rebalancing the age structures of European countries needs to be a long-term goal, it follows that the European Union should set itself the task of doing more to boost the birth rate in its constituent countries, and, to this end, to pay more attention to those countries' family policies. No one could accuse the Union of not being interested in family matters: the Council of Ministers has, on numerous occasions, made proposals concerning families. However, the guidelines set out at EU level remain fragmented, and aim at targets that are certainly justified and interesting, but very limited (5). |
| --- | --- |

3.2.3.1

If we believe that rebalancing the age structures of European countries needs to be a long-term goal, it follows that the European Union should set itself the task of doing more to boost the birth rate in its constituent countries, and, to this end, to pay more attention to those countries' family policies. No one could accuse the Union of not being interested in family matters: the Council of Ministers has, on numerous occasions, made proposals concerning families. However, the guidelines set out at EU level remain fragmented, and aim at targets that are certainly justified and interesting, but very limited (5).

| 3.2.3.2 | Obviously, bringing about greater and better commitment in an area such as this will not be easy. Member States' policies are extremely diverse; pro-birth policies are expensive; and finally, on top of all that, there are significant differences of opinion among both experts and decision-makers about just how effective these policies are. However, the EESC does not believe that these difficulties, however great they may be, are an excuse for the EU institutions to continue avoiding the issue to a great extent. |
| --- | --- |

3.2.3.2

Obviously, bringing about greater and better commitment in an area such as this will not be easy. Member States' policies are extremely diverse; pro-birth policies are expensive; and finally, on top of all that, there are significant differences of opinion among both experts and decision-makers about just how effective these policies are. However, the EESC does not believe that these difficulties, however great they may be, are an excuse for the EU institutions to continue avoiding the issue to a great extent.

| 3.2.3.3 | The Committee considers it desirable that those institutions should set out a proper strategy on the subject, taking into account the numerous aspects of the issue; and, specifically, that they encourage Member States to pursue family policies with the long-term aim of rebalancing the age structures in the countries of the Union. |
| --- | --- |

3.2.3.3

The Committee considers it desirable that those institutions should set out a proper strategy on the subject, taking into account the numerous aspects of the issue; and, specifically, that they encourage Member States to pursue family policies with the long-term aim of rebalancing the age structures in the countries of the Union.

| 3.2.3.4 | The EESC wishes only to cooperate — actively and as far as its resources permit — with the work that such a step, were it to be taken, would make necessary. |
| --- | --- |

3.2.3.4

The EESC wishes only to cooperate — actively and as far as its resources permit — with the work that such a step, were it to be taken, would make necessary.

4.   CONCLUSION

| 4.1 | The societies of Europe, and the European society they are committed to building together, are and will continue to be subject to ongoing risks of social, political, ethnic and cultural division. It is important that we do everything possible to ensure that these divisions are not compounded by inter-generational divisions. |
| --- | --- |

4.1

The societies of Europe, and the European society they are committed to building together, are and will continue to be subject to ongoing risks of social, political, ethnic and cultural division. It is important that we do everything possible to ensure that these divisions are not compounded by inter-generational divisions.

| 4.2 | By their very nature, the problems posed by relations between the generations are long-term problems. Therefore, in seeking solutions to them, we must also look to the long term. |
| --- | --- |

4.2

By their very nature, the problems posed by relations between the generations are long-term problems. Therefore, in seeking solutions to them, we must also look to the long term.

| 4.3 | The large number and complexity of the sectoral aspects that need to be taken into consideration are no excuse for not developing a forward-looking, holistic and systematic approach; in this area, as in others, the issues are neither separate nor separable. Moreover, it must be stressed that proper management of the problems of relations between the generations would have an extremely positive impact on the economy. |
| --- | --- |

4.3

The large number and complexity of the sectoral aspects that need to be taken into consideration are no excuse for not developing a forward-looking, holistic and systematic approach; in this area, as in others, the issues are neither separate nor separable. Moreover, it must be stressed that proper management of the problems of relations between the generations would have an extremely positive impact on the economy.

| 4.4 | Although we should not rush things, nor, of course, violate the subsidiarity principle, neither the European Union nor its Member States should adopt a wait-and-see or minimalist attitude. |
| --- | --- |

4.4

Although we should not rush things, nor, of course, violate the subsidiarity principle, neither the European Union nor its Member States should adopt a wait-and-see or minimalist attitude.

| 4.5 | The European Economic and Social Committee considers this area of discussion to be very important. It clearly warrants increasing attention but the Member States and the EU have yet to give it the political consideration it deserves. |
| --- | --- |

4.5

The European Economic and Social Committee considers this area of discussion to be very important. It clearly warrants increasing attention but the Member States and the EU have yet to give it the political consideration it deserves.

| 4.6 | This opinion is a response to a challenge: the challenge of facilitating the development in the future of more consultation on a major issue, where coordinated, ongoing action from a wide range of players and the continuity of a constructive plan are necessary and short-term interests must not be allowed to prevail. A new pact between the generations needs to take shape step by step across the EU. (6) |
| --- | --- |

4.6

This opinion is a response to a challenge: the challenge of facilitating the development in the future of more consultation on a major issue, where coordinated, ongoing action from a wide range of players and the continuity of a constructive plan are necessary and short-term interests must not be allowed to prevail. A new pact between the generations needs to take shape step by step across the EU. (6)

| 4.7 | This opinion is in no way a final document. It does not claim to provide ready-made solutions but proposes that a long-term project be undertaken which will continue for some time. |
| --- | --- |

4.7

This opinion is in no way a final document. It does not claim to provide ready-made solutions but proposes that a long-term project be undertaken which will continue for some time.

| 4.8 | At this juncture, the Committee calls for a public debate to be held on this huge subject as soon as is realistically possible. Participants at this conference would include political decision-makers, representatives of the EU institutions, members of civil society and experts. The Committee would be willing to launch and organise an initiative of this kind. |
| --- | --- |

4.8

At this juncture, the Committee calls for a public debate to be held on this huge subject as soon as is realistically possible. Participants at this conference would include political decision-makers, representatives of the EU institutions, members of civil society and experts. The Committee would be willing to launch and organise an initiative of this kind.

| 4.9 | Throughout its involvement in this huge area of concern, the Committee can and must constantly act in close cooperation with the EU institutions. |
| --- | --- |

4.9

Throughout its involvement in this huge area of concern, the Committee can and must constantly act in close cooperation with the EU institutions.

Brussels, 16 December 2004.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  Relations between the generations are discussed here from the economic, social, cultural and political perspectives.

1

(2)  This is an expression taken from a report by Mr Jean Billet, presented to the French Economic and Social Council in 2004 (unofficial translation).

2

(3)  In some cases not without ulterior motives of a commercial nature.

3

(4)  C.f. EESC opinion entitled Towards the seventh Framework Programme for Research: Research needs in the area of demographic change – quality of life of elderly persons and technological requirements. Rapporteur Ms Heinisch. CESE 1206/2004 of 15 September 2004.

4

Towards the seventh Framework Programme for Research: Research needs in the area of demographic change – quality of life of elderly persons and technological requirements

(5)  Families in difficulty; childcare; maternity and parental leave, etc.

5

(6)  In this regard, the May 2004 report of the High level group on the future of social policy in the enlarged European Union. is of interest.

6

---

| 28.6.2005 | EN | Official Journal of the European Union | C 157/155 |
| --- | --- | --- | --- |

28.6.2005

EN

Official Journal of the European Union

C 157/155

---

Opinion of the European Economic and Social Committee on the ‘Co-existence between genetically modified crops, and conventional and organic crops’

(2005/C 157/29)

On 29 January 2004, the European Economic and Social Committee, acting under Rule 29(2) of its Rules of Procedure, decided to draw up an opinion on ‘Co-existence between genetically modified crops, and conventional and organic crops’.

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 21 September 2004. The rapporteur was Mr Voss.

At its 413th plenary session on 15/16 December 2004 (meeting of 16 December 2004), the European Economic and Social Committee adopted the following opinion by 47 votes in favour, 13 votes against and 4 abstentions:

1.   Introduction

| 1.1 | The EESC considers it necessary to develop and lay down rules on coexistence between the cultivation of genetically modified crops on the one hand, and the conventional and organic cultivation of crops and environmental protection on the other. These rules must be sustainable, legally certain, and practicable, and must apply to the entire food sector and to agricultural, fishery and forest production including that for pharmaceutical, non-food and research purposes. |
| --- | --- |

1.1

The EESC considers it necessary to develop and lay down rules on coexistence between the cultivation of genetically modified crops on the one hand, and the conventional and organic cultivation of crops and environmental protection on the other. These rules must be sustainable, legally certain, and practicable, and must apply to the entire food sector and to agricultural, fishery and forest production including that for pharmaceutical, non-food and research purposes.

| 1.2 | The Commission a) wants to leave significant aspects of coexistence to national legislation, and b) is minded to address the issue of the adventitious or technically unavoidable presence of GMOs in non-GMO seed, which is central to the future of coexistence, by means of the comitology procedure under Directive 2000/18 and under the directives on the marketing of seed. Therefore, the EESC is not being consulted on these issues. It therefore makes sense to join the debate on these issues by drawing up an own-initiative opinion, thus drawing particular attention to the associated economic and social issues and providing an opinion on these to the Council, the Commission and the Parliament. |
| --- | --- |

1.2

The Commission a) wants to leave significant aspects of coexistence to national legislation, and b) is minded to address the issue of the adventitious or technically unavoidable presence of GMOs in non-GMO seed, which is central to the future of coexistence, by means of the comitology procedure under Directive 2000/18 and under the directives on the marketing of seed. Therefore, the EESC is not being consulted on these issues. It therefore makes sense to join the debate on these issues by drawing up an own-initiative opinion, thus drawing particular attention to the associated economic and social issues and providing an opinion on these to the Council, the Commission and the Parliament.

| 1.3 | The purpose of this own-initiative opinion is twofold: firstly, to shed light on the most important substantive aspects of coexistence; and secondly, to make proposals as to which of these aspects should, in the EESC's view, be dealt with by European legislation, which should be dealt with by national legislation, and what practical objectives and guidance the relevant businesses, in particular farms, need. |
| --- | --- |

1.3

The purpose of this own-initiative opinion is twofold: firstly, to shed light on the most important substantive aspects of coexistence; and secondly, to make proposals as to which of these aspects should, in the EESC's view, be dealt with by European legislation, which should be dealt with by national legislation, and what practical objectives and guidance the relevant businesses, in particular farms, need.

| 1.4 | As the Commission ended the moratorium on marketing GMOs as foodstuffs, which had been in force since 1998, in May this year and intends to take a decision in the near future on the cultivation of GMOs (1), it is of vital importance to set up a practical framework for coexistence. |
| --- | --- |

1.4

As the Commission ended the moratorium on marketing GMOs as foodstuffs, which had been in force since 1998, in May this year and intends to take a decision in the near future on the cultivation of GMOs (1), it is of vital importance to set up a practical framework for coexistence.

2.   General preliminary remarks and definitions of terms

| 2.1 | Due to the authorisation of the marketing of genetically modified organisms (GMOs):






  — | for plant and microbe cultivation and stock farming; |
| --- | --- | --- |

2.1

Due to the authorisation of the marketing of genetically modified organisms (GMOs):

—

for plant and microbe cultivation and stock farming;

| — | for research purposes; |
| --- | --- |

—

for research purposes;

| — | as food and animal feed; |
| --- | --- |

—

as food and animal feed;

| — | as a raw material for other purposes, including cultivation for pharmaceutical production; |
| --- | --- |

—

as a raw material for other purposes, including cultivation for pharmaceutical production;

| — | for the purpose of managing the natural environment (for example to break down pollutants), and |
| --- | --- |

—

for the purpose of managing the natural environment (for example to break down pollutants), and

| — | as an aid to agriculture and forestry (for example, to control parasites and weeds), |
| --- | --- |

—

as an aid to agriculture and forestry (for example, to control parasites and weeds),

the need arises to lay down practical provisions for the implementation of such marketing and for the handling of these products in food, animal feed and the natural environment.

| 2.2 | The following matters have already been settled at European level:






  — | risk assessment and risk management (2); |
| --- | --- | --- |

2.2

The following matters have already been settled at European level:

—

risk assessment and risk management (2);

| — | authorisation; |
| --- | --- |

—

authorisation;

| — | labelling requirements for food and animal feed (3) |
| --- | --- |

—

labelling requirements for food and animal feed (3)

| — | traceability (4), and |
| --- | --- |

—

traceability (4), and

| — | transboundary transport outside the European Community (implementing the International Cartagena Protocol on Biosecurity) (5). |
| --- | --- |

—

transboundary transport outside the European Community (implementing the International Cartagena Protocol on Biosecurity) (5).

| 2.3 | The following areas have yet to be dealt with at European level:






  — | labelling requirements for seed and reproductive material; the Commission is currently drawing up a proposal on this matter (6), and |
| --- | --- | --- |

2.3

The following areas have yet to be dealt with at European level:

—

labelling requirements for seed and reproductive material; the Commission is currently drawing up a proposal on this matter (6), and

| — | the practicalities of the economic, social and cultural consequences of the use of GMOs (7); the parliaments and governments of Member States are currently dealing with this in the framework of the implementation of Directive 2001/18 and the development of their national legislation relating to rules on cultivation and civil liability relating to this. |
| --- | --- |

—

the practicalities of the economic, social and cultural consequences of the use of GMOs (7); the parliaments and governments of Member States are currently dealing with this in the framework of the implementation of Directive 2001/18 and the development of their national legislation relating to rules on cultivation and civil liability relating to this.

| 2.4 | Existing EU legislation states that GMOs require particular risk assessment, risk management and labelling and traceability throughout their life cycle. It is based on the assumption that it should be possible to refrain from the active and passive use of GMOs and strictly forbids the use of GMOs in organic agriculture and organic food (with the exception of a few veterinary products). It also provides for the possibility, on a case-by-case basis, of subjecting the release of GMOs in particular areas to special conditions or prohibiting it altogether. |
| --- | --- |

2.4

Existing EU legislation states that GMOs require particular risk assessment, risk management and labelling and traceability throughout their life cycle. It is based on the assumption that it should be possible to refrain from the active and passive use of GMOs and strictly forbids the use of GMOs in organic agriculture and organic food (with the exception of a few veterinary products). It also provides for the possibility, on a case-by-case basis, of subjecting the release of GMOs in particular areas to special conditions or prohibiting it altogether.

