Mr Wolf may speak for one minute to make a personal statement.
President Santer reacted irritably to my question yesterday and accordingly congratulated himself on the fact that he was not descending to my level. A Member from one of the large groups asked me whether I would accept that as it stood. Surely no self-respecting Parliament can allow itself to be attacked in this way by an Executive! That is why I want to explain my question yesterday and clarify some personal questions which President Santer brought up.
Firstly, Mr Santer is an honourable man in his own choice of words. I had no intention of saying nor did I say anything that would cast any doubt about that. However, I must confess that I am somewhat concerned about one thing, namely that the political attitude displayed by President Santer yesterday in pretending that every failure and every defeat was a success could one day plunge our EU into a serious crisis of credibility.
It fills me with consternation that the question about the Lyons summit and the way it was used for electoral purposes, which is an objective one - and not just for President Santer - was punished with authoritarian disparagement on the part of the Executive, for it makes me pessimistic about our parliamentary future if objective problems of this kind can no longer be addressed in graphic language. But I am not giving up hope that this was merely a slip-up and that in fact President Santer has a more highly developed sense of democracy than to regard himself as an authority who may at most be criticized in the roundabout language of sycophants. Ladies and gentlemen, I very much hope that you will realise that here I am addressing a common concern of this House.
Mr President, following that last intervention, I would not want Parliament to associate itself with this remark, because it referred to respect for Parliament. Parliament is respected to the extent that Parliament itself respects the other institutions. The manner in which Mr Wolf addressed Mr Santer yesterday was not a mark of respect.
Mr Herman, ladies and gentlemen, we are not going to open a debate on this question. Mr Wolf, in accordance with Rule 108 - personal statements - has made use of the legitimate right which the Rules of Procedure give him. What he said was addressed to the Commission. Any reference which might have been made to that institution has been explained by Mr Herman. We shall not therefore start a discussion on this question which has now been considered in accordance with the provisions of Rule 108 of our Rules of Procedure.
Commercial transactions, capital markets and information networks
The next item is the joint debate on the following reports:
A4-0147/96 by Mrs Ewing, on behalf of the Committee on Economic and Monetary Affairs and Industrial Policy, on the second report from the Commission relative to the implementation of the decision regarding the provision of Community interest subsidies on loans for small and medium-sized enterprises extended by the European Investment Bank under its temporary lending facility (the SME facility) (COM(95)0485 - C4-0594/95); -A4-0168/96 by Mr Harrison, on behalf of the Committee on Economic and Monetary Affairs and Industrial Policy, on the communication from the Commission reporting on the feasibility of the creation of a European capital market for smaller entrepreneurially-managed growing companies (COM(95)0498 - C4-0486/95); -A4-0161/96 by Mr Harrison, on behalf of the Committee on Economic and Monetary Affairs and Industrial Policy, on the Commission recommendation on payment periods in commercial transactions (C(95)1075 - C40198/95); -A4-0161/96 by Mr Hendrick, on behalf of the Committee on Economic and Monetary Affairs and Industrial Policy, on the report from the Commission on the future operation of the information and cooperation networks in the framework of enterprise policy (COM(95)0435 - C4-0012/96).
Mr President, there are very pessimistic statements going round about the industrial prospects for the Union. A draft communication on European industrial competitiveness from the Commission paints a very gloomy picture. Our position is deteriorating every year compared with America and Japan. Many people have spoken about the 18 million unemployed and the 50 million on the breadline.
Starting with that pessimistic note, we have a bright star on our European economic horizon, namely the potential of small and medium-sized enterprises to create jobs. I am privileged in being asked to make my report on the Commission report on what has been a very practical and successful step to help small businesses to create jobs. I am calling for more information than the Commission has given us. At the outset I want to say that I accept the one amendment tabled. It also recognizes the need for more information.
The idea is quite a simple one. Compared with big businesses, small businesses are at a disadvantage when they seek access to funding. They often do not have the collateral. Yet, if they could just get the money on loan at reasonable terms they could create jobs for us. So here is the practical arrangement. The bankers acting as intermediaries may lend at 2 % less than the standard interest rate for a period of five years. The amount available is ECU 30, 000 multiplied by the number of jobs to be created. There is a very practical step.
For my own part, I wonder whether the dissemination of information about this scheme is satisfactory. Banks are not being encouraged to advertise this. They say it might distort competition. European information centres, where they exist, do a good job but there are not enough. In an area such as mine there is one but as it is a very large area many people do not know about this. As an MEP representing a specific geographical area I try to disseminate information to bodies such as the Federation of Small Businesses. So, the scheme is in place but is not sufficiently publicized.
However, one has to say that the Commission has reported considerable success. Some Member States, however, have not taken up the allocation. We have to find out from the Commission why this is. Why are some states not seizing on this and why do some have a greater success in job creation than others? Why do some find that they can create a job with a smaller loan than others? These are some of the extra bits of information I am sure we would find useful if the Commission can step up the considerable statistical work it already does.
By July 1995, 95 % of the total resources were allocated so the Commission is reporting this as a considerable success. But we need to know more so that we can do a better job of getting the money where it could be best used. The Committee on Budgets suggests that there should be a more favourable attitude to small and medium-sized businesses in peripheral areas. Naturally, representing the Highlands and Islands of Scotland, I would agree with that. Every job there is of such vital importance to the whole survival of communities.
I welcome the change in the attitude to what is meant by small and medium-sized enterprises. I welcome the division of the criteria into the very small (under 10 jobs), the small (10 to 50 jobs) and the medium (50 to 250 jobs). I would like to think that the ELISE programme which I welcome very much should concentrate on the very small and the small. That is where the greatest number of jobs will be created.
The Commission boasts that 42, 000 jobs have been created. We need to know more about where these are and in what sectors of economic activity. Perhaps the Commission could give us this extra information. Parliament welcomes this scheme being extended and expanded.
Mr President, small businesses is big business for the European Union as we strive for growth recovery in jobs. Small capital markets are potentially big for us and for Europe's small but fastgrowing firms, the expansion of which depends on regular shots of fast capital at their most explosive stage of development. Get these SMEs on the travelator of success and we can really be seen to be helping to tackle the scourge of unemployment which still disfigures the EU in too many of its Member States.
Help is at hand for these smaller entrepreneurially-managed growing companies in the form of Europe's small capital electronic stock markets like EASDAQ in Brussels, AIM in London, Neuer Markt in Frankfurt and Paris's Nouveau Marché. I should make it clear at this point that the earlier references to EASDAQ in my text should be replaced by the term pan-European small capital markets.
All these new markets borrow ideas from the world's most successful small capital market, America's NASDAQ, its most famous listing being Microsoft itself. Not only is NASDAQ the forcing-house of American fast-track SMEs but it is also the home to European companies thirsty for capital. Ten per cent of new listings on NASDAQ are European and European finance institutions use NASDAQ to invest in new American companies to the tune of 20 % of turnover and in NASDAQ-listed Euro companies by 35 %. How crazy! Why are we in Europe not providing home pitches for our domestic SMEs and finance institutions to come together and marry their finance and their entrepreneurial flair for Europe and Europeans' benefit. Well, now we are, and the Commission's report is a response to this fast-changing situation.
The Commission and Parliament acknowledge the need to focus on the specialized area which in the American hothouse of NASDAQ has netted 16 % of all new jobs in the early nineties despite representing only a minuscule 0.04 % of all US company listings. Europe's focus then is on high-risk, high-return entrepreneurialmanaged growth companies with trans-national aspirations whose Jack-and-the-Beanstalk growth often implies early years of loss-making expansion, a fact which would disqualify them from a listing on Europe's more traditional markets.
Parliament can strongly support the Commission's communication reporting on the feasibility of creating what are more Europe-wide capital markets, another distinctive feature of which would be the electronic screen-based nature of the marketplace. Such a development is the way of the future and threatens those existing market locations which remain flat-footed in their thinking and their response to a changing market scheme.
But Parliament calls for caution to be mixed with enthusiasm. We believe that issues of liquidity, regulation and possible protectionism have to be addressed. We call upon Member States, for instance, to repeal restrictions on pension fund investments in securities listings or exchanges in other Member States and in unlisted securities. We are, after all, in a single market and we should make that single domestic market work for our own small businesses.
But hand-in-hand with this liberalization should go the strict observance of prudential rules established by appropriate regulatory authorities. In addition, access to small capital markets should be facilitated. Entrance fees should not be prohibitive. Investors should not be discriminated against fiscally in terms of double taxation or capital gains tax because they choose to buy shares that are listed in a market located in another Member State. Insofar as we can, we should ensure that the duplication of markets does not take place such that we divide our effort to set up an alternative to America's NASDAQ. On present evidence we will avoid that problem. To interest big institutional investors we need the highest standards of regulation, perhaps a European Securities and Exchange Commission.
The prospectus approval system must be streamlined by harmonization or by mutual recognition. Any panEuropean small company stock market should of course be complementary to the national official list but Member States should not frustrate the development of such markets by engaging in unfair competition practices, for example by withholding settlement facilities. Finally, I reiterate the point that the introduction of the Euro as our single currency will heighten the attractions of a small capital market for all Europe's fastgrowing hi-tech companies. Indeed, any such pan-European market will itself be an appropriate means of channelling European investment funds. I welcome the Commission's report.
On late payments, recently in my home town of Chester, I was approached by a small firm which was suffering cash-flow problems as a result of a big firm paying late. Their problem was intensified, however, by the fact that their supplier in the chain of added-value business was a business in Sweden where payment times are short due to the far-sighted payment practices endemic to Scandinavia. My local firm was caught by the double whammy brought about by the single market: in hock to a larger firm happy to pay late but obligated to pay a Swedish firm used to being paid early.
Two other firms in my constituency in Ellesmere Port and Crewe name the culprit late payers as the European Commission itself. Mention of my role as Parliament's rapporteur on this vexed subject prompted payment double quick but these are all too familiar stories in Europe today. It is small firms which are the revving engines of Europe's growth and recovery which too often have been the victims of slow payment at the hands of big business, local or central government or, indeed, the Commission itself.
That some of our Member States do not take the matter seriously was sharply exemplified by the confession of UK Deputy Prime Minister Michael Heseltine that he built his own big business empire on the backs of small businesses whose bills he habitually paid late before breakfast, before lunch and before supper. It is time to call it the Last Supper for those who deliberately flout proper business practice by paying their colleagues late. In any other parlance we would call these people cheats and they certainly swindle the small businesses which go to the wall after such daylight robbery.
Late payment is, arguably, SMEs biggest problem. It is a worsening rather than improving situation. As the Commission's recommendation reveals, the outlook is bleak for those businesses which attempt to trade across borders. The variation across the EU markets for a bumpy playing field is such that the EU average of thirteen days delay after due date is exceeded by the UK's deplorable figure of twenty-three days and includes Sweden's admirable average of a mere seven days.
How do we right this wrong? How do we help SMEs regain monies which might otherwise be used profitably to invest in growing small businesses and producing jobs for Europe's jobless. Remember we are talking megabucks here. The UK-based Forum of Private Business calculates that the British SMEs are deprived of £20bn at any one moment in the business cycle through late payments. My answer - and I hope Parliament's too - will be a directive aimed at introducing a statutory right to interest for firms paid unwarrantably late. Such a system could encourage a virtuous circle where prompt payment becomes the norm not the exception. Existing Swedish legislation and the US Prompt Payment Act have each transformed the business culture.
