Opinion of the Economic and Social Committee on the 'Proposal for a European Parliament and Council Decision establishing a general framework for community activities in favour of consumers'
Date: 1998-05-28
Institutions: European Economic and Social Committee
Subjects: EU activity, EU financing, consumer protection, project evaluation, public health

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Opinion of the Economic and Social Committee on the ‘Proposal for a European Parliament
and Council Decision establishing a general framework for community activities in favour of
consumers’ (1)

(98/C 235/17)

On 12 February 1998 the Council decided to consult the Economic and Social Committee, under
Article 129A of the Treaty establishing the European Community, on the above-mentioned
proposal.

The Section for Protection of the Environment, Public Health and Consumer Affairs, which
was responsible for preparing the Committee’s work on the subject, set up a study group and
appointed Mr Koopman as rapporteur.

At its 355th plenary session (meeting of 28 May 1998), the Economic and Social Committee
appointed Mr Koopman as rapporteur-general and adopted the following opinion by 94 votes
in favour, 8 against and 3 abstentions.

1.

Introduction

— and the promotion and representation of consumers’

interests.

1.1.
In its explanatory memorandum the Commission
mentions the strengthening of consumer policy in the
last decade, culminating in the Treaty of Amsterdam.
So far, there has not been a basic act for the financing of
Community actions undertaken in support of consumer
policy.

1.2.
The draft Parliament and Council Decision
presents a ‘basic act’ (2) for activities which require
financial support from the Union Budget for Consumer
Policy and Consumer Health Protection. It establishes a
framework for activities in the period 1999-2003, rather
than a list of all the activities to be undertaken in that
period, as it is not possible to anticipate precisely all the
action that may be needed from the consumer perspective
in that period.

1.3.
The proposed Decision is based on Article 129 A
of the EC Treaty. However, the Commission states that
it may re-examine its proposal and base it on the new
Articles 152 and 153 to be inserted by the Amsterdam
Treaty, which broaden the ambit of consumer policy, if
the proposal has not yet been adopted before the new
Treaty comes into force.

The Commission groups the activities which

1.4.
may necessitate financial support into four categories:

— health and safety of consumers;

— protection of economic interests;

An indicative list of these activities is given in an Annex.

1.5.
The proposal covers three types of actions: those
launched by the Commission itself, those in support of
activities of the European consumer organizations and
specific projects primarily presented by consumer orga-
nizations in the Member States.

The total budget allocation over these five years

1.6.
is estimated at ECU 114 million.

The financial support for activities of European
1.7.
and national consumer organizations which are related
to the areas mentioned (see 1.4) may not in principle
exceed 50 % of the expenditure involved in implementing
the projects.

1.8.
The conditions for granting financial support
are listed in Articles 7 to 9 of the proposed decision.
Criteria pertaining to cost-effectiveness, the multiplier
effect and dissemination are dealt with in Article 7. The
procedures related to the application for and approval of
projects, which results in the conclusion of a contractual
relationship, are set out in Article 8 and the requirements
for monitoring, supervision and documentary evidence
are mentioned in Article 9.

1.9.
In the Financial Statement an indicative break-
down of the total budget allocation over the five-year
period is given as well as a provisional distribution into
the different areas for the three types of activity.

— educating and informing consumers about their

rights;

2. General remarks

(1) OJ C 108, 7.4.1998, p. 43.
(2) Within the meaning of Article 22 of the Financial Regu-
lation (in its consolidated version of 20 December 1996 —
SG B.4 (96) p. 674).

2.1.
The Committee is pleased that consumer policy
has gradually been gaining importance in the course of
the Community’s development. Its origin may perhaps
be traced back to 1961 when Commissioner Mansholt

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for Agriculture for the first time called on consumer
representatives to discuss matters of mutual concern.
The first distinct unit dealing with consumer policy
issues was created within DG IV in 1968. In 1973 a
Service for Environmental and Consumer Policy was
established which was transformed into DG XI in 1981.
A separate Consumer Policy Service came into existence
in 1989 — the predecessor of DG XXIV, which was
established in 1995. The extension of its tasks to
health issues in 1997 mark the latest organizational
developments. These changes were the result of the
increased relevance of and need for consumer policy
within the European Community.

