Eurozone (2007) - European Central Bank (2006) (continuation of debate)
The next item is the continuation of the debate on the Eurozone 2007 and European Central Bank report 2006.
on behalf of the ALDE Group. - (IT) Mr President, Commissioner, President Trichet, President Juncker, ladies and gentlemen, the European Parliament can state with satisfaction that the Eurozone is a fundamental factor for stability within the global economy.
As has already been brilliantly explained by the rapporteurs, Mr Rosati and Mr Mitchell, in this second report, Parliament can compare the unquestionable improvement in the economy in 2006, which led to a positive change in terms of economic growth and particularly employment, with the creation of two million new jobs, as has already been pointed out. This is a positive trend that the Member States of the Eurozone have been able to achieve thanks to a healthy and cautious fiscal policy and to the efforts made to carry out the requisite structural reforms, which are also the fruit of a greater degree of interdependence required of the Member States by the Eurozone.
Nonetheless, we need to ask some questions, the main one having already been raised in the report by Commissioner Almunia: how do Europeans perceive this favourable economic situation? What are the benefits for individual citizens? Unfortunately, over and above the official data, the tangible effects have still not really been recognised by the public. We must note that the repeated requests for wage moderation, under certain conditions that have a solid basis from an economic point of view, are in fact far from the daily lives of individual citizens, and it is therefore clear that, at the moment, some Member States, including Italy, which is experiencing severe social tensions, are having real difficulties in channelling all additional revenue towards debt reduction.
I therefore believe that, while fulfilling the commitments made in the medium term, we must respond to a challenge: how can we make the rigid rules of the economy compatible with the demands of social justice?
Mr President, in taking the floor in this debate, I would like to raise two points.
Firstly, we should note with satisfaction that 2006 was unusually good for the Eurozone countries. GDP increased by 2.7%, compared with 1.4% in 2005, unemployment stood at 7.6%, which was the lowest in fifteen years. These results were achieved against an inflation rate that has remained at a steady 2.2% since 2005, and a reduced fiscal deficit. It is puzzling, however, that these figures are consistently worse than the growth, unemployment, inflation and budget deficit figures in three countries outside the Eurozone, i.e. the United Kingdom, Sweden and Denmark. They also fall behind the annual figures achieved by the US economy.
Secondly, both reports are full of figures, and we have concentrated on these. However, it would seem that not everybody regards figures as having the greatest importance. The newly-elected French president said in an interview that economic growth and full employment are so important that the heads of state should deal with them directly, and also that the excessive strength of the euro, brought about by the latest increases in interest rates by the European Central Bank, harms European exporters. In addition to this diagnosis, the French president also wants to reduce taxation and increase the budget deficit in order to increase economic growth and reduce unemployment in the future.
I am nearly done. But I have not heard any words of criticism, either from the President of the Europe...
(The President cut off the speaker.)
on behalf of the Verts/ALE Group. - (FR) Mr President, I should like to begin by saying to Mr Juncker that he should not take offence at the small number of us in this House. I myself would have willingly stayed in my office to have the pleasure of seeing him close-up on my television screen. The debating conditions in this room are rather difficult.
I should like, first and foremost, to express my emotion at seeing just how in line the Mitchell report is with the debates that the entire Committee on Economic and Monetary Affairs has been holding for several years now. For the first time we have a relatively unanimous report, which will enable us to reach agreements on points that used to divide us.
Firstly, there is the idea that structural reforms can be implemented and can increase the potential growth rate compared with that which we had in the 1990s, and that they may perhaps have already increased it.
Secondly, there is what is, in short, the explicit affirmation that the labour market reforms do not relate to an unconditional wage moderation, but rather, as Mr Juncker said, to a moderation qualified by means of proportionality with productivity growth and that this growth is being created by means of improved human capital, training and research, and not by means of a reduction in social guarantees.
The third major advance of Mr Mitchell's report is that the issue of paragraph 111 of the Treaty has at last been properly addressed. It is the responsibility of the Council to set exchange-rate policy. I would say to Mr Juncker that he should also listen to what Mr Gallois says about the competitiveness of Airbus. One cannot say that there is one country in particular that has difficulty in adapting to the current exchange rates.
In paragraph 10 of the resolution by Mr Mitchell, we call on Mr Juncker to agree with Mr Almunia, and this should be welcomed.
on behalf of the GUE/NGL Group. - (FR) Madam President, it is not governance that the Union needs, but political action on its economies in order to promote a form of growth that creates stable and, above all, well-paid, jobs. The European Central Bank is harmful because its sole aim is to have the lowest inflation rate possible, when it should include structural policy elements such as growth, as the US Federal Reserve does.
Creating the euro without implementing, at the same time, a federal budget at the level of the Member States concerned has resulted in the demise of the instrument of devaluation, without any other protection methods having been provided. The undervaluation of the dollar is, from this point of view, a weapon for the mass destruction of Europe's industrial capacities, and your self-satisfied speeches cannot disguise this reality of the exorbitant and unbearable cost of the overvaluation of the euro. Europe's workers and citizens are paying a very high price for this mistake.
The Eurozone can no longer function in its current state; we must, as a matter of urgency, resort to a change in the statute of the European Central Bank and in the organisation itself of the euro. We must, as a matter of urgency, have recourse to customs protections. It is time to implement industrial policies that ensure that the vital interests of the people of Europe are protected and that enable jobs to be created and the common interests of European workers to be protected.
on behalf of the IND/DEM Group. - Madam President, economic growth is higher, unemployment is down, government deficits are falling a little, but concerns are now being expressed that this growth may be threatened by the strong foreign value of the euro. While Mr Juncker does not share these concerns, Mr Sarkozy and others have been calling for active management of the exchange rate. Mr Mitchell's report draws our attention to the rules that give Member States the responsibility for exchange rate policy, and calls on Eurozone finance ministers to coordinate their influence on the exchange rate with the European Central Bank.
The report then says that this action should not undermine the ECB's independence to use its interest rates to control inflation. We do not seem to understand how it works. The way to bring down the value of the euro is for the ECB to reduce interest rates. But then it would have to abandon its inflation target. In these days of free capital flows it is not possible simultaneously to control inflation and the exchange rate.
There is another way, of course, and that is to impose exchange controls. Maybe this is really what they are thinking. It would not be out of keeping with Mr Sarkozy's remarks about defending French protectionism and it would also be disastrous for the market economies of the Eurozone.
(SK) I would like to emphasise that variations in the rate of inflation are largely the result of structural factors, not unsound policies.
There has been a two-fold increase in salaries in the new Member States of the European Union and the share of energy- and raw materials-intensive output in these countries is greater than in the more developed states of the Eurozone. At the same time, a major portion of the energy- and raw materials-intensive output is destined for the Eurozone. Because of such reasons, the new Member States are more susceptible to fluctuations in prices of energy and raw materials; by the same token, they serve as a buffer, absorbing price impacts on the states of the Eurozone. However, inflationary pressures in the new Member States may also result from high growth, rising productivity and catching up with the standards of more developed countries.
After all, this is one of the goals of EU membership.
I therefore support the demand to review the convergence criteria, notably with regard to inflation, so that they do not become instruments for creating new divisions in Europe.
(ES) Madam President, Commissioner, Mr Trichet, Mr Juncker, I should first like to congratulate Mr Rosati and, in particular, Mr Mitchell, on the quality of their reports.
I believe that, economically speaking, these are promising times for Europe. Our objective is to increase production and economic activity. This is being reflected in new employment opportunities, and with inflation kept under control.
The challenge right now is to consolidate this economic growth, a goal we will not achieve unless our institutional problems are resolved. The issue in the reports is whether what we are witnessing is a cyclical recovery or a more substantial economic movement.
In this context, we do not have to resign ourselves to the idea that Europe has potential growth of 2%. The Member States must from now on synchronise their growth rates. In short, more jobs and more SMEs need to be created.