We must act here for all the European single market, perhaps targeting first all public institutions like governments and local authorities. The penalty of a statutory right to interest is where Europe can score right between the posts and bring succour and soccer to Europe's level playing-field for its SME entrepreneurs. I implore the Commission to bring forward a directive with this purpose in mind. In the meantime we will naturally support all the other worthy ideas set out in the Commission communication. It must be wise, for instance, to establish definitions regarding due date, to have common ideas on payment periods - perhaps 60 days - whilst leaving such decisions to the contracting parties, to encourage the development of a common format for invoices, to applaud the publication of appropriate credit information on persistent late payers, to harmonize legal provisions especially in respect of enforcement procedures, to supply concrete measures for training SMEs in credit management, something positive which was recorded in the latest Coopers and Lybrand report on British SMEs. All these carrots of encouragement are bland without the stick of a statutory right to interest. This is the linchpin in tackling trade's toughest task. As parliamentarians we must ensure that small businesses are given the true opportunity they should have by acting on late payments.
Mr President, ladies and gentlemen, first of all I should like to support the Hendrick report on the future organization and operation of the information and cooperation networks. The incorporation of computerized communication networks in business is fundamental in an interconnected, open world such as we now live in. The business world cannot be left behind by a reality such as the information networks, Internet and the like, but it is a reality which must be regulated in order to prevent those networks from being used for spreading criminal material, diffusing pornography or defending terrorism and also in order to protect data of a personal nature and the private life of users.
I should like to take this opportunity to congratulate the Telecommunications Council on approving the harmonized rules for protecting data of a personal nature. I regard it as a first step in seeking solutions at European level, the OECD level and on a world scale in this field.
With regard to the Hendrick report on the other hand I must confess that I have my doubts about his view that these communication networks and so on can create employment in line with the Delors report. I think they are necessary and indispensable, but intrinsically there is nothing about them which creates employment, since the only thing they do is to adapt situations to present-day life and frequently jobs are unfortunately lost.
I should like to consider the statement that there will be an automatic net creation of jobs, as was mentioned. There is no doubt that strengthening new technologies, processes and procedures creates employment, but unfortunately harsh reality confirms that frequently more jobs are lost than are created. On behalf of the Committee on External Economic Relations I should particularly like to thank the rapporteur for agreeing to accept the new conclusions from our committee which he has incorporated in his work and for which I had the honour to draft the opinion.
So I basically support the rapporteur's report and I should like to add certain details about the networks as regards third countries. It is obvious that virtually all countries observe the rules of the free-market economy and consequently immense markets are emerging in Asia, Central America, South America, Central and Eastern Europe and so on. A transnational basis consequently needs to be established for business relations. Such links, such networks serve to promote cooperation and must incorporate support for those bodies which have the most direct contact with the actual business world, such as chambers of commerce, trade guilds and the like.
What are the main existing networks? The Euro Info Centres, the Business Cooperation Networks, the Business Cooperation Centres and so on. What are the results? To put it briefly, they are all being pooled in order to develop these networks. However, the evaluation of the results varies greatly according to the network. Their effectiveness could be greatly improved and they should be brought closer to the business world. Distribution is not homogeneous as regards human resources. I am referring to the quality. There is a risk of developing variable-speed networks. Operation of the networks is not sufficiently decentralized and is too bureaucratic.
To sum up, I should like to emphasize the importance of these networks. We note their disparity, we think it is important to consolidate them and we welcome the new phase which is dawning with the information offices. I therefore repeat my thanks to the Commission for the progress made along these lines.
Mr President, the most serious problem faced today by Europe and European society is the very high level of unemployment that prevails, which threatens the fabric of social and economic life. Unfortunately, the European Union has not so far been able to develop a long-term and cohesive policy to promote employment, which would include among other things funding for infrastructure projects, networks, etc.
There are proposals. There is the White Paper of President Delors and the recent Confidence Agreement by President Santer. What is lacking, is the political will to provide the necessary funding. The activity we are debating today on the opportunity of the Commission's report concerning the implementation of the decision on Community interest subsidies for loans by the European Investment Bank to small and medium enterprises, is a positive step by the European Union in the right direction, though its scope is limited compared with the overall problem. It relates to SMEs, which are the backbone of business activity in many Member States and which are the main sector in which new jobs can be created. The report describes the course so far of this loan facilitation and must be welcomed because it demonstrates that substantial progress has indeed been made, while the measure as such has worked relatively well. It is significant that 42, 000 new jobs have been created so far.
Yet, a number of comments concerning the problem should be made:
First, so far as jobs are concerned, it is not clear where those jobs have been created and in which sectors; second, it is not clear how the aid has been distributed between large and small countries, and perhaps it would be appropriate for the Commission to examine ways of favouring outlying and peripheral regions; finally, I believe that the Commission ought to submit proposals to extend the programme, which has ben shown to be both useful and beneficial.
Mr President, I rise to present my report to Parliament and to say that the exercise of compiling this report was extremely gratifying. I have been very interested in the work that the European Information Centres have been carrying out both in the UK and elsewhere around the European Union.
As many of you will know, the enterprise policy for the European Union began approximately six years ago and these centres have been in operation for that period. Particularly at a time when the finances of the European Union are coming under great scrutiny for various reasons - fraud, mismanagement and waste - it is particularly important that we assess the benefits as well as the costs of these information centres and the services they provide to small business.
I was particularly interested to visit one in my own region in the City of Liverpool which has been operating for quite some time and to see how it was helping business. The people at the centre were very keen to show me examples and case studies of businesses they had worked with and how people had benefited from their activities. I was particularly interested in how the networks function and the fact that we have this network across Europe. It is doing much to foster enterprise and trade across the European Union. I have recently come from a BBC TV interview where they asked me some very clear questions about what the benefits of these centres are to the Community.
My report focuses on two particular areas. Firstly, as I have already said, it is clear that significant amounts of European Union funds go into these centres. Therefore, at a time when the finances of the Community are under scrutiny, it is important that we begin to quantify the value of the work they are doing. That means we need to measure the benefits of the centres as against the costs. As the Commission report itself points out, no significant amount of work has been done to assess the benefits. Some measure of customer or client satisfaction is obviously required to determine the benefits and then to weigh those against the costs.
At the moment people in these centres feel they are doing a good job. They are fostering enterprise and promoting business but it is difficult to say how many businesses they are helping and how successful that help is. In some cases one centre may quickly find business across the European Union with another company in another country but then it may only come six months later because in many cases what is on offer is not necessarily the sort of services you would expect from a consultancy. It may be just that the centre has pointed a business in the right direction and it takes the business some time to link up with another company.
For example, a company which sells bolts and wishes to sell in France needs to be matched up with a company in France that wants to buy bolts. It is this matching process which may only take hours but in some cases can take months. That is an area I am concerned about and in my report I have suggested that a review procedure takes place and a set of parameters is developed whereby the benefits to the small business can be measured as well.
I have also suggested that, as we are moving towards an information society in the next century, the centres do as much as they can to benefit from the new technologies which are becoming available. At the moment the centres tend to pick up most of their inquiries through telephone calls and use fairly basic new technological methods such as electronic mail in order to pass messages around the Community and to match up companies.
At the present time, where millions of pounds can change hands in a micro-second and with the sort of activities that go on the stock exchange and new methods of electronic commerce, it is clear that the matching of two companies - one which wants to buy and one which wants to sell - can be done quite automatically. I would like to see the centres begin to introduce these new techniques so that the enterprise policy for the European Union can move into the next century. With those comments, I ask Parliament to support my report.
Mr President, the severe employment, or rather unemployment situation in Europe has created a general interest in supporting the activities of small and medium-sized enterprises. The social democrats have been very active in this respect both regarding budgeting and other matters. The same applies to our position at the national, provincial and local level. It is understandable that small and medium-sized companies naturally operate in the surroundings most familiar to them. It is quite natural that a majority of the problems encountered by small and medium-sized companies originate from sources local to the companies. I however believe that networking and the availability of information will for example increase the knowledge of business culture in new Member States. The Nordic countries, as we know, are not known for the prominent position of their small and medium-sized companies. But employment can also be improved by using these networks. From the point of view of developing internal markets, particularly in the high-tec sector, small and medium-sized companies are of great importance. They, however, face problems which have been discussed here today, particularly financing. National frontiers and monetary transactions also cause great difficulties to small companies. It goes without saying that small companies require ʼsoft' finance and that the need for risk financing is particularly great at present. After all one billion ecu is not a lot of money. It is less than three ecu per capita, so increasing the amount should not present any difficulties.
The price of money is one problem, and another problem is that the guarantees are inadequate. We should also be able to make progress in this area. The EU should make sure that there is also enough competition in all Member States in financing, and that small and medium-sized companies are not unreasonably squeezed in this respect. In this connection I would like to describe briefly the situation in my own country by giving you a practical example. Finland has an advantage over other countries in as much as the number of qualified engineers is relatively high. In the rest of Europe there is a shortage in this particular sector of the work force, and it should therefore be made available to these countries. One alternative is of course mobility of labour, which however also causes social problems. It is therefore better that such engineering work is sold by companies to its users. I know of a company whose exports account for 80 % of its business. Last year this company's loss due to currency fluctuations was greater than its net profit, which illustrates the dilemma. The culture of late payment in the rest of Europe is another major problem for these companies. Companies are forced to double their capital in relation to domestic requirements when operating abroad. If these innovative engineers are having to face currency and financing problems, they lose sight of the main objective, and suddenly they are no longer designing raw material and energy-saving ships which could improve European competitiveness. Finally I would like to point out that in any circumstances currency is a factor, and problems facing small and medium-sized companies cannot be overcome until we have a common currency.
Mr President, today there are four reports on the agenda which have a bearing on the position of European small- and medium-sized enterprises in the internal market. Yesterday too in the debate about simplification of legislation the concept of SMEs occurred repeatedly. The position of small- and mediumscale businesses is a little like that of women. The target group is large and appealing and they are discussed at length, but very little is done. Take for example the squabbling about the budget for the European multiannual programmes for small-and medium-scale businesses. We are thinking of the ECU 180 million which the Commission needs in order to carry out its action programme properly. Let the Council realize that this is a minimum and if that amount is not produced, then as far as I am concerned the Council need never again mention employment plans and all the rest of it.
A sphere in which the European Union has a clear responsibility, which it actually accepts, is the establishment of mechanisms for giving small- and medium-scale businesses access to risk-bearing capital. Mrs Ewing rightly remarks that the temporary lending facility of the European Investment Bank has been a success, but not in every country. Parliament increased this budget heading for 1996 to ECU 50 million.
I applaud the latest Commission proposal for providing credit guarantees for investments of small- and mediumscale businesses through which the SMEs get better access to financing, the so-called ELISE programme, particularly because it is specifically addressed to the really smaller businesses. I see it as a continuation of the growth and environment budget heading which I had to defend almost with my life in this Parliament in 1995 and 1996. I hope that will be a success so that the ELISE programme may also be a success. It is unusually accessible and very unbureaucratic, so it should deserve genuine success.
Secondly my Group is glad that something is being done with the establishment of the EASDAQ, the European exchange for high-growth innovative companies with trans-frontier ambitions. From the forthcoming European observatory for SMEs it will appear that this is the group of firms which will generate the most employment and from their manner of working we can perhaps learn a lot about solving the employment problem.