2.3. Whilst agreeing with the need to establish a basic
act as such, the Committee would like to note that this
can be done in two distinct ways: i) through a framework
featuring indicative activities by area along the lines of
the present Commission proposal or ii) through a
framework in which a more concrete medium term
policy programme plays a pivotal role. The Committee
disagrees with the reasoning of the Commission that
such a multiannual programme cannot play that role,
as, according to the Commission, ‘it is not possible in
the field of consumer protection to anticipate precisely
and for a period of five years, all the problems which
would necessitate Community intervention.’

The Committee can agree with the reasoning of
2.2.
the Commission to establish a basic act for financing
actions in favour of the consumer policy of the Com-
munity, although it would like to note that so far
the absence of such an act has never prevented the
Commission from funding such projects.

The establishment of a basic act is in conformity
2.2.1.
with Article 22 of the Financial Regulation which states
that the implementation of budgetary appropriations
entered for significant Community action needs to be
preceded by the enactment of a basic act.

2.2.2.
In addition, the establishment of a basic act
in conjunction with the determination of a budget
allocation over a five-year period may also create more
clarity and certainty with respect to the size of the funds
that DG XXIV has at its disposal for the execution of
its policies. In the past, the process in which its annual
budget was determined (cf. Article 203 of the Treaty)
left much to be desired, as the budget was always subject
to the power play between the Council (reducing it) and
the European Parliament (proposing an increase).

2.2.3.
In the same way, the establishment of a basic
act for the allocation of funds may provide a welcome
opportunity to firmly establish expedient, efficient and
unambiguous procedures for the funding of projects and
to give an adequate definition of the conditions to be
fulfilled by the recipients in order to meet warranted
accounting objectives in a transparent manner. Fortu-
nately, for 1998 the procedures for funding have already
been much improved in comparison to those of preceding
years.

2.2.4.
Furthermore, the proposal also paves the way
for a proper definition of the criteria that consumer
organizations have to meet in order to qualify for
financial support. An important factor in this context
is the representativeness of these organisations. The
Commission may however apply further criteria.

2.3.1.
Firstly, it is not necessary to know the future
precisely in order to draw up a multiannual programme.
The details of activities to be undertaken in the course
of time may be included later as may be witnessed in so
many Community (framework) programmes. Secondly,
EU-consumer policy has always, since its inception in
1975, been conducted within the context of a medium
term programme: the first and second (5-year) consumer
protection programmes, the ‘new impetus’programme,
the first and second 3-year action plans and finally the
present ‘Priorities for Consumer Policy (1996-1998)’.

2.3.2.
The Committee regrets that the new multiannu-
al action programme has not yet been finalized, as it
could and should have given further directions to the
allocation of funds for the proposed actions and activities
in the near future. In this manner, a discussion could
have taken place on all the issues which are encompassed
by the triangle: basic act, programme of activities and
(total) budget allocation.

2.3.3.
The submission of such a multiannual action
programme would also have been more in line with
Article 1 of the Declaration by the European Parliament,
the Council and the Commission of 6 March 1995 on
the incorporation of financial provisions into legislative
acts (1), which refers to ‘multiannual programmes’ rather
than to (indicative) ‘policy frameworks’.

2.3.4.
The Committee nevertheless endorses the
framework as it seems to be sufficiently flexible to fully
embrace the planned multiannual consumer action
programme, provided that an explicit reference to
this action programme is included in the proposed
framework itself. In this manner the Commission would
achieve the indispensable link between the required basic
act for the implementation of budget appropriations
in the field of consumer policy and its multiannual
programme. This action programme should also com-
mence on 1 January 1999 and its duration should,
in principle, correspond with the time span of the
framework. The Committee will not discuss the activities

(1) OJ C 102, 4.4.1996.

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mentioned in the Annex to the proposal now, as it
intends to give its comprehensive views on the planned
action programme. This programme will provide a
much better basis for discussion on the future course of
EU consumer policy than the proposed framework.

2.4.
The Committee would welcome a re-exam-
ination of the proposal on the basis of the relevant
new Treaty provisions following from the Amsterdam
Treaty, should this opportunity be offered. It urges the
Commission to present its ideas on how these new
responsibilities may influence actions in the area of
consumer policy as quickly as possible in order to
commence discussions on this issue simultaneously with
this proposal. The Commission would then be able
to present a modified proposal, or to propose an
amendment to the Decision, immediately after the entry
into force of the Treaty of Amsterdam. In any case, the
new action programme in development ought to be
based on these new provisions.

