Opinion of the European Economic and Social Committee on the "Proposal for a Decision of the European Parliament and of the Council establishing a general framework for financing Community actions in support of consumer policy for the years 2004-2007"

(COM(2003) 44 final - 2003/0020 (COD))

(2003/C 234/19)

On 12 February 2003 the Council decided to consult the European Economic and Social Committee, under Article 308 of the Treaty establishing the European Community, on the above-mentioned proposal.

The Section for the Single Market, Production and Consumption, which was responsible for preparing the work on the subject, adopted its opinion on 25 June 2003. The rapporteur was Mr Hernández Bataller.

At its 401st Plenary Session of 16 and 17 July 2003 (meeting of 17 July), the European Economic and Social Committee adopted the following opinion by 94 votes in favour, four votes against and one abstention.

1. Introduction

1.1. The essential aim behind the general framework for Community activities in favour of consumers, established by Decision No 283/1999/EC of 25 January(1), was to group together all initiatives carried out for the benefit of consumers so as to optimise their effects for consumers, whilst taking account of the initiatives adopted by the Community and the support provided to those organisations and bodies which work to defend consumer interests at Community and national level. It was adopted to meet the immediate need for a legal framework for expenditure on consumer protection in accordance with the judgement of the European Court of Justice of 1998 (case 106/96)(2).

1.2. This Decision pursued the aim of strengthening those organisations and bodies active in the area of consumer protection so that they could be a more effective driving force in raising consumer awareness. It set out the arrangements for the financial support provided by the Community to such organisations and bodies with the aim of ensuring maximum transparency and effectiveness in the use of the funds allocated by the Community.

1.3. This Decision provided the first legal framework for expenditure on activities in several areas of health and consumer protection. It expires on 31 December 2003.

1.4. In its opinion on the previous proposal(3), the Committee expressed its agreement with the Commission's reasoning and its support for the proposed framework, provided explicit reference was made to the planned action to be undertaken. The Committee also suggested leaving sufficient room for the introduction of a new basic act to earmark new financial provisions in order to take appropriate action in the case of events in areas not covered by this framework.

1.5. The Commission drew up a report in 2001(4) in which it outlined three principal lessons, taking account of the experience gained over the previous years:

- the benefits of flexibility in implementing the action plan;

- the need to adopt a more strategic approach to EU consumer policy;

- the importance of effective integration of a consumer dimension in all relevant EC policies.

1.5.1. Recently, the Commission drew up an evaluation report(5) in which it concluded that any future legal framework for expenditure in favour of consumers should contain a better alignment of policy and budgetary frameworks and should take account of important shifts in the policy context, such as enlargement and new governance, and the adoption of the new Consumer Policy Strategy.

1.6. In May of 2002, the Commission issued the "Consumer Policy Strategy 2002-2006"(6), which comprised three essential objectives: a high common level of consumer protection; effective enforcement of consumer protection rules and proper involvement of consumer organisations in Community policy making. The following are some of the key factors underlying the strategy: prioritising the integration of consumer interests into other EU policies, maximising the benefits of the internal market for consumers, and preparing for enlargement. The Committee has already issued an opinion(7) on this strategy, expressing its satisfaction and support for more effective implementation of the existing legislation and advocating the integration of consumer policy in other relevant policy areas, including education. The Council(8) for its part urged the Commission and the Member States to ensure that the proposal for a future legal act for Community activities in favour of consumers reflects and supports the objectives outlined in the Commission strategy.

2. Content of the Proposal

2.1. The aim of the proposal is to establish an enabling framework for the Community actions in support of consumer policy set out in the Consumer Policy Strategy 2002-2006, adopted by the Commission in May 2002, which establishes the following objectives:

- high common level of consumer protection,

- effective enforcement of consumer protection rules,

- proper involvement of consumer organisations in Community policy making.