But what is important is that the Commission is investigating how many European undertakings meet the conditions laid down, how many European firms actually qualify for joining the EASDAQ which are now quoted on the NASDAQ in the United States. How many of those firms are actually planning to come over to the EASDAQ? This would enable us to estimate the credibility and liquidity of this future pan-European exchange. It will have to be attractive for investors to invest their money and for firms to put their shares on this exchange. The European Association of Securities Dealers would perhaps be the appropriate body to recommend this market to investors.
One European measure to improve the liquidity of the market might consist in the abolition of national restrictions with regard to investment of pension funds in stocks and shares. The recent pronouncements of Commissioner Monti about summoning a number of Member States, namely Italy and Denmark, before the European Court because of a restrictive policy for those pension funds give hope for the future.
It goes without saying that there must be clarity with regard to the relationship between the future EASDAQ and the existing national and regional exchanges in connection with undesirable overlapping and competition.
These small- and medium-scale businesses which have to act as a driving force for employment deserve real support at the moment from both Parliament and the Commission, and not last, in drawing up the budget in the near future, from the Council. Now is the moment of truth.
Mr President, ladies and gentlemen, it was the European Council in Copenhagen which, in 1993, instituted the SME mechanism, providing for the appropriation by the EIB of one thousand million ECU for schemes designed to increase the competitiveness of small- and medium-sized enterprises. In 1994, the Ecofin Council held that, in certain circumstances, the loans granted could be the subject of interest-rate subsidies financed from the Community budget. Only those loans made within the framework of the EIB's SME mechanism are eligible, and the subsidies - granted for a period of five years - are fixed at 2 %. In other words, a loan granted at a rate of 8.5 % per annum, for example, costs the borrower only 6.5 % per annum, the difference being paid from the Union's budget.
For some time now it has been apparent that some Member States were committing only a small proportion of the funds appropriated to them. It is clear that these delays in the appropriation of resources are prejudicial to potential borrowers in the Member States. Consequently, we support the rapporteur when he invites the Commission and the EIB to examine why these delays are occurring. Similarly, it is noteworthy that some Member States are publishing much higher job creation forecasts than others, and again that some Member States are, it seems, able to create jobs with infinitely smaller loans than the others.
Mrs Ewing's report is approved by our group as a whole, though we would enter certain reservations. I should remind you that the original mechanism was intended to promote investment to create jobs, not to subsidise the creation of jobs. Consequently, it would be dubious under these conditions to create a mechanical link between the total subsidy - ECU 30, 000 per job created - and the number of jobs created, without taking into account the type of investment made or the quality and durability of the jobs created, even if we favour endeavouring to ensure that the Community scheme produces the best effect on employment. Any comparison between enterprises or between States thus appears somewhat random.
Similarly, we consider that it is not a matter for the States to assess what is the most effective vector for promoting and organizing this type of mechanism. Furthermore, Article 10 appears to us to be unfounded in that its effective functioning does not presuppose the creation of a joint committee which would prove to be an ad hoc supervisory body.
Finally, ladies and gentlemen, our group will support the report by Mr Hendrick and Mr Harrison. Our group particularly values the call in Mr Harrison's report for the creation of a pan-European capital market on which high-growth entrepreneurial companies could make contact with private and institutional investors at minimum transaction costs and quotation fees but with the assurance of absolute transparency and security.
However, this initiative will be conclusive only if the obstacles relating to liquidity, regulation and the risks of protectionism are attended to.
Mr President, ladies and gentlemen, this debate is certainly important because it reconsiders specific and very relevant questions to try to give due attention to entrepreneurial activity which is of paramount importance in creating employment - and which forms the basis of the European Union's business activity - such as the small- and medium-sized enterprises. And it deals with questions genuinely concerning the real problems experienced by the SMEs, as is the case with the loans at below market rate interest - the loans provided by the European Investment Bank - or again the subject of security and the periods for recovery of payment for the services supplied by the small- and medium-sized businesses, which sometimes face excessive pressure from the great conglomerates, both commercial and managerial.
Of course these are questions of fundamental importance affecting the most important social problem raised by the European Union, namely that of employment, and let us remember once again that it is precisely the small- and medium-scale businesses which, at times of crisis or recession or simply of economic stagnation like the present, create the most jobs.
So in this debate there are a number of features which we must emphasize and I should like to say how anxious I am for this debate to come first to the ears of the small- and medium-sized enterprises so that they may know that the European institutions and the European Parliament do concern themselves with the specific problems affecting them and so that they have the best access to these facilities provided by the European institutions.
Mr President, regarding the future economic structure small enterprises are no doubt of great interest. But at the same time we should not have a too idealistic and optimistic view of their ability to create new jobs. Firstly small companies are of divergent types. Subcontractors are very different from companies operating in the consumer goods market. Small companies in different lines of business also have different opportunities. Secondly, a great number of small companies are established, but a fair number also go under. Many companies have a limited life, which also decreases the effectiveness of subsidies of a general character. Although the purpose of subsidies and lower interest rates is good, it is questionable whether they are effective when there is a general economic depression.
Sweden's experience of reduced social costs for example is that they are practically worthless. A current survey of small companies in Sweden shows that most companies blame a weak market as the source of their difficulties. And this is evidently the conclusion to be drawn, that ultimately macroeconomic policy is the decisive factor as regards small companies contribution to job creation. The current deflationary policy in Europe restricts opportunities for small companies.
Thank you, Mr President. Mrs Peijs, I would like to compliment you on the energetic manner in which you always raise the question of the SMEs and put forward your arguments, many of which I agree with. I am very glad to see how energetically you keep doing so, in our committee and here in Parliament. The Council should not only take that to heart, that is one aspect, but should also take a closer look at the problems of the SMEs in Europe. For small and medium-sized enterprises and the policy vis à vis these enterprises represent the policy for the basis of employment in Europe.
Basically, in terms of support measures the SMEs still come off worst in comparison with large firms, with shortterm industrial projects, especially in rural areas. Now one could say that these are the usual arguments put forward by parliamentarians, who always want more and more and are never satisfied. That is not the case. I regard the ELISE programme as a very good project. And it will bear fruit. My request to the Commission and the Council, and especially to the Council, is that they draw up a more consistent and well thought-out general plan for the SMEs. To be paid too late for work already done, especially outside Europe, spells the end for small and medium-sized firms, which is why my group endorses and supports a directive on payment periods, as referred to in Mr Harrison's report. We also support Mr Hendrick's proposal, which Mrs Hautala will be discussing in a moment.
Mr President, this is an extremely important issue. I am talking on Mr Harrison's report in particular and I should like to congratulate him on the way he set out his report. He has pinpointed the issues which confront in a quite stark way many of the small industries and small enterprises on which Europe depends for its growth. The rhetoric of dependency on small and medium enterprises does not match the reality which is that such firms are very vulnerable to the unscrupulous and the big boys who can lean on the small boys and refuse to pay them on time.
This is obviously an issue of great concern to many small firms. I am sure all of us have come across a firm where its viability has been threatened and sometimes destroyed by the failure of a large, powerful client to pay its bills on time.
One has to say that the bad boys are not just other commercial firms but very often public bodies. I am reliably informed that the UK Government, including the Scottish Office, is one of the worst offenders. This is simply not good enough and I am delighted that some steps have been taken to redress this situation.
The concept of an SRI, a statutory entitlement to interest on overdue payments, is at the heart of the attempts to redress the situation. If we were able to achieve this at one stroke across the Europe we would achieve a tremendous amount for employment and for the generation of confidence. For all the speeches that are made in this august building on that subject, this is one thing which could make the biggest difference, if we are serious about it.
One has to ask whether or not the Commission is really serious. Not only is a rather weak measure proposed which is discussed in the report. If you look at the track record of the Commission itself, it hardly inspires confidence. Let me take you briefly through a Christmas horror story which I had to contend with in my constituency. A firm which had been in receipt of both praise and grants from the Commission found itself near bankruptcy because for the second time it was facing delays in payment. I phoned the Commission and spoke to a very helpful official who explained that there was nothing much the Commission could do because there was a shortage of staff in the department which paid out the cheques and the person who signed the cheques had only a limited amount of signing capacity and there were not enough people to feed the cheques to him. So, there was a crisis in that department. If it were not done by Christmas Eve nothing could be done until the New Year.
Here was a firm facing bankruptcy and the laying off of workers for the simple reason that it had an excellent track record in innovation and research and was being encouraged by the Commission. I should therefore like to ask the Commission spokesman for some guarantees and figures on how well the Commission matches its rhetoric with reality. Will it put its own House in order and show an example to the rest of Europe?
Mr President, small- and medium-scale businesses should be pleased about the enormous interest of the authorities, at both national and European levels in recent years. Small- and mediumscale businesses seem to be the European politicians' pet child. Let us hope that with everything we do not cuddle small- and medium-scale businesses to death. There is a real danger of that. So with measures for encouraging SMEs the accent must be placed on lightening administrative burdens and simpler legislation. That works much more effectively than any system of subsidies, because in practice it seems that financial encouragement of small businesses costs a great deal of effort on the part of both the authority providing the subsidy and the firm receiving it. What does the Commissioner think of the suggestion of concentrating subsidies for supporting SMEs on test projects established by the bodies providing services perhaps in collaboration with educational institutions?
With regard to Mrs Ewing's report about interest subsidies I notice that relatively few firms with fewer than 250 employees are included. That is due particularly to the short period for application. It is worth recommending that local and national employers' organizations should be involved in the information process. The Euro Info Centres would then have to collaborate closely with that kind of organization.
Then I come to the European capital market for rapid-growth firms. I understand that such an institution gives a positive spur to promising firms, but I have one fundamental question: is it the authorities' job to set up such an exchange? Definitely not, in my opinion. The authorities ought simply to remove obstructions and create the necessary legislative preconditions for such an institution.
Finally the problem of the late payments in the European Union. How do we solve that? With a recommendation or a directive? Paragraph 6 of the motion for a resolution calls for a directive. The arguments for that are too slight. A directive looks very nice for the SMEs but how will that help an employer? If others have to pay on time, he will have to as well. That will just be robbing Peter to pay Paul. The rapporteur's argument does not hold water. There will not be nearly so much capital freed as he maintains for investments and employment. The risk that a customer will not pay remains the same. So employers would be better served by a course in how to assess a customer's credit-worthiness. It would also be a good thing if small firms were allowed to deliver their VAT return quarterly or were allowed a longer time for returns. More far-reaching proposals would quickly amount to an encroachment on freedom to contract. I say in advance that I shall not blame the Member States if they say they cannot do much with the Commission's recommendation.
Mr President, SMEs are becoming increasingly important as a means of boosting the economy and reducing the high unemployment figures. That makes it all the more pleasing that, if the report draws the right conclusions, the grant of interest subsidies has done more than expected to create new jobs in European SMEs.
It is to be welcomed that the definition of the size of SMEs has been reviewed in this context and the dimensions are to be revised downwards in order to take account of the real situation of European enterprise structures. And efficient information and cooperation networks can give small SMEs in particular the necessary market access so that they do not to lag behind in terms of efficiency and can participate in the innovative developments. Even though I am in favour of privatization on principle, we must ensure that the proffered information services are simple and affordable for the SMEs.
Finally, we must also pay attention to the balanced distribution of the horizontal information and cooperation networks to preclude from the outset any risk of distortions of competition in this area too.