| 2.5 | GMOs are living organisms that are capable of reproducing and spreading within the natural environment. The biological systems into which they are to be introduced, and from which they cannot then be easily removed, can neither be hermetically partitioned nor similarly controlled in the way that is possible in closed scientific, industrial or craft facilities. The biosphere is fundamentally a globally interconnected, open system, of whose laws and behaviour we currently only have limited knowledge and control. |
| --- | --- |

2.5

GMOs are living organisms that are capable of reproducing and spreading within the natural environment. The biological systems into which they are to be introduced, and from which they cannot then be easily removed, can neither be hermetically partitioned nor similarly controlled in the way that is possible in closed scientific, industrial or craft facilities. The biosphere is fundamentally a globally interconnected, open system, of whose laws and behaviour we currently only have limited knowledge and control.

| 2.6 | For these reasons, the European legislators have taken the precautionary principle along with case by case assessment and regulation as the basis for dealing with GMOs. At the same time, they have considered transparency and freedom of choice in respect of the use of GMOs to be of great importance. |
| --- | --- |

2.6

For these reasons, the European legislators have taken the precautionary principle along with case by case assessment and regulation as the basis for dealing with GMOs. At the same time, they have considered transparency and freedom of choice in respect of the use of GMOs to be of great importance.

| 2.7 | This is taking place against a background where a majority of the citizens of the European Union are either sceptical or hostile to the use of GMOs in agriculture, forestry, food and feed. |
| --- | --- |

2.7

This is taking place against a background where a majority of the citizens of the European Union are either sceptical or hostile to the use of GMOs in agriculture, forestry, food and feed.

| 2.8 | The coexistence of agriculture and land use with and without genetically modified organisms therefore affects:






  — | agriculture, forestry, and fisheries, including management of land ownership; |
| --- | --- | --- |

2.8

The coexistence of agriculture and land use with and without genetically modified organisms therefore affects:

—

agriculture, forestry, and fisheries, including management of land ownership;

| — | the whole of the food sector (processing, trade, catering); |
| --- | --- |

—

the whole of the food sector (processing, trade, catering);

| — | regional and local land use and economic development; |
| --- | --- |

—

regional and local land use and economic development;

| — | consumer protection; and |
| --- | --- |

—

consumer protection; and

| — | environmental protection |
| --- | --- |

—

environmental protection

within the temporal and spatial framework appropriate to each.

| 2.9 | The European Commission, in non-binding opinions, has until now reduced coexistence to the purely economic factors of various forms of agriculture existing alongside each other. It suggests that regulating these aspects should be left largely to individual Member States. However, this position has caused controversy in the Council of Ministers and has been criticised by the European Parliament (8). |
| --- | --- |

2.9

The European Commission, in non-binding opinions, has until now reduced coexistence to the purely economic factors of various forms of agriculture existing alongside each other. It suggests that regulating these aspects should be left largely to individual Member States. However, this position has caused controversy in the Council of Ministers and has been criticised by the European Parliament (8).

3.   Main aspects of coexistence (structure)

3.1   Current scientific thinking

| 3.1.1 | In order to regulate coexistence effectively, a sound scientific basis is needed for estimating the speed and breadth of the spread and interbreeding of GMOs of various plant species (and, where applicable, the spread of micro-organisms and animals). Reliable, practical experience and estimates of possible modes of transmission during production, storage, transport and processing are also essential. |
| --- | --- |

3.1.1

In order to regulate coexistence effectively, a sound scientific basis is needed for estimating the speed and breadth of the spread and interbreeding of GMOs of various plant species (and, where applicable, the spread of micro-organisms and animals). Reliable, practical experience and estimates of possible modes of transmission during production, storage, transport and processing are also essential.

| 3.1.2 | The Commission has obtained various reports and opinions (9) on this subject; however, these do not yet give a coherent picture. Further studies have been commissioned. At the first scientific conference on coexistence (10), which was held in November 2003, the assembled scientists established that there was a considerable need for research and felt that their ability to make firm statements on the possibilities of coexistence was limited. An opinion of the EU Scientific Committee from 2001 (11) points to significant uncertainties and does not unequivocally commit itself to the limits for food, feed and seed suggested by the Commission. |
| --- | --- |

3.1.2

The Commission has obtained various reports and opinions (9) on this subject; however, these do not yet give a coherent picture. Further studies have been commissioned. At the first scientific conference on coexistence (10), which was held in November 2003, the assembled scientists established that there was a considerable need for research and felt that their ability to make firm statements on the possibilities of coexistence was limited. An opinion of the EU Scientific Committee from 2001 (11) points to significant uncertainties and does not unequivocally commit itself to the limits for food, feed and seed suggested by the Commission.

| 3.1.3 | The current state of knowledge of cross-breeding behaviour, propagation, and persistence of genetically modified plants does not at present allow any reliable predictions to be made as to the feasibility of coexistence. |
| --- | --- |

3.1.3

The current state of knowledge of cross-breeding behaviour, propagation, and persistence of genetically modified plants does not at present allow any reliable predictions to be made as to the feasibility of coexistence.

| 3.1.4 | This particularly applies to long-term forecasts and to various ecosystemic surroundings and conditions of cultivation. |
| --- | --- |

3.1.4

This particularly applies to long-term forecasts and to various ecosystemic surroundings and conditions of cultivation.

| 3.1.5 | The evaluation and estimation of the ability of particular GMOs to co-exist must be undertaken plant species by plant species, taking into consideration the regional circumstances and the various production systems. Such evaluations and estimates also need to take into account the changes to cultivation methods this involves (for example, the use of total herbicides made possible as a result of appropriate resistance). |
| --- | --- |

3.1.5

The evaluation and estimation of the ability of particular GMOs to co-exist must be undertaken plant species by plant species, taking into consideration the regional circumstances and the various production systems. Such evaluations and estimates also need to take into account the changes to cultivation methods this involves (for example, the use of total herbicides made possible as a result of appropriate resistance).

| 3.1.6 | Particular difficulties in forecasting and monitoring arise where plant species are involved that are genetically capable of interbreeding with naturally-occurring, non-cultivated related species. Oilseed rape, whose genetic origins are in Europe, has many direct and indirect wild and cultivated cross-breeding partners. These include cabbage, rape, mustard (rocket), wild radish, annual wall rocket, common dogmustard, wild mustard, wild cabbage and Mediterranean mustard. The same also applies to beet, for example. |
| --- | --- |

3.1.6

Particular difficulties in forecasting and monitoring arise where plant species are involved that are genetically capable of interbreeding with naturally-occurring, non-cultivated related species. Oilseed rape, whose genetic origins are in Europe, has many direct and indirect wild and cultivated cross-breeding partners. These include cabbage, rape, mustard (rocket), wild radish, annual wall rocket, common dogmustard, wild mustard, wild cabbage and Mediterranean mustard. The same also applies to beet, for example.

3.2   Risk management, monitoring and registration of cultivation

| 3.2.1 | The identification and labelling of GMOs is the material precondition for the implementation of the registration of cultivation and the monitoring of GMOs required by Directive 2001/18. It is also a precondition for taking particular GMOs out of circulation if this becomes necessary due to new scientific information or to the expiry of a time-limited authorisation. The labelling of GMOs capable of reproducing is of decisive importance for effective risk management, especially in the event that emergency measures become necessary. It cannot, therefore, focus solely on the question of whether or not it will lead to the limit for a labelling requirement in food and feed being exceeded, particularly since the proposed limits with respect to consumer information cease to be relevant if an authorisation is withdrawn. |
| --- | --- |

3.2.1

The identification and labelling of GMOs is the material precondition for the implementation of the registration of cultivation and the monitoring of GMOs required by Directive 2001/18. It is also a precondition for taking particular GMOs out of circulation if this becomes necessary due to new scientific information or to the expiry of a time-limited authorisation. The labelling of GMOs capable of reproducing is of decisive importance for effective risk management, especially in the event that emergency measures become necessary. It cannot, therefore, focus solely on the question of whether or not it will lead to the limit for a labelling requirement in food and feed being exceeded, particularly since the proposed limits with respect to consumer information cease to be relevant if an authorisation is withdrawn.

| 3.2.2 | An assessment of the risks associated with GMOs is required under Directive 2000/18 and similar provisions in other Community regulations and directives and is a precondition of their authorisation. However, the way in which cultivation is carried out in practice will have a decisive effect on whether the measures provided for in the directive to limit cultivation and to control and monitor its effects and to withdraw authorisation can actually be carried out. Thus, the issue of coexistence cannot be limited to the economic aspects of cultivation alone, but is an integral part of the risk management and prevention laid down by law. |
| --- | --- |

3.2.2

An assessment of the risks associated with GMOs is required under Directive 2000/18 and similar provisions in other Community regulations and directives and is a precondition of their authorisation. However, the way in which cultivation is carried out in practice will have a decisive effect on whether the measures provided for in the directive to limit cultivation and to control and monitor its effects and to withdraw authorisation can actually be carried out. Thus, the issue of coexistence cannot be limited to the economic aspects of cultivation alone, but is an integral part of the risk management and prevention laid down by law.

3.3   Traceability and control in the human and animal food chain by sampling, testing and documentation

| 3.3.1 | Measures for identifying and labelling GMOs throughout the food chain are set out in the directive on traceability and labelling of GMOs (part of the general principles and requirements of food legislation (12)). These extend beyond the identification of the GMOs in the final product, as products now need to be labelled even if no trace of the GMOs can be detected in the end product. |
| --- | --- |

3.3.1

Measures for identifying and labelling GMOs throughout the food chain are set out in the directive on traceability and labelling of GMOs (part of the general principles and requirements of food legislation (12)). These extend beyond the identification of the GMOs in the final product, as products now need to be labelled even if no trace of the GMOs can be detected in the end product.

| 3.3.2 | The information needed to identify a GMO are recorded in a central database and published (13). |
| --- | --- |

3.3.2

The information needed to identify a GMO are recorded in a central database and published (13).

| 3.3.3 | The Joint Research Centre of the EU is now working towards the standardisation and validation of the sample collection and test procedures that are required in this context. |
| --- | --- |

3.3.3

The Joint Research Centre of the EU is now working towards the standardisation and validation of the sample collection and test procedures that are required in this context.

| 3.3.4 | The identification of specific DNA or of a specific protein of a GMO is technically possible, using currently available analysis techniques, between 0.001 and 0.05 per cent of the total of the sample being analysed. The costs for non-specific, qualitative tests for the presence of GMOs are currently between 100 and 150 EUR per test. The costs for specific and quantitative tests vary between 250 and 500 EUR per test. |
| --- | --- |

3.3.4

The identification of specific DNA or of a specific protein of a GMO is technically possible, using currently available analysis techniques, between 0.001 and 0.05 per cent of the total of the sample being analysed. The costs for non-specific, qualitative tests for the presence of GMOs are currently between 100 and 150 EUR per test. The costs for specific and quantitative tests vary between 250 and 500 EUR per test.

| 3.3.5 | Considerable differences persist within the Community as to the reliability and across-the-board availability of detection procedures and the technical capacity to put them into practice. As yet, adequate provision for such procedures has been made in only a few Member States; in some, no such provision has been made at all. |
| --- | --- |

3.3.5

Considerable differences persist within the Community as to the reliability and across-the-board availability of detection procedures and the technical capacity to put them into practice. As yet, adequate provision for such procedures has been made in only a few Member States; in some, no such provision has been made at all.

| 3.3.6 | Currently, there are, in practice, considerable difficulties particularly with quantitative and specific tests for the presence of GMOs, particularly where the manufacturer has provided no appropriate detection procedure or insufficient reference material. This applies especially to those GMOs that are not permitted in the EU, but whose presence in imported seed and raw materials cannot be ruled out. |
| --- | --- |

3.3.6

Currently, there are, in practice, considerable difficulties particularly with quantitative and specific tests for the presence of GMOs, particularly where the manufacturer has provided no appropriate detection procedure or insufficient reference material. This applies especially to those GMOs that are not permitted in the EU, but whose presence in imported seed and raw materials cannot be ruled out.

3.4   Good professional practice in agriculture

| 3.4.1 | Good professional practice needs to be adhered to throughout the food production chain:






  — | in research and development, particularly where the release of GMOs for scientific purposes is involved (2001/18 Part B); |
| --- | --- | --- |

3.4.1

Good professional practice needs to be adhered to throughout the food production chain:

—

in research and development, particularly where the release of GMOs for scientific purposes is involved (2001/18 Part B);

| — | in the development of seed, particularly with respect to the composition of the stock material and of the various stages of the basic seed; |
| --- | --- |

—

in the development of seed, particularly with respect to the composition of the stock material and of the various stages of the basic seed;

| — | in maintenance breeding and reproduction; |
| --- | --- |

—

in maintenance breeding and reproduction;

| — | in the reproduction, preparation, treatment and packaging of the seed; |
| --- | --- |

—

in the reproduction, preparation, treatment and packaging of the seed;

| — | in the cultivation, processing, harvesting and transport of the plant products; |
| --- | --- |

—

in the cultivation, processing, harvesting and transport of the plant products;

| — | in selecting and preparing harvested seed for replanting; |
| --- | --- |

—

in selecting and preparing harvested seed for replanting;

| — | in the buying, processing, storage and transport of agricultural raw materials and products; |
| --- | --- |

—

in the buying, processing, storage and transport of agricultural raw materials and products;

| — | in further processing of food and feed, and |
| --- | --- |

—

in further processing of food and feed, and

| — | in packaging, distribution and labelling of finished products. |
| --- | --- |

—

in packaging, distribution and labelling of finished products.

| 3.4.2 | In most areas, good professional practice is in many ways already established. Complementing them with specific provisions for handling GMOs is the key condition for the practical implementation of the legally defined rules for risk management, traceability, and labelling of GMOs. The greatest need for this action is in the areas of seed and agricultural production, but also with respect to the buying, storage and transport of agricultural produce. |
| --- | --- |

3.4.2

In most areas, good professional practice is in many ways already established. Complementing them with specific provisions for handling GMOs is the key condition for the practical implementation of the legally defined rules for risk management, traceability, and labelling of GMOs. The greatest need for this action is in the areas of seed and agricultural production, but also with respect to the buying, storage and transport of agricultural produce.

| 3.4.3 | Both the success and the requirements of good professional practice depend substantially on the success with which good professional practice was adhered to in the prior stages of the production process. |
| --- | --- |

3.4.3

Both the success and the requirements of good professional practice depend substantially on the success with which good professional practice was adhered to in the prior stages of the production process.

| 3.4.4 | In order to avoid interbreeding and other spreading of GMOs on to fields and the environment at large, as well as the mixing of GMO seed with non-GMO seed, various measures (appropriate to the crop in question and the regional circumstances) need to be taken. The Commission has spelled some of these out in its guidelines on coexistence (14) and requested Member States to issue appropriate regulations. These affect both farmers who plant GMOs and those who want to keep them out of their produce. They also apply to agricultural service companies and businesses, including those involved in storage and transport, as well as the authorities responsible for agricultural practice and institutions involved in protecting the countryside and the environment. |
| --- | --- |

3.4.4

In order to avoid interbreeding and other spreading of GMOs on to fields and the environment at large, as well as the mixing of GMO seed with non-GMO seed, various measures (appropriate to the crop in question and the regional circumstances) need to be taken. The Commission has spelled some of these out in its guidelines on coexistence (14) and requested Member States to issue appropriate regulations. These affect both farmers who plant GMOs and those who want to keep them out of their produce. They also apply to agricultural service companies and businesses, including those involved in storage and transport, as well as the authorities responsible for agricultural practice and institutions involved in protecting the countryside and the environment.