The Committee is aware of the Declaration
2.5.
mentioned above (see 2.3.3) according to which the
budgetary authority and the Commission will not depart
from the total financial allocation ‘unless new, objective,
long-term circumstances arise ....’. It notes, however,
that given the horizontal nature and the continuous
development of consumer policy as well as the unpre-
dictability of future events, and this in relation to the
limited budget available, the loss of flexibility that the
adoption of a financial framework entails should not be
taken lightly.

Therefore, the Committee wishes to stress the
2.5.1.
need for flexibility in allocation of funds in the case of
unforeseen events in the areas of activity covered by the
proposed Decision. In its annual reports to the European
Parliament and the Council (article 12.1 of the proposed
Decision), the Commission may indicate, if this happens
to be the case, major deficiencies in consumer activities
resulting from a lack of funds. Such information would
give the EP and the Council the chance to allocate
further funds to specific areas.

2.5.2.
The Committee would moreover like to suggest
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.

2.6.
The Committee understands that the allocation
of funds for the three types of action and the four
categories of policy concerns is provisional. It hopes
that the considerations upon which this distribution has

been based, or any new distribution, will be made visible
in the new action programme.

2.7.
The Committee notes with satisfaction that the
framework is open to the participation of the associated
countries of central and eastern Europe and Cyprus and
understands that funds for this participation will be
made available outside the financial scope of this
framework. The Committee expressed its views on the
significance of consumer policy for these countries in
transition in an earlier opinion (1) and hopes, also in the
light of the necessary steps to be taken in the process of
enlargement, that sufficient support can be given to the
development and implementation of mutually beneficial
projects.

3. Specific remarks

Recitals in the preamble

3.1.
In the eleventh recital mention is made of the
integration of the consumer policy aspects into other
Community policies. Two observations are in order. In
the first place, especially in the light of the new
Article 153(2), reference to other important policies
should also be made, such as: public services, financial
and monetary matters (Euro), agriculture and external
trade (WTO). Secondly, reference to these issues does
not necessarily imply that financial commitments for
such actions should follow from the budget of DG XXIV.
The essence of integration policy in the final analysis is
that those responsible for these other policies are also
responsible and accountable for the integration — in
this case — of consumer interests. This responsibility
also includes, in principle, the financial component of
the action involved (2). This notion should be reflected
in the proposal.

Article 1: financial allocation

3.2.
Comparing the annual budget allocations pro-
posed for the 1999-2003 period with the annual allo-
cations over recent years, the Committee unfortunately
must conclude that for a large number of activities the
figures represent a decrease. This is the result of the
addition of new fields of action to the budget of
DG XXIV, stemming mainly from the BSE-crisis. It
notes that this decrease stands in contradiction to the
growing importance of Community consumer policy as
reflected, among other things, in the Amsterdam Treaty.

(1) See the ESC opinion on the Commission Communication
‘Priorities for consumer policy (1996-1998)’: OJ C 295,
7.10.1996, p. 14, point 2.9.

(2) This principle has, for instance, been reflected in the
allocation of EU-funds for New Car Assessment Pro-
grammes which establish safety ratings of vehicles. It
should however be followed on a much larger scale.

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The Committee therefore urges the Commission and
the Budgetary Authority to increase the consumer budget
for the 2000-2003 period beyond the very modest growth
(determined by reference to the growth in Community
GDP) proposed by the Commission (1). The Committee
takes the view that the multiannual programme being
drawn up by the Commission may provide additional
arguments for such an increase.

3.3.
In this context the Committee would like to
stress the importance of financial support to consumer
organizations as these organizations have to play an
active role in shaping the Single Market. Their contri-
bution will enhance the confidence of the Community’s
370 million consumers in the functioning of the Single
Market.

pursued under this general framework. The ESC urges
the Commission to present adequate mechanisms
enabling DG XXIV to take better account of other
relevant policy intentions at an early stage and to
contribute to the consistency and the complementarity
of Community policies. In this context it draws attention
to a number of Council Resolutions on the need for
increased integration of consumer policy considerations
into other areas as well as to numerous opinions in
which the Committee referred to this aspect (2).

3.6.1.
The Committee invites the Commission to
evaluate relevant measures taken to date. In this context
the integration efforts made by DG XI (e.g. the system
of ‘environmental correspondents’ in other DGs) should
serve as an example. Furthermore, attention should also
be paid to applying the concept of consumer impact
statements.