On this issue, the European Central Bank must also pursue the recommendations contained in Mr Mitchell's report, namely prudence when it comes to raising interest rates, because decisions that should rest with governments, decisions on reform and much more far-reaching decisions in the fight against protectionism should not be pre-empted. The major problem we face in Europe is the rhetoric of protectionism, which goes against the spirit of European integration.
To sum up, this is a positive economic time, which, among other things, must be used to ensure that this growth continues and that European citizens are encouraged to identify the euro as one of their sources of well-being, prosperity and, most importantly, fresh job opportunities.
Madam President, I want to use my short speaking time to express, on behalf of the PSE Group, our full support for the Stability and Growth Pact - it is necessary to repeat that several times - and in particular for the reform of the pact. We have made it more intelligent to take into account the economic cycle and developments. This is something that has to be applied properly and not deliberately as is now the case. Therefore, I appreciate what Mr Juncker and Mr Almunia have said, and it is good that we also express this on behalf of my political group.
I wish to draw attention to two specific issues and I should like to hear the reactions from the three of you, whom I am very happy to see together here for this debate. One is the wage moderation issue. We support the principle that wage moderation should remain within the productivity growth, and this has been the case for more than ten years. However, it is now time to look at the rebalancing of the fruits of growth and, where we see that wages lag behind and are a smaller part of GDP, it is also time to look at rebalancing this. I should like to hear some comments on this. I know that Mr Juncker and Mr Almunia have also expressed them in this way. I should like to invite the President of the ECB in particular to comment on this issue.
The other issue I want to raise is not only hedge funds but also paragraph 19 of the Mitchell report on corporate debt restructuring. This is a major concern for financial stability, and I should also like to ask you how to assess this and how to deal with this issue.
(SV) I wish to begin by thanking both rapporteurs for their constructive work. The European Central Bank is doing a good job of fulfilling its tasks. Even if the debate gets a bit heated sometimes, Mr Trichet always succeeds is calming people down with a use of language worthy of a diplomat. The ECB has become significantly more open and more transparent than it has been, but Parliament' demands for minutes to be published remain. That system works well for other central banks and would strengthen the ECB and increase its reputation. We also again express our desire for a more open procedure for elections to the Executive Board of the ECB.
It is extremely important to safeguard the ECB's independence and to support the goal of price stability. The Group of the Alliance of Liberals and Democrats for Europe gives the ECB, Jean-Claude Trichet and Jean-Claude Juncker its full support where this crucial issue is concerned. We know that a firm stability policy is a basic condition for a growing Europe.
Unfortunately, there are quite a few of us who are concerned that the strident tones of the French presidential election campaign will now continue. Monday's meeting in Brussels does nothing to reduce this concern. That concern is also present in the committee, even if Mr Juncker is trying to reassure us, and it can be heard in the wide-ranging debate in this House today. There are wordings in the report that could be taken as a pretext for calling the into question independence of the ECB and allowing it to interfere politically to a greater extent. Those are developments that we reject. I would point to the wording of paragraph 10 which, in turn, refers specifically, as did Mr Hamon, to Article 111 of the Treaty. It would be extremely unfortunate if our report could in any respect be seen as calling the ECB into question.
- (PL) Madam President, the good macroeconomic results in the Eurozone countries confirm the huge impact economic and monetary union has on the results, which was in fact the aim of introducing a common currency in the European Union. Higher levels of integration in various areas make it possible to increase development and progress. However, the problems with the European Constitution, voting, and the strength of certain Member States, are currently preventing further integration.
The two-speed Europe predicted by President Prodi has unfortunately become a reality. It is also evident in the introduction of the euro in Member States. Introducing the euro in one, or even two, states over a three-year period cannot be regarded as a resounding success. We must reinforce and accelerate these activities, as they will allow faster development and further integration. Let us seize this opportunity.
In conclusion, let me extend my heartfelt congratulations to both rapporteurs.
(SV) Not quite four years have gone by since Sweden held a referendum on the euro and, by a very large majority, rejected introducing the euro as a currency. There were, and are, many arguments against becoming a part of the Eurozone. For one thing, it is a very unstable political project; for another, it is extremely problematic for a country not to be able to control its own interest rates in order to respond to trade cycles. These fears have proved to be justified, and we now see how all this is affecting countries that have exchanged their currencies for the euro.
Has Sweden lost out by keeping the krona? Recent studies show that trade has been affected, but to a negligible degree. What Sweden has gained by not introducing the euro is much more valuable. We are quite differently placed to control our development because interest rates can be adapted to prevailing conditions in Sweden without the Bank of Sweden needing to take account of the trade outlook in other countries. I therefore think that, contrary to what Commissioner Almunia has said in this House, the Swedish 'no' vote must be respected and that Sweden too should be given a formal exemption from having to join the Eurozone, just as Denmark and the United Kingdom have. Anything else would be extremely undemocratic.
(HU) I am glad this debate is taking place now, so that in relation to some commonalities between the two topics, I may call attention to some consequences for enlargement. In the first place, I am pleased that not only representatives from candidate countries for the Eurozone and the rapporteur, but also my German fellow Member, Mr Schwab, noticed the problem that the understanding of the reference country with regard to the inflation criterion for admission to the Eurozone - that is, all Member States - is different to the one we use in setting the ECB target, which implicitly applies to the 13 Member States.
In spite of Mr Almunia's letter sent to us yesterday in reply, Parliament must continue to insist that the reform Treaty should contain a correction that follows logically from the creation of the Eurozone. Besides, is this not a double standard, not having measures against excessive inflation for Member States of the Eurozone but setting up more stringent anti-inflationary expectations for those who want to join?
I would like to point out that, while the reference benchmark for the euro is based on 27 Member States, in the ECB board of directors the same definition applies only to 13 States, since I am not aware of any role played in that body by citizens of States outside the Eurozone. Thus, I see a double meaning of the Treaty expression "European Union's Member States”.
We hear a great deal of rhetoric about solidarity, but this is not apparent with regard to the use of euro banknotes. As a matter of fact, the smallest denomination, the 5 euro note, will be worth many times the value of the smallest banknotes of new Member States' national currencies, forcing the residents of the latter to run around with bagfuls of coins on the streets. At the same time, we have the largest, the 500 euro bill, which will often be worth half a year's pension in those countries. But I myself have been unable to use this bill for weeks, even here in Strasbourg or in Brussels, to pay for anything. If anyone could change it, I would be much obliged. What then could one do with it in Riga?
May I add that Mr Rosati made a very thoughtful remark about extending the four fundamental freedoms to the internal market. But I have a question in this regard as well: how is it possible that those participating in monetary integration today can block the free movement of manpower, fearful of Slovakian labour dumping? How is it possible that EU regulations indirectly exclude labour-intensive activity from the provision of services?
Thank you, Madam President, and I hope the expansion of the Eurozone towards the East, towards the former Soviet sphere of influence, will also begin shortly.
(FR) Madam President, Mr Juncker, Mr Trichet, Mr Almunia, I believe that this is a good week for the euro. Firstly, because this is the first time that this macro-economic dialogue on the Eurozone has been held here, in the European Parliament. I hope that this is the start of a good routine; the euro has visibility in Parliament in this debate, and I welcome that.
And then, this is also the week that a newly elected President of the Republic felt that he himself ought to justify within Eurogroup what he was going to propose to his country. It seems to me that, a few years ago, that would not have happened in this country in which it was felt that budgetary strategy came under national sovereignty. The collective debate on what the management of the euro consists of has moved on, and I welcome that. You have requested the right to judge the effectiveness of the EUR 13 billion in tax gifts that have been proposed, and I can only back your proposal.
However, as far as the future is concerned, I should like to invite you to go even further. Firstly, because I believe that making use of the preventive arm of the Stability and Growth Pact does not make it possible to implement that which we need, that is to say, ex-ante coordination in order to organise future strategic investment in a coordinated way and to anticipate, together, the effects of the structural reforms, because what happens in a country in terms of structural reforms has an impact on all the other countries.