3.5   Composition, control and labelling of seed

| 3.5.1 | Seed is the first stage in the production chain. It reproduces by a factor of between 40 and 1000 depending on type and may in some cases remain in the soil for long periods. GMOs in seed fertilise neighbouring crops and any wild relations growing nearby through external pollenisation. Seed and pollen can thereby be dispersed across great distances. Scientists agree that these space and time elements mean that the presence of GMOs in seed is a key factor in coexistence. |
| --- | --- |

3.5.1

Seed is the first stage in the production chain. It reproduces by a factor of between 40 and 1000 depending on type and may in some cases remain in the soil for long periods. GMOs in seed fertilise neighbouring crops and any wild relations growing nearby through external pollenisation. Seed and pollen can thereby be dispersed across great distances. Scientists agree that these space and time elements mean that the presence of GMOs in seed is a key factor in coexistence.

| 3.5.2 | Directive 2001/18 provides for the establishment of limits for certain product groups, below which limits labelling of GMOs is not required if certain conditions are met. The regulations on genetically modified food and feed (15) and on traceability (16) set a limit of 0.9 % for those products. |
| --- | --- |

3.5.2

Directive 2001/18 provides for the establishment of limits for certain product groups, below which limits labelling of GMOs is not required if certain conditions are met. The regulations on genetically modified food and feed (15) and on traceability (16) set a limit of 0.9 % for those products.

| 3.5.3 | The Commission has proposed that the directives on plants and seed should also contain such limits on GMOs in seed, which should be between 0.3 and 0.7 per cent. Due to legal concerns, the Commission withdrew this proposal in October 2003 and drew up a new proposal. This contained only limits of 0.3 % for rape seed and maize seed. However, the Commission withdrew this proposal, too, in September 2004. Further risk assessments are now planned in order put the decision on a sounder scientific basis and, in particular, to obtain a more accurate picture of the economic effects. It is clear that setting purity standards for non-genetically modified seed will have significant effects on whether coexistence of certain plant species and types of production will even be possible and, where applicable, on the costs associated with it. |
| --- | --- |

3.5.3

The Commission has proposed that the directives on plants and seed should also contain such limits on GMOs in seed, which should be between 0.3 and 0.7 per cent. Due to legal concerns, the Commission withdrew this proposal in October 2003 and drew up a new proposal. This contained only limits of 0.3 % for rape seed and maize seed. However, the Commission withdrew this proposal, too, in September 2004. Further risk assessments are now planned in order put the decision on a sounder scientific basis and, in particular, to obtain a more accurate picture of the economic effects. It is clear that setting purity standards for non-genetically modified seed will have significant effects on whether coexistence of certain plant species and types of production will even be possible and, where applicable, on the costs associated with it.

| 3.5.4 | On the question of whether limits should be set on the adventitious and technically unavoidable presence of GMOs in seed, and if so what limits. There are differing opinions, not only among the governments of Member States, but also among the businesses and organisations affected. |
| --- | --- |

3.5.4

On the question of whether limits should be set on the adventitious and technically unavoidable presence of GMOs in seed, and if so what limits. There are differing opinions, not only among the governments of Member States, but also among the businesses and organisations affected.

| 3.5.5 | Unlike food and feed, seed labelling is not designed as information to help final consumers make a free choice. Rather, it provides key information for those releasing GMOs into the environment in line with the legal provisions and for the authorities responsible for implementing the deliberate release directive. Lack of information about the presence of GMOs in certain seed makes it all but impossible to comply with the legal requirements for their registration, monitoring (post-market monitoring) and, in the case of any subsequent ban, retrieval. |
| --- | --- |

3.5.5

Unlike food and feed, seed labelling is not designed as information to help final consumers make a free choice. Rather, it provides key information for those releasing GMOs into the environment in line with the legal provisions and for the authorities responsible for implementing the deliberate release directive. Lack of information about the presence of GMOs in certain seed makes it all but impossible to comply with the legal requirements for their registration, monitoring (post-market monitoring) and, in the case of any subsequent ban, retrieval.

| 3.5.6 | If, for instance, a GMO should subsequently prove to be allergenic, or where the transfer of its properties to wild relations generates a competitive advantage and thus produces undesired shifts in the ecological balance, the GMO in question would have to be banned and withdrawn from circulation. For this purpose, limits in the area proposed by the European Commission would be wholly unacceptable. Assuming that all the seed of the affected plant species is contaminated with up to 0.5 % of this GMO, then retrieval and emergency measures would have to cover the entire yield and the entire seed of the species concerned. |
| --- | --- |

3.5.6

If, for instance, a GMO should subsequently prove to be allergenic, or where the transfer of its properties to wild relations generates a competitive advantage and thus produces undesired shifts in the ecological balance, the GMO in question would have to be banned and withdrawn from circulation. For this purpose, limits in the area proposed by the European Commission would be wholly unacceptable. Assuming that all the seed of the affected plant species is contaminated with up to 0.5 % of this GMO, then retrieval and emergency measures would have to cover the entire yield and the entire seed of the species concerned.

| 3.5.7 | Practical experiences with a product recall in the USA illustrate both the difficulties and the possible costs. In 2000, after the US Environmental Protection Agency banned the use of the genetically modified maize variety Starlink due to possible allergenic effects, the total costs across the product chain were around US$1 billion. Contaminated seed and crops were bought up on a large scale and withdrawn from the market. To this day, however, it has been impossible to eliminate the contamination completely. In 2003, more than 1 % of samples tested showed traces of Starlink. |
| --- | --- |

3.5.7

Practical experiences with a product recall in the USA illustrate both the difficulties and the possible costs. In 2000, after the US Environmental Protection Agency banned the use of the genetically modified maize variety Starlink due to possible allergenic effects, the total costs across the product chain were around US$1 billion. Contaminated seed and crops were bought up on a large scale and withdrawn from the market. To this day, however, it has been impossible to eliminate the contamination completely. In 2003, more than 1 % of samples tested showed traces of Starlink.

| 3.5.8 | Moreover, the presence of GMOs in non-genetically-modified seed has a critical impact on the costs incurred in the downstream farming and processing sectors. A huge amount of expensive testing and monitoring is involved in cases where, under legal provisions permitting a certain degree of contamination, all non-genetically-modified products still have to be routinely checked to ensure that their contamination with GMOs does not exceed the legal labelling limit of 0.9 % for food and feed, or correspondingly lower levels for upstream products. |
| --- | --- |

3.5.8

Moreover, the presence of GMOs in non-genetically-modified seed has a critical impact on the costs incurred in the downstream farming and processing sectors. A huge amount of expensive testing and monitoring is involved in cases where, under legal provisions permitting a certain degree of contamination, all non-genetically-modified products still have to be routinely checked to ensure that their contamination with GMOs does not exceed the legal labelling limit of 0.9 % for food and feed, or correspondingly lower levels for upstream products.

| 3.5.9 | The contamination of conventional and organic seed with GMOs will also be a key factor in determining the party liable for any financial damage incurred by exceeding the labelling limits for food and feed, as well as the lower limits derived from this that commercial and processing businesses are demanding. Naturally, any potentially liable parties will first of all demand proof that the damage involved has not been the result, at least in part, of the condition of the seed rather than the transfer of GMOs in the field. |
| --- | --- |

3.5.9

The contamination of conventional and organic seed with GMOs will also be a key factor in determining the party liable for any financial damage incurred by exceeding the labelling limits for food and feed, as well as the lower limits derived from this that commercial and processing businesses are demanding. Naturally, any potentially liable parties will first of all demand proof that the damage involved has not been the result, at least in part, of the condition of the seed rather than the transfer of GMOs in the field.

| 3.5.10 | Also, the presence of GMOs in conventional and organic seed adversely affects farmers' scope for breeding and planting their own seed. The original seed contamination can accumulate in subsequent generations, especially, of course, when combined with further contamination from neighbouring fields. That might not only generate substantial financial losses for the farmers concerned, but could also harm seed diversity and the suitability of seed for local conditions. |
| --- | --- |

3.5.10

Also, the presence of GMOs in conventional and organic seed adversely affects farmers' scope for breeding and planting their own seed. The original seed contamination can accumulate in subsequent generations, especially, of course, when combined with further contamination from neighbouring fields. That might not only generate substantial financial losses for the farmers concerned, but could also harm seed diversity and the suitability of seed for local conditions.

3.6   Product and environmental liability

| 3.6.1 | Under Directive 85/374/EEC concerning liability for defective products, manufacturers and suppliers of GMOs are liable only for defective products in the case of culpable or negligent damage to life, limb or property (17). This liability is, however, restricted to final products for private use and consumption and therefore does not cover either the seed or any financial damage incurred by a reduction in the value of the yield or its derivative products. |
| --- | --- |

3.6.1

Under Directive 85/374/EEC concerning liability for defective products, manufacturers and suppliers of GMOs are liable only for defective products in the case of culpable or negligent damage to life, limb or property (17). This liability is, however, restricted to final products for private use and consumption and therefore does not cover either the seed or any financial damage incurred by a reduction in the value of the yield or its derivative products.

| 3.6.2 | This comprehensive Community restriction on product liability makes it difficult for national rules to place direct liability on GMO suppliers for any damage falling within the scope of civil law as well. It puts the entire civil liability on the users (i.e. the farmers) as the direct manufacturers of the final product. |
| --- | --- |

3.6.2

This comprehensive Community restriction on product liability makes it difficult for national rules to place direct liability on GMO suppliers for any damage falling within the scope of civil law as well. It puts the entire civil liability on the users (i.e. the farmers) as the direct manufacturers of the final product.

| 3.6.3 | The scope of the new environmental liability directive (2004/35/EC) covers ‘any deliberate release into the environment, transport and placing on the market of genetically modified organisms as defined by Directive 2001/18/EC’. This directive authorises Member States (but not individual citizens) to require those responsible to remove and remedy environmental damage if they are at fault or negligent and a causal link can be established between the damage and the activities of individual operators (18). Member States are required to implement this Directive by 30 April 2007. The fact that a GMO is authorised for release within the Community will, generally speaking, rule out the conditions for negligence or intent, unless specific conditions for release were breached. In its opinion on the environmental liability directive (19), the EESC had already stated that ‘the definition of biodiversity should include the effect of GMOs, in both the short and long term’. |
| --- | --- |

3.6.3

The scope of the new environmental liability directive (2004/35/EC) covers ‘any deliberate release into the environment, transport and placing on the market of genetically modified organisms as defined by Directive 2001/18/EC’. This directive authorises Member States (but not individual citizens) to require those responsible to remove and remedy environmental damage if they are at fault or negligent and a causal link can be established between the damage and the activities of individual operators (18). Member States are required to implement this Directive by 30 April 2007. The fact that a GMO is authorised for release within the Community will, generally speaking, rule out the conditions for negligence or intent, unless specific conditions for release were breached. In its opinion on the environmental liability directive (19), the EESC had already stated that ‘the definition of biodiversity should include the effect of GMOs, in both the short and long term’.

3.7   Civil liability

| 3.7.1 | The unwelcome presence of GMOs in products, production facilities and production areas can cause financial damage to farmers, processors and traders of food and feed if this hampers or prevents the production and sale of products without genetic modification or makes special measures for inspection and removal necessary. It can also make measures to return areas to their original state necessary if the release of GMOs is not permitted in those places (for example environmentally sensitive areas). Such measures cost money. |
| --- | --- |

3.7.1

The unwelcome presence of GMOs in products, production facilities and production areas can cause financial damage to farmers, processors and traders of food and feed if this hampers or prevents the production and sale of products without genetic modification or makes special measures for inspection and removal necessary. It can also make measures to return areas to their original state necessary if the release of GMOs is not permitted in those places (for example environmentally sensitive areas). Such measures cost money.

| 3.7.2 | The insurance industry is at present ruling out insurance against such civil claims. |
| --- | --- |

3.7.2

The insurance industry is at present ruling out insurance against such civil claims.

| 3.7.3 | The European Commission feels that the Member States should determine the civil liability for these costs. This will obviously have an effect on competition within the Community. Differing national rules in this area may significantly distort competition in the internal market and create legal uncertainty in cases where cause and effect cross the Community's internal borders. |
| --- | --- |

3.7.3

The European Commission feels that the Member States should determine the civil liability for these costs. This will obviously have an effect on competition within the Community. Differing national rules in this area may significantly distort competition in the internal market and create legal uncertainty in cases where cause and effect cross the Community's internal borders.

| 3.7.4 | Individual liability for the costs incurred by third parties in avoiding damage (testing, monitoring and other measures to prevent cross-breeding and contamination with GMOs) is hardly legally practicable. In contrast to compensation for damages actually incurred, these very considerable costs, which will arise in all regions where GMOs are cultivated, cannot be dealt with by civil liability provisions. The affected farmers, businesses and authorities could, however, be compensated by special funds financed by the companies and farmers who bring the costs about. |
| --- | --- |

3.7.4

Individual liability for the costs incurred by third parties in avoiding damage (testing, monitoring and other measures to prevent cross-breeding and contamination with GMOs) is hardly legally practicable. In contrast to compensation for damages actually incurred, these very considerable costs, which will arise in all regions where GMOs are cultivated, cannot be dealt with by civil liability provisions. The affected farmers, businesses and authorities could, however, be compensated by special funds financed by the companies and farmers who bring the costs about.

