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)
Date: 2004-12-15
Institutions: European Economic and Social Committee
Subjects: EU financing, EU investment, EU research policy, competition, competitiveness, cooperation policy, research and development

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Official Journal of the European Union

C 157/107

It

4.7
that
mechanism be maintained to guarantee the price level.

the current CMO intervention

recommends

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 compensa-
tion, insofar as this may be possible. It emphasises the need to
ensure sustainable aid and to maintain the sugar budget.

Brussels, 15 December 2004.

It asks that the current provisions for the supply of
industries

4.9
quota sugar to the chemical and pharmaceutical
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.

The Committee would request

4.11
the Commission to
clarify its intentions regarding sugar production that is not
under quota.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

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:

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. 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 struc-
tures, labour market situation and raw material parameters. It
is becoming increasingly clear
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.

that growth,

The European Research Area (ERA) (1). The European
1.3
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

1.2
Global competition. Europe is no longer competing
only with now-traditional industrial nations such as the USA,

(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).

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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 poten-
tial, 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 atten-
tion to the Sixth Framework Programme,
the EURATOM
programme and related tools to promote research, as well as to
the 3 % objective (1) 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.

sustainable economic,

Committee opinions to date. In its earlier opinions (2),
1.5
the Committee has consistently expressed strong support for
each of the Commission initiatives set out above. It has under-
scored the crucial importance of research and development for
the Lisbon, and later the Gothenburg and Barcelona objectives,
social, environmental and
and for
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 step-
ping 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 over-
regulation,
restrictive requirements and bureaucratic proce-
dures, 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

(1) 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) 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.

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.

2.3
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.

Drawing, among other things, on the experience gained
framework

2.4
in formulating and implementing the
programmes, the Commission lays down six major objectives:

earlier

— creating European centres of excellence (3) through colla-

boration between laboratories;

— launching European technological initiatives;

— stimulating competition in basic research at European level;

— making Europe attractive to the best researchers;

— developing research infrastructures of European interest;

and

— improving

the

coordination

of

national

research

programmes.

Other points and proposals made in the Commission

2.5
communication include:

— realising the potential of a Europe of 25;

— taking full advantage of complementarity with the Struc-

tural Funds;

— identifying topics of major European interest;

— bringing in two new key areas: space and security;

— using the most effective means of implementation; and

— improving the operation of the framework programme.

(3) See point 3.3 below.

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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
it had made in earlier
opinions.

the specific recommendations

In particular,

The 3 % objective (1).

the Committee
3.2
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.

3.2.4 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 develop-
ments outside Europe (3). 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-Euro-
pean 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 frame-
work programme (and EURATOM), with the main emphasis on
the thematic priorities.

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 Commit-
tee's own recommendation on this issue in its opinion on the
Sixth Framework Programme (2).

Prerequisite. This objective can only be attained if
3.3.1
bodies or teams of excellence are already in place, which,
if
they work together, may be expected to produce first-rate
results (4).

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
the EU. The
R&D investment
Committee recommends exploring the reasons for this unfortu-
nate trend so that steps can be taken to ensure that industrial
R&D in Europe also moves closer to the 3 % objective.

even shifting outside

is

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).

The Committee's call. The Committee therefore
3.2.3
the Parliament, Member State
again calls on the Council,
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 interna-
tional competitive environment,
long overdue. Words now
need to be backed up by deeds.

implementation,

Tools to promote research (5)

(project structure).
3.4
Bearing in mind the Commission's laudable intention of estab-
lishing effective means of
the Committee
reiterates (6) 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.

(1) OJ C 112 of 30.4.2004.
(2) (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.

(3) See point 1.2.
(4) See also point 4.2 et seq.
(5) See also point 4.6.
(6) See also point 5.4 (OJ C 95, 3.4.2003).

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3.5
Basic research and European competition. Reiterating
the key message of its recent opinion (1) on this subject, the
Committee would also stress the clear need to promote basic
research as the fundamental element of all further R&D activ-
ities. This must be done within the context of European compe-
tition, and applicants must be free to choose the subjects they
wish to research. European competition generates European
added value.

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.

that

The international dimension of research. It must be
3.6
remembered, however,
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 (2) 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 agree-
ments etc.)