2.2. These objectives will be implemented through actions included in the rolling programme (annexed to the Strategy) which will be regularly reviewed by the Commission. This proposal establishes a direct link between the objectives and priorities of the Consumer Policy Strategy 2002-2006 and the actions to be financed under the proposed Decision. The legal basis for the proposal is Article 153 of the EC Treaty.

2.3. The scope of this proposal covers issues concerning consumer safety related to non-food products, consumer economic interests, consumer information and education, the promotion of consumer organisations at European level and their contribution to EU policies affecting consumer interests.

2.4. The proposal covers the four-year period from 2004 to 2007. The total budget proposed for the four-year period amounts to EUR 72 million, or EUR 18 million per year, in operational credits and EUR 32 million, or EUR 8 million per year, in human resources and other administrative expenditure. This is intended to create budgetary stability for consumer policy actions.

2.5. Only specific projects that support the objectives of the Consumer Policy Strategy and fall within the following areas will be eligible for co-financing:

- protection of consumer health and safety with respect to services and non-food products;

- protection of the economic interests of consumers;

- promotion of consumer information and education;

- promotion of consumer organisations at European level.

With the aim of extending both the size and duration of the projects financed, it is planned to issue a call for proposals at the least every two years.

2.6. The proposal does not incorporate selection and award criteria for the financing of specific projects. These are, instead, set out in an annual work programme to be presented to the "Advisory Committee" responsible for assisting the Commission in implementing the proposed Decision. In line with subsidiarity, co-financing of specific projects will no longer be used as an instrument to provide support to smaller-scale national consumer organisations. Instead, the Commission will directly finance projects that support and promote consumer organisations through staff training and exchanges of best practices.

2.7. The proposal modifies the eligibility criteria for financial contributions to European consumer organisations in order to clarify that they must be independent of industry, commerce and other business interests, and that their primary objective must be to promote the health, safety and economic interests of European consumers.

2.7.1. The proposal provides for different forms of budgetary support based on varying levels of Commission participation and funding percentages:

2.7.2. Projects implemented directly and financed 100 % by the Commission, carried out through the award of contracts. These projects will cover areas such as:

- advice, analysis, expertise and preparation of technical, legal and socio-economic proposals aimed at the protection of consumers;

- monitoring and assessing consumer protection standards, including the creation of databases and other IT tools;

- providing support to consumer organisations in the form of technical and legal expertise, staff training, consumer information and education, and developing initiatives in this area.

2.8. Co-financing of specific projects run at Community or national level by any legal person or association of legal persons acting independently of commerce and industry. The financial support available here amounts to between 50 % and 70 % of the costs of the implementation of the project.

2.8.1. Financial contributions for the functioning of European consumer organisations in accordance with the definitions provided in the proposed Decision. This category of financial support is capped at 50 % of all administrative expenditure, although up to 95 % of costs incurred by organisations that protect the interests of consumers by developing standards applicable to products and services Community-wide may be financed. This latter measure is explained by the significant political relevance and "general European interest" of standardisation.

2.8.2. The proposal also introduces specific provisions for actions undertaken and financed jointly by the Commission and the Member States and consisting of:

- financial contributions to bodies that are part of existing Community networks set up to provide information and assistance to consumers to help them exercise their rights and to obtain access to appropriate dispute resolution;

- actions to be developed in the area of administrative and enforcement co-operation with the Member States.

2.9. The proposal also contains rules on publication, monitoring, and evaluation, implementation of measures, and the assistance to be provided to the Commission by an advisory committee.

3. General comments

3.1. The Committee agrees with the Commission that the creation of a general legal framework for the financing of Community actions in favour of consumer policy based on the principles of unity, sound financial management and budgetary transparency is a necessity.

3.2. The Committee welcomes the Commission's desire to enhance the effectiveness of these actions and to tailor them more closely to objectives on the basis of an ex ante evaluation of the Consumer Policy Strategy 2002-2006 and an ex post evaluation of the implementation of Decision No 283/1999/EC. Sound financial management must be based on the principles of economy, efficiency and effectiveness and confirmed through the use of measurable effectiveness indicators, related to the activity in question, so that the results can be assessed. The Committee advocates a system of ex ante and ex post assessments to be carried out by the institutions in accordance with the new general financial framework.