3.8   Macroeconomic and microeconomic costs

| 3.8.1 | The cultivation of GMOs will make measures for control and prevention of the unwelcome presence of GMOs necessary right across the food and feed production sector. There may also be an impact on markets in certain regions and for certain kinds of production and product types (for example, regional quality labels and organic farming and production). In addition to the market players, this affects various authorities and institutions of the Member States and of the Community. |
| --- | --- |

3.8.1

The cultivation of GMOs will make measures for control and prevention of the unwelcome presence of GMOs necessary right across the food and feed production sector. There may also be an impact on markets in certain regions and for certain kinds of production and product types (for example, regional quality labels and organic farming and production). In addition to the market players, this affects various authorities and institutions of the Member States and of the Community.

| 3.8.2 | The monitoring and prevention measures required for coexistence to some extent involve radical changes in farming, craft and industrial practice and tradition. The economic, social and cultural impact, especially on farmers and the craft-based food industry, has not so far been consistently examined and presented. This is, however, essential so as not to adversely affect either their ability to survive and compete, or the market and price structure. |
| --- | --- |

3.8.2

The monitoring and prevention measures required for coexistence to some extent involve radical changes in farming, craft and industrial practice and tradition. The economic, social and cultural impact, especially on farmers and the craft-based food industry, has not so far been consistently examined and presented. This is, however, essential so as not to adversely affect either their ability to survive and compete, or the market and price structure.

| 3.8.3 | A comprehensive picture of these costs is needed in order to evaluate what measures and regulations on coexistence will be most appropriate. To date, however, only limited, piecemeal information and estimates exist on this subject (20) |
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3.8.3

A comprehensive picture of these costs is needed in order to evaluate what measures and regulations on coexistence will be most appropriate. To date, however, only limited, piecemeal information and estimates exist on this subject (20)

| 3.8.4 | The EESC considers a comprehensive overview and estimate of costs that will arise out of coexistence measures for a) individual market players in various types of production and regions and b) the public purse to be an essential requirement for a forward-looking and sustainable solution for coexistence. Clear, binding and reliable arrangements are needed as to who should bear or indeed avoid these costs. |
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3.8.4

The EESC considers a comprehensive overview and estimate of costs that will arise out of coexistence measures for a) individual market players in various types of production and regions and b) the public purse to be an essential requirement for a forward-looking and sustainable solution for coexistence. Clear, binding and reliable arrangements are needed as to who should bear or indeed avoid these costs.

| 3.8.5 | The Commission is right when it writes in its guidelines on coexistence: ‘As a general principle, during the phase of introduction of a new production type in a region, operators (farmers) who introduce the new production type should bear the responsibility of implementing the farm management measures necessary to limit gene flow. Farmers should be able to choose the production type they prefer, without imposing the necessity to change already established production patterns in the neighbourhood.’ |
| --- | --- |

3.8.5

The Commission is right when it writes in its guidelines on coexistence: ‘As a general principle, during the phase of introduction of a new production type in a region, operators (farmers) who introduce the new production type should bear the responsibility of implementing the farm management measures necessary to limit gene flow. Farmers should be able to choose the production type they prefer, without imposing the necessity to change already established production patterns in the neighbourhood.’

| 3.8.6 | The increased production costs resulting from the requisite coexistence measures must not be passed on in higher consumer prices. That would curb freedom of choice, not least for more socially disadvantaged consumers. Agricultural and craft-based food production not involving genetic engineering must not be threatened by cost and price increases and forced into niche production. |
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3.8.6

The increased production costs resulting from the requisite coexistence measures must not be passed on in higher consumer prices. That would curb freedom of choice, not least for more socially disadvantaged consumers. Agricultural and craft-based food production not involving genetic engineering must not be threatened by cost and price increases and forced into niche production.

4.   EESC Recommendations

4.1   Principles of coexistence

| 4.1.1 | Rules on coexistence should be driven by the principles of caution, maintaining natural and agricultural biodiversity, minimum cost, maximising economic and social opportunities, promoting regional diversity and economic autonomy, and the polluter pays principle. They should be sustainable in the long term, robust, realistic and forgiving of mistakes. |
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4.1.1

Rules on coexistence should be driven by the principles of caution, maintaining natural and agricultural biodiversity, minimum cost, maximising economic and social opportunities, promoting regional diversity and economic autonomy, and the polluter pays principle. They should be sustainable in the long term, robust, realistic and forgiving of mistakes.

| 4.1.2 | The necessary measures and the resulting costs should, as a matter of principle, be borne by those economic players who make them necessary by supplying and using GMOs. The burden on those who wish to produce and consume without GMOs should be kept to a minimum, and such measures must not push up their production costs and prices. Nor should they be borne by the taxpayer. |
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4.1.2

The necessary measures and the resulting costs should, as a matter of principle, be borne by those economic players who make them necessary by supplying and using GMOs. The burden on those who wish to produce and consume without GMOs should be kept to a minimum, and such measures must not push up their production costs and prices. Nor should they be borne by the taxpayer.

| 4.1.3 | Measures to prevent the appearance and spread of GMOs should, as a matter of principle, take place at the stage where they are least costly and most effective. |
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4.1.3

Measures to prevent the appearance and spread of GMOs should, as a matter of principle, take place at the stage where they are least costly and most effective.

| 4.1.4 | GMO cultivation must not be allowed wherever this would make production of plants of the same or similar types without genetic manipulation no longer possible or disproportionately difficult. |
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4.1.4

GMO cultivation must not be allowed wherever this would make production of plants of the same or similar types without genetic manipulation no longer possible or disproportionately difficult.

4.2   Elaboration of scientific principles and dealing with the current state of scientific knowledge

| 4.2.1 | Until an adequate scientific basis is established, the conditions for coexistence must be developed using the precautionary principle, the aim being to prevent changes that are difficult or impossible to reverse and whose consequences for coexistence cannot adequately be assessed. Such preventive action should also include the economic, social and agricultural aspects of coexistence. |
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4.2.1

Until an adequate scientific basis is established, the conditions for coexistence must be developed using the precautionary principle, the aim being to prevent changes that are difficult or impossible to reverse and whose consequences for coexistence cannot adequately be assessed. Such preventive action should also include the economic, social and agricultural aspects of coexistence.

| 4.2.2 | The Commission is called upon to launch a coherent, interdisciplinary, scientific and practical research programme to bridge the huge gaps in knowledge about coexistence. |
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4.2.2

The Commission is called upon to launch a coherent, interdisciplinary, scientific and practical research programme to bridge the huge gaps in knowledge about coexistence.

| 4.2.3 | The opinion of the Scientific Committee on Plants (21) referred to by the Commission in the discussion on GMO limits in seed is not satisfactory. It fails to answer the question of what limits are required for labelling to meet the provisions of Directive 2001/18. Nor does it adequately answer the question of which kinds of seed contamination will, in practice, lead to which kinds of contamination in the yield and final product. The Commission should therefore again submit specific questions to the EFSA Scientific Committee. |
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4.2.3

The opinion of the Scientific Committee on Plants (21) referred to by the Commission in the discussion on GMO limits in seed is not satisfactory. It fails to answer the question of what limits are required for labelling to meet the provisions of Directive 2001/18. Nor does it adequately answer the question of which kinds of seed contamination will, in practice, lead to which kinds of contamination in the yield and final product. The Commission should therefore again submit specific questions to the EFSA Scientific Committee.

| 4.2.4 | Furthermore, the scientific and practical studies by the European Food Safety Agency, the European Environment Agency and the Joint Research Centre available at national and regional level should be summarised and made accessible to the Member States. |
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4.2.4

Furthermore, the scientific and practical studies by the European Food Safety Agency, the European Environment Agency and the Joint Research Centre available at national and regional level should be summarised and made accessible to the Member States.

| 4.2.5 | The Committee recommends that the Commission join forces with a number of European regions to undertake practical, large-scale coexistence trials under various conditions. By cultivating species of maize, rape, potatoes, beet and tomatoes that are not genetically modified but are quite distinct from other species, all those involved should test and study the practical implications of cross-breeding prevention, various safe distances, the cleaning of machinery, separation during transport, storage and processing and other coexistence measures. |
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4.2.5

The Committee recommends that the Commission join forces with a number of European regions to undertake practical, large-scale coexistence trials under various conditions. By cultivating species of maize, rape, potatoes, beet and tomatoes that are not genetically modified but are quite distinct from other species, all those involved should test and study the practical implications of cross-breeding prevention, various safe distances, the cleaning of machinery, separation during transport, storage and processing and other coexistence measures.

4.3   Precautions and use of the best available technologies in risk management

| 4.3.1 | Labelling and good professional practice must be aimed at making it possible to monitor the spread and effects of GMOs as accurately as possible. It should also facilitate the fullest possible elimination of a GMO from the environment, seed and produce. |
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4.3.1

Labelling and good professional practice must be aimed at making it possible to monitor the spread and effects of GMOs as accurately as possible. It should also facilitate the fullest possible elimination of a GMO from the environment, seed and produce.

| 4.3.2 | Under no circumstances should the setting of thresholds for labelling or provisions for good professional practice impede or render impossible the aims and objectives of Directive 2001/18 and Regulations 1830/2003 and 1829/2003. |
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4.3.2

Under no circumstances should the setting of thresholds for labelling or provisions for good professional practice impede or render impossible the aims and objectives of Directive 2001/18 and Regulations 1830/2003 and 1829/2003.

| 4.3.3 | It should therefore be a fundamental requirement that the best available technology and practice is used in cultivation, transport, processing, import and export of GMOs. |
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4.3.3

It should therefore be a fundamental requirement that the best available technology and practice is used in cultivation, transport, processing, import and export of GMOs.

| 4.3.4 | In this context, the particular requirements of protecting nature and the diversity of Europe's ecosystems must also be taken into consideration. |
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4.3.4

In this context, the particular requirements of protecting nature and the diversity of Europe's ecosystems must also be taken into consideration.

4.4   Obtaining and keeping the information necessary for identification and labelling

| 4.4.1 | It should be a fundamental requirement that the identification of GMOs and their labelling at various stages of production is carried out as accurately as possible at the beginning of the chain of production and is passed on to subsequent stages in the chain in as complete a form as possible. |
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4.4.1

It should be a fundamental requirement that the identification of GMOs and their labelling at various stages of production is carried out as accurately as possible at the beginning of the chain of production and is passed on to subsequent stages in the chain in as complete a form as possible.

| 4.4.2 | The loss of information must be prevented. Once information has been obtained, this should be documented and passed on, regardless of any threshold values that may be in place. |
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4.4.2

The loss of information must be prevented. Once information has been obtained, this should be documented and passed on, regardless of any threshold values that may be in place.

| 4.4.3 | The provision and validation of test procedures and reference material is the responsibility of the companies and institutions that want to supply a particular GMO or release it for the purpose of scientific tests. They also have a duty to keep these up to date and to make them available to all interested parties at minimum cost. |
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4.4.3

The provision and validation of test procedures and reference material is the responsibility of the companies and institutions that want to supply a particular GMO or release it for the purpose of scientific tests. They also have a duty to keep these up to date and to make them available to all interested parties at minimum cost.

| 4.4.4 | Sampling procedures should, especially at the beginning of the production chain, be selected such that they provide the highest possible level of certainty and secure the maximum possible information. They should therefore be based on the most reliable technology available, and not on any threshold limits for labelling that may apply. |
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4.4.4

Sampling procedures should, especially at the beginning of the production chain, be selected such that they provide the highest possible level of certainty and secure the maximum possible information. They should therefore be based on the most reliable technology available, and not on any threshold limits for labelling that may apply.

4.5   Binding, practicable, verifiable and robust standards for good professional practice at all stages of production are a key criterion for coexistence.

| 4.5.1 | They should be set out in such a way that they achieve the goals of coexistence and precaution in the long term and can be adapted to ongoing developments in science and technology. |
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4.5.1

They should be set out in such a way that they achieve the goals of coexistence and precaution in the long term and can be adapted to ongoing developments in science and technology.

| 4.5.2 | In order to avoid a) damaging the single market in food and feed and the agricultural order within the Community and b) distortions in competition, the rules on good professional practice should, whilst remaining flexible enough to take account of the various conditions of cultivation and processing, be set or harmonised at a high (i.e. Community) level. |
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4.5.2

In order to avoid a) damaging the single market in food and feed and the agricultural order within the Community and b) distortions in competition, the rules on good professional practice should, whilst remaining flexible enough to take account of the various conditions of cultivation and processing, be set or harmonised at a high (i.e. Community) level.

4.6   The regulations on labelling and purity of seed are crucial in guaranteeing coexistence.

| 4.6.1 | Therefore, when setting limits for labelling of GMOs in seed, the highest technically and practically achievable level of precision and transparency should be sought. Although the technically reliable detection threshold in a sample is currently as low as 0.01 %, in practice the size and number of samples to be taken mean that a level of 0.1 % of the entire batch of seed is more realistic. |
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4.6.1

Therefore, when setting limits for labelling of GMOs in seed, the highest technically and practically achievable level of precision and transparency should be sought. Although the technically reliable detection threshold in a sample is currently as low as 0.01 %, in practice the size and number of samples to be taken mean that a level of 0.1 % of the entire batch of seed is more realistic.

| 4.6.2 | The limit for labelling GMOs in non-genetically-modified seed must be set at the virtual detection threshold. |
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4.6.2

The limit for labelling GMOs in non-genetically-modified seed must be set at the virtual detection threshold.

| 4.6.3 | The respective seed directives should, in addition, contain strict rules (maximum limits) concerning the marketability of non-genetically modified seed. |
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4.6.3

The respective seed directives should, in addition, contain strict rules (maximum limits) concerning the marketability of non-genetically modified seed.

4.7   Civil liability provisions must fully cover compensation for financial damages

| 4.7.1 | The reproductive capability of GMOs and the fact that their unwelcome presence can cause financial damage to those affected makes it necessary to adapt the civil liability provisions in Member States to ensure that such damages are covered. |
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4.7.1

The reproductive capability of GMOs and the fact that their unwelcome presence can cause financial damage to those affected makes it necessary to adapt the civil liability provisions in Member States to ensure that such damages are covered.

| 4.7.2 | The civil liability provisions should ensure that those involved are liable only to the extent that they are able to prevent possible damages. Liability for keeping to good professional practice and any further expenses of the supplier of a GMO should rest with the users of that GMO. Conversely, the liability for damage occurring despite good professional practice being observed should rest with the supplier. If appropriate, the Community rules on legal liability should be adapted accordingly. |
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4.7.2

The civil liability provisions should ensure that those involved are liable only to the extent that they are able to prevent possible damages. Liability for keeping to good professional practice and any further expenses of the supplier of a GMO should rest with the users of that GMO. Conversely, the liability for damage occurring despite good professional practice being observed should rest with the supplier. If appropriate, the Community rules on legal liability should be adapted accordingly.

| 4.7.3 | Suppliers or users of GMOs should be able to prove their ability to cover, whether through insurance or by similar means, any liability for damages that arise from their activities. |
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4.7.3

Suppliers or users of GMOs should be able to prove their ability to cover, whether through insurance or by similar means, any liability for damages that arise from their activities.