Mr President, I think that, as has already been said, we owe hearty congratulations to the Commission because this initiative means an important series of measures which help to find a solution to the excessively long payment periods in commercial transactions and which provide security for their recovery. And of course I should like to congratulate Mr Harrison for his splendid report.
Up to a point the recommendation - which is not binding according to Article 189 of the EC Treaty - diverges from Parliament's resolution on the Commission's communication on the implementation of an integrated programme, but all the same it must be accepted seeing that this instrument is intended as a first stage in regulating payment periods, with a view to creating a reference framework.
A single solution is impossible. Different solutions will have to be applied. What is happening is that the report on the recommendation has the great advantage of bringing solutions to a specific subject. At international level it is important to stress that it would be necessary to begin extending to the commercial field the Rome Convention on the Law Applicable to Contractual Obligations and also to carry out a study of the situation of those who, in spite of the 1968 Brussels Convention on Jurisdiction, have difficulties in obtaining enforcement.
As I said before, the problem of payment periods has no single legal solution and the law cannot be regarded as the only option. Any rules governing payment periods will moreover have to take into account aspects of tax policy - particularly those relating to SMEs, banking policy, cross-border transfers, industrial policy, business training and business management techniques.
Mr President, in supporting today's proposals in favour of small business I want to bring to this Chamber the clear experience of small business in my own constituency. I speak as an honorary member of the South Essex Chamber of Commerce having close contacts and met in recent weeks with the Thurrock Industrial Association and the Basildon Business Association and just last Friday participated with representatives of over one hundred local companies at the launch of Business Link Essex. All these organizations are committed to nurturing small and medium-sized companies. The question is what can the European Union do to help us.
Firstly, I should like to give the strongest support to action to halt the scourge of late payments which threaten so many of our small businesses. I would highlight a small printing company in Tilbury in Thurrock, S & S Printing, which finds by and large that it is working for other companies which are larger and more secure. Yet non-payment of invoices presents a real problem to their manager, David Stear. He puts it plainly when he says that when these companies who are in debt to him pay their salaries they are doing so with his money. In another arena that would be called fraud and it is shameful that the UK has the worst record of late payments in Europe at a dismal average of 23 days. That is why our initiative to end this scourge of late payments is absolutely right.
Secondly, I wish to support the continuation of our European programme for intra-subsidy loans to small companies but to call for clear improvements in the way that these loans are administered. Eleven small companies have benefited or become eligible to benefit from South Essex since 1994. Too many of them have told me of the difficulties associated with this scheme. Let me make it clear that bank loans are absolutely crucial to this sector of business and European support with minimum bureaucracy and targeted at job creation is a very effective way of offering support.
Precision Components in Benfleet, a small engineering company, started by the owner's father from a garage and still present on the same site were enabled to invest in new equipment for the first time in four years. Before the recession in the 1980s they invested in new capital every year and our help has returned them to the path of growth and new competitiveness. Just this week Thames Estuary Plastics of Rayleigh has had its interest subsidy from Europe confirmed to support twelve new jobs as part of a £470, 000 project. In addition, we will enthusiastically try to implement the new loan guarantee scheme, ELISE, in my area.
However, Terry Pearce from Precision Components remains sceptical about Europe's involvement. While Thames Estuary Plastics have had to wait nearly two years for confirmation of their support, another company, Camtac of South Woodham Ferrers, have waited so long that their success in the meantime means they now no longer have need for the loan. A success story for them but hardly for Europe! Another company, Beaver 84 Ltd, of Basildon was not even told by its intermediary that its application for a financial lease was even on the list for a European subsidy. Europe's role was hidden from them.
The solution to all of this is to ensure that sufficient funds are given to meet the demands and to avoid lengthy delays on the waiting lists. In Britain as a whole 700 companies have been helped but 650 more applied and were eligible. Intermediaries should be much clearer about the role of European support and all Member States should operate a reserve list system to help eligible companies who were not first in the queue.
Finally, on the European information centres, we receive no service in Essex. There is a huge gap to the north of London, in Essex, Bedfordshire and Hertfordshire. Essex has 66, 000 overseas and UK businesses providing 590, 000 jobs. Commissioner Oreja's answer to my parliamentary question on 13 June when he said that services are provided from Norwich or should be sublet from Norwich is wholly unacceptable. Let the Essex County Council Library Service be a European information centre. No new money is needed. We simply want the title so that we can get access to the information, to the publications and to the network of other centres. It is not working at the moment in Essex. Look at our case once again.
Mr President, I am glad that before dealing with the multiannual programme for SMEs we can devote a whole morning to these dossiers. Since Edinburgh it has been the custom for every European Council to sing the praises of the small- and medium-scale businesses. Again and again the part they play in economic growth and in the creation of employment is painted in glowing colours - as happened in Florence too.
The fundamental political significance of this must naturally not be underestimated, but let us not forget that a policy needs specific action if it is to be of any use. To improve the SME climate effectively and to make all the solemn declarations credible, measures are needed. In the organization for independent employers and SMEs for which I worked for years it was our slogan that SMEs are not just pocket-sized big business. They have their own characteristics and need a specific policy. This morning's dossiers are an apt illustration of that.
The small-scale and frequently the family nature of these businesses means that they have to settle funding problems in a special way. Their small scale moreover prevents them from taking in experts in all fields, so that there is a danger of chronic lack of information. Finally small businesses find late payers more than a nuisance.
The Community initiative for granting interest subsidies on loans was modest but welcome. At that time I was anxious to reduce the target group to undertakings with fewer than 250 employees. The Commission did not want to support my amendment but did promise to steer the bulk of the resources to that sector. I am glad to note today that that promise has been kept.
I also support the rapporteur, Mrs Ewing, to the full when she asks for priority attention to those of less than 50 employees. I hope ELISE will give our new loan guarantee system a push in the right direction.
The SME capital market is another instrument for financing. The EASDAQ may perhaps start in September and will finally provide a solution within and not outside Europe for the rapid-growth advanced high-technology SMEs. The Euro Info Centres and the Cooperation Networks are more necessary than ever. The rapporteur, Mr Hendrick, is right to emphasize that service to the SMEs must be the criterion. We shall certainly talk about this again in debating the multiannual programme.
Finally there is the Harrison report about terms of payment. Late payments are not infrequently the cause of one or a series of bankruptcies. They are an evil which SMEs relatively often have to reckon with. The lack of knowledge and expert advice and an incomplete internal organization certainly have something to do with this, but also the lack of a position of power in negotiations serves the SMEs ill. The question is whether we can put this right with a directive. Personally I have doubted this for a long time and have always advocated harmonization of procedural law, the introduction of simple judicial procedures and encouragement of extrajudicial arbitration procedures. I still think this is needed, but I admit that many discussions with employers have also eventually convinced me of the need for a directive - a directive with rules of imperative law but also, as regards terms of payment themselves, rules of dispositive law.
Mr President, you will certainly allow me to tell the rapporteur that I found his willingness to cooperate exemplary. As a result we have been able to arrive at a report which has the full approval of my Group. I would have been glad to hear from the Commission exactly what it plans to do now about late payments. Is a proposal for a directive already being prepared, or are there other plans?
Mr President, our group has come out in favour of the position sustained by the rapporteur this morning on small and medium-sized enterprises. We could not do otherwise, because anyone with a broad vision of Community economic growth cannot dismiss the growth of small and medium-sized enterprises. But if they are to grow they must be given the necessary tools, on the one hand legislative, laws geared to the needs of the market, and on the other hand financial. I do not think anyone doubts that the development of the European economic fabric over the next few years will above all depend on small and medium-sized enterprises rather than large ones, so greater attention must be paid to that sector, with appropriate support. In this context we can only applaud the new multi-annual plan for 1997-2000 recently drawn up by Commissioner Papoutsis and DG XXIII with special attention to the necessary financial instruments, which we will shortly deal with in this Chamber.
The fragmentation of the Community capital market constitutes a problem for all growing firms. Too often when companies turn to other countries and to other sources, we do not do our job very well. So it is vital to strengthen the European capital market where firms can get directly in touch with private and institutional investors, with steadily falling brokerage charges. We are convinced that a phenomenon of late commercial payment exists and that it is a great burden, especially for micro-businesses which survive on respect for payment terms. That is less true of medium-sized and larger companies. In that sector payment conditions are only one of the contractual terms governing relations between client and supplier. So it would be absurd to seek to regulate one of the normal conditions of relations between businesses by law. The recommendation relating to medium-sized firms is more than sufficient, while legislation is desirable for micro-businesses.
One final point I would like to mention here is the distinction that should be made between the various economic sectors of small and medium-sized enterprises. We believe three sectors deserve particular attention because of their innate potential for development, employment and investment. I refer in particular to crafts, tourism, commerce and distribution. These three sectors have the greatest resources and the greatest direct contact with the consumer, which is the real objective of the daily work of millions of entrepreneurs, however small or large, facing a market we are duty-bound to expand and improve.
Mr President, Commissioner, ladies and gentlemen, the importance of smalland medium-scale businesses is once again highlighted with the discussion of these four reports today. An important subject which is raised here is the establishment of a European capital market for small-scale growth businesses. It is high time for a pan-European capital market to become operational - the EASDAQ as a match for the American NASDAQ. This will perhaps become a reality at the end of September.
We are always talking about the creation of sustainable employment. One of the very measures which can really lead to permanent jobs more than all manner of employment programmes is the encouragement of growth undertakings. An earlier American study confirms this. The businesses quoted on NASDAQ, it is true, constitute only 0.4 % of all American businesses, but they created 16 %, or 300 000, of the total of jobs created between 1990 and June 1994, whilst with the 500 biggest businesses in the United States 850 000 jobs were lost.
Except in one or two Member States venture capital is insufficiently encouraged and treated as the Cinderella. Pensions, which can play an important part or may be an important source of risk capital, have to put up with restrictions or high taxes.
The European Federation of Pension Funds recently submitted a report to the Commission with a recommendation which would yield an astronomical amount of reserves towards the year 2020. The report supports the idea that greater mobility for investments of pension funds might play a part both within a country itself and between one country and another.
The Commission must make the necessary effort along with the Member States so that free movement of capital does not remain a dead letter here and so that obstacles such as double taxation, amongst other things, might be overcome.
Mr President, it is known that both development itself, and the promotion of employment rely largely on the existence and activity of small and medium enterprises, and more particularly, small enterprises. It should be stressed, however, that SMEs and in particular the smaller among them face very acute problems due to the intensified competition brought about by the internal market, the internationalization of production, and the coordinated action of major international capital. The result is that thousands of companies are approaching extinction, with the loss of tens of thousands of jobs. From that standpoint, the European Union's measures so far on behalf of SMEs cannot be regarded as satisfactory. They are fragmentary and purely administrative, and they try to present the alibi of protection, when the European Union's more general policy is stifling such companies and contributing to their extinction.
That is the background against which we judge the implementation of the programme 'Facilities for small and medium enterprises' . Subsidies should be directed towards companies that are really unable to cope with the burden entailed by recourse to foreign capital. Small and medium enterprises employing fewer that ten people, which account for 92 % of SMEs in the European Union, should be treated favourably.
Consequently, we consider that the limit of 500 employees mentioned in the decision is entirely unacceptable. In essence, it is a means of providing yet more help to large companies. The reduction of that limit to 250 and the classification of SMEs suggested by Commissioner Papoutsis are along the right lines, but not enough. Granted the essential coverage of the initial distribution of one billion, we call upon the Commission to extend the programme by approving new appropriations, and to adopt special support measures for very small companies, in other words those employing fewer than 10 people.