3.7
Interplay and balance between research cate-
gories. (3) 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 inter-
play — which is vital both for the Community's competitive-
ness 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 cate-
gories and in the specific remits and ‘sub-issue’s of the thematic
priorities/actions. Hence, the above-mentioned research cate-
gories must be given access to all the relevant research para-
meters 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

(1) OJ C 110, 30.4.2004.
(2) e.g. Canada, China, India, Japan, Korea, Russia and the USA.
(3) This issue and some of the fundamental difficulties it throws up
were also discussed in detail in section 7 (Research and technolo-
gical
innovation) of the EESC opinion on the European research
area.

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 (4).

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 develop-
ment 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 consid-
erations.

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.

Extraneous criteria. Other extraneous or speculative
4.2.3
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.

4.3.1
Subsidiarity. In keeping with the subsidiarity prin-
ciple, national scientific and technological capacity building
and basic funding to promote excellence is the responsibility of
individual Member States.

(4) OJ C 95, 23.4.2003; OJ C 110, 30.4.2004.

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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 Commis-
sion'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 infra-
structure.

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 reason-

able limits.

— Instruments need to be well defined, with clear objectives.

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.

Research infrastructure. With this

in mind,
the Commission's proposal

the
4.4
Committee also welcomes
to
develop research infrastructures (1) 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 Euro-
pean 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.

Framework

the Committee supports

Reinforcing thematic priorities and enhancing mobi-
4.5
lity. As already mentioned,
the
Commission's proposal to double the funding available for the
Seventh
EURATOM
Programme
Programme (relative to current levels under the Sixth Frame-
increase should mainly (2) benefit
work Programme). This
thematic priorities/activities/projects (including those covered
by EURATOM) and the mobility programme (3)
(including
support both for leading researchers and for those embarking
on scientific careers).

and

the

— The instruments should be as simple to manage as possible.

— They should concentrate on direct support of R&D activ-

ities 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 (4). At
the Commission
should offer applicants advice and explain to them why
particular instruments are preferable for particular themes.

the same time,

— To ensure that instruments are reasonably manageable for
there needs to be sufficient continuity, and

all parties,
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 observa-
tions on SMEs.

One of the recommendations that can be made with these prin-
ciples 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 (5). The Committee is pleased to
note that there is very close agreement between the recommen-
dations of the recently published Marimon Report and its own
recommendations on this subject, and strongly endorses the
conclusions of the Report.

(1) See also point 5.4 (OJ C 95, 23.4.2003).
(2) See also recommendations in point 3.5.
(3) The Communication recommends a stronger role for the Marie
Curie Programme, which has made a particularly important contri-
bution here.

(4) The Committee reiterates its disappointment that its earlier recom-

mendations to this effect were ignored.

(5) Report of an expert panel chaired by Prof. Marimon, 21 June 2004,

Sixth Framework Programme.

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legal conditions,

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
Seventh Framework
Sixth to the
transition from the
Programme. The changes in eligibility criteria, application
procedures, assessment criteria,
instruments
and cost models which have previously accompanied transi-
tions 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 recommen-
dations. The main objectives should therefore be continuity,
simplification, clarity and flexibility for applicants in the choice
of instruments.

Technology Platforms. The Committee is strongly in
4.7
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 appro-
priate 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 (1). However, this is
another area where careful reflection is needed (2) 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 devel-
opment 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 proce-
dures should be reviewed, and if necessary simplified or supple-
mented with simpler procedures, in order to avoid additional
confusion and excessive coordination as a result of continuing

(1) ‘The Community may set up joint undertakings or any other struc-
ture necessary for the efficient execution of Community research,
technological development and demonstration programmes.’

(2) See also point 4.7.2.

growth in the number of partly overlapping instruments. If
possible, simpler instruments should be used.

Small and medium-sized enterprises (SMEs). SMEs
4.8
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). Gener-
ally, in the fields of both high and low technology, program-
ming and adaptation of aid instruments should be more geared
than previously to enabling eligible SMEs to participate. Aid
such as Specific Targeted Research Projects
instruments
(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.

SMEs and knowledge transfer. Another key issue
4.8.1
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 occa-
sions (3), 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 devel-
opment than with management and marketing issues, and espe-
cially the lack of financial resources to adequately bridge the
initial loss-making period. This, then, is an area where coordi-
nation 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 (4),
which has been used by the United States government
to
support commercial R&D activity in small and medium-sized
enterprises through various agencies.

(3) See, for example, points 7 and 8 (OJ C 204, 18.7.2000).
(4) See

http://sbir.us/pm.html

and

http://www.zyn.com/sbir/

funding.htm.