4.8   The total costs of coexistence need to be established, kept to a minimum, and shared in line with the polluter-pays principle.

| 4.8.1 | The Commission is asked to submit a comprehensive and systematic assessment of the costs involved in coexistence, the changes to market conditions and the impact on the various sectors and production patterns in the farming and food industry, especially on small and medium-sized enterprises, traditional farming, including part-time farmers, the traditional craft-based food industry, the organic farming and food industry and seed production and reproduction businesses. In particular, this should include the effects on employment. |
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4.8.1

The Commission is asked to submit a comprehensive and systematic assessment of the costs involved in coexistence, the changes to market conditions and the impact on the various sectors and production patterns in the farming and food industry, especially on small and medium-sized enterprises, traditional farming, including part-time farmers, the traditional craft-based food industry, the organic farming and food industry and seed production and reproduction businesses. In particular, this should include the effects on employment.

| 4.8.2 | Beyond that, the Commission should set out what effects the necessary coexistence measures and the separation of means of productions and goods flows will have on achieving the aims of the Common Agricultural Policy and the reform thereof. Particular attention should be given to the effects on business structures and on local and regional cultivation, processing, origin and quality control programmes and their labelling. |
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4.8.2

Beyond that, the Commission should set out what effects the necessary coexistence measures and the separation of means of productions and goods flows will have on achieving the aims of the Common Agricultural Policy and the reform thereof. Particular attention should be given to the effects on business structures and on local and regional cultivation, processing, origin and quality control programmes and their labelling.

| 4.8.3 | The Commission is also asked to set out how the extra costs of coexistence are to be shared out and compensated for according to the polluter pays principle, and what measures are necessary in order to reliably prevent any negative impact on the prices of non-GMO foodstuffs across the single market. |
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4.8.3

The Commission is also asked to set out how the extra costs of coexistence are to be shared out and compensated for according to the polluter pays principle, and what measures are necessary in order to reliably prevent any negative impact on the prices of non-GMO foodstuffs across the single market.

| 4.8.4 | When establishing the proportionality of particular measures, the effects on the whole production chain should be taken into consideration. |
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4.8.4

When establishing the proportionality of particular measures, the effects on the whole production chain should be taken into consideration.

4.9   Recommendations for Community and national legislation

| 4.9.1 | The following aspects of coexistence must be regulated at European level:






  — | labelling requirements for the presence of GMOs in non-genetically-modified seed; |
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4.9.1

The following aspects of coexistence must be regulated at European level:

—

labelling requirements for the presence of GMOs in non-genetically-modified seed;

| — | purity requirements for non-genetically-modified seed with regard to the adventitious presence of GMOs under the existing seed directives; |
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—

purity requirements for non-genetically-modified seed with regard to the adventitious presence of GMOs under the existing seed directives;

| — | the requisite targets, results, legal provisions and minimum standards of good practice in GMO cultivation and the financing of the costs that arise from complying with them; |
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—

the requisite targets, results, legal provisions and minimum standards of good practice in GMO cultivation and the financing of the costs that arise from complying with them;

| — | and civil liability both for users and suppliers of GMOs for potential damage connected with co-existence. |
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—

and civil liability both for users and suppliers of GMOs for potential damage connected with co-existence.

| 4.9.2 | The following aspects of coexistence must be regulated at national and regional level:






  — | specific measures to prevent undesired cross-breeding and the transfer of GMOs in line with the conditions obtaining in each region; |
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4.9.2

The following aspects of coexistence must be regulated at national and regional level:

—

specific measures to prevent undesired cross-breeding and the transfer of GMOs in line with the conditions obtaining in each region;

| — | regional provisions for the cultivation of certain GMOs where this makes economic sense and is commensurate with the regional cost-benefit ratio between cultivation and the precautionary measures required; these provisions may also include banning the cultivation of certain GMOs; |
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—

regional provisions for the cultivation of certain GMOs where this makes economic sense and is commensurate with the regional cost-benefit ratio between cultivation and the precautionary measures required; these provisions may also include banning the cultivation of certain GMOs;

| — | measures to protect nature conservation areas in line with the Directive 92/43 on habitats, flora and fauna (22), Directive 79/409 on the protection of birds (23), and other ecologically sensitive areas; and |
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—

measures to protect nature conservation areas in line with the Directive 92/43 on habitats, flora and fauna (22), Directive 79/409 on the protection of birds (23), and other ecologically sensitive areas; and

| — | measures to safeguard regional economic and cultural interests. |
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—

measures to safeguard regional economic and cultural interests.

5.   Practical and topical aspects of coexistence

| 5.1 | In July 2004 the European Economic and Social Committee invited players from the entire production chain to a hearing in order to obtain a detailed picture of the current and likely future situation. The following conclusions, amongst others, were reached: |
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5.1

In July 2004 the European Economic and Social Committee invited players from the entire production chain to a hearing in order to obtain a detailed picture of the current and likely future situation. The following conclusions, amongst others, were reached:

| 5.2 | The testing and tracing of GMOs along the whole production chain will certainly lead to considerable additional costs. Simple, qualitative tests currently cost between EUR 100 and 150, while the cost of more sophisticated and quantitative tests varies between EUR 250 and 400. In the process a sample is tested for one specific gene sequence only. The possible presence of a number of different GMOs will mean a corresponding increase in the cost of testing. |
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5.2

The testing and tracing of GMOs along the whole production chain will certainly lead to considerable additional costs. Simple, qualitative tests currently cost between EUR 100 and 150, while the cost of more sophisticated and quantitative tests varies between EUR 250 and 400. In the process a sample is tested for one specific gene sequence only. The possible presence of a number of different GMOs will mean a corresponding increase in the cost of testing.

| 5.3 | The first case in which a GMO had to be taken out of circulation on health grounds (Starlink maize in the USA) has so far cost more than US$ 1 bn. Nevertheless, more than two years after the start of retrieval operations, it has still not proved possible to withdraw the GMO completely from circulation. |
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5.3

The first case in which a GMO had to be taken out of circulation on health grounds (Starlink maize in the USA) has so far cost more than US$ 1 bn. Nevertheless, more than two years after the start of retrieval operations, it has still not proved possible to withdraw the GMO completely from circulation.

| 5.4 | The amount and distribution of testing and tracing costs essentially depend on whether the GMO-free status of certain products is the generally accepted and maintained standard on the market, which may be departed from only in exceptional cases, or whether proof of GMO-free status has to be provided by producers, processors and traders in every single case. |
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5.4

The amount and distribution of testing and tracing costs essentially depend on whether the GMO-free status of certain products is the generally accepted and maintained standard on the market, which may be departed from only in exceptional cases, or whether proof of GMO-free status has to be provided by producers, processors and traders in every single case.

| 5.5 | Once a GMO has been placed on the market it is, in principle, no longer possible to guarantee its complete absence from other varieties. It is, however, possible to keep the level of fortuitous and technically unavoidable contamination with the GMO in question below 0.1 %, which is effectively the threshold for reliable detection. |
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5.5

Once a GMO has been placed on the market it is, in principle, no longer possible to guarantee its complete absence from other varieties. It is, however, possible to keep the level of fortuitous and technically unavoidable contamination with the GMO in question below 0.1 %, which is effectively the threshold for reliable detection.

| 5.6 | Keeping non-GMO seed free of unintentional mixing with GMO seed imposes considerable additional demands on seed production. The lower the threshold, the higher the prevention and monitoring costs for seed production and propagation. |
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5.6

Keeping non-GMO seed free of unintentional mixing with GMO seed imposes considerable additional demands on seed production. The lower the threshold, the higher the prevention and monitoring costs for seed production and propagation.

| 5.7 | Depending on the method of propagation used for the plant species in question, ensuring GMO-free status will be possible only by maintaining a considerable physical distance during cultivation and a complete separation during the processing, packing and sales processes. ISO standards and HACCP protocols, which are in some cases still at the development stage, must likewise be complied with, and external inspections carried out. |
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5.7

Depending on the method of propagation used for the plant species in question, ensuring GMO-free status will be possible only by maintaining a considerable physical distance during cultivation and a complete separation during the processing, packing and sales processes. ISO standards and HACCP protocols, which are in some cases still at the development stage, must likewise be complied with, and external inspections carried out.

| 5.8 | That purity has to be guaranteed up to the 0.1 % detectability threshold in the USA too, where GMOs are grown in large quantities, and by firms which prepare GMO and non-GMO seed in the same installations, was convincingly demonstrated by a leading international seed producer. |
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5.8

That purity has to be guaranteed up to the 0.1 % detectability threshold in the USA too, where GMOs are grown in large quantities, and by firms which prepare GMO and non-GMO seed in the same installations, was convincingly demonstrated by a leading international seed producer.

| 5.9 | There are at present no binding practical limit values or standards for GMO contamination in seed production either within the EU or internationally. The monitoring of seed in the Member States is at present subject to different regulations. The official approach in dealing with contamination (tolerance of between 0.1 % and 0.5 %) also differs. |
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5.9

There are at present no binding practical limit values or standards for GMO contamination in seed production either within the EU or internationally. The monitoring of seed in the Member States is at present subject to different regulations. The official approach in dealing with contamination (tolerance of between 0.1 % and 0.5 %) also differs.

| 5.10 | Although seed producers at present categorically refuse to give a complete guarantee of the GMO-free status of their products, direct negotiations in Italy between the Italian farmers' union Coldiretti and leading seed producers have resulted in guarantees supervised by third parties. In Austria, supplying seed that contains GMOs (more than 0.1 % in a test sample) has been forbidden by a regulation since 2002. Despite intensive monitoring, no violations of this regulation have been detected since then. |
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5.10

Although seed producers at present categorically refuse to give a complete guarantee of the GMO-free status of their products, direct negotiations in Italy between the Italian farmers' union Coldiretti and leading seed producers have resulted in guarantees supervised by third parties. In Austria, supplying seed that contains GMOs (more than 0.1 % in a test sample) has been forbidden by a regulation since 2002. Despite intensive monitoring, no violations of this regulation have been detected since then.

| 5.11 | The additional costs for seed production and propagation vary, according to industry estimates, between 10 and 50 %. |
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5.11

The additional costs for seed production and propagation vary, according to industry estimates, between 10 and 50 %.

| 5.12 | If GMOs are commercially used in a region where GMO-free seed is propagated, large areas need to be designated as protected zones for cultivation as is already done in some countries for various crops. Particularly long separation distances are required for rape cultivation. |
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5.12

If GMOs are commercially used in a region where GMO-free seed is propagated, large areas need to be designated as protected zones for cultivation as is already done in some countries for various crops. Particularly long separation distances are required for rape cultivation.

| 5.13 | All market players, with the exception of the seed producers, see compliance with strict purity rules for seed (labelling if above the 0.1 % detection threshold) as the decisive pre-condition for guaranteeing GMO-free products in future. |
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5.13

All market players, with the exception of the seed producers, see compliance with strict purity rules for seed (labelling if above the 0.1 % detection threshold) as the decisive pre-condition for guaranteeing GMO-free products in future.

| 5.14 | Guaranteeing GMO-free status below 0.1 %, as required by manufacturers of foodstuffs, starch and pet food, already adds EUR 3 per tonne to the cost of buying up and processing maize. These costs would rise considerably if there were extensive use of GMOs in agriculture. In addition, the potential cost of failure to prevent contamination above the tolerance threshold varies between EUR 150,000 and 7.5 m, depending on batch size. |
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5.14

Guaranteeing GMO-free status below 0.1 %, as required by manufacturers of foodstuffs, starch and pet food, already adds EUR 3 per tonne to the cost of buying up and processing maize. These costs would rise considerably if there were extensive use of GMOs in agriculture. In addition, the potential cost of failure to prevent contamination above the tolerance threshold varies between EUR 150,000 and 7.5 m, depending on batch size.

| 5.15 | The parallel purchase of GMO and GMO-free commodities at one location appears impracticable. What is required is complete separation for the purposes of buying, storage, drying and transport. |
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5.15

The parallel purchase of GMO and GMO-free commodities at one location appears impracticable. What is required is complete separation for the purposes of buying, storage, drying and transport.

| 5.16 | Purchasing companies and cooperatives already guarantee that their products are GMO-free by contractual agreements with the farmers supplying them. Inter alia, a positive list of accepted and tested seed varieties is drawn up, and a continuous monitoring system established from cultivation to supply and delivery checks. |
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5.16

Purchasing companies and cooperatives already guarantee that their products are GMO-free by contractual agreements with the farmers supplying them. Inter alia, a positive list of accepted and tested seed varieties is drawn up, and a continuous monitoring system established from cultivation to supply and delivery checks.

| 5.17 | From the standpoint of the purchasing companies, systems which guarantee GMO-free status below the threshold currently applied by their customers will work only if there is a regional separation of GM and non-GM cultivation. The costs of such management are estimated at EUR 150 to 250 per hectare. The additional cost of separate transport and storage is estimated at EUR 10 to 20 per tonne. |
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5.17

From the standpoint of the purchasing companies, systems which guarantee GMO-free status below the threshold currently applied by their customers will work only if there is a regional separation of GM and non-GM cultivation. The costs of such management are estimated at EUR 150 to 250 per hectare. The additional cost of separate transport and storage is estimated at EUR 10 to 20 per tonne.

| 5.18 | IP (Identity Preservation) and quality assurance systems also exist at processing plants, such as mills. Their customers at present expect purity guarantees between 0.1 % and a maximum of 0.5 %. Standard PCR (Polymerase chain reaction) tests and traces are carried out on all deliveries. In addition, suppliers are audited and proof required that they buy and process exclusively GMO-free goods. During transport, points where mingling or contamination could occur, such as road haulage and port warehouses where GMO goods are handled, are, wherever possible, avoided. |
| --- | --- |