Article 2: Types of action

Article 4: Areas of action

3.4.
Following the remarks made in point 2.3.4 on
the need to link up the action programme with the legal
framework, the Committee proposes the following
amendment to Article 2 (a):

‘actions taken by the Commission to support and
supplement the policy conducted by the Member
States, and to develop, update and monitor it in the
context of a multiannual programme under the
conditions set out in (new) Article 5;’

3.4.1.
In this new Article 5 the conditions for the
drafting of a multiannual programme should then be
spelled out in more detail, for example as regards the
following aspects: the duration of the programme, a
reference to its priorities, evaluation aspects and the
existence of a financial paragraph.

3.5.
An explicit financial allocation of the total budget
over the three types of action is not given, but may be
derived from the indicative breakdown in the Financial
Statement in the Annex by those intimately involved
with consumer policy. Acknowledging the provisional
character of these figures, more transparency on this
distribution would nevertheless be desirable.

Article 3: Integrating consumer interests into other
policies

3.6. Notwithstanding the observations made in
point 3.1 on the responsibility for integrating consumer
interests into other policies, it is the responsibility of the
Commissioner for consumer policy to secure consistency
between the manner in which these consumer aspects
are treated elsewhere and the way the activities are

(1) Obviously within the limits of the 1,27 % ceiling.

3.7.
These areas are in complete accordance with the
objectives set out in new Article 153(1) and meet the full
approval of the Committee. Although subjects such as
the enforcement of consumer legislation or the legal
position of the consumer are not mentioned explicitly,
they may constitute important elements of the stated
areas. The Annex gives an indicative list of activities by
area. It is not clear to what extent this list is a determining
factor in selecting projects from consumer organizations
for financial support. The Committee asks the Com-
mission to shed light on this issue. The Committee
expects that the Commission, in drawing up the new
action programme and defining its priorities, will take
into account the new directions presented in its Com-
munication ‘Priorities for Consumer Policy (1996-
1998)’ (3) and its state of progress.

Present Article 5: eligibility criteria for European
consumer organizations

3.8.
The Committee is pleased with the definition of
European consumer organizations given in Article 5.1.
This definition would ensure that only active and
independent organizations with a strong represen-
tational base will be eligible for EU-funding.

Article 6: eligibility criteria for national organizations

3.9.
The Committee disagrees with the broad defi-
nition of national organizations which may qualify for

(2) Notably in its opinion on the Single Market and Consumer
Protection, see its paragraph 3 (OJ C 39, 12.2.1996, p. 120).
(3) See the ESC opinion on the Commission Communication
‘Priorities for consumer policy (1996-1998)’: OJ C 295,
7.10.1996, point 1.9.

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financial support. The Commission is of the opinion
that not only consumer organizations, but also other
organizations may submit worthwhile projects in the
interest of the consumer. Although the Committee does
not deny that these other organizations may propose
interesting projects, it firmly believes that it is better to
confine this article to the (conditional) support of
consumer organizations: granting financial support to
consumer organizations in one area also strengthens
these organizations in a broader sense and is thus also
conducive to the pursuance of other consumer policy
objectives.
the view that
strengthening consumer organizations is valuable in
itself is in line with the Commission’s reasoning in
point 9.2 of the Financial Statement of the proposal.

It should be noted that

3.9.1.
The Commission may participate in the cost
of projects proposed by other organizations, such as
research institutes, universities, or centres of excellence
if these projects are to contribute to the pursuance of its
own goals. Such support should however be based on a
separate article in the proposed framework and account-
ed for in a separate budget line.

3.10.
The Committee is of the opinion that national
consumer organizations should satisfy a number of
conditions in order to qualify for support from the
Commission (1).

As stated before, these organizations should
3.10.1.
meet certain criteria of representativeness. These criteria
differ in Member States and the principle of subsidiarity
dictates that the definition of such criteria must be left
to them (2). In the absence of national criteria, the
Commission is free to apply its own qualifications for
the test of representativeness. Important factors in this
context are:

— The statutory objective of the organization should
be the representation and pursuance of the consumer
interest.

(1) Sectoral consumer organizations (for instance for public
transport and public utilities) could also be financially
supported by those DGs which are responsible for these
affairs, depending on the contribution those organizations
make to the pursuance of the policy objectives of the DGs
in question.

(2) See also Article 3 of the common position of the Council
on the proposed Directive on injunctions for the protection
of consumer interests (OJ C 389, 22.12.1997). This Article
states that the ‘qualified entities’ must be ‘constituted
according to the law’ of the Member States. It should be
recognised however that in some Member States public
bodies and not consumer organisations have been desig-
nated as qualified entities. Moreover, not every Member
State has defined criteria of representativeness.