And then, I should like to invite you to open the debate on the issue of the exchange rate. This is an issue that Article 111 of the Treaty permits you to address, including at Council level. It must also be considered as an issue of common interest, as Article 99 of the Treaty calls on you to consider it.
(CS) Madam President, the introduction of the single currency was supposed to create a single internal market. The European Union, however, is today in thrall to the concept of rigid political integration and the creation of an over-regulated superstate, rather than creating the economic freedoms which in 1957 helped form the foundations of the common market and which remain unfulfilled to this day. The failure to adopt the original Bolkestein Directive, the existence of obstacles to the free transfer of production to more efficient areas of the Union, and restrictions on the free movement of labour from the new Member States, as well as other protectionist and regulatory restrictions on the freedom of the common market are turning the euro into an artificial currency. As a result, we have a single currency in a non-single market. A typical example of this is that there is on the one hand the brutal forcing through of concessions in the Stability Pact, which some of the large EU states decided they could not do without, and on the other hand the new Member States have nonsensical and long out-dated conditions imposed on them for entry to the Eurozone, which do not take due account of necessary inflation levels and other indicators that are no more than peripheral and incidental manifestations of very dynamic economies that are growing at a faster rate than the EU average. The narrow-mindedness of the Eurozone and the failure to fulfil economic freedoms in an unfair and non-single market are turning the euro into an unsafe and half-hearted currency.
Madam President, please allow me to make a technical remark. On the panel above you and on the display, my name has regularly been incorrectly displayed for several months now. The 'ý' at the end of my name is missing. Please take note of this.
(DE) Madam President, I welcome the three-leaved euro clover too.
The euro has been a success: the euro is the EU's best response to global challenges. The euro and the four freedoms are the cornerstones of a strong internal market. To my mind, the Maastricht criteria and the Stability and Growth Pact are the greatest regulatory principles to have been achieved by the European Union. From 1 January 2008, the Euro Group will have an absolute majority among the EU members. That is good news, and we would like to extend a warm welcome to Malta and Cyprus.
I am struck by the fact that we are getting excited because a Head of Government has promised to do their homework. Homework has to be done. We need to respect the rules, rather than interpreting them in a protectionist manner.
We are glad that there are economic benefits, and we call for those benefits to be used to reduce trade deficits and public debt, whilst at the same time allowing the workers to share in the benefits.
We are not questioning the European Central Bank's independence. The Bank stands guarantor for the euro's good performance. But an independent ECB and unified external relations for the Eurozone are not mutually exclusive. A single voice for the Eurozone in external relations has nothing to do with the fact that these three gentlemen influence foreign exchange rates. The foreign exchange rate is determined by the market, and the European Central Bank decides interest rates. I want to make that clear to the left.
Nowadays we all sing the praises of the euro and the economic data, but we have forgotten that the euro should also be seen and presented as beneficial for Europe's citizens. Let us emphasise how much we are saving in exchange rate costs. Let us emphasise the euro's effect on stability in the Eurozone and the internal market. Let us not forget that we are currently doing better than the dollar: that is a real sign of success. When we introduced the euro, that is what citizens wanted.
(FR) Madam President, I feel as though I am taking part in a debate of deceptions: the deception of our guests, who are faced with an empty Chamber, and deception on the right, where Members are getting worked up about the ECB's losing its independence, when the European Central Bank is and will remain independent. France changed its Constitution so that the ECB could be independent. For the statute of the ECB to be changed, it would take an agreement among 27 governments and 28 parliaments, including ours. That is a mission impossible!
Furthermore, the ECB is doing some rather good work; the euro is the second currency of the international reserve and, since 2000, it has appreciated by some 25% against the dollar. It costs us less to buy raw materials, petrol and gas. Inflation is lower in the Eurozone than in the United States and the United Kingdom. If I have one criticism to make about the ECB, it is that it is too obsessed with combating inflation. Inflation is harmful, especially for the economically weak, but, as inflationary pressure is currently limited, the Bank could do more to support EU economic policy.
The purchasing power of many Europeans has decreased, which is not stopping the ECB from advocating wage moderation. I hope that Mr Trichet will also recommend moderation to President Sarkozy, who is renouncing the commitments made by France in order to give tax gifts to the rich.
The final deception is this: what is the point of a European Charter of Fundamental Rights if it is not applied throughout the Union? How can the European Court of Justice apply this Charter when it will not be applied in the United Kingdom? This final question is obviously addressed to the great European that is my fellow countryman, Mr Juncker.
(FR) Madam President, Mr Juncker, Mr Trichet, ladies and gentlemen, it is neither paradoxical nor contradictory to endorse the conclusions of the excellent reports that have been submitted to us and to support the courageous and determined action of the French Government to carry out the necessary reforms and to promote growth. It is neither paradoxical nor contradictory because France has made a comeback in Europe. By solemnly declaring his commitment to European integration, the President of the French Republic has made a powerful contribution to reviving Europe and to breaking the deadlock that it was in. The agreement that was reached during the Brussels Summit, thanks to the efforts of Chancellor Merkel, is the first practical example of this.
One of the aims is to improve the way in which the Eurozone operates. The Stability and Growth Pact, which since 1999 has provided a framework for the budgets of the Eurozone countries and which defines the budgetary discipline that the Member States must apply in order to prevent any excessive deficits from emerging, must be applied systematically, because it helps to establish monetary stability. Quite clearly, France, despite what may have been said, is not calling into question the rules of the Stability and Growth Pact, which remain fundamental. However, we need to adhere to its criteria without losing sight of the objective of growth. It must be applied intelligently and dynamically.
It is in this spirit that the President of the French Republic was anxious to provide the necessary explanations regarding the ambitious structural reform programme that he is going to implement. The fruitful dialogue that has begun has made it possible to clarify the positions. Mr Sarkozy has confirmed his commitment to do everything possible to meet the objective in 2010, if the boost to growth that he expects from these measures produces the results that he anticipates in terms of tax revenue. France has already committed itself to bringing its government deficit down to 2.4% as from 2007. There will be no let up in the efforts to consolidate the budget in order to reduce the public debt.
I am among those who believe that Eurogroup's role must be strengthened. Equipped with a stable and high-quality president, it must pursue its quest for consistent and coordinated national economic policies. Finally, in this way, with respect shown for the independence of the European Central Bank, Eurogroup will be able usefully to counterbalance the implementation of growth- and employment-oriented economic policy.
(SK) Last week I attended talks at the Ministry of Finance in Dublin.
The Irish economy has been growing at the remarkable rate of 6% on average over the last 10 years. Per capita GDP is 40% above the EU average. Unemployment is at 4.2%, and the Irish will clearly manage to attain the Lisbon Strategy goal as regards unemployment. Their concern, however, is that inflation will reach 5% this year. Had Ireland not already been part of the Eurozone, it would not have been able to join today under the current regulations. In this context I would like to recall that in fast growing economies structural inflation is higher. Such a situation is part and parcel of the monetary union.
Inflation is a part of the process, particularly for the new Member States that are seeking to catch up with the more developed countries. The Council and Commission should therefore develop a new analysis and review the convergence criteria. It is essential to continue with political discussions concerning the application of these criteria to the future members of the Eurozone.
President of Eurogroup. (FR) Madam President, I am taking the floor at the end of the debate in order to make a few remarks further to what was said, or not said.
I shall begin by mentioning wage policy, since this is a subject that I am dealing with and that concerns me. I remain convinced that, if the current policies are pursued, that is, the policies that consist in further widening the gap that exists between those who work and those who say that they provide work, we are heading for disaster. Europeans, especially simple and modest Europeans, who are no less intelligent than the others, do not understand this gap that is getting bigger every day between those who have and those who aspire to have.