5.18

IP (Identity Preservation) and quality assurance systems also exist at processing plants, such as mills. Their customers at present expect purity guarantees between 0.1 % and a maximum of 0.5 %. Standard PCR (Polymerase chain reaction) tests and traces are carried out on all deliveries. In addition, suppliers are audited and proof required that they buy and process exclusively GMO-free goods. During transport, points where mingling or contamination could occur, such as road haulage and port warehouses where GMO goods are handled, are, wherever possible, avoided.

| 5.19 | In the case of mills processing maize, the cost of keeping equipment clean is currently estimated at EUR 2.50, in addition to the extra charges demanded by suppliers (see above). As these costs can be passed on only in relation to goods for which a guarantee is required, but are nevertheless incurred for the entire volume processed they are in some cases considerably higher for GMO-free end products. For example, maize meal constitutes only 50 % of the processed product, i.e. the additional costs (EUR 2.50 plus EUR 3.00 = EUR 5.50) make a significant difference, at EUR 11 per tonne. The cost of failing to prevent contamination and of supplying goods to customers with a GMO content above the guaranteed threshold could, depending on the batch size and processing, run into tens of millions of euros. It is not at present possible to insure against this risk. |
| --- | --- |

5.19

In the case of mills processing maize, the cost of keeping equipment clean is currently estimated at EUR 2.50, in addition to the extra charges demanded by suppliers (see above). As these costs can be passed on only in relation to goods for which a guarantee is required, but are nevertheless incurred for the entire volume processed they are in some cases considerably higher for GMO-free end products. For example, maize meal constitutes only 50 % of the processed product, i.e. the additional costs (EUR 2.50 plus EUR 3.00 = EUR 5.50) make a significant difference, at EUR 11 per tonne. The cost of failing to prevent contamination and of supplying goods to customers with a GMO content above the guaranteed threshold could, depending on the batch size and processing, run into tens of millions of euros. It is not at present possible to insure against this risk.

| 5.20 | Consumer caution has meant whole areas where GMO cultivation gives rise to an increased risk of contamination being effectively boycotted whether or not contamination has actually occurred. The mere fact that GM wheat was on an experimental basis in a particular German federal state caused the largest German milling group to stop buying wheat from that area. |
| --- | --- |

5.20

Consumer caution has meant whole areas where GMO cultivation gives rise to an increased risk of contamination being effectively boycotted whether or not contamination has actually occurred. The mere fact that GM wheat was on an experimental basis in a particular German federal state caused the largest German milling group to stop buying wheat from that area.

| 5.21 | The policy of most of the large retailers and branded good manufacturers in the EU of guaranteeing that they do not use GMOs has in the past few years led to the emergence of extensive quality assurance systems in which individual companies invest tens of millions of euros annually. These consist of a comprehensive documentation and audit system for the suppliers, as well as regular spot checks on goods on offer. These additional costs have usually not been passed on to customers. No systematic quantification has so far taken place in relation to individual products and product groups. |
| --- | --- |

5.21

The policy of most of the large retailers and branded good manufacturers in the EU of guaranteeing that they do not use GMOs has in the past few years led to the emergence of extensive quality assurance systems in which individual companies invest tens of millions of euros annually. These consist of a comprehensive documentation and audit system for the suppliers, as well as regular spot checks on goods on offer. These additional costs have usually not been passed on to customers. No systematic quantification has so far taken place in relation to individual products and product groups.

| 5.22 | From a regional point of view, the requirements for coexistence of GMO and non-GMO cultivation vary widely. Particularly in regions with small-scale agriculture, parallel cultivation within a region appears to be impracticable. For example, according to Italy's register of farm land, 90 % of cultivated land in Tuscany is unsuitable for coexistence. The same applies to many more of Europe's regions. Moreover, technically demanding separation, monitoring and planning measures would often be beyond the scope of small and part-time farmers. This is also true of the small-scale processing of regional speciality products. |
| --- | --- |

5.22

From a regional point of view, the requirements for coexistence of GMO and non-GMO cultivation vary widely. Particularly in regions with small-scale agriculture, parallel cultivation within a region appears to be impracticable. For example, according to Italy's register of farm land, 90 % of cultivated land in Tuscany is unsuitable for coexistence. The same applies to many more of Europe's regions. Moreover, technically demanding separation, monitoring and planning measures would often be beyond the scope of small and part-time farmers. This is also true of the small-scale processing of regional speciality products.

| 5.23 | Regional quality marks and guarantees of origin, which play an ever more important role in the marketing of premium high-quality products, have up to now not used GMOs. The introduction of GMOs in the regions in question would have a massive impact on the actual production costs and image of these products. This is one reason why may regions of Europe have declared themselves GMO-free zones, although the legal basis for this is controversial and requires clarification by European and domestic legislation. The possibility that individual farmers, as a result of the freedom to cultivate GMOs guaranteed by European law, could impose enormous additional costs and problems on many neighbouring farms and enterprises is considered extremely regrettable by those affected and a threat to social stability. |
| --- | --- |

5.23

Regional quality marks and guarantees of origin, which play an ever more important role in the marketing of premium high-quality products, have up to now not used GMOs. The introduction of GMOs in the regions in question would have a massive impact on the actual production costs and image of these products. This is one reason why may regions of Europe have declared themselves GMO-free zones, although the legal basis for this is controversial and requires clarification by European and domestic legislation. The possibility that individual farmers, as a result of the freedom to cultivate GMOs guaranteed by European law, could impose enormous additional costs and problems on many neighbouring farms and enterprises is considered extremely regrettable by those affected and a threat to social stability.

| 5.24 | A particular source of concern to regional authorities, farmers' associations and processors is the possibility that future GMO varieties (for example pharmaceutical varieties) unlike the existing ones, will have to be hermetically separated from food and animal feed production for health reasons. This has already led to massive additional problems and uncertainty in the USA . |
| --- | --- |

5.24

A particular source of concern to regional authorities, farmers' associations and processors is the possibility that future GMO varieties (for example pharmaceutical varieties) unlike the existing ones, will have to be hermetically separated from food and animal feed production for health reasons. This has already led to massive additional problems and uncertainty in the USA .

| 5.25 | In some Member States legislation regulating coexistence has been passed, or else the legislative procedure is almost complete. Legal and procedural systems already differ widely from country to country. These differences cannot be explained by regional peculiarities. It is already clear that the approach adopted to ensuring coexistence will need to be harmonised. |
| --- | --- |

5.25

In some Member States legislation regulating coexistence has been passed, or else the legislative procedure is almost complete. Legal and procedural systems already differ widely from country to country. These differences cannot be explained by regional peculiarities. It is already clear that the approach adopted to ensuring coexistence will need to be harmonised.

| 5.26 | Coexistence of methods of cultivation with and without GMOs and the possibility of GMO-free food is the EU's stated political objective. If it appears that this goal cannot be attained within the existing legal framework, it will be in the interest of consumers, farmers and the other economic players involved to amend the relevant regulations and directives in good time. |
| --- | --- |

5.26

Coexistence of methods of cultivation with and without GMOs and the possibility of GMO-free food is the EU's stated political objective. If it appears that this goal cannot be attained within the existing legal framework, it will be in the interest of consumers, farmers and the other economic players involved to amend the relevant regulations and directives in good time.

Brussels, 16 December 2004

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

---

(1)  Communication for an orientation debate on Genetically Modified Organisms and related issues

1

http://europa.eu.int/rapid/start/cgi/guesten.ksh?p_action.gettxt=gt&doc=IP/04/118|0|RAPID&lg=EN

GMO authorisations under EU law – Current situation

http://zs-l.de/saveourseeds/downloads/com_stand_gvo_28_01_04.pdf

Questions and answers on GMO legislation in the EU

http://zs-l.de/saveourseeds/downloads/com_fragen_antworten_28_01_04.pdf

(2)  Directive 2001/18/EEC of 12 March 2001 on the deliberate release into the environment of genetically modified organisms

2

OJ L 106, 17.4.2001, p. 1.

(3)  Regulation (EC) No 1829/2003 of the European Parliament and the Council of 22 September 2003 on genetically modified food and feed

3

OJ L 268, 18.10.2003, p. 1.

(4)  Regulation (EC) No. 1830/2003 of the European Parliament and the Council of 22 September 2003 on traceability and labelling of genetically modified organisms

4

OJ L 268, 18.10.2003, p. 24.

Commission Regulation (EC) No. 65/2004 of 14 January 2004 establishing a system for the development and assignment of unique identifiers for genetically modified organisms

OJ L 10, 16.1.2004, p. 5.

(5)  Regulation (EC) No. 1946/2003 of the European Parliament and the Council of 15 July 2003 on transboundary movements of genetically modified organisms

5

OJ L 287, 5.11.2003, p. 1.

(6)  European Commission, September 2003, Questions and Answers about GMOs in seeds

6

http://europa.eu.int/rapid/start/cgi/guesten.ksh?p_action.getfile=gf&doc=MEMO/03/186|0|RAPID&lg=EN&type=PDF

(7)  Commissioner Fischler, June 2003: Communication to the Commission on the Co-existence of Genetically Modified, Conventional and Organic Crops (pdf)

7

http://zs-l.de/saveourseeds/downloads/Communication_Fischler_02_2003.pdf

(8)  European Parliament resolution on coexistence between genetically modified crops and conventional and organic crops (2003/2098(INI))

8

OJ C 91 E, 15.4.2004, p. 680.

(9)  Joint Research Centre, 2002, Scenarios for co-existence of genetically modified, conventional and organic crops in European agriculture.

9

http://www.jrc.cec.eu.int/download/gmcrops_coexistence.pdf

Round Table on research results relating to co-existence of GM and non-GM crops.

http://europa.eu.int/comm/research/biosociety/news_events/news_programme_en.htm

(10)  First European Conference on Co-existence of Genetically Modified Crops with Conventional and Organic Crops 13-14 November, 2003, Helsingør, Denmark

10

http://www.agrsci.dk/gmcc-03/

(11)  Opinion of the Scientific Committee on Plants concerning the adventitious presence of GM seeds in conventional seeds

11

http://europa.eu.int/comm/food/fs/sc/scp/out93_gmo_en.pdf

(12)  Regulation (EC) No. 178/2002 of the European Parliament and of the Council of 28 January 2002 laying down the general principles and requirements of food law, establishing the European Food Safety Authority and laying down procedures in matters of food safety.

12

(13)  Commission Decision of 23 February 2004 laying down detailed arrangements for the operation of the registers for recording information on genetic modifications in GMOs, provided for in Directive 2001/18/EC of the European Parliament and of the Council (notified under document number C(2004) 540) (2004/204/EC)

13

OJ L 65, 3.3.2004, p. 20.

(14)  Commission Recommendation of 23 July 2003 on guidelines for the development of national strategies and best practices to ensure the coexistence of genetically modified crops with conventional and organic farming (notified under document number C(2003) 2624)

14

OJ L 189, 29.7.2003, p. 36.

(15)  Regulation (EC) No 1829/2003 of the European Parliament and the Council of 22 September 2003 on genetically modified food and feed

15

OJ L 268, 18.10.2003, p. 1.

(16)  Regulation (EC) No. 1830/2003 of the European Parliament and the Council of 22 September 2003 on traceability and labelling of genetically modified organisms

16

OJ L 268, 18.10.2003, p. 24

(17)  Council Directive 85/374/EEC of 25 July 1985 on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products

17

http://europa.eu.int/eur-lex/en/consleg/main/1985/en_1985L0374_index.html

(18)  Directive 2004/35/CE of the European Parliament and of the Council of 21 April 2004 on environmental liability with regard to the prevention and remedying of environmental damage, OJ L 143, 30/04/2004 P. 56 – 75, see Article 3 and 4 and Annex III.

18

http://europa.eu.int/smartapi/cgi/sga_doc?smartapi!celexapi!prod!CELEXnumdoc&lg=DE&numdoc=32004L0035&model=guicheti

(19)  Opinion of the Economic and Social Committee on the Proposal for a Directive of the European Parliament and the Council on environmental liability with regard to the prevention and remedying of environmental damage, COM(2002)17 final – 2001/0021 (COD)), CES 868/2002, OJ C 241 of 7.10.2002, pp. 37-45

19

(20)  DG Agriculture, ‘Economic Impacts of Genetically Modified Crops on the Agri-Food Sector’ (2000)

20

http://europa.eu.int/comm/agriculture/publi/gmo/fullrep/index.htm

(21)  Opinion of the Scientific Committee on Plants concerning the adventitious presence of GM seeds in conventional seeds

21

http://europa.eu.int/comm/food/fs/sc/scp/out93_gmo_en.pdf

(22)  Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora, OJ L 206, 22.7.1992, pp. 7-50

22

http://europa.eu.int/smartapi/cgi/sga_doc?smartapi!celexapi!prod!CELEXnumdoc&lg=en&numdoc=31992L0043&model=guicheti

(23)  Council Directive 79/409/EEC of 2 April 1979 on the conservation of wild birds, OJ L 103, 25.4.1979, pp. 1-18.

23

http://europa.eu.int/smartapi/cgi/sga_doc?smartapi!celexapi!prod!CELEXnumdoc&lg=en&numdoc=31979L0409&model=guicheti

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APPENDIX

to the opinion of the European Economic and Social Committee

The following amendments were defeated but obtained at least a quarter of the votes cast:

Point 3.5.10

Delete.

Reason

Given that, in setting thresholds for source material, consideration is given to cross-breeding in adjacent plots and that the coexistence provisions do take account of unintentional contamination, the fear expressed in this point is unwarranted.

Result of vote

For: 25

Against: 55

Abstentions: 10

Point 4.2.1

Delete.

Reason

When authorising market access for GMOs, consideration is given to all factors that may have an adverse effect on human and animal heath and to environmental impact. There is no reason at all to bring the precautionary principle back into play at this juncture. After all, 100 % safety can never be guaranteed and is hardly realistic.

Result of vote

For: 22

Against: 60

Abstentions: 5

---

| 28.6.2005 | EN | Official Journal of the European Union | C 157/167 |
| --- | --- | --- | --- |

28.6.2005

EN

Official Journal of the European Union

C 157/167

---

Opinion of the European Economic and Social Committee on the ‘Communication from the Commission to the Council and the European Parliament: European action plan for organic food and farming’

(COM(2004) 415 final)

(2005/C 157/30)

On 15 October 2004 the Commission decided to consult the European Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on the abovementioned communication.

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 16 November 2004. The rapporteur was Mr Voss.

At its 413th plenary session, held on 15 and 16 December 2004 (meeting of 16 December), the European Economic and Social Committee adopted the following opinion with 70 votes in favour and two abstentions.