— The organisation’s policy independence

from
government should be statutory and it should be
financially independent from business. It should
have full legal competence and a certain internal
organization for a number of years.

— Its organization and financial basis should express

its viability.

— Its membership, which can be composed of individ-
uals or organizations, should be significant in com-
parison with other such organizations.

3.10.2.
A further factor may be the role the orga-
nization plays in representing consumers in policy
making. In addition, these organizations should consti-
tute a relevant factor beyond the mere local or regional
level.

The Committee expresses the hope however
3.11.
that these criteria will be available soon in all the
Member States. It is moreover the view of the Committee
that consumer organizations from Member States in
which consumer representation is less developed should
qualify more easily than those from Member States in
which the consumer movement is more advanced,
analogous to the principles guiding EU cohesion policy.

Articles 5 and 6: the volume of financial support

financial
Paragraph 5.3 and 6.3 state that
3.12.
support shall ‘not in principle, exceed 50 % of the costs’.
According to the additional information the Commission
provided for applicants for Community support for
consumer projects in 1998, these applicants have to
argue why more support is justified in the absence of
further criteria. The Committee invites the Commission
to explain, in as far as possible, under which circum-
stances this percentage may be exceeded, as it may help
to reduce the number of requests which may have to be
turned down. Perhaps the funding of ANEC (3), which
so adequately represents consumer interests in standard-
ization and which receives a much higher proportion of
its costs, may help the Commission to define these
conditions more explicitly. The Commission should, on
the basis of past experiences, give a further indication
of the considerations which may permit a funding in
excess of 50 % of the costs of a project in its subsequent
calls for tender.

The term ‘operating expenses’ also needs to be eluci-
dated. It is the view of the Committee that infrastructure
costs do not constitute part of these operating expenses
and should therefore be reimbursable.

(3) The European association for the co-ordination of con-

sumer representation in standardisation.

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Article 7: project selection criteria

Although the Committee can largely agree with
3.13.
the proposed criteria, it takes the view that they need to
be further elaborated in order to provide more concrete
guidance (further clarification could for instance be
given on the meaning of the word ‘lasting’). The
Committee understands that this will be done in the
annual calls for tenders published by the Commission
(see Article 8 point 1). In view of the call for tender for
the funding of projects in 1998, the Committee would
like to observe that, although clarity has improved much
in comparison with the past, further efforts will remain
necessary. The Committee is sceptical about the intro-
duction of criteria which require applicants to predict
outcomes of projects, as these outcomes cannot always
be safely predicted at the outset. Finally, the Committee
points out that dissemination of results entails costs
which should be included in the total cost of the projects
submitted for financial support.

Article 8 and 9: procedures

3.14.
The Committee urges the Commission to set
timetables also for its own activities such as the
assessment and selection of projects, the notification of
applicants, the conclusion of contracts and the actual
payment of projects. In the past there have been long
delays, especially for payments. Timetables will make
for transparency and discipline for grantor and grantee
alike and thus allow for orderly planning. Finally, a
provision should be made for the funding of projects
covering more than one year, in order to achieve more

Brussels, 28 May 1998.

continuity and effective use of funds. The Commission
may consult its Consumer Committee on the contents
of the note it refers to in Article 8.1.

3.15.
The Committee is pleased with the efforts of
the Commission to reduce bureaucratic procedures
regarding auditing requirements and thus save the
valuable time of (especially small) organizations. The
provisions of Article 9.1 are an important step in the
right direction. It expresses the hope that
further
improvements will be made in order to achieve a better
balance between the benefits and the administrative
burden of smaller projects.

Article 12: reporting

3.16.
The Committee suggests that the annual report
that the Commission will send to the European Parlia-
ment and Council should be confined to eventual
problems and mere description of facts. Bureaucratic
paper work has to be avoided. It understands that the
evaluations of some projects only will be included in
these reports as part of the Commission’s ongoing
evaluation process. If this is the case, the Commission
would be well advised to express these intentions more
precisely. The Committee is pleased that an evaluation
report on the functioning of the ‘general framework’
will be submitted by end June 2002 at the latest. These
findings should constitute the basis for drafting the
proposal for the subsequent ‘framework’. Furthermore,
the Committee is of the opinion that, also in line with
the remarks made with respect to the insertion of a new
Article 5, an evaluation of the multiannual programme
should be part of the aforementioned report.

The President

of the Economic and Social Committee

Tom JENKINS