3.3. Given that expenditure related to food safety is to be financed independently, as outlined in the White Paper on Food Safety and Regulation (EC) No 178/2002, it would seem logical for initiatives concerning foodstuffs to be left out of the scope of the present proposal.

3.4. The Commission believes that the annual project cycle on which the framework is based has been shown to be highly costly both for the Commission and the applicants and that as such it diminishes the Community added value and long-term impact of the projects financed. In the light of this, the decision has been taken to issue a call for projects at least every two years. Nonetheless, it must be made clear that the introduction of a two-year project cycle in principle and a call for proposals every two years at least does not imply that the projects financed must have a duration of two years. This would be excessively rigid in view of the ever-changing nature of the market.

3.5. The Commission has proposed a total budget for 2004-2007 of EUR 72 million, or EUR 18 million per year, in operational credits and EUR 32 million, or EUR 8 million per year, in human resources. The Commission does recognise, however, the concern expressed by the experts consulted in the ex ante evaluation with respect to the adequacy of the programme of action proposed. In view of this, it would be advisable not only to ensure a more effective use of resources, but also to provide additional funding for human resources, in particular given that the new Member States will also be in line for financing during that period. Third countries, whether EFTA/EEA countries or other states which have bilateral agreements with the EU, may also benefit insofar as they have contributed to the budget. In terms of the participation of the new Member States, the financial perspective for enlargement is currently being adapted, increasing the funds available within the financial framework by approximately 2,5 million EUR per annum.

3.6. In its proposal the Commission pledges its support to associations working at European level, which are the only organisations eligible for operational subsidies. The Committee notes that in reality only one organisation will be awarded this type of subsidy and believes that the Commission should be more flexible and amend this definition to enable other well-established consumer protection organisations to continue to benefit from operational subsidies. This would ensure in practice that the strongest, most powerful associations do not take advantage of the actions financed within the framework.

3.6.1. The Committee thus proposes the following definition of "European Consumer Organisation": "Non-governmental, non profit-making organisation which has amongst its main objectives the promotion and protection of consumers' interests and health by working for their defence, interest and representation and to provide information, training and advice and take initiatives in their interests. It shall have member organisations in most of the Member States and shall be mandated by them to represent the interests of consumers at Community level."

3.6.2. The Committee asks the Commission to ensure that the criteria relating to representation on the Consumer Committee do not become dependent on the criteria used to grant funding.

3.7. Whilst the Committee agrees with the overall aim of strengthening the European framework for consumer protection and organisations that work to protect consumer rights, it feels that this approach to operational subsidies should be clarified. In this respect, the Committee notes that the budget must be based on the principle of efficiency, i.e. the means used must match the results obtained as closely as possible; the Commission must not lose sight of this, given its ultimate responsibility for budgetary implementation in accordance with Article 274 of the Treaty.

3.7.1. It is important to distinguish the size and resources of the organisations, whether they operate at national or Community level and the "Community interest" of their proposals. A variety of areas are of great strategic importance for European consumers, including the new technologies, electronic communication, self-regulation and co-regulation, general interest actions, new financial services, etc. Within these areas, specialist organisations that work to protect consumers' rights can provide essential added value, independently of their organisational strength and the scale of their operations.

3.7.2. The Committee considers that the role of the Commission in coordinating Community projects carried out within different Member States must be maintained and indeed reinforced. Examples have shown, over and above the concrete assessment of their circumstances and results, that organisations can combine action at national level with activities that provide added value at the European level provided the Commission acts as coordinator.

3.7.3. Article 7 of the proposal establishes the beneficiaries, with paragraphs 2 and 3 providing two different definitions of European consumer organisations. Although this can be explained in terms of the varying objectives of the subsidies provided and the strategic interest of standardisation projects, problems could arise as a result of the use of differing definitions. Therefore it would be desirable to agree a single definition as described in 3.6.1 above.