(Applause)
I believe that several us of have said this, including the President of the European Central Bank, who recently opposed these ever-widening gaps. I believe that we must stick with the principle of wage moderation. I believe that wage moderation can be explained simply: so long as wages evolve in line with advances in productivity, wage moderation will result in neither a loss of competitiveness nor surplus inflation. If, on the other hand, wages were to deviate from the path mapped out for them by a development in productivity, we could - and certainly would - have a problem. I believe that we need to look into a modern way of allowing as many people as possible to share in the fruits of growth. Not everything depends on nominal wage increases. We must look into the possible forms of worker participation; we must look into forms of profit-sharing; we must look into other forms of employee training that could enable as many people as possible to share in the fruits of economic growth, which, I might add, should not be vilified or criticised in principle, as it tends to be by some quarters. Rather, it must be perceived as an instrument enabling the Eurozone and the European Union to increase their rate of participation on the labour markets and, by extension, to reduce their unemployment rate in relation to what we are experiencing at present. We want growth because we want jobs; we do not want growth to be an objective in itself.
As regards the free movement of workers within the Eurozone, I will say - together, I might add, with the President of the European Central Bank, which goes to show you just how completely aligned our positions are - that, yes, there is a contradiction between the fact of being part of the same monetary area and of not sharing fully in the four freedoms. I therefore agree with those who say that Slovenian workers, for example, should be able to move freely within the Eurozone. However, you will not find, either in the Treaty, or in the accession arrangements, provisions enabling us to say that, yes, Slovenian workers must be able to move within the territory of the 12 members of the Eurozone but not within the territory of the others, any more than you will find provisions enabling us to say that, no, Czech workers, Slovakian workers and Polish workers cannot move, only those who are members of the Eurozone are permitted to do so. I did not write all the passages of the Treaty, or even the smallest part of it, but you will not escape the cumbersomeness that at times characterises all of these texts. It follows, then, that this is a debate that we must have, but we need to realise that we cannot resolve the issue at the level of the Eurozone alone; we really must resolve it at the level of the European Union as a whole.
Much has been said about the person whom I called 'our evening visitor', last Monday in the Eurogroup. This is, moreover, Mr Hamon, an expression that I have taken from a period in the history of the Elysée Palace that does not entirely correspond to that of today, since others, before the President of the Eurogroup, used to be in the habit of receiving evening visitors. This was more a phenomenon of the 1980s, in France. In Europe, this phenomenon is rather new, and we will see whether this is the start of a great tradition or whether it will amount to the epiphenomenon that was.
That being said, I should like briefly to point out some commitments made by France. Firstly, France has not put an end to budget consolidation, France has not started to put its financial consolidation effort on hold. Secondly, the 2008 deficit ...
(Addressing Mr Goebbels, who had heckled him)
... Yes indeed, Mr Goebbels, we shall see. I am not responsible for French budgetary policy, so we shall see ... Finally, I should like to say to you, my dear friend, Mr Goebbels, that, if France's public finances were in the same health as the finances of the country for which I am responsible, we would not be having this debate, and we would not have had our visitor on Monday evening.
(Laughter)
That being said, France is fully committed; France will do everything it can to meet the objective in 2010, just as we all made a commitment to do in April this year. France is not the only country to have problems in meeting the objective by the deadline set. We will be as strict and tenacious in analysing the results of the other countries, which may not perhaps manage, under the conditions set, to meet the objective at the desired time, but Eurogroup expects all the Member States of Eurogroup to meet their medium-term objective in 2010, at the latest. As for France, it will submit an updated stability programme to us in September so that, together, the Commission and Eurogroup can see whether the structural reforms begun by the French Government will be likely to lead to the desired result, that is to say, the return of buoyant French growth and the guarantee of the viability of French public finances in the longer term. I am quoting the Stability and Growth Pact in its amended version.
With regard to the enlargement of the zone, and independently of the debate that we could have on the accession criteria, I should like to repeat before Parliament that, of course, the Eurozone and the Eurogroup are neither a zone nor an exclusive club. All Member States that meet the accession criteria not only can join the Eurozone, but must join it. No member of the Eurozone, State or politician can turn down a request to join the Eurozone. On this point, the Treaties are crystal-clear.
We can of course, and will no doubt, discuss this, but we must discuss it in depth, and not avoid the fundamental questions, such as: should we base the criteria more on a nominal reading, as the Treaties call on us to do, or should we think instead about real convergence? I have already guarded the new Member States - an expression that I still detest - against the notion of real convergence. The Member States, those that are referred to as the new Member States, in fact have nothing to gain by our having recourse to analyses that are based more on real convergence than on a nominal reading, but this is a debate that we can have over the next few months.
I did not understand very well the question that my friend, Mr Goebbels, put to me at the end of his speech, when he questioned me about the Charter of Fundamental Rights in Europe. I do not really see the connection with the debate that we are currently having, unless it is to suggest that there is no more reason for the United Kingdom to request an opt-out concerning the Charter of Fundamental Rights, and that there is no reason for it to persist in wanting to opt-out at any price on monetary matters. I am, moreover, of the opinion that the United Kingdom will one day apply the declaration of fundamental rights on its territory - because the time will come when it wants it, for one cannot forever defy common sense - before applying the single currency there.
The virtuous union of the declaration of fundamental rights and that of the Council of Europe, which relates to the same subject, will therefore create a solution that, by combining these two sources of law, will enable the European Court of Justice to ensure that, on this point as on others, praetorian law will have demonstrated that it is sometimes ahead of the reality that is shaped by those who want more Europe and those who, unfortunately, want less. The great contribution that the European Parliament makes to our debates is, as a general rule, to find itself on the side of those who want more Europe. We have nothing to gain from wanting less Europe each day or from selling off the Europe that we have in sections that we make available to those who would like to dismantle a project that has not stopped expanding or impressing the world ever since we started work on it.
(Applause)
ECB Chairman. Madam President, I have five points to make in response to the question. First of all, I should like to say again that the reports by Mr Rosati and Mr Mitchell were very impressive and full of very important ideas and recommendations.
First, on Mr Schwab's remarks: it is clear that there is a question of institutional philosophy. There are 13 exemplary political democracies in the euro area, and next January there will be 15. In the future, there may be 25 or even more. It is inconceivable that changes would occur three or four times a year because of changes brought about by the normal functioning of our democracy. Clearly, commitments made within the Eurogroup are either kept or they are not. If they are not kept, then it is impossible to have a Eurogroup which has authority - which, I am sure, is the wish and the will of all the countries concerned.
My second point concerns jobs. Figures are figures. I regularly hear that the euro is not designed to create jobs, that we have a problem with growth and jobs and so forth. The euro was created on the basis of a philosophy that is shared the world over: that price stability, and credibility in ensuring price stability, are prerequisites for sustainable growth and job creation. That is the decision that Europeans have taken, but they are in good company, because it is a consensus. What are the figures? More than 12 million jobs have been created since the euro was set up - more than 12 million; two million, as the rapporteur said very eloquently a moment ago, were created in 2006. Since the euro was launched, we have created more jobs even than the US. We have the lowest unemployment rate for 25 years. We are not satisfied, and we are right not to be satisfied, because we have to do much better. However, let it not be said that the euro is playing against job creation - it is not true, and we can prove it.
As regards the obsession we might have with price stability, I have already said that price stability is a prerequisite for sustainable growth and sustainable job creation. Let me also say that this sentiment is fully shared by our fellow citizens. All the surveys show that they are fully in favour, by an incredible margin, of price stability, and that they are not necessarily fully satisfied with the present situation; they are encouraging us to be as credible as possible. If, today, we have a 50-year rate of 4.67% and a 30-year rate of 4.65% (the 50-year rate applies to France, where bonds are issued for 50 years, and the 30-year rate to Germany), these figures are still much lower than the 10-year rate in the United States. Why are they so low? Because we are credible - on ensuring price stability over 30 years and, even, over 50 years. That is the contribution our credibility makes in Europe.