Mr President, I would like to express a few thoughts on the views put forward in Mrs Ewing's report. I agree with Mrs Ewing that we should consider going even further in directing interest subsidies to the very small companies, and in this respect the ELISE programme occupies a key position. Another aspect which I would like discussed is that when public funds are used to support companies, we really need to know in detail whether our good intentions are achieved with this support. In this respect the Green Group has tabled an amendment to Mrs Ewing's report, which emphasizes that the Commission should look into those sectors of business where the support system has succeeded in creating more jobs. In actual fact I would like to ask the Commissioner whether she thinks that we have an adequate picture of the effects of the support on unemployment. Interest subsidies are in themselves an excellent instrument. They are flexible and perhaps provide an opportunity to provide support to a greater variety of companies than would be achieved with direct support. In connection with this I would like to bring up a slightly difficult, sensitive matter, that we should also encourage investigations into how support to companies may distort competition and hinder the activities of healthier companies. I would be interested in hearing whether the Commissioner has given any thought to this matter, and if the Commission has possibly looked into whether support to companies does distort competition. I know that in some business circles there is a desire to cut back on direct support and perhaps give companies support from the community for example in the form of tax reliefs.
Mr President, late payment is the scourge of businesses the length and breadth of the single market. It is an especial problem for our 17 million small and medium-sized enterprises. I welcome the Commission's initiative in the area of late payment but my welcome can only be qualified. The recommendation is acceptable only so far as it goes.
Europe's SMEs and SMEs in towns like Dudley, Halesowen, Stourbridge, Smethwick and Wolverhampton in my constituency need more. In the early 1970s my father set up his own small business. One of his first major contracts was to erect a security fence around a cold storage company premises. He had to borrow money from the bank to buy his materials. The cold storage company, an internationally renowned business, delayed its payment. This delay took my father's young business to the verge of collapse and I can well remember the anxiety this financial crisis caused in our family home.
We need to change the business culture regarding late payments but I would say to the Commissioner that I do not believe this can be achieved with a recommendation which is essentially a wish list for best practice observance. This is a carrot approach without the stick. A directive introducing the automatic statutory right to interest on late payments of outstanding commercial debt would be that stick. The need for such a statutory right of interest was the conclusion of an EMAC hearing in April 1995. All the small businesses that spoke at this hearing spoke persuasively of the need for a statutory right.
Mr Sam McCrone from Scott Young Research of Brierley Hill and Mr Ian Brough, chief executive of Dudley Chamber of Commerce and Industry gave the hearing the benefit of their experience of late payments as it affected their locality. Mr McCrone, in particular, made the point that this was a single market issue. Small and medium-sized businesses such as his were experiencing real late payment delays in other parts of the European single market such as France.
I believe we may be back here in two or three years' time talking about the failure of the recommendation to deliver what we want. We should have that directive and have it now. We can save ourselves the trouble of waiting for two or three years and actually deliver for our SMEs not just in my part of the industrial West Midlands but throughout the whole of the single market.
Mr President, today we have four documents from the Commission on the agenda; a communication, two reports and a recommendation. The texts usually contain plenty of sensible comments. Unfortunately these documents do not always lead to firm actions.
The four separate reports from the Committee on Economic and Monetary Affairs and Industrial Policy are very good. They indicate an understanding of the conditions of small and medium-sized companies. I would like to mention one report in particular. Mr Harrison's report on payment periods in commercial transactions, which should have been issued as a binding document from the Commission. Instead it is unfortunately only a recommendation, which means that it does not receive the attention required to promote effectively shorter payment periods and consequently lead to less strain on cash flow for European companies.
Sweden's experiences of legal regulations currently in force on the recovery of payments for the benefit of commercial companies are good. What I dislike about the Commission's recommendation and the final report is the interference with freedom of contract. In my opinion there is no need for statutory payment conditions. Access to capital is essential for a growing company, both through better cash flow and the opportunity of generating its own capital without high taxation and through the possibility of accessing venture capital. The latter particularly concerns fast growing companies in the high-technology sector. This was dealt with in Mr Harrison's second report. I agree that European companies must be given the same conditions as their American counterparts, and it would be excellent if a working capital market could be established as part of this process, otherwise we run the risk of the good ideas being exploited elsewhere. I hope that the Commission will take the initiative for the legal conditions required to establish a European capital market. National regulations and restrictions on the movement of capital will have to be abolished in order to create an effective capital market.
Mr President, I too would like to congratulate the rapporteurs on these reports. They are very helpful contributions to the very important debate we are having about small businesses. As we know, the latter are so important in the generation of wealth and employment in our Union.
The schemes which have been put in place by the European Investment Bank have been extremely good. Certainly in my country the way these have been operated through some of the commercial banks have been very helpful to small companies. I would like to see the European Investment Bank investigating a little more closely how they are actually put into operation. I have had complaints from businesses in my constituency of commercial banks requiring the businesses to move their accounts to those banks before money can be paid out under the schemes. If that is the case it is a deplorable situation and it would be good to see it investigated.
The work that is being done on capital markets is most important. The biggest problem that small businesses face across the Union is access to capital. But perhaps the most important and most immediate of all these reports is that on late payments of debt. In my country we know that the total trade debt owed to private business is now of the order of £46bn, that the total overdue debt owed to private business is now of the order of £20bn. These figures are ones which are clearly not helping small businesses and these reports can only be helpful in achieving a satisfactory solution.
Mr President, ladies and gentlemen, I myself run several SMEs in France, and it is in that capacity that I offer these comments on the reports before us today. I have never resorted to an EIC to obtain information. In my country, the prefectures, general and regional councils, chambers of commerce, professional associations and other bodies deluge us with information. For me, therefore, going to the European level would be gilding the lily.
As regards the delays in payment, which are now as long as six months, you are attacking the consequences and not the cause: the general economic crisis. These payments would be made much more quickly if the economy were in good health, and the economic policy which you impose on the Member States is not conducive to growth. Charging interest in default, which is actually obligatory in France, is rarely respected for fear of losing a customer.
The really good idea contained in this report is the idea of paying VAT when invoices are actually settled. This is a commonsense measure attractive to all heads of businesses. The creation of a second European market, in the sense in which you mean it, is of interest only to a few enterprises in a very specific sector. I should be content with a flexibilization of the second French market to make it more accessible to small private shareholders and businesses. Savings exist, but they are not invested in the economy for lack of suitable structures.
Finally, as far as credits are concerned, the EIB mechanism seems to me to be the prototype of restrictive aid to employment, which becomes the focal point of enterprises' financial arrangements and very often brings about their downfall. Abandonment of EMU, cheaper credit and persuading the banks to stop regarding loans to SMEs as a risk they are no longer willing to take - those are the things that would help us.
Finally, as I see it, the main problems of the SMEs are as follows: cost of credit, the nervousness of the banks, administrative constraints, taxation, excessive social burdens - and none of these problems, I fear, will be solved by your Europe.
Mr President, before I became a Member of the European Parliament I was for some fifteen years a member of a local authority in the United Kingdom and for ten of those years as deputy chairman I was responsible for an organization called the Staffordshire Development Association, the main objective of which was to encourage and foster the growth of small businesses.
In this organization in Staffordshire we had over 200 members ranging from large companies such as Wedgwood and Steelite which are well-known - when you drink your coffee in this Parliament it is from crockery made in my constituency by Steelite - to micro companies. I really want to address my remarks on the two reports before us today to the question of those micro companies.
These are the companies consisting of between roughly 5 and 15 employees. When I was deputy chairman of the Staffordshire Development Association two key problems emerged in dealing with small businesses. One was the access to capital markets. In her report Mrs Ewing highlighted the problems - despite some changes - which small businesses face in that area. The work of the EIB is highly commendable but two points should be taken on board. The sums available of ECU 1bn are too small given the number of micro companies in the European Union. We need to increase that sum steadily over a period of years.
The second point which is very important is that there ought to be a target or targeted fund for the micro companies in particular. Those companies which have a small number of employees find it most difficult to access resources to expand their businesses. If we go back to the Delors White Paper, as Mr Harrison has commented, we see that the engine of growth is going to be the micro companies. These are going to be the organizations which are going to grow. We have to focus on them. Also, we have to study the lack of takeup in some Member States' economies.
Another point is the late payment argument. There have been many wonderful contributions from this Chamber. We need a statutory right to interest. For too long now we have been pussyfooting around. It is local authorities and large organization, quangos and national governments which are by and large responsible for a very high proportion of that. If we do not have a statutory right to interest, if we do not bring forward legislation on this, we are going to sell short our small companies in the European Union. The figures on late payment which Mr Harrison gives in his report pale into insignificance compared with debt payments in Staffordshire which take much longer and which are driving small businesses into the ground. Let us have a Commission proposal and statutory right to interest right across the European Union to encourage and help small businesses.
Mr President, I welcome these reports today and their recommendations. I particularly welcome the proposal for a statutory right to interest on late payments. I hope it will improve confidence and the functioning of the single European market and eliminate unfair payment practices. It would be ideal if companies were to take their responsibilities seriously in terms of prompt payment but we know that is not the case and therefore minimum legislation is necessary to improve the business culture and ensure fair and good practice.
Companies need to understand that late payment is not good credit management. How often have we said in this House that the growth of SMEs is the key to fighting unemployment in the EU and indeed in our regional policy programmes we have strengthened our support for SMEs in recognition of this potential. It would be a travesty if, as a result of late payments, we were to undo all that good work.
It is a fact that many small firms struggle because of late payments. Their cash flow dries up. Innovation and enterprise is halted because funds cannot be released due to supporting late payment. It is time for action. Governments, public institutions and the Commission should lead the way by example. They can institute a policy of prompt payment without the need for EU legislation. Recently the British Government White Paper: Competitiveness - Helping Business to Win said that small firms pay a vital role in the economy. They are flexible and responsive to change. They stimulate, and are a major source of, job creation. Yet I am sure you will agree with me that it is scandalous and shocking that the Economic Secretary to the Treasury in the UK and the spokesperson for small businesses, Angela Knight MP, an MP in my own Euro-constituency, said that the Treasury's late payment on 25 % of its bills is not exactly the crime it has been portrayed as. It is a crime if, as a result of late payments, small firms go to the wall. They collapse and people lose jobs and our social security bill increases.
I welcome this directive. I welcome the chance to improve the survival chances and financial prospects of UK small companies and also to contribute to the overall competitiveness of the EU in boosting job creation. I also hope that it will force the UK Treasury and Miss Knight, as Economic Secretary, to pay their bills on time.
Mr President, we have advanced a great deal since a few years ago, when very little notice was taken of small and medium-sized firms, even in the European Parliament. I am pleased about this. But today we are in a delicate, difficult stage. There are two questions that I want to put to you, Commissioner Papoutsis. First, the Florence Summit, which was not positive on the issue of employment or therefore on small and medium-sized firms, threatens to weaken the policy on small and medium-sized enterprises as well as the funding for the third programme. How are we going to react?
The second question is about the way small and medium-sized enterprises are being strangled by delays in payment by larger firms and also by public authorities. The recommendation is a first step which I myself asked for many years ago, but if it does not bear fruit, if the Member States do not apply it, we will have to move quickly to a directive. That is the political point. So, I propose a grand meeting of the European Parliament and Commission with representatives of the small business community to address this problem. Either the recommendation is applied or we will have to move to another, more binding, instrument. That is my proposal, Commissioner.