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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.

conferences

Self-organisation and self-coordination. As

4.10
the
Committee has also noted on several occasions, there is a
bottom-up, autonomous approach to organisation and coordi-
nation in European scientific and technological circles. Actors
get to know one another within their respective fields through
publications,
become
involved in programme development on their own initiative,
and thus contribute to coordination — a process which is influ-
enced 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.

and workshops,

they

In

this

context,

Promoting

competition.

4.11
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 Euro-
pean level through competition. The Committee reiterates its
previous statement (1)
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.

European Research Council

4.14
(ERC). As previously
mentioned in its recent opinion (2), the Committee supports the
Commission's plans to set up a European Research Council
to coordinate and support basic research, with the
(ERC)
support of the scientific community. The Council should have
full autonomy and operate on similar lines to successful coun-
terparts in Member States and the USA. In order to exploit the
interplay between research categories, the Committee recom-
mends 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 (3)).

Career support. The Committee strongly supports the
4.16
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 (4) 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
The
otherwise
Committee reiterates its call for urgent action, particularly by
Member States.

employment.

comparable

public

sector

4.12
Competition, cooperation and coordination. The
objectives of competition, cooperation and coordination are
not always in harmony with one another; conflicts are particu-
larly likely to arise in connection with product development.
The optimal scope of each objective should be defined and
for each one should be selected
appropriate instruments
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 indi-
vidual 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 Dimen-
sion), and need to measure up to international standards. The
previous comments on technological platforms also apply here.

(1) Points 4.2.2, 4.2.3 and 4.2.4 (OJ C 95, 23.04.2003).

4.17
Preventing overlap and parallelism of administra-
tion and governing bodies. Research activity involves plan-
ning, entrepreneurial, administrative and assessment
tasks,
which can only be performed by experienced scientists. In view
of the proliferation of application, assessment/review and moni-
toring procedures, the Committee reiterates its recommenda-
tion (5) that the Commission look into this question and work
towards effective, coordinated procedures (especially procedures
coordinated between the Commission and the various partici-
pating bodies in the Member States, and between these latter
bodies among themselves) in order to prevent the emergence
(as well as horizontal/parallel)
of too many separate vertical
approval, governing, review and monitoring bodies (and proce-
dures) and the resulting unproductive activity.

(2) OJ C 110 of 30.4.2004
(3) The Committee has repeatedly recommended following a similar

procedure in the Commission's activities to support research.
(4) OJ C 110, 30.4.2004 (CESE 305/2004) and CESE 1086/2004.
(5) CESE 305/2004, point 5.18 (OJ C110, 30.4.2004).

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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 rele-
vant 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 sensi-
instead of judging on the basis of personal/human
tive area,
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 impos-
sible dilemma. Evaluation of scientific achievements and crea-
tivity 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 (1)
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 recom-
mendations on space policy (2). However,
the Committee
recommends that, in view of their special character and incom-
patibility with Framework Programme procedures, these two
areas should be approached separately from the thematic prio-
rities and outside the proposed budget for the Seventh Frame-
work Programme.

In the case of space research, a very strong and
4.20.1
successful programme already exists. The programme involves
collaboration between the ESA and European space and avia-
tion 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 sepa-
rately from the Framework Programme. The Committee would
be interested to find out more details of this.

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 develop-
ment are vital for European competitiveness, and consequently
the Lisbon objectives. The Committee therefore
also for
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 addi-
tion, 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.

5.4
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.

The Committee supports the Commission's intention to
5.5
implementation of the programme and to
improve practical
streamline implementation procedures.
therefore recom-
mends 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.

It

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

(1) See point 3.5.
(2) OJ C 112, 30.4.2004.

5.6
The Committee recommends closer involvement of rele-
vant SMEs than hitherto in research, development and innova-
tion. In this connection, it refers to the SBIR programme in the
United States. The Committee also recommends closer coordi-
nation 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.

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5.7
The Commission supports the Commission's plan to
adopt research into space and security as new thematic priori-
ties, and it explains why these should be financed and run sepa-
rately 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 competi-
tion, 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 develop-

ment is of vital importance, and that therefore a balance should
be struck in providing support for each one.

The Committee supports the Commission's plans to
5.10
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 criti-
cisms,
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

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:

the quality of statutory auditing in the European Union. In May
2003, a step towards this objective was taken with the presen-
tation 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 Direc-
tive on Company Law.

1. Introduction

The proposal of the European Commission for a Direc-
1.1
tive 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

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.