Let me mention the exchange issue, which is very important. Firstly, the rules are clear - they are set out in the Treaty. They are exactly the same as the rules in operation in Germany since the foundation of the Bundesbank after the Second World War. They are exactly the same as those used under the French system introduced in January 1994, when the Banque de France became independent, as called for by the Treaty of Maastricht and agreed unanimously by the French Left and Right, who decided, as Mr Goebbels said, to change the Constitution of the Fifth Republic to make the central bank independent.
So, the rules are clear. They are the same as in a number of countries. In practice, as has been said here very eloquently by an honourable Member, this means that we are in a floating exchange rate system, and we have a forum to discuss those matters: the G7. To my knowledge, Jean-Claude Juncker and I signed the G7 statement, together with our US partners - the Federal Reserve as well as the Secretary of the Treasury - with our Japanese partners and with our other partners, the UK and Canada.
This is how we have discussed matters since the establishment of the floating exchange rate system. That is not to say that the situation is easy or very nice, but let us be as responsible as possible in the present circumstances and let us be sure that we have this dialogue - between ourselves, certainly, and with our partners. It is inconceivable that we could do things that would be contradictory to our partners' wishes. It will not work.
Madam President, I do not want to bore you by restating what we have said, but together we are saying to China that we are not satisfied with the present situation. We are, certainly, echoing what has been said by our Japanese friend, that the markets are not fully recognising their present fundamentals, and, as regards the United States, we said together that we noted that the Secretary of the Treasury and the monetary authority had said that a strong dollar vis-à-vis the euro was in their interests. I shall not say anything else on that point, but we have to know exactly what the situation is.
I come now to the last point, which is also an important one: independence. I noted with great attention the fact that all governments in Europe have said that they would fully respect the independence of the Central Bank. Jean-Claude Juncker, on behalf of the Eurogroup, said that a moment ago. Independence is in the Treaty and is the absolute key for credibility. How could we be credible over the next 50 years if we were not deemed independent by all those who are taking decisions - here in Europe, in New York, in Tokyo, in Singapore, in Hong Kong and elsewhere? They trust us because we are independent, but independence is not only based upon full respect of the Treaty by our partners, the executive branches, it also depends on us. I wanted to say, on behalf of the Governing Council - if I could I would say it in several languages to make sure I was well understood! -
(FR) I will preserve most firmly the independence of the ECB in all circumstances. My 18 colleagues and I intend to adhere strictly to the Treaty on this point, as on all the others. It will be about the Treaty, the whole Treaty, and nothing but the Treaty.
(DE) As President, I am firmly committed to maintaining the ECB's independence in all circumstances. My 18 colleagues and I intend to adhere strictly to the Treaty, the whole Treaty and nothing but the Treaty.
Member of the Commission. (ES) Madam President, I would like to end this very interesting debate by making a very brief comment on the application of the Stability and Growth Pact, because in this debate - as in many other debates that we have held inside and outside of this Parliament - some people are calling upon the Commission and the Council - upon the Commission in particular, and quite rightly - to apply the Pact firmly. And I entirely agree.
The Commission and myself intend to propose to the Council that the Pact be applied as it stands, as it has been agreed. So a firm application, without exceptions, without breaking any rules, which does not mean a rigid application. We have had bad experiences when firmness has been confused with rigidity. Firmness does not mean rigidity. Firmness means rigour, and rigour, in the face of different and difficult situations, requires a combination of firmness and flexibility if the aim is to achieve the results of budgetary discipline, which is a necessary condition for economic growth.
I now come to my second consideration. Some of the honourable Members have referred to other efforts that we need to make in order to sustain growth and prolong growth and employment. We must carry on developing the internal market, and there will be a debate on that before the end of this year.
The Commission has promised the Council that it will present an analysis on the functioning of the internal market and how we believe it should continue to develop. This is an important debate which is going to follow on from debates such as those that have been held in this Parliament and in the Council on the Services Directive - and we will now have to see how it is applied - a debate that is linked to the increasing integration of financial services, which is crucial in terms of improving the functioning of the Eurozone in particular.
We must carry on talking about the Lisbon Strategy and over the coming months we are going to discuss the review of the integrated guidelines, of the broad economic policy guidelines and the employment guidelines.
The structural reforms within the context of the Lisbon Strategy are beginning to bear fruit. The good results, the wonderful results in employment terms, that the President of the European Central Bank has just mentioned, would not have been possible without the labour market reforms that have been included within the framework of the Lisbon Strategy, and neither do I think - although we do not yet have all of the analytical elements in our hands - that it is going to be possible to explain some of the productivity improvements over recent quarters without relating them not just to the economic cycle but also to certain reforms in the product markets, in the services markets, to certain processes, or without the, once again, firm and rigorous but not blind application of the competition rules that the Commission has to oversee in particular.
My final comment, which has been mentioned on several occasions and to which Mr Juncker has already replied, relates to the issue of wages. I have mentioned it here in Parliament on several occasions, and in discussions outside of it.
I entirely agree with the position laid out by Mr Juncker. Wages must develop in line with productivity. While there are improvements in productivity, those improvements must be reflected in the development of wages. We cannot recommend the negotiation of wages in line with productivity when productivity is not growing and then forget that recommendation when productivity increases.
My feeling is, however, that at the same time we cannot forget the need to moderate the development of wages, not to lose competitiveness and, in the case of the Eurozone, to analyse very thoroughly the reasons for, and alternatives to, the divergent development of unit labour costs between Member States of the Eurozone that can create significant problems in terms of the functioning of countries that are losing competitiveness by this means. I therefore suggest that we expand this debate a little further. We must not just focus on wages but also talk about the development of inequalities, because - and I shall link this to the final idea I wish to mention in this debate - the citizens' perception of the euro is a significant element of their perception of Europe and the idea of Europe.
Perceptions of the euro are undoubtedly affected by the citizens' perception of economic development, and we must tell them the truth. When the economy is going badly, we must say so, but when the economy improves, we must also let that be known. We must not forget that now that the economy is improving, we must also communicate those improvements to the citizens, whose individual economic situations do not perhaps provide them with a view of the overall development of our economies.
However, that perception of the economic situation, of the effect of European integration, of economic and monetary integration, on individual economies, is also affected by uncertainty about the future, uncertainty about the future of social protection systems, uncertainty about the consequences of globalisation and ageing of the population, and we must respond to those uncertainties without jeopardising the foundations of the Economic and Monetary Union that we have been analysing today.
The debate is closed.
The vote will take place tomorrow, Thursday 12 July.


18. Sovereign Wealth Funds (vote)


Opening of the sitting


Question Time (Council)
The next item is Question Time (B6-0006/2009).
The following questions have been submitted to the Council.
Subject: SMEs
Given that the economy is one of 'the 3 Es' of the Czech Presidency's priorities, what specific steps will the Council be taking to enhance the confidence of small and medium-sized enterprises in the market economy in light of the current economic situation?
President-in-Office of the Council. - Let me begin by saying that I appreciate the question on SMEs, because during this current economic crisis the big businesses and the big companies are always strong enough to lobby for some relief, but it is much more difficult for SMEs and it certainly requires a systemic approach.
On 1 December 2008, as you know, the Council endorsed the European Economic Recovery Plan, which was presented by the Commission on 26 November 2008. As a response to the financial crisis, the Council supported a stimulus which is equivalent to about 1.5% of the EU's gross domestic product to restore business and consumer confidence. Furthermore, the plan contains specific measures to support SMEs, the most important of which are those aimed at improving access to finance for SMEs and reducing the administrative burden.
The Council also agreed that improvements in the framework conditions for European businesses, particularly for small and medium-sized enterprises, was essential to counter the effect of the crisis on competitiveness and to support and enhance job creation.
The Council also adopted two sets of conclusions related to providing support for SMEs, in the context of overall competitiveness. Firstly, conclusions endorsing proposals to support SMEs presented in the Commission Communication entitled, as you probably know, 'Think Small First: a Small Business Act for Europe', this so-called SBA, including an action plan outlining the priority measures requiring particular attention.