Mr President, ladies and gentlemen, I would first like to thank the European Parliament for organizing this joint debate at a very appropriate time.
As you know, all the European Councils from 1993 onwards have stressed the importance of small and medium enterprises for Europe's economy. The Florence Summit Conference stressed the importance of the European Confidence Agreement on Employment, as Mr Speciale stressed a few minutes ago when he called upon the national, regional and local authorities and the social partners and Community bodies to take action to promote development and the creation of jobs within the scope of an integrated approach. SMEs are now called upon to play a protagonistic role in that effort.
However, Mr President, let me at once answer Mr Speciale's first question. Following the Florence Conference, it is now in the hands of the other institutional bodies, mainly the European Parliament during the debate on the budget for 1997, but also those of the Council on Budgets, to demonstrate whether we really intend to abide by our political commitments and, of course, adopt the decisions that must be taken in relation to the financial consequences of those political commitments.
All these years, the European Parliament with its resolutions has stressed the essential role of SMEs in economic development and employment, but also the problems faced by European companies. I would like, Mr President, to congratulate the rapporteurs on the four excellent reports they prepared and presented today. On these important issues, we will have other opportunities for debates in the future, with the report which Mrs Thyssen is working on concerning the third multi-annual programme on behalf of SMEs.
Today, however, let me comment on the reports one by one, in sequence:
As for the serious matter of funding, dealt with by the report prepared by Mrs Ewing, I would like to remind you that finance facilities for SMEs, amounting to one billion ECU of subsidised loans, were absorbed by the end of 1995. However, a significant fraction of the demand, representing over 400 million ECU, was not satisfied. On the basis of information collected, the sums committed for specific companies show that the target of creating 33, 300 jobs was exceeded, granted that so far over 45, 000 jobs have been created. 95 % of the subsidised loans, within the scope of the facility for SMEs, were granted to companies employing fewer than 250 people. The actual disbursements are accelerating. In some countries, indeed, jobs have been created with lower loan levels than in other countries. This is because the need for capital is not the same in all industries and all over the Union. The Commission and the European Investment Bank are looking at ways of assessing the structural nature of the jobs created thanks to this programme of facilities for SMEs. This will certainly be a very difficult procedure. Yet, it is a fact that though facilities for SMEs have existed throughout the lifetime of the Union, they have been used more in some countries than in others.
A probable explanation of this phenomenon is that the structural funds sometimes offer SMEs more attractive conditions than those offered by this facility for SMEs. Secondly, the structure and specialization of the banking system in each country also plays an important part in channelling state support to companies. Thirdly, the number and type of intermediate financial credit agencies in each country plays an important part in attracting companies to take advantage of this initiative.
I want to assure you that the Commission will consider some of the points raised by the European Parliament in Mrs Ewing's report at greater length. After the completion of the third report on financial facilities for SMEs, we will be in a position to examine those issues. At any rate, I can say that the financial facility for SMEs has been a clear success. And this is due largely to the fact that the Commission and the EIB made it their common aim to create a simple and effective mechanism, and to ensure its prompt implementation.
We are now very carefully examining the results of implementing those measures, and particularly the distribution of the jobs created. The EIB is carrying out a similar study. And in answer to the questions by Mrs Ewing, Mr Kranidiotis, and Mrs Hautala, from the facts and figures available to us today from just one country, France, the subsidized loans went mainly to arts and crafts enterprises employing up to 10 people. The Commission will include the European Parliament's proposal in its preparation of the mechanism for the ELIS initiative, an initiative which also supports the creation of jobs by small companies via a loan guarantee system. I would like once more to thank you for your support in this new initiative, which is so important for the support of SMEs.
Now, as for the report prepared by Mr Harrison on the Commission's statements concerning the feasibility of creating a European capital market for developing SMEs, as you know, and thanks to the Commission's activity in that sector, various European capital markets are being designed or are already in operation for dynamic SMEs with an international orientation.
It is worth mentioning two more particular initiatives, because they are European in the scale of their implementation. In other words, the planned EASDAQ market, which is to begin its transactions next September, and the EURO-NM initiative, a joint venture between the parallel financial markets of three countries: France, Belgium and Germany. The Commission welcomes such initiatives, granted that they contribute towards improving the access of SMEs to funding by venture capital. I would like, however, simply to point out that all these new markets are initiatives in the private sector, initiatives that operate within the scope of competition between the capital markets, which were created by the directive on investment services.
The role played by the Commission was to stimulate interest in the creation of new capital markets for SMEs. Now that the interest of the private sector has been awakened, it is up to the markets itself to determine the future of those capital markets. However, the access of small companies to finance by venture capital and to the capital markets in general is a steady feature of the Commission's agenda. It is one of the basic funding problems faced by many SMEs, and is at the same time one of the ingredients in the third multi-annual programme on behalf of SMEs. The Commission is now working on yet another statement, a statement which will examine the perspectives of these new markets, but at the same time the obstacles that may impede their successful operation. I believe that we will be in a position to present this second statement to you in the near future.
Now, as for Mr Harrison's second report, the Commission is fully aware of the importance of dealing with the problem of late payments, both to improve the funding environment of SMEs, and to encourage cross-border exchanges between SMEs in the context of the Single Market. As you know, in 1995 the Commission made a recommendation to the Member States concerning that issue. The recommendation persuaded the Member States to adopt necessary measures to reduce the problems created by late payments. On behalf of the Commission, I want to express my great satisfaction at the fact that the Harrison report supports the initiatives undertaken by the Commission in that area.
Now, as for the European Parliament's request to consider converting the recommendation to a proposed Council Directive, the Commission is quite willing to carry out an intermediate assessment of the consequences of the recommendation at the beginning of 1997. Personally, however, I believe that we should go ahead with the formulation of a proposed directive - and I agree with Mr Murphy - but before we go on to formulate a directive, I would prefer to have more facts and figures about the result of implementing the recommendation in the Member States. Of course, the issue of automatic imposition of interest for delayed payments is something that we should really look at very seriously during our thinking. And in answer to that point in the second question by Mr Speciale, in other words, concerning the possibility of a major conference between the European Parliament, delegates from the national Parliaments, and representatives of the SME agencies, personally I would like to say that I think this is a marvellous idea. I believe that the European Parliament could very well undertake that initiative, and I personally commit myself to support that effort in every way I can on behalf of the European Commission. Besides, the services of Directorate-General XXIII will be at your disposal to assist in the organization of so large a conference.
We will have to move ahead, however, and we must do so as carefully as possible. I believe that within the scope of the new multi-annual programme on behalf of SMEs, there is great potential to speed up the assessment procedure envisaged by the 1995 recommendation concerning delayed payments. The need for further action will be justified on the basis of that detailed reconsideration of the matter. Besides, the Commission will support further action that could be undertaken by various bodies to improve payment practices in industry. And it will also continue to encourage the Member States to adopt the necessary measures to reduced problems created by late payments.
Finally, as for the report prepared by Mr Hendrick, I am particularly glad that this report agrees with the Commission's approach and proposals concerning the future operation of information networks and the development of company relations. And I am particularly glad that the Hendrick report recognises that companies throughout the European Union are clearly taking advantage of those networks. Those networks are intended to provide better access to information, and at the same time, they provide an adequate mechanism for the creation of entrepreneurial company relations.
The Commission's report on the future operation of the information networks and on cooperation, was drawn up after widespread consultations with the members of the network. The Commission's report expresses the common desire to continue and extend the activities undertaken in connection with functional aims. The basic problems analysed in that report have been included in the proposals for the third multi-annual programme on behalf of SMEs, which is now being examined by the European Parliament. I would like to remind you that the approach chosen by the Commission, in other words to encourage the creation of a favourable environment for the development of companies in the European Union, has a clearly decentralizing effect. Intermediate agencies established throughout Europe, undertook to put the objectives for the integration of the internal market into practice. And they are trying to do this by improving the flow of information in relation to the risks and opportunities which that creates, and of course, by enhancing cooperation between companies and regions. This decentralized approach has the advantage that it has promoted a strategic European dimension in the context of the activities of companies at local, regional, and national level. And it has also contributed to the effective preparation of companies in the context of the internationalization of the economies.
The Commission echoes the views expressed by the rapporteur, who recommends continuation of the operation of the European information centres by local agencies and, of course, recommends the development of cooperation with newer networks. The Commission also shares the view that the activities of networks should be determined by demand, and should be inspired by the spirit of providing services. We also agree with the finding that the improvement of knowledge about the quality aspects and the satisfaction of customers are important aspects of the information and cooperation services.
Now, as for the network of Euro-infocentres, the Commission's report has opened the way for the proposal made by the European Council of Madrid concerning the renewal of the mandate of the European information centres, to operate as first-contact centres, particularly granted the evident need for greater transparency of the numerous Community services that they offer. That is also the reason why the Commission proposes to maintain the two existing cooperation networks, in other words BC-NET and BRA, bearing in mind the need expressed by SMEs to search for partners in various ways depending on the degree of complexity of the cooperation sought. In addition, the use of the latest technology by the networks for their more effective operation has also been taken into account in the new multi-annual programme on behalf of SMEs.
Mr President, ladies and gentlemen, I have tried to present briefly the basic aspects of the critical issues dealt with by the four reports. I believe that the sector of SMEs will play a definitive part in the development of Europe's economy over the next few years. Today's debate has been very useful. It has contributed a great deal to our thinking about how to deal with the more particular problems and how to promote European company policy still further.
In conclusion, I would like once more to thank the four rapporteurs and the European Parliament for its support throughout all these years in the preparation and implementation of the policies and programmes on behalf of SMEs, and to assure you that the Commission will take serious note of all your comments and proposals.
Thank you very much, Mr Papoutsis.
The debate is closed.
The vote will be held at 11 a.m.
Votes
Madam President, our group voted against the Schulz report because for internal policy reasons Mr Schulz has created an extremely contradictory report through his amendments, by which he has tried to belittle the Bavarian security organs, which represent an important front in the fight against organized crime. That is why we could not vote for that report and we call on Mr Schulz to follow the example of the US Congress and the US Senate, where both large parties have jointly initiated a major programme to combat nuclear smuggling, which they designated as the number one threat to the United States, on the basis of a report by the Institute for Strategic Studies which drew on hundreds of cases of nuclear crimes in the territory of the former Soviet Union.
The United States has managed to get the major democratic forces to cooperate. Mr Schulz has missed that opportunity and I hope we will soon follow the example of the United States in this area.
I should first like to pay a sincere tribute to our colleague and friend Mr Schulz, for the documentary quality of his report and the intense effort that must have gone into it.
We are rightly focusing on this traffic in nuclear materials, a quite recent development. This form of contraband presents dangers on a completely different scale to those we have encountered in other fields.
Thus, we need to reconsider the nuclear problem in terms of its origin: the production of energy. We must not totally call into question nuclear energy for peaceful purposes. On the other hand, we need to be even more vigilant in view of the potential dangers it involves.
Next, we need to take due account of the handling of nuclear wastes and to suppress this unhealthy trade that I have denounced.
It is absolutely essential to monitor all flows of fissile materials and other nuclear wastes. Euratom could very well take charge of this if the Commission and Council were to take a decision to that effect.