1.   Introduction

| 1.1 | The number of organic farms in the European Union has increased sharply in the last fifteen years. Between 1985 and 2002 the number of organic farms in the EU-15 rose from 6,300 to 150,000 and the area farmed by them from 100,000 ha to 4.4 million ha. This is equivalent to these farms' share of agricultural land rising from 0.1 % to 3.3 %. Organic food sales are worth EUR 11 billion in Europe and EUR 23 billion worldwide. |
| --- | --- |

1.1

The number of organic farms in the European Union has increased sharply in the last fifteen years. Between 1985 and 2002 the number of organic farms in the EU-15 rose from 6,300 to 150,000 and the area farmed by them from 100,000 ha to 4.4 million ha. This is equivalent to these farms' share of agricultural land rising from 0.1 % to 3.3 %. Organic food sales are worth EUR 11 billion in Europe and EUR 23 billion worldwide.

| 1.2 | The development of organic farming, which was mainly due to farmers supported by consumers, began in the 1920s. Sustained consumer demand in specialised markets became established in the 1970s. A variety of socio-economic players started to expand, promote and monitor organic production and marketing in the 1980s. |
| --- | --- |

1.2

The development of organic farming, which was mainly due to farmers supported by consumers, began in the 1920s. Sustained consumer demand in specialised markets became established in the 1970s. A variety of socio-economic players started to expand, promote and monitor organic production and marketing in the 1980s.

| 1.3 | Council Regulation (EEC) No. 2092/91 was the first piece of legislation on organic farming to be drawn up by the EU, on the basis of the preparatory work carried out over a period of many years by the leading organic farming associations. EU support was first provided in 1992, when this type of farming became part of agri-environmental policy. |
| --- | --- |

1.3

Council Regulation (EEC) No. 2092/91 was the first piece of legislation on organic farming to be drawn up by the EU, on the basis of the preparatory work carried out over a period of many years by the leading organic farming associations. EU support was first provided in 1992, when this type of farming became part of agri-environmental policy.

| 1.4 | The Agriculture Council called on the Commission in June 2001 and again in December 2002 to present an action plan for organic food and farming. In the meantime the Commission has conducted a consultation exercise on the Internet in which 1,136 citizens and organisations have taken part. The results have, inter alia, been used for the Commission staff working document on the feasibility of a European action plan for organic food and farming. A European Parliament hearing was held in July 2003, and in January 2004 the launch of the action plan took place at an event that was well attended by European governments and organisations and members of the general public. |
| --- | --- |

1.4

The Agriculture Council called on the Commission in June 2001 and again in December 2002 to present an action plan for organic food and farming. In the meantime the Commission has conducted a consultation exercise on the Internet in which 1,136 citizens and organisations have taken part. The results have, inter alia, been used for the Commission staff working document on the feasibility of a European action plan for organic food and farming. A European Parliament hearing was held in July 2003, and in January 2004 the launch of the action plan took place at an event that was well attended by European governments and organisations and members of the general public.

| 1.5 | The action plan represents a crucial contribution to the further development of the common agricultural policy and gives a good picture of the special role to be played by organic farming in future agri-environmental policy. This enhanced role depends on the cooperation of economic stakeholders and especially producers. The economic interests of the farms must therefore be taken into account. The early involvement of national and regional government bodies in the Member States will be decisive for the success of the plan. |
| --- | --- |

1.5

The action plan represents a crucial contribution to the further development of the common agricultural policy and gives a good picture of the special role to be played by organic farming in future agri-environmental policy. This enhanced role depends on the cooperation of economic stakeholders and especially producers. The economic interests of the farms must therefore be taken into account. The early involvement of national and regional government bodies in the Member States will be decisive for the success of the plan.

| 1.6 | The EESC welcomes the European action plan for organic food and farming. It would point out, however, that sufficient human and material resources are required within the EU administration to perform the related tasks satisfactorily. In this connection, the Committee is pleased to note that at its first reading the European Parliament decided to include the action plan under the budget headings for support measures, including measures for improving the quality of agricultural production. |
| --- | --- |

1.6

The EESC welcomes the European action plan for organic food and farming. It would point out, however, that sufficient human and material resources are required within the EU administration to perform the related tasks satisfactorily. In this connection, the Committee is pleased to note that at its first reading the European Parliament decided to include the action plan under the budget headings for support measures, including measures for improving the quality of agricultural production.

2.   Content of the Commission document

| 2.1 | The Commission notes that organic farming makes a major contribution to various EU policy measures which are designed to provide a high level of environmental protection. The problem areas listed are: pesticides, plant nutrients, soil protection, biodiversity, nature protection, animal welfare, and food safety. |
| --- | --- |

2.1

The Commission notes that organic farming makes a major contribution to various EU policy measures which are designed to provide a high level of environmental protection. The problem areas listed are: pesticides, plant nutrients, soil protection, biodiversity, nature protection, animal welfare, and food safety.

| 2.2 | The Commission's main aim is to expand the organic farming sector steadily and exploit market potential. Special attention is to be paid in this connection to farm incomes. This is to be done with due regard to the dual role of organic farming, namely a) to produce organic produce which has to fetch higher prices because of the non-use of environmentally important inputs and the lower yields resulting therefrom, and b) to deliver public goods which have no market price and therefore have to rely on public funding. |
| --- | --- |

2.2

The Commission's main aim is to expand the organic farming sector steadily and exploit market potential. Special attention is to be paid in this connection to farm incomes. This is to be done with due regard to the dual role of organic farming, namely a) to produce organic produce which has to fetch higher prices because of the non-use of environmentally important inputs and the lower yields resulting therefrom, and b) to deliver public goods which have no market price and therefore have to rely on public funding.

| 2.3 | The action plan has three priorities:






  — | to make the development of the organic food market information-driven and increase consumer awareness; |
| --- | --- | --- |

2.3

The action plan has three priorities:

—

to make the development of the organic food market information-driven and increase consumer awareness;

| — | to make public support for organic farming more effective; and |
| --- | --- |

—

to make public support for organic farming more effective; and

| — | to improve and reinforce EU standards and import and inspection requirements. |
| --- | --- |

—

to improve and reinforce EU standards and import and inspection requirements.

| 2.4 | The plan makes provision for 21 actions, two of which have budgetary implications and are subject to the availability of funding. Implementation of the action plan depends on the availability of Commission staff. Subject to these provisos, the Commission intends to introduce the requisite measures as indicated without delay. The action plan makes no specific provisions for targets and timetable. |
| --- | --- |

2.4

The plan makes provision for 21 actions, two of which have budgetary implications and are subject to the availability of funding. Implementation of the action plan depends on the availability of Commission staff. Subject to these provisos, the Commission intends to introduce the requisite measures as indicated without delay. The action plan makes no specific provisions for targets and timetable.

3.   General comments

3.1   Reform of the CAP

| 3.1.1 | The Luxembourg agricultural reform decisions of June 2003 stipulate for many products a cutting back of administrative price controls and an erosion of the safety net. However, thanks to a large-scale decoupling of direct payments from production, which is a new cornerstone of the agricultural reform decisions, the Commission anticipates a stabilisation of prices and even an increase in prices for agricultural produce. Because producer price levels for organic produce depend on the general level of producer prices, new opportunities to earn a living can arise on the market for organic farmers. The Committee would stress that this will only be possible if the Community preference is maintained at an adequate level for all agricultural produce . |
| --- | --- |

3.1.1

The Luxembourg agricultural reform decisions of June 2003 stipulate for many products a cutting back of administrative price controls and an erosion of the safety net. However, thanks to a large-scale decoupling of direct payments from production, which is a new cornerstone of the agricultural reform decisions, the Commission anticipates a stabilisation of prices and even an increase in prices for agricultural produce. Because producer price levels for organic produce depend on the general level of producer prices, new opportunities to earn a living can arise on the market for organic farmers. The Committee would stress that this will only be possible if the Community preference is maintained at an adequate level for all agricultural produce .

| 3.1.2 | The promotion of organic farming depends, inter alia, on the total funds available in the second pillar of the CAP. Member States are under no obligation to promote this agricultural reform. The EESC notes that in European countries and regions that do promote organic food and farming, this sector of the economy is particularly extensive and very stable. The pace of development and implementation of the new European Agricultural Fund for Rural Development (EAFRD) in the Member States should be carefully monitored. |
| --- | --- |

3.1.2

The promotion of organic farming depends, inter alia, on the total funds available in the second pillar of the CAP. Member States are under no obligation to promote this agricultural reform. The EESC notes that in European countries and regions that do promote organic food and farming, this sector of the economy is particularly extensive and very stable. The pace of development and implementation of the new European Agricultural Fund for Rural Development (EAFRD) in the Member States should be carefully monitored.

| 3.1.2.1 | The Committee is following the forthcoming decisions on the Union's financial perspectives with great concern. Rural development resources, in particular, are threatened with cuts. The EESC points out that these resources are of crucial importance for the stabilisation and innovative development of Europe's rural regions. The Committee has already set out its views on this subject in its own-initiative opinion on future rural development policy (1) and is currently working on an opinion on the proposal for a regulation on the European Agricultural Fund for Rural Development. (2) |
| --- | --- |

3.1.2.1

The Committee is following the forthcoming decisions on the Union's financial perspectives with great concern. Rural development resources, in particular, are threatened with cuts. The EESC points out that these resources are of crucial importance for the stabilisation and innovative development of Europe's rural regions. The Committee has already set out its views on this subject in its own-initiative opinion on future rural development policy (1) and is currently working on an opinion on the proposal for a regulation on the European Agricultural Fund for Rural Development. (2)

| 3.1.3 | More and more stakeholders are interested in receiving rural development funding, and numbers are increasing further with the accession of ten new countries. Even if 80 % of the funds earmarked for modulation have to be used in these funds' country of origin, the additional financing available here is very limited. |
| --- | --- |

3.1.3

More and more stakeholders are interested in receiving rural development funding, and numbers are increasing further with the accession of ten new countries. Even if 80 % of the funds earmarked for modulation have to be used in these funds' country of origin, the additional financing available here is very limited.

| 3.1.4 | Organic farming, even more than other agricultural practices, has vast potential for delivering public goods. The Committee would urge the Commission, Council and Parliament to ensure that changes to the CAP agreed upon in June 2003 should not jeopardise good land management practices. Furthermore, the funds allocated to the second pillar (rural development) should be sufficient to fulfil Community priorities. |
| --- | --- |

3.1.4

Organic farming, even more than other agricultural practices, has vast potential for delivering public goods. The Committee would urge the Commission, Council and Parliament to ensure that changes to the CAP agreed upon in June 2003 should not jeopardise good land management practices. Furthermore, the funds allocated to the second pillar (rural development) should be sufficient to fulfil Community priorities.

4.   Specific comments

4.1   The organic food market

4.1.1   Consumers' perception of organic products

| 4.1.1.1 | The stakeholders involved in organic farming, and especially producers, have already won an appreciable share of the food market to the point where the EESC considers that the term ‘niche market’ can no longer be used in every Member State to describe this market share. In many EU regions and for some products, the proportion of organic farms and foods is already very high. Many raw materials for baby food, for example, are already organically produced. |
| --- | --- |

4.1.1.1

The stakeholders involved in organic farming, and especially producers, have already won an appreciable share of the food market to the point where the EESC considers that the term ‘niche market’ can no longer be used in every Member State to describe this market share. In many EU regions and for some products, the proportion of organic farms and foods is already very high. Many raw materials for baby food, for example, are already organically produced.

| 4.1.1.2 | Europe has regional and product-specific concentrations in production, processing and market development, as well as in research and initial and further training in the organic foods sector. The reason for this may be either natural regional specificities or a dynamic interaction of local economic players. The Committee calls on the Commission to pay particular attention in this action plan to this clustering in organic farming that is common in Europe. |
| --- | --- |

4.1.1.2

Europe has regional and product-specific concentrations in production, processing and market development, as well as in research and initial and further training in the organic foods sector. The reason for this may be either natural regional specificities or a dynamic interaction of local economic players. The Committee calls on the Commission to pay particular attention in this action plan to this clustering in organic farming that is common in Europe.

| 4.1.1.3 | Organic food has safeguarded the livelihood of many enterprises, especially on the production side but also in processing and marketing. |
| --- | --- |

4.1.1.3

Organic food has safeguarded the livelihood of many enterprises, especially on the production side but also in processing and marketing.

4.1.2   Market mechanisms

The higher marketing costs for organic produce certainly contribute in part to the higher prices in the production, processing and retail sectors. Therefore the Committee strongly welcomes initiatives on regional processing and marketing structures, because this can bring producers and consumers closer together and make it possible to understand how prices are formed. On the other hand, the food retail sector is now extremely concentrated in some Member States, and this exerts considerable pressure on producer prices in the organic sector, too.

4.1.3   An information-led demand

The Committee expressly welcomes the measures proposed in Action 1 for supporting the promotion of information and sales. They should, however, incorporate individual Member States' experiences, since special pressure on purchasing prices is exerted by industrial kitchens, canteens, schools and the like. Industrial kitchens which feed children, the elderly and the sick represent an important market.

4.1.4   Market problems due to variations between standards

The envisaged establishment of an Internet database for comparing differing regional and national regulations can be a useful instrument for promoting trade in goods in the single market. However, the demand for all differences to be completely eliminated would be going too far. These differences often have regional, sectoral and cultural roots and are a driving force for innovation and for developing standards and product quality further.

4.1.5   Monitoring and analysis of supply and demand

It makes sense to improve the collection of statistical data on organic production and the market in organic products (action 3). However, in collecting and processing this additional data, care must be taken to ensure that the partners involved in this market (a small number of large trading firms on the demand side and a large number of small and medium-sized farms on the supply side) are able to benefit equally from such data or at least that farmers do not suffer any serious disadvantages. The collection and prompt publication of this sector's statistical data in the new Member States is still something to work towards.

4.2   EU policy on organic farming

4.2.1   Organic farming in the framework of the common agricultural policy

The Committee would query whether the European model of multifunctional agriculture, to which organic farming with its environmental services makes an important contribution, is being given sufficient prominence in the WTO international negotiations in order to ensure the viability of the CAP and, more especially, in order to ensure that aid under the second pillar of the CAP continues to qualify as ‘green box’ aid.