Secondly, conclusions from the Commission communication entitled 'Towards world-class clusters in the European Union - implementing the broad-based innovation strategy'. Although clusters are not exclusively meant for the SMEs, they play an important role in many clusters that have been set up throughout the EU.
At its meeting in mid-December 2008, the European Council approved this European Economic Recovery Plan and supported the full implementation of the Action Plan for the Small Business Act. It has specifically supported an increase in the intervention by the European Investment Bank to the tune of EUR 30 billion for the years 2009-2010, especially for loans to SMEs, which amount to an increase of EUR 10 million over the EIB usual lending in this sector.
The Council also supported a temporary exemption for two years beyond the de minimis threshold for state aid in respect of an amount of up to EUR 50 000 and the adaptation of the state aid framework as required to increase support for enterprises, especially the SMEs.
The Council also called for the use of accelerated procedures for awarding public contracts provided for EC legislation, as well as for reducing the administrative burden on businesses.
The Czech Presidency will continue to pursue this effort, because our economy is broadly based on SMEs, so we have our own experience with that. Therefore, both of the forthcoming Competitiveness Councils under the Czech Presidency - one will take place very soon in early March, as well as the informal one which will take place in Prague - will tackle the question of reducing the administrative burden, since we believe that better regulation is an important factor for improving competitiveness, in particular for SMEs, and it plays an even more important role in times of economic crisis.
Moreover, the Presidency will try to make progress in the implementation of the action plan and put this SME policy at the forefront of society as well as linking the implementation of the action plan to the national reform programmes of all the Member States.
The Presidency will also continue with the increased effort of discussing legislative proposals related to SMEs, such as the regulation on the Statute for a European Private Company, which would offer SMEs a form of business enabling them to take advantage of their potential and develop cross-border activities.
Another legislative proposal I should mention is the proposed directive for reduced VAT rates for labour-intensive services, which will be discussed at the upcoming ECOFIN Councils.
In addition, the Council will be concerned with the review of the Late Payment Directive, which is now being prepared and which is to ensure that small and medium-sized enterprises are paid in time for all business transactions. Again, that is pretty important in the current situation.
Since we are running rather late, I propose that the Council reply to all the supplementary questions together. As you know, I can only accept two supplementary questions in addition to the original author's. That being the case, I have selected two of the five questions tabled based on the criterion of choosing different political groups and nationalities. The Members I have selected are Philip Bushill-Matthews and Silvia-Adriana Ţicău.
author. - Normally I use my own mother tongue but, as I am replacing Marian Harkin, I will try in broken English. This is a common language in this Parliament.
You mentioned, Minister, the administrative burden and the goal of reducing it by 25% by 2012. Do you really think that is an ambitious goal? Could we not do more, and could you perhaps be more specific about what has been done so far? What are your aims? Could you not say 25% by 2010, for instance? That would be rather ambitious.
- You mentioned the review of the Late Payments Directive, which I think is extremely important. I was concerned, though, that the consultation period for that finished at the end of August, just before the real financial crisis hit. Had the consultation period been extended I think we might have got much more robust answers as a basis for a better review of the Directive. Is it worth considering whether we should open a further short period of consultation, so that we get the most up-to-date information possible, on which a review could then be based?
(RO) I would like to ask the Council a question about the European Economic Recovery Plan. This plan is providing a sum of EUR 30 billion for small- and medium-sized enterprises. The Commission advised us that grants will be awarded on the 'first come, first served' principle.
I would like to ask the Council about what measures it is taking so that all Member States develop national programmes to support their small- and medium-sized enterprises so that they can access these funds.
President-in-Office of the Council. - I will try. On the first question on the targets for the reduction of the administrative burden, my country, with some other like-minded countries, has already started with the process somewhat in advance. Along with the Netherlands and some other countries, we have a national goal of a 20% reduction by 2010. We will have to see whether we can do more by 2012.
The Commission has announced a road map for the end of January 2009 showing how it will ensure that all the proposals needed to achieve the 25% reduction in the administrative burden at Community level are tabled before the end of 2009. Proposals tabled during the first half of this year in this area will be responded to by the Council under the incumbent Presidency, so we will certainly be dealing with that. We will evaluate the process during the Spring European Council. I hope that we will be able to act as thoroughly as we can. Certainly this is what the Presidency wants to do.
On the Late Payment Directive, the Commission intends to publish the proposal at the end of February 2009. The Presidency will start discussing the issue at the Council's preparatory bodies.
The last question - which I missed - was related to the European Recovery Plan. It was specifically about the amount of the possible EIB loan. I hope that SMEs will be able to compete with those other big industries. We had a substantial debate on the automotive industry just an hour ago, so certainly I think that the general wish is that the SMEs would be able to benefit from that.
Subject: Grounds for a new world trade agreement
Following the stalling of the Doha Round multilateral trade negotiations last summer and the agreements reached by the Group of Twenty at the Washington summit last November, does the Council feel that there are grounds for the European Union making new proposals on trade that would satisfy developing countries?
President-in-Office of the Council. - In response to Mr Medina Ortega's question, which relates to the WTO, I think it is an important issue. We have all read the reports of - some of us even took an active part in - the Davos World Economic Forum, and have listened to the recent comments by Pascal Lamy and others. There is no doubt that there is a fear of rising protectionism, so we are all very well aware of the challenges ahead of us.
I would like to point out that on 15 November last year the members of the G20 emphasised the importance of establishing the modalities for an agreement by the end of 2008, which has already passed. In this context the delegations of the WTO members, including the European Commission on behalf of the EU, intensified their work in Geneva with a view to providing a political impulse.
A lot of work has been done, and the effort led to the new revision of the AGRI and NAMA texts. Moreover, in the light of the current political and economic development, the European Council in mid-December last year stated in its conclusions that it endorsed the objective of arriving this year, within the WTO, at an agreement on the modalities leading to the conclusion of the Doha Round with an ambitious global and balanced report and result.
The Council and Commission stood ready for constructive EU participation at the ministerial talks, if and when convened. However, on 12 December 2008, the WTO Director-General, Pascal Lamy, at an informal meeting of the heads of delegation, indicated that he would not convene the ministers to finalise modalities by the end of the year, because the conditions did not yet exist for a successful ministerial meeting, despite intensive consultation.
The aim of the Doha Development Agenda (DDA) is to achieve transparent liberalisation of trade at multilateral level which will bring about long-term advantages and a major boost for the world economy, in particular for developing countries, due to the development-oriented character of this round.
Therefore, despite the fact that no conclusion was possible by the end of 2008, the Council remains fully committed to the multilateral trade system, as well as to the conclusion of an ambitious, balanced and comprehensive outcome of the WTO Doha Round. This is even more important given the current economic and financial situation.
Although the Presidency is well aware of the obstacles that exist on the way toward successful completion of the whole process, it will undoubtedly seek to give an effect to these commitments by working on the renewal of discussions on the DDA as soon as the conditions allow. It will also support more intensive work within the framework of other WTO agendas, in particular in the areas of services and TRIPS.
(ES) Thank you, Mr President-in-Office of the Council, for that response, which I consider quite comprehensive. I would, however, like to remind the President-in-Office of the Council that, in the summer of 2008, the Doha Round was about to conclude but an agreement could not be reached because some BRIC countries were not disposed to make any kind of concession.
Considering that the BRIC countries played a greater role at the Washington meeting, it is possible that the previous unwillingness of these countries to make a concession was due to their considering that they had been afforded a secondary position, whereas at the Washington meeting they were given a priority role. Does the Council Presidency have any information that the BRIC countries, as a result of the commitments made in Washington, may be disposed to adopt a more active role and contribute to the successful outcome of the Doha Round?
- I just wondered, as a supplementary to this question, if, looking at the European Union's new proposals, or if the European Union were to come forward with new proposals, he agrees that any such proposals should include moves to remove the inequities of the common agricultural policy so we can unlock the negotiations in NAMA and then unlock the negotiations on services, which account for about 70% of the EU's GDP. Would he also agree that it is time for the EU to show a true commitment to free trade?