The territory of the European Union cannot remain a permanent nuclear danger zone. With this aim in mind, we must take into account the many questions posed by the countries of central and eastern Europe, which today are juggling dangerously with the civil and military nuclear arsenal which they have acquired.
Our duty is clearly to establish the means for combatting the distribution of these substances. These are areas in which there is a need for precise knowledge of the situation with this traffic and the risks being run.
We need a strong political will to protect the public. I have no desire to find myself shortly a victim of those 'sorcerer's apprentices' whom I denounced a few months ago.
Illegal trade in nuclear material and radioactive elements must of course be fought strongly. This trade is evil both for human beings and for the environment. Action must be taken to stop it.
But we are being used to bring about the creation and extension of Europol and as a means of exerting pressure on Member States to ratify the Europol convention. We have therefore chosen to abstain from the final vote on the Schulz report.
My understanding is that it is necessary to get to the root of this problem which is the production of radioactive elements leading to potential for trade in 'waste products' . This problem is mentioned in paragraph 3 of the Schulz report, which is good. Therefore, I intent to vote no to Amendment No 22, which would remove this.
Illegal trade in nuclear material is a problem not only for EU countries but an international problem. Therefore, we must take action internationally to resolve the problem. Of course the UN and Interpol should receive increased resources to be able to take action. Closer cooperation between all the countries involved is important, not just in the EU but internationally. Europol is not the appropriate organisation for this issue as Europol is not a global organisation. I am voting against paragraph 18 which requests that Member States should immediately bring about the creation and extension of Europol.
The Danish social democrats in the European Parliament are voting in favour of the Schulz report on the illicit traffic in radioactive substances and nuclear materials. We are doing so because we agree with the rapporteur that it is absolutely essential to do something to prevent this illicit traffic.
As the situation appears now, the actual problem is very small, but there is potentially a major problem just around the corner. If we do not treat the problem with the respect it deserves, it may come to be a threat to the environment, public health and both internal and international security.
One of the most important ways of combatting illicit traffic is making the best possible use of the technology available to us. That is why, in this report, Parliament is calling on the Commission to assess the possibilities offered by modern technology. It is also vital for us to set up close monitoring and a comprehensive register of the trade in radioactive and nuclear materials, as a means of uncovering any illegal ramifications. Moreover, it is clear that we should keep a watchful eye on the countries of Eastern Europe, and also investigate whether these countries are complying with the rules on safety monitoring, and how security can be improved and extended.
However, it is important to emphasize that even if the problem is potentially a major one, we should not make the very serious mistake of devising a much too complicated and comprehensive solution which simply adds to the problem instead of solving it: the solution must be appropriate to the problem.
Even the tiniest amounts of plutonium are enough to poison the whole of mankind. For that reason alone we must prevent the production of plutonium. To do so we must put an end to the civil and military use of nuclear energy.
But even if we abandon nuclear energy, that does not eliminate the existing plutonium. The civil and military stocks must be declared and placed under the control of Euratom and the IAEA. Under no circumstances may any more plutonium be carted around on our streets or in the air.
The Munich plutonium scandal in particular raises a number of questions that should be clarified by a committee of inquiry. firstly: the Federal Government, the Bavarian State Government and the authorities told the public fairy-stories for electoral strategy reasons. They irresponsibly stirred up fears and put many people at serious risk, in an infringement of international law. Headed by the public prosecutor Helmut Meier-Staude, first they created the demand for plutonium, so that they could then make loud noises about a nuclear market and present themselves as anti-crime supermen.
The astonished public is then faced with the question: who is more dangerous or a greater criminal, the Bavarian State Government or the traffickers in nuclear materials?
Second question: when did the Federal Government inform Euratom? Two dates have been given. So: who is lying, the German Federal Government or Euratom?
The plutonium scandal raises a third question: the question of the relations between the secret service and the police. After the terrible experiences with the Gestapo under Nazi rule, people in the Federal German Republic drew strict distinctions between secret service and police. Particularly in Bavaria, these distinctions are becoming increasingly blurred. The Munich scandal showed where that leads: both agencies become unpredictable and uncontrollable. That provokes breaches of the law.
My colleague Martin Schulz has taken up the questions I have discussed in his very good report. That is why we endorsed the report.
European Council in Florence
Madam President, the European Council in Florence gave the impression of enormous confusion where the problems of employment are concerned. Yesterday, in the report given by the Italian presidency, we heard two expressions which are typical of European speeches today. First, that there is no miracle cure for unemployment; secondly, that the national level is the level best suited to combat unemployment. The cumulative effect of these two proposals, which incidently are partly contradictory, is hardly exhilarating. This sudden desire to respect powers of the Member States would be more convincing if one did not have the feeling that it was dictated mainly by impotence, and if the violation of subsidiarity had not become an everyday event - especially as represented by President Santer's Confidence Pact, despite all its manifest good intentions.
In the field of international trade, especially, one may wonder whether the implicit purpose of this new presentation is not to dilute European responsibility by this sharing-out of functions. The Commission wanders the world negotiating free trade agreements in the supposed interests of mankind, while the Member States try to deal with the unemployment that is partly as a consequence of those agreements. Obviously, we are not in agreement with this share-out which seems a little too convenient for the Commission, which we feel should get it into its head that its primary task is to defend the States of Europe.
Finally, the conclusions of the Florence Council relating to the IGC contain another proposition: a call for improved European coordination of national policies. This policy is based on the notion that improved European coordination would necessarily, everywhere and always, produce beneficial results. Unfortunately, one may wonder whether the bureaucratic coordination of ill-conceived policies like those of today may not be more likely to paralyse growth and employment, as seems to be proved, a contrario , by the experience of those countries that have remained outside the Union.
This European Council was overshadowed by the so-called mad-cow crisis. The mad cows actually rescued the summit because it was possible to claim that it was a success just because the boycott threatened by one Member State or its prime minister was avoided, apparently firmly. But was public health truly safeguarded, unequivocally, on the basis of scientific criteria? From this point of view the Council was not such a resounding success and the European Parliament's resolution does not raise this vital question.
This Council was once again a 'summit' meant to define policies, take measures, sign pacts and which, following on from the indecisive positions taken at other Councils, was meant to fight rising unemployment and the deteriorating social situation. One boycott replaced another without being clearly denounced. Another Member State, another summit protagonist, impeded any clear affirmation of proposals, proposals of good intentions, together with any previous ones. Not even that. This too has not been properly dealt with in our resolution.
This Council was a reaffirmation, intransigent for some and autistic for others, of one road towards 'European Construction' . Not even sweetened with good intentions and better words. These major questions were left for Councils of lesser ministers.
Accelerated liberalization of public services, especially telecommunications because there are information highways to earn profits and for circulating, competitiveness and wage restraint, but not offset with any consideration of moderating speculative transactions that withdraw capital from its job-creating function, a clear threat of diverting structural policies away from their objectives linked to the now forgotten economic and social cohesion. That is what is present in and absent from the summit 'conclusions' and the resolution says nothing about this.
As far as foreign policy is concerned, once again 'sympathy' for Turkey without the necessary self-criticism for the steps already taken banking on the fact that minimum human rights would be observed when, on the contrary, the situation has deteriorated.
On the other hand, as for Cuba, the firmness towards the unacceptable US legislation was tempered with unfounded not to say false assessments as to the responsibility for the rift in relations between the US and the European Union.
For these reasons (and more) a Council unable to cover up social failures withe so-called successes over mad cows and EUROPOL and a resolution that once again skirts around the real issues as if they had been solved or would be solved once we reach El(euro)dorado .
Transitional period in the accession treaties
In our opinion the European Union will not prevent any Member State from going ahead with reforms on environmental protection even if other Member States feel that it infringes the four aspects of freedom of the internal market.
There has been no evidence so far that the environmental guarantee exists in reality. In our opinion the environmental guarantee shall apply as soon as it is referred to by the national parliament of a Member State for a decision to be made.
Mosiek-Urbahn report
We have voted for Mrs Mosiek-Urbahn's report. We agree to a large extent with the criticism of the Molitor Group's report which is presented in Mrs MosiekUrbahn's report. We feel that when talking about pan-European issues, especially social issues relating to the labour market and problems relating to the environment, minimum regulations are required also at Union level. This however does not prevent individual countries from proceeding on their own and introducing more stringent regulations. This requires for example that the current Article 100a(4) of the Treaty of Rome is made more stringent.
But we are also critical of some aspects of the report of Mrs Mosiek-Urbahn, namely the proposal that by virtue of Article 171 Member States would be ordered to pay a penalty. The wording in clause 1.26 is in our opinion completely absurd. It reads: ' The European Union is currently conducting the greatest simplification campaign in modern economic history by endeavouring to replace 15 sets of rules and regulations with 1' .
It is beyond our comprehension how a parliament which would like to consider itself as serious can accept such wording.
The Swedish environmental party, like the environmental parties in the other new Member States, were seriously concerned that joining the EU could lead to a situation where our existing standards on environmental, social and consumer protection, among others, would be lowered. Unfortunately developments so far seem to justify our misgivings, which has been proven for example by the fact that the Commission has not fulfilled its promises to increase the EU's environmental standards to the level of the standards in the new Member States during the transitional period agreed.
This apart, I cannot support the conclusions of the so-called Molitor report, since they only involve the interests of big industries. It also seems clear that the Molitor Group's intention was in fact to use the deregulation of EU legislation as a model for similar measures at a national level. The intention was simply to break down what has been achieved for example within environmental protection in Europe, instead of progressing.
Since I, as a member of the Swedish environmental party, generally speaking remain rather sceptical for reasons mentioned above to EU legislation in certain areas of importance to us, I would like to concentrate on clarifying my vote regarding the two amendments I have tabled.
The first proposal is about the Molitor Group's view that economists are the only experts regarding decisions on legislation in society. Therefore we wanted to stress that there are other aspects than financial calculations of importance when decisions are taken on the need for legislation.
The Green Group in the European Parliament has also expressed concern that clauses on minimum standards regarding environmental, consumer and social protection in the future are interpreted as optimum standards. For us it is therefore essential that a lowering of existing national standards is not imposed in the name of free competition in areas of vital importance to the environment and for the so-called ordinary citizen. It is equally important that the EU does not constitute an obstacle to further progress in these areas.
Deregulation at EU level is of importance in order to reduce unnecessary regulations and bureaucracy. The report however only deals with the symptoms of the problem, since regulations at EU level are already a reality.
The report should have examined which issues should be considered at various levels; local, regional, national and European EU level. A check list describing the issues to be considered and by whom they should be considered should have been drawn up.
The report also concentrates on deregulation of trade and industry for the benefit of strengthening competition. Deregulation is important from a democratic point of view to simplify existing regulations for the individual citizen and to clarify at what level different decisions are taken.
A 'subsidiary list' with issues which could be transferred back from the EU to national, regional and local level should have been drawn up.
This report deals with an absolutely crucial issue, the importance of which for the further development of the internal market - and, in this context, for employment and economic growth in Europe - must not be underestimated. The report thus contains an excellent analysis and a critical assessment of the so-called Molitor Group's report on legislative and administrative simplification.
On the whole, one must agree with the rapporteur and the committee in their criticism of the Molitor Group's report, since while the report does indeed contain a useful summary of the problems connected with extensive legislative or administrative regulation of the market, it unfortunately also tends to underestimate the adverse effects in terms of competition and/or consumer policy of arbitrary deregulation at European level. The rapporteur is thus entirely right to draw attention to the need for an analytical checklist to be compiled, making it possible to judge whether it is necessary to implement any new piece of Community legislation or whether new Community initiatives are required, and also to assess the consequences of repealing or amending legislation which exists already.