4.2.2   Rural development

In addition to the development of a web-based menu of all EU measures (action 5), it is suggested that, in order to promote the local production of organic food, the hygiene and health standards applicable to small and medium-sized food processing and marketing firms be geared to their special risk potential. The standards laid down for bulk processors are frequently not applicable to small firms with restricted regional processing and marketing volumes and often impede investment and therefore hamper job-creation in rural areas. The Committee stresses in particular the need for appropriate standards for small-scale regional firms processing and marketing both organic and conventional produce. For this reason, they should benefit from the derogation framework for the processing sector. For the EESC, the absolute priority remains of course compliance with the principles of food safety laid down in the White Paper on food safety and hygiene and in recently adopted legislation.

| 4.2.2.1 | With regard to the initiative proposed under action 6 for targeting the establishment of organic farming in environmentally sensitive areas, care should be taken to ensure that this does not lead to an imbalanced supply situation and subsequently to politically-driven distortions of competition within organic farming. The difficult arable farming conditions in these areas must be adequately described. |
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4.2.2.1

With regard to the initiative proposed under action 6 for targeting the establishment of organic farming in environmentally sensitive areas, care should be taken to ensure that this does not lead to an imbalanced supply situation and subsequently to politically-driven distortions of competition within organic farming. The difficult arable farming conditions in these areas must be adequately described.

| 4.2.2.2 | In the EESC's view, the action programme does not take account of the great significance of the organic farming and foodstuffs sector for employment, particularly in rural regions. Surveys in EU Member States have shown that organic farming is almost exclusively responsible for new start-ups in farming and its upstream and downstream sectors. The Committee would also stress that all quality agricultural produce bearing an indication of regional origin will have a positive impact on rural development. |
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4.2.2.2

In the EESC's view, the action programme does not take account of the great significance of the organic farming and foodstuffs sector for employment, particularly in rural regions. Surveys in EU Member States have shown that organic farming is almost exclusively responsible for new start-ups in farming and its upstream and downstream sectors. The Committee would also stress that all quality agricultural produce bearing an indication of regional origin will have a positive impact on rural development.

| 4.2.2.3 | Training, education and advice are described in Action 6. A clearer emphasis on delivering information and knowledge in the rural development context is needed in order to strengthen these farming production methods and the marketing and processing of organic products. |
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4.2.2.3

Training, education and advice are described in Action 6. A clearer emphasis on delivering information and knowledge in the rural development context is needed in order to strengthen these farming production methods and the marketing and processing of organic products.

4.3   Research

| 4.3.1 | Organic farming is a type of farming which specifically uses and develops methods, instruments and techniques that have the least possible impact on the environment. |
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4.3.1

Organic farming is a type of farming which specifically uses and develops methods, instruments and techniques that have the least possible impact on the environment.

| 4.3.2 | The Committee sees publicly financed research for organic farming as a particular challenge. Research fields which have little private-sector investment and which are of major importance for society must be made key areas of publicly supported research. Both organic farming and technology impact assessment should be given priority status in the EU's Framework Programme for Research. |
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4.3.2

The Committee sees publicly financed research for organic farming as a particular challenge. Research fields which have little private-sector investment and which are of major importance for society must be made key areas of publicly supported research. Both organic farming and technology impact assessment should be given priority status in the EU's Framework Programme for Research.

| 4.3.3 | The Committee welcomes more research into organic farming. The aims of this research must be distinguished more clearly, and their consistency with other areas of the common agricultural policy checked. Education, knowledge transfer and the importance of interdisciplinary science are the premise for the successful development of an organic food sector and should be given greater weight — including financial — in the Commission's action plan. |
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4.3.3

The Committee welcomes more research into organic farming. The aims of this research must be distinguished more clearly, and their consistency with other areas of the common agricultural policy checked. Education, knowledge transfer and the importance of interdisciplinary science are the premise for the successful development of an organic food sector and should be given greater weight — including financial — in the Commission's action plan.

| 4.3.4 | There is an urgent need for organically-oriented research into plant cultivation and livestock breeding. This includes further development of modified breeds and species to ensure market viability. |
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4.3.4

There is an urgent need for organically-oriented research into plant cultivation and livestock breeding. This includes further development of modified breeds and species to ensure market viability.

4.4   Standards and inspection — safeguarding integrity

4.4.1   The regulatory concept

Despite the existence of a regulation on organic farming, no basic principles have been laid down hitherto. The only possible explanation for this is historical. Basic principles have long existed in some Member States with a long tradition of organic farming. An understanding should be reached here, to be followed by a definition of the principles (action 8). Account should be taken of the experiences of the IFOAM (3). The Committee particularly wants the historical development in the new Member States to be taken into account.

| 4.4.1.1 | It should also be borne in mind that in the view of a number of national organic farming organisations, the concept should encompass not only environmental criteria but also socio-economic principles, such as the creation of valuable jobs offering social stability in rural areas. The adaptation of the regulations on organic farming should then take place on a case-by-case basis,stressing the need to comply with the basic principles, and the granting of transitional periods with fixed end dates should be reviewed stage-by-stage (action 9). |
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4.4.1.1

It should also be borne in mind that in the view of a number of national organic farming organisations, the concept should encompass not only environmental criteria but also socio-economic principles, such as the creation of valuable jobs offering social stability in rural areas. The adaptation of the regulations on organic farming should then take place on a case-by-case basis,stressing the need to comply with the basic principles, and the granting of transitional periods with fixed end dates should be reviewed stage-by-stage (action 9).

4.4.2   The scope of organic production standards

Apart from calling for simplified and harmonised plant and animal husbandry rules, care should be taken to ensure that small and medium-sized farms continue to influence developments in husbandry so as to obviate monopolistic structures similar to those to be found, for example, in the case of many crops and in chicken farming. In chicken farming it is already impossible to supply farms with organically suitable breeds. Investment subsidies should be contemplated for the implementation of improved animal welfare standards, since expensive new or converted premises can frequently be required to house the animals. In the arable farming sector there are still no rules on trade in traditional plant varieties or old crop varieties no longer listed in the register of varieties. The Committee finds this regrettable and urges the Commission to take the necessary steps to introduce the required measures.

| 4.4.2.1 | In action 10 (last indent) it is necessary to clarify whether ‘biodiversity’ means crops and livestock or whether it has a broader meaning and refers to all fauna and flora. The EESC would also point out, however, that according to the objectives of the CAP, preservation of biodiversity cannot be the responsibility of organic farms alone. |
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4.4.2.1

In action 10 (last indent) it is necessary to clarify whether ‘biodiversity’ means crops and livestock or whether it has a broader meaning and refers to all fauna and flora. The EESC would also point out, however, that according to the objectives of the CAP, preservation of biodiversity cannot be the responsibility of organic farms alone.

| 4.4.2.2 | Although energy- and resource-saving practices are at the heart of organic farming, the EESC rejects introducing special standards. The priorities here are effective general agricultural and economic provisions. |
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4.4.2.2

Although energy- and resource-saving practices are at the heart of organic farming, the EESC rejects introducing special standards. The priorities here are effective general agricultural and economic provisions.

| 4.4.2.3 | The creation of the first-ever EU standards for organic wine and aquaculture products is expressly welcomed. In particular, the Committee also sees the positive effects on conventional practices in the sectors. |
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4.4.2.3

The creation of the first-ever EU standards for organic wine and aquaculture products is expressly welcomed. In particular, the Committee also sees the positive effects on conventional practices in the sectors.

| 4.5 | The establishment of an independent expert panel for technical advice, as proposed under action 11, is welcomed by the Committee provided that stakeholders, i.e. farmers, processors and consumers, are suitably involved so that such a panel enjoys the public's confidence. However, there is a lack of specific provisions concerning the timetable, goals and budget resources needed to make a success of this initiative. |
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4.5

The establishment of an independent expert panel for technical advice, as proposed under action 11, is welcomed by the Committee provided that stakeholders, i.e. farmers, processors and consumers, are suitably involved so that such a panel enjoys the public's confidence. However, there is a lack of specific provisions concerning the timetable, goals and budget resources needed to make a success of this initiative.

4.6   Genetically modified organisms

| 4.6.1 | The Committee regrets that on this point the action programme deals only with thresholds and does not propose a comprehensive approach to ensure co-existence as a prerequisite of organic farming in Europe. |
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4.6.1

The Committee regrets that on this point the action programme deals only with thresholds and does not propose a comprehensive approach to ensure co-existence as a prerequisite of organic farming in Europe.

| 4.6.2 | The ban on the use of GMOs in organic farming is of particular importance in the context of the ongoing discussion on co-existence rules. The recommendations proposed under this point can be accepted to a large degree. The non-GMO farming sector (conventional and organic) should not have to bear any of the costs or loss of income arising from the release of GMOs. |
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4.6.2

The ban on the use of GMOs in organic farming is of particular importance in the context of the ongoing discussion on co-existence rules. The recommendations proposed under this point can be accepted to a large degree. The non-GMO farming sector (conventional and organic) should not have to bear any of the costs or loss of income arising from the release of GMOs.

| 4.6.3 | The general thresholds for seed in organic farming must be the detection limit (action 12). In the Committee's opinion, the detection limit should also be the threshold for conventional non-GMO seed. Otherwise, it is to be feared that the presence of GMO components in organic products, too, might rise rapidly, thereby jeopardising the foundations on which organic farming in Europe is based. Because of the free movement of goods and the presence of vast areas of agricultural land on both sides of national borders within the EU, harmonisation is necessary here, too. |
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4.6.3

The general thresholds for seed in organic farming must be the detection limit (action 12). In the Committee's opinion, the detection limit should also be the threshold for conventional non-GMO seed. Otherwise, it is to be feared that the presence of GMO components in organic products, too, might rise rapidly, thereby jeopardising the foundations on which organic farming in Europe is based. Because of the free movement of goods and the presence of vast areas of agricultural land on both sides of national borders within the EU, harmonisation is necessary here, too.

4.7   Inspection systems

Implementation of the risk-based approach to improve inspections (action 13) is to be endorsed. The EESC points out that the German version of the action plan, unlike the English, states that agricultural producers present the highest risk in terms of fraudulent practices. The EESC urgently requests this to be corrected. The inspection system's risk analysis and risk management should take account, rather, of the exposed flanks in sectors further upstream and downstream such as processing and trade. The inspection systems must be improved by cutting red tape and costs. An efficient networking of inspection organisations could be helpful.

4.8   Imports

| 4.8.1 | When the rules governing imports of organic produce are refined, account should be taken of the growing risk of GMO contamination. |
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4.8.1

When the rules governing imports of organic produce are refined, account should be taken of the growing risk of GMO contamination.

| 4.8.2 | The Committee recommends looking at the promotion of the Mediterranean economic area when considering the possibilities of organic farming. The point is to strengthen the centres of organic cultivation and to promote their networking. |
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4.8.2

The Committee recommends looking at the promotion of the Mediterranean economic area when considering the possibilities of organic farming. The point is to strengthen the centres of organic cultivation and to promote their networking.

| 4.8.3 | Organic products must not be granted more far-reaching concessions than conventional imports in international trade agreements. This is necessary for reasons of competition and, in particular, in order to ensure that organic farming in Europe continues to have a chance on the market. |
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4.8.3

Organic products must not be granted more far-reaching concessions than conventional imports in international trade agreements. This is necessary for reasons of competition and, in particular, in order to ensure that organic farming in Europe continues to have a chance on the market.

5.   Summary

| 5.1 | The Committee welcomes the proposed action plan for organic food and farming. It is a fitting response from the Commission not only to the call of the Agriculture Council, but to the expectations of many citizens. With the implementation of cross-compliance and the definition of conditions of good agricultural and environmental practice, the environmentally-friendly development of European agricultural policy has to face higher demands. |
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5.1

The Committee welcomes the proposed action plan for organic food and farming. It is a fitting response from the Commission not only to the call of the Agriculture Council, but to the expectations of many citizens. With the implementation of cross-compliance and the definition of conditions of good agricultural and environmental practice, the environmentally-friendly development of European agricultural policy has to face higher demands.

| 5.2 | The EESC welcomes targeted marketing campaigns and consumer information. It does not, however, expect existing imbalances in the food industry and in processing to be increased. |
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5.2

The EESC welcomes targeted marketing campaigns and consumer information. It does not, however, expect existing imbalances in the food industry and in processing to be increased.

| 5.3 | This important sector for employment prospects and production of public goods must get the attention it merits in the EAFRD programme, in connection with the measures linked to the quality of agricultural produce. |
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5.3

This important sector for employment prospects and production of public goods must get the attention it merits in the EAFRD programme, in connection with the measures linked to the quality of agricultural produce.

| 5.4 | Efforts to harmonise norms and inspections must not overburden businesses and must allow for regional specificities. In the case of both EU- and third-country goods, the EU logo should not prevent identification of origin. |
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5.4

Efforts to harmonise norms and inspections must not overburden businesses and must allow for regional specificities. In the case of both EU- and third-country goods, the EU logo should not prevent identification of origin.

| 5.5 | On the matter of co-existence with GMOs, the question of how Europe-wide organic production can be guaranteed in the future remains unanswered. For this reason, the GMO contamination limits for all seeds should be set at the detection threshold. |
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5.5

On the matter of co-existence with GMOs, the question of how Europe-wide organic production can be guaranteed in the future remains unanswered. For this reason, the GMO contamination limits for all seeds should be set at the detection threshold.

| 5.6 | Organic farming must be given a higher priority in the EU's research plan. This prioritising is justified by the great importance for society as a whole and the meagre private research resources available to this sector. |
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5.6

Organic farming must be given a higher priority in the EU's research plan. This prioritising is justified by the great importance for society as a whole and the meagre private research resources available to this sector.

| 5.7 | With the European Parliament's decision to make funds from the budget heading for improving the quality of agricultural production available to the action plan, European decision-makers have begun to combat the shortcomings in staffing and materials resources referred to above. |
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5.7

With the European Parliament's decision to make funds from the budget heading for improving the quality of agricultural production available to the action plan, European decision-makers have begun to combat the shortcomings in staffing and materials resources referred to above.

| 5.8 | The EESC is monitoring discussion of the financial perspectives with great concern. A cut in resources for rural development would also set back organic farming and the organic food sector in Europe. |
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5.8

The EESC is monitoring discussion of the financial perspectives with great concern. A cut in resources for rural development would also set back organic farming and the organic food sector in Europe.

Brussels, 16 December 2004.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

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(1)  Own-initiative EESC opinion on The CAP second pillar: outlook for change in development policy for rural areas (follow-up to the Salzburg conference)

1

(2)  EESC opinion currently in the pipeline on the Proposal for a Council Regulation on support for rural development by the European Agricultural Fund for Rural Development (EAFRD)

2

(3)  International Federation of Organic Agriculture Movements

3

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