I would like to ask the Minister if his attention has been drawn to the protectionist elements in the plan for recovery in the United States, particularly as put forward by members of the House of Representatives and the Senate, and if he has, on behalf of the Council, communicated the concern of the European Union to the American Administration about this.
This does not augur well for a new Doha Round. Would he ensure that our concerns are communicated before the necessary legislation passes through the US Congress?
President-in-Office of the Council. - I think we all know where the problem lies. It does not lie in the European Union. I think the European Union is very much in favour of completing the Doha Round and we did all that was necessary for it in the course of the last year and we almost, almost made it.
Where, then, is the problem? First we have to wait for the US Administration, and, while some appointments have already been made, some others are still to come, and it remains to be seen whether the current US Administration will remain committed to trade liberalisation. We may have some doubts about a fast-track approach under the current circumstances. Another country to discuss this with is India, which, as we know, is expecting elections in the spring.
So as a representative of the Council who is coming from a small- or medium-sized country which traditionally has an open economy, I would like to promote this, and would like to tell you that our primary goal is to finish the talks successfully, as soon as possible, but I am afraid we also have to be realistic, and I cannot promise you castles in the air.
The optimistic scenario is this: a clear favourable message from the G20 meeting which will take place in London early in April, and then the fulfilment and implementation of the commitment, which could be followed by a ministerial meeting in Geneva in June or July. There agricultural and NAMA (non-agricultural market access) modalities could be concluded. So we are all hoping for that. We will be working hard to do that, but we will see when we meet here at the end of our Presidency whether we have been successful or not.
Subject: Measures to improve the energy efficiency of buildings
The Council has set itself the target of achieving a 20% reduction in greenhouse gas emissions and a 20% increase in energy efficiency by 2020, with 20% of the energy used coming from renewable sources. Forty per cent of overall greenhouse gas emissions stem from buildings. Improving the energy efficiency of buildings could significantly reduce greenhouse gas emissions. In November the Commission proposed a revision of the directive on the energy efficiency of buildings.
Bearing in mind how important the energy efficiency of buildings is for citizens, given the potential for reducing their electricity and heating bills, can the Council say how much priority will be given to this area in the period from January to April 2009?
President-in-Office of the Council. - I would like to thank Mrs Ţicău for her question, which is also timely. Housing, or the issue of increasing energy efficiency and the commitment to increase energy efficiency by 20% by 2020, has to be taken seriously.
The Council shares the view that the draft revised directive on the energy efficiency of buildings is of fundamental importance for the achievement of the Community's targets on increased energy efficiency, renewable energy and reduced greenhouse gas emissions. The recent gas crisis has once again unveiled the vulnerability of the EU vis-à-vis energy dependency. Should we succeed in meeting an ambitious reduction goal, while not increasing energy security risks, we must adopt a series of short-, medium- and long-term measures that will decrease our energy dependency.
Increasing the energy efficiency of buildings is definitely among the most important of them. As a result, the Presidency is beginning to examine this draft directive at working party level. The aim of the examination is to explore difficulties in the proposal. We expect that the question of the scope of the directive will be put on the table first. This question of scope is the most important, not only in relation to possible energy savings, but also regarding the administrative burden of households. Therefore, the Czech Presidency will ensure that work continues intensively over the coming months. I have regular discussions with Martin Bursík, my colleague in the Government and the Minister of the Environment, who chairs the respective Council.
The Council will also follow closely the work on this issue in the ITRE Committee. For your information, I am meeting the Chair of the Committee after this Question Time. The Presidency is committed to making as much progress as possible, with a view to the early adoption of the directive. To that end, it plans to submit a progress report to the TTE Council in mid-June. The adoption of the Council conclusions on the Second Strategic Energy Review is envisaged for the first TTE Councils, which will be held on 19 February, and which will form the input for the March European Council meeting.
Adequate attention will also be paid to the recent Ukraine-Russia gas dispute and its consequences. A policy debate will be held on the draft Council directive on the oil stock. So, in general, the Council considers it important that the highest priority be given to the finalisation of the negotiations with the European Parliament on the third internal energy market legislative package over the coming months. The Council also recalls that energy efficiency will be addressed in relation to the wider question of energy security, the protection of the environment and, indeed, the context of the examination of the Second Strategic Energy Review.
(RO) I would like you to know that in my report I am going to propose setting up a European fund for energy efficiency and renewable energy to help raise the public and private funds for implementing specific energy efficiency projects across the European Union, and I would like to have the Council's support for this important initiative.
- (SK) The energy efficiency of buildings can lead directly to savings for European consumers. I see a solution in the wide-scale introduction of automated intelligent consumption metering systems and of systems providing up-to-the-minute snapshots of energy consumption, including ones for household use.
What can the Council do to implement this solution? What sort of timetable do you consider to be realistic? Can the Council inspire the European Technology Institute in Budapest to address itself to the problem of the energy efficiency of buildings?
- Has there been any discussion in Council about trying to get Member States to provide financial incentives for increasing energy efficiency, in particular for elderly people? On the one hand it would increase energy efficiency, and on the other hand it would provide employment.
President-in-Office of the Council. - I fully share the view that energy efficiency is an important instrument for handling both environmental concerns and energy security needs.
In fact, we have just been discussing this at home - now I will just step out of my Presidency role - and in Prague we consider two measures to be really important. The others are also important, but either in the long term or without such a huge impact. One is housing and energy efficiency. The second one is nuclear energy, but I know this is a sensitive issue for some Member States. Those are the most important in combating climate change and dealing with energy security. Therefore, finding the proper instruments to promote energy efficiency and housing is the challenge of our time.
I would like to deal with the questions on financing. The European Regional Development Fund, as was proposed by the Commission, could be used to find resources for investment in housing and energy efficiency, so this is one instrument which will be available now, also within the framework of the recovery plan.
Another possibility for countries like Romania - I know this from my own country - is just to use the emissions trading scheme, which is within the current Kyoto, so it is possible to use the income from that.
I think we have the instruments. With regard to this new directive, we will consider the debate about the scope to be the most important. Certainly, we in the Czech Presidency, in cooperation with the upcoming Swedish Presidency - for them it is a priority - will try to do our best and not to waste too much time.
Subject: Energy, external relations and the economy under the Czech Presidency
In light of the Presidency's stated priorities for its term in office, can it please specify how it intends to integrate the three priorities in terms of concrete initiatives? I refer specifically to discussions with partners to the east over strategic energy corridors which could serve to guarantee the EU's energy security and economic competitiveness into the future.
President-in-Office of the Council. - I want to thank Mr Burke for his question concerning the southern corridor plans and the meetings during the upcoming Czech Presidency. We will ensure that these are the three priorities - energy, external relations and the economy - which are fully integrated and interconnected and focus on the concrete initiative; this is one of them. It will in particular concentrate on the objective of ensuring reliable supplies of energy through the development of a range of energy relationships with third countries and regions and by working towards greater diversification of energy resources, as well as the transit routes.
The Presidency intends to take this work forward on the basis of the elements contained in the Commission communication on the Second Strategic Energy Review. The Council is expected to adopt a conclusion on this communication in February and energy security will be of particular focus in the spring 2009 European Council.
As part of its work, a large number of meetings with third countries or third-country organisations are planned. These meetings will deal either exclusively with energy-related themes or will cover energy among the other issues. As regards the specific discussion on energy strategic corridors to which the honourable Member refers, the Presidency is organising the following meetings. The most important are, first, the international investment conference on the Ukrainian gas transit network, which will take place in Brussels on 23 March 2009. Second, the so-called Southern Corridor Summit meeting, which we plan to organise together with the Eastern Partnership event; that will take place in Prague in early May. The aim of that meeting is to launch a mutually beneficial dialogue between the EU and both the transit and producing countries from the Caspian region. This should lead to a greater diversification of energy supply routes, suppliers and sources, and will thus strengthen the energy security of the EU. One of the specific purposes is to promote the Nabucco project.