3.7.4. The EESC calls on the Commission, the Member States and consumer organisations to consider how people with disabilities might play an active role in consumer policy.

3.7.5. The Committee finds it strange, against the current background of European integration, that no requirement is placed on these organisations to operate in a democratic and transparent manner and to make their organisational data available to the public.

3.7.6. The Committee notes that the proposed Decision deals with the period 2004-2007 whilst the related consumer policy strategy covers the period 2002-2006. Whilst it understands the internal reasons cited by the Commission for this, the time discrepancy could create problems in the future.

3.8. In terms of the co-financing of specific projects that support the consumer policy objectives outlined under point 2.1 and are run by legal persons or associations of legal persons that act independently either at Community or national level, it would seem clear that these projects can be developed either at Community or national level and that the financing can be granted to any person or association that meets with the independence criterion even where they are not represented at European level.

3.8.1. The Committee considers that, when granting financing, priority should be given to cross-border actions and those based on co-operation between different associations in various Member States. Given that cooperation between consumer organisations in different Member States can be problematic, the Commission should seek out appropriate measures to remedy this.

3.8.2. The EESC also feels that, in terms of co-financing, great store must be set by projects that aim to provide information to consumers.

3.8.3. The Commission should support the priority for financing given to specific projects which are of strategic importance and comply with the consumer policy aims. It should not be forgotten that in a great many cases such projects are based on new activities that require additional human and technical resources over and above the organisation's existing resources.

3.8.4. More generally, the Committee finds it unusual that the support for the co-financing of specific projects cannot also attain 95 % of eligible project implementation costs where the significance and scale of the project would require this. Experience has shown that partial subsidies force consumer organisations to look for other sources of financing for their projects and that this financing is subject to severe restrictions, thereby limiting their ability to present new initiatives.

3.9. The Committee agrees with the Commission that the principle of transparency must be applied to the planned publication, monitoring and evaluation measures. With this in mind, it considers that greater efforts must be made when submitting the proposals and the list of beneficiaries to the consumer organisations to use all possible communication methods available to the Commission, both electronic and through the Official Journal.

3.10. The proposal provides for the creation of an advisory committee set up to assist the Commission. The Committee would remind the Commission that it is bound to provide adequate justification for the type of committee chosen(9) and its makeup.

3.11. The Committee would remind the Commission of the need to set aside public money under the new post-2006 financial perspective for the creation of a European research body for the protection of consumer rights. The EESC awaits the Commission's proposal with interest.

Brussels, 17 July 2003.

The President

of the European Economic and Social Committee

Roger Briesch

(1) Decision No 283/1999/EC of the European Parliament and of the Council of 25.1.1999 establishing a general framework for Community activities in favour of consumers. OJ L 34 of 9.2.1999.

(2) This judgement stipulates that implementation of Community expenditure relating to any significant Community action presupposes not only the entry of the relevant appropriation in the budget of the Community, ... but in addition the prior adoption of a basic act authorising that expenditure.

(3) OJ C 235 of 27.7.1998.

(4) Report from the Commission on the "Action Plan for Consumer Policy 1999-2001" and on the "General Framework for Community activities in favour of consumers 1999-2003", COM(2001) 486 final.

(5) Report from the Commission to the European Parliament and the Council on the implementation and evaluation of Community activities 1999-2001 in favour of consumers under the General Framework as established by Decision (EC) No 283/1999. COM(2003) 42 final.

(6) Communication from the Commission to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions. COM(2002) 208 final.

(7) OJ C 95 of 23.4.2003

(8) Council Resolution of 2.12.2002 on Community consumer policy strategy 2002-2006, OJ C 11 of 17.1.2003.

(9) Judgement of the Court of Justice of 21.1.2003, case C-378, Commission versus the European Parliament and the Council, section 63.