In this context, it must be borne in mind that the implementation of common legislative provisions in the EU - where the introduction of such provisions is necessary in the first place - is in itself a considerable simplification of the rules for the benefit of our citizens and businesses, since fifteen different national sets of rules are thereby replaced with one.
Mombaur report
Debates on energy have been fashionable in the European Parliament just recently. So far, they have been conducted more from a liberal, industrial and competitive standpoint than from an environmental one.
This report by Mr Mombaur seems to be an essential one. Its subject is nothing less than the future of the planet and the satisfaction of ever increasing energy needs.
All of us here know that the road we are currently following in order to meet those needs is a dead-end. Our sources of energy are far from inexhaustible, and in any case they cause pollution. While the former aspect is a matter of concern for future generations, we are already feeling the effects of the latter.
Also, I would like to pay tribute to the clarity of the report and to the innovations it suggests, which are the result of deep analysis.
The European Union really does have an interest in developing renewable energy technologies. Nature itself offers us the means of achieving this. It is up to us to be able to and willing to exploit these means. And it is up to us, too, to equip ourselves with the necessary resources.
We need to convince the Council of the value of this research, and to take swift steps to promote new, healthy and efficient energy sources through tax incentives. It is necessary for the Union to set an example and increase its consumption of renewable energies.
Admittedly, the initial investments are high; admittedly, just how high depends on how conveniently situated the sources of these energies are. But the stakes are equally high - the issue for us is to preserve our planet but also to enable everyone to produce energy sources to guarantee independence and development factors that are mutually complementary.
The Union needs to integrate this necessity into its policy of development and cooperation. Today's investments will be tomorrow's economic, human and ecological benefits.
Renewable energies exist, even in the northern European countries: solar energy, wind energy, hydraulic energy, biomass.
Renewable energy techniques need to be developed on a voluntary basis: if, as this report demonstrates, the same appropriation from the European Union budget were to be made to the promotion of renewable energy sources as is made to the promotion of nuclear fusion, ECU 840 million in other words, they would soon reach a competitive standard.
The objective is clear: we must make use of these energy sources, which are inexhaustible, non-polluting, capable of decentralized exploitation, well accepted by public opinion, not reliant on mega-installations like nuclear energy and offer great employment potential.
The stimulus to master the various technical and economic problems can come from the European Union, but that is not to say that the Member States have no responsibilities of their own to discharge, especially if the target - as this report proposes - is that renewable energies should amount to 15 % of all primary energy by the year 2010.
One essential condition has to be satisfied in order for that to be possible. In order to ensure the competitiveness of renewable energy technologies, it will be necessary to take into account the true costs of other technologies. In the case of nuclear energy, then, that would have to include security measures, investments and the enormous cost of treating nuclear wastes and decomissioned installations, not to mention the overall social cost of a high-risk technology that has never been completely mastered by man.
I would like to express my complete agreement with the measures proposed by the rapporteur for the Committee on Research, Technological Development and Energy, and to congratulate him on this important work.
I have voted for the report which in principle I find satisfactory. Most of the EU funds for energy research are spent on fusion research within the so-called JET programme. This could be reduced or dropped completely. More resources are required for research and development of renewable energy sources.
It is completely unacceptable to invest 400 million ecu on two nuclear reactors in the Ukraine, and this must be rejected. The Commission must quickly present proposals as to how carbon dioxide emissions are to be reduced. A recommendation for a carbon dioxide tax must be drafted. This is a commitment accepted by the EU and its Member States at the conference on the environment in Rio in 1992.
The Euratom Treaty must be transformed into a treaty for investing in renewable energy resources.
We have long been aware of the need for a consistent reorganization of energy consumption. Around the time of the oil price shock in the 1970s, the western industrialized countries recognized the need to step up research into the use of renewable energy. This was above all out of a concern for security of supplies, stemming from the realization that our energy needs could not be covered indefinitely by the use of fossil fuels. Since then, environment policy considerations have understandably come to play an equally important part in the debate - not least in view of the fact that the world's overall energy consumption is expected to increase dramatically within the next quarter of a century, as a result of the industrialization of many third world countries.
Against this background, it is high time that the European Union implemented an action plan to promote renewable energy sources, taking special account of the particular conditions for using certain forms of renewable energy in the individual Member States: increased use of solar energy in the Mediterranean countries, for example, further use of wind power in the north-western Member States, and so on.
This report from the Committee on Research, Technological Development and Energy contains an excellent analysis of the proposals from the Commission, amongst which those concerning measures to improve the competitiveness of renewable energy sources are of particular interest.
The continually increasing demand for energy, combined with the shortage of conventional energy forms and the problems they create, make it essential to develop renewable sources of energy. For countries such as Greece, moreover, the issue is vitally important granted that the country's geographical and morphological structure enhances the importance of developing renewable energy sources such as wind energy or solar energy, as a means of meeting the energy demands of island and outlying regions.
Reduction of the energy dependence of the Member States would contribute towards improving the publicsector economies by decreasing reliance on external energy sources, while it could also contribute substantially to regional and local development and to the growth of employment.
In that context, the EU could contribute by devoting financial means at its disposal to the support of related programmes.
However, we categorically oppose not only the liberalization of the energy sector more generally, but in particular the sector of alternative energy sources. Liberalization would have tragic consequences, granted that this is a branch of strategic importance. Any such development would threaten security of supply, even at the present level of energy availability, to the benefit of major capital which would make huge profits while threatening the viability of public agencies that would provide no more than the infrastructure, and also to the cost of the economy and consumers, who are entitled to cheap, adequate and environmentally friendly energy.
In our opinion technological advances should not be sacrificed on the altar of profit. It must be made possible for everyone to benefit from them, and they should not become the means to increase the profits of some who exploit them to their own advantage.
Fouque report
Our colleague Antoinette Fouque is presenting to us here a report following up the International Conference on Population and Development held in Cairo in September 1994. In doing so, she is offering the European Parliament the opportunity to review the status of development and the condition of women in the world. First and foremost, I must thank her for her work and for the enthusiasm that inspires it.
That Cairo conference, like many other international conferences, is often called into question, some people regarding it only as a mass of good intentions, soon forgotten. I believe, nevertheless, that they are creating increasing interest, as witness the Cairo conference, which is intended to enable the Union to express, once again, its principles with regard to development and women's rights.
The Cairo conference reaffirmed the essential status of women in the quest for sustainable human development. Confronted with demographic growth and the consequences to which it leads, the conference clearly defined the role which women could take in controlling it, and the trump cards they hold.
As our colleague recalls, birth control alone cannot solve the population problems facing the world, and more particularly the developing world. Early steps need to be taken to allow for the problems of aging, rural depopulation, international migration and, above all, the environment.
Within this framework, the demographic problems associated with non-respect for women's rights have to be solved. Women must be able to become the protagonists of this renewal. Freedom of choice to have children, free access to health and education for all women, these are the best tools. Too many women in today's world are not 'full members' of the human race. Who can settle for that? Who can accept it?
There is a need for a genuine development policy, integrating the objective of the valorization of women as the motive force of development. The Union has already entered into commitments along these lines, and it would be well for all the Member States to do the same, following the example of our German and Dutch friends.
The financial commitments entered into must be respected, and the facilities must be granted to ensure that this aid is not wasted because of the sluggish administrative procedures that we know too well! We must think in terms of new partnerships, and develop our cooperation both with third countries and with the NGOs.
The subject is a crucial one. It is the guarantee of the future for one part of the world. At all levels, we have to commit ourselves to sharing in this new state of mind. Let us think again about development, let us think of ways of helping those men and women who are suffering. Technical assistance in itself is not enough - it must be backed up by consideration and concern for universal dignity, the specific feature of the human condition.
I was pleased to note that the report really does attempt to contribute to a practical implementation of the results of the conference in Cairo regarding the EU's policy on development aid. Women, and hence children, in different parts of the world are in real need of direct, strong action. All the same the report leaves a bad taste in the mouth. As usual the European Union is quick to take a stand and set requirements for countries outside the Union. Poor developing countries are expected, with help from the EU, to manage things that some of the EU's own Member states do not manage. For example:
' Adequate' courses in sexual education at different school levels; -Encourage the use of condoms which are distributed free of charge; -Family planning to be integrated into co-operation programmes; -Introduce equal opportunities for women in politics/economics; -The right to free and legal abortion etc.Should our next objective perhaps be to implement the results of the international conferences on women within the European Union and the Union's co-operation countries?
It should also be mentioned that the existing, virtually unrestrained market liberalism of which the EU professes itself adherent does not favour women either within the EU or in the developing countries. Quite the reverse!
Despite the above I am voting for the report, since the purpose of promoting women's situation, is the essential issue after all.
Olympic Games in Atlanta
The idea of the Olympic Games is a grand idea, the idea of bringing together men and women from all five continents to participate in a sporting competition based on the principles of brotherhood and fair play. But what happens to this fine idea under the influence of discrimination?
The European Parliament must reassert its essential commitment to equality between men and women, and fight against all forms of obscurantism, whatever and wherever they may be.
Even more seriously - and here I echo the text of the motion for a resolution and the oral question - we cannot accept, I trust, a situation where the European Union finances or aids, by whatever route, all or some of those countries which prevent their women from going to compete in the Atlanta games. We cannot be the accomplices of this kind of segregation, which in our eyes represents a seriously retrograde step.
I would venture to hope, then, that the Council and the Commission will quickly give us assurances on the points that have been mentioned and will officially adopt a position hostile to such methods. Our credibility is at state here.
Ewing report
I have given my support to this report today because I am a keen supporter of small businesses, as we all should be if we are interested in the future of Europe's economy. Almost 100 % of our companies in Europe are officially classed as SMEs. Yet too often these key companies who employ two-thirds of all EU workers and generate two-thirds of our business turnover are forgotten by policymakers because they do not have the lobbying voice of industrial giants. All the more reason for the Commission to extend the affordable loan scheme for smaller companies which is a genuine EU success story - as far as it goes. When in the UK alone over ECU 200m has helped to create almost 12, 000 jobs since 1993 it is vital that we build on such success, given the hard economic times people are living through in my constituency and across Europe. Our people deserve any assistance we can provide to their businesses upon whose success we all depend.
Harrison report (A4-0161/96)
I am glad to support this report by my British Labour Party colleague Mr Harrison as it aims to give businesses - and in practice that means small businesses - the protection they deserve from the unacceptable practice of too many larger companies who pay their bills late. This trend has caused real financial hardship to many of the honest and hardworking business people and employees of commercial areas such as my own constituency. That is why my own party is addressing this problem in Britain and why the Commission is looking at late payments at European level. However, the good intentions of the Commission will not be enough if as currently suggested compensation to creditors affected by late payments is a nonbinding Recommendation to Member States. Given that the Conservative President of the Board of Trade in Britain himself virtually boasted of his skill at paying creditors late during his time in business, I can think of one Member State at least whose government needs a directive if we want them to act to protect the honest and hardworking from what we in Britain call the 'spivs' .
That concludes voting time .
Adjournment of the session
I declare adjourned the session of the European Parliament.
(The sitting was closed at 12.55 p.m.)