The issue of the strategic energy corridor is also likely to be addressed during the meeting of the EU-Russia Permanent Partnership Council on Energy, which will also be organised under the Czech Presidency, probably in May, just to create a run-up to the summit meeting between the EU and Russia, which we are planning for 22 May 2009. So the importance of the strategic energy corridors referred to by the honourable Members has been clearly underlined by the Ukrainian-Russian gas dispute in early January.
The Council, at its extraordinary session of 12 January 2009, which was devoted to this subject, adopted conclusions outlining a number of measures to be taken in the short, medium and long term. So the Presidency will work to ensure that appropriate and concrete follow-up is given to these measures as a part of the high priority it attaches to the issue of energy security.
- I would like to thank the President-in-Office for his very comprehensive reply. In fact this question was tabled before the Russia-Ukraine dispute arose. I had a feeling that it might arise at the time it did. I would like to ask him this: under Lisbon, we were talking about a common energy policy; maybe he could outline, in his capacity as President-in-Office, his opinions on the improved tool kit which Lisbon provides to address these challenges in the future and the advantages of adopting the whole Lisbon approach and Treaty.
- (LT) Thank you for your explanation of a very important subject. I would like to ask how the Czech Republic, the presiding country, views the Nordstream project, which has both positive and negative aspects, and we know that there are certain doubts about its ecological impact. Thus, as you begin the Presidency, how do you evaluate this project? Thank you.
(DE) It would interest me to find out whether there is an initiative in ECOFIN and on the part of Commissioner Kovács to initiate a progressive tax write-off across Europe for those energy projects that are currently imminent, such as the Nabucco pipeline or the building of new power stations, in order to create incentives and thus drive these strategic initiatives forward.
President-in-Office of the Council. - All these questions are about issues which we are discussing almost on a daily basis now. On the Lisbon Treaty, we all know that it contains solidarity formulas which should help us to enforce the legal framework for better cooperation in the area of energy within the EU. That is one part of the story.
At the same time I think we have learnt some lessons during the current crisis. One thing is the solidarity as a political slogan. The other one is the need to react quickly in a time of crisis and to respond, for example, to a difficult situation which we had in Bulgaria or Slovakia during the crisis. So we need to have some improvement of the interconnections in particular in Central and Eastern Europe in the area of gas supplies. We need to have a compressor on the pipeline to be able to reverse the flow. For example, my country has it because it modernised and invested, but the Slovaks did not.
So that brings me to your question as to whether there is some investment programme to cover short- or medium-term needs - there is. In fact, today I had some meetings with the respective chairs of the Committee on Budgets, the Committee on Industry, Research and Energy as well as the Committee on Agriculture and Rural Development, because EUR 5 billion remains, which was not spent last year, and it has been agreed within the European Economic Recovery Plan to allocate that for some infrastructure projects. As far as the Commission has proposed late last month, EUR 3.5 billion out of those five should be allocated to the interconnection projects which can be realised in the next two years, 2009 to 2010, in the area of gas connections, electricity grid interconnections and connecting gas with the offshore wind turbines in the north of Europe.
So, yes, there is a plan and my view on Nord Stream is that there is a debate, we all know that. I think one lesson of the current crisis between Moscow and Kiev is this: that we should have the means to make it possible to solve these problems if they are repeated, both regarding Russia and Ukraine.
There is the Nabucco project, which should be able to bring gas to Europe from countries other than Russia, in other words the Caspian Basin. But we also should be able to diversify the transit route of gas to Europe so that this is not just one country. I think, in this respect, Ukraine is serving us as the only terrestrial supplier.
So there are some concerns about the possible environmental impact. Some Member States are raising the question, so there is no secret about that, but I think that at the end of the day we need to have diversification of both routes and suppliers.
Subject: Tobacco control and smoking cessation
The WHO Framework Convention on Tobacco Control (FCTC) is the first international health agreement signed and ratified by the European Union and all Member States except one, the Czech Republic. As the Czech Republic will be leading the discussions on the FCTC, what plans has the Czech Presidency to ratify the treaty itself?
President-in-Office of the Council. - I see Avril Doyle and I am asking myself whether I am the other side of this question: the last time we discussed this was in the only place in this building where I as a heavy smoker can smoke. I guess that you observed that, and that is one of the reasons why I now have the obligation to answer your question. My mother was always advising me to speak truthfully at every opportunity so now I have a dilemma: to read this or to speak my mind.
But I shall use this opportunity to start at the personal level. I am a member of the 30% minority in Europe: I am a heavy smoker, and I feel terribly discriminated against in this building. I appeal to you as a person, not on behalf of the Council, to provide better conditions for appeasing our habit. But now I have to respond to this question.
The question is about the state of the ratification process in the Czech Republic. I can assure you that the ratification process of the framework convention in the Czech Republic is in progress. It has been in progress since 2003, and the new attempt to find approval in the Czech Parliament is ongoing. The new Czech Minister for Health - who, like her predecessor, smokes - has the new proposal aimed at renewing ratification and will send it to the inter-agency process, so it will reach Parliament pretty soon.
The ratification process should be concluded if we find enough votes in Parliament. In the Senate I can assure you that this is not easy when our senators are travelling in Europe and are facing the same problem as I do in this building. But I think one thing is important: that the legislation is fully implemented so all laws abide by those commitments which are part of the convention.
Regarding our approach as the Presidency: the next formal meeting in the framework of the FCTC will be the third meeting of the international negotiating body on a protocol on illicit trade in tobacco products. Here my country, as well as the Presidency, is fully committed to fighting the illicit trade in tobacco products. That will take place from 28 June to 5 July in Geneva, so we will share this somehow with our friends the Swedes, because that is the time when we, the Czechs, will hand over the Presidency to our friends in Stockholm. That is the substance of my response.
- I would like to thank the President-in-Office. I do not mean to make him paranoid with my question. It was tabled, after all, last December.
I am anti-smoking, not anti-smokers. We all agree they need all the help they can get: nicotine replacement therapies etc. But we must recognise the damage that passive smoking does to those who do not enjoy smoking, so please do not feel personally under the spotlight here.
Could you guarantee me then that, before the end of the Czech Presidency, you will have ratified the framework convention - yes or no? It would be extremely important if you could give me guarantees on that. After all, cigarettes are the only legal product on our shop shelves that, if used by consumers according to instructions, kills one in two of the consumers. They are amazing really.
- Thank you, President-in-Office, for your honesty. You quoted your mother - well, as a mother, can I urge you to stop smoking, while sympathising with your plight in the building? If you were in Ireland, you would be completely out in the cold.
My question is: have you ever considered giving some leadership and quitting the bad habit and encouraging your senators to follow suit?
President-in-Office of the Council. - To conclude this rather unusual evening's debate, my mother smoked when she was pregnant, and here I am as the Deputy Prime Minister of the Czech Republic, and my brother and sister are both in very good condition. My wife smoked as well and she still smokes. We have three nice, very intelligent, kids - so those are my private views.
I notice that this issue attracts particular interest in Ireland, and I know that you have adopted the measures. The date of our ratification is in the hands of the Members of the Czech Parliament and the Senate. Parliament is sovereign.
I am now fighting in my country for the earliest possible ratification of the Lisbon Treaty. During the debate on Lisbon, I am often asked by the members of the Senate whether the adoption of the Lisbon Treaty will lead to keeping their freedom of smoking in some public spaces.
So I have a dilemma. What is more important: the Lisbon Treaty or this? But I can assure you that the Government will do whatever it can to obtain ratification of both Treaties. We signed both Treaties, and the responsibility of the Government is to do the best it can.
- The questions that have not been taken due to lack of time will be answered in writing (see Annex).
That concludes questions to the Council.
(The sitting was suspended at 7.15 p.m. and resumed at 9.00 p.m.)