VAT on insurance and financial services (debate)
The next item is the report by Mr J. Muscat, on behalf of the Committee on Economic and Monetary Affairs, on the proposal for a Council directive amending Directive 2006/112/EC on the common system of value added tax, as regards the treatment of insurance and financial services - C6-0473/2007 -.
I should like to take this opportunity to welcome my friend, Mr Muscat, and to congratulate him on the recent and very important success in his political life. This will perhaps at some point cause him to leave this House but, for the time being, it is a cause for celebration, both for himself and certainly for many of us.
We are discussing new and more transparent rules in the financial services sector at a time when we are going through one of the biggest crises in this sector. The current situation shows that we cannot let things run their own course and there is a need for regulation. 'Regulation' does not mean bureaucracy - certainly not excessive bureaucracy - but assurance that things are being done in the best possible way, and not by means of formulas and papers that lead nowhere. When my fellow Members and I prepared this report we had two priorities. Firstly, to ensure that any changes that take place do not have negative repercussions for the consumer.
In other words, there should be no additional burdens on the consumer, and that is why we are saying that the possibility of introducing VAT on financial services should apply only to transactions between one business and another and should therefore be recoverable. At no stage should our text propose that VAT on a financial service that is not taxable be passed on to an individual - that is, the consumer. This is stated clearly and directly in the proposed text, despite possible reservations on the part of other institutions. Some people criticise the fact that the industry will save on expenses and that Member States' income may be reduced - an interesting argument which, however, quite frankly I think comes most of the time from those with a restricted view of the economy and fiscal policy. Firstly, in a competitive sector like that of financial services and in a system where you have safeguards against agreements between companies, any expenses not incurred by companies should either be passed on as benefits to the consumer or else be used to compensate for other existent expenses. Secondly, as Europe we should understand once and for all that we are not competing alone on the market; we have to ensure that the systems used by other Member States - and by the European Union as a whole - are attractive to serious companies wishing to enter the market and establish themselves as true European operators. Facilitating the systems is a way of offering an incentive in this sector, generating market potential and creating work, productive work.
Through this report we are helping to create a European market by removing obstacles. We are doing what has been talked about for many years; we are fulfilling one of the aims of the action plan in this sector. We are proving that we can be proactive, solve problems and act on new ideas. Perhaps we may disagree on technicalities, perhaps some may say that we can use one system and not another, but I believe that this Parliament must give an indication that this is our ultimate aim. Obviously there are certain points on which we are not all agreed, myself included: for example, broadening the definitions. I believe that it would have been better if the committee had followed my recommendations on this, which were always either to keep to the Commission's text, or else to further restrict the definitions. In spite of this, we should also note that the committee chose to proceed strategically, and so this report was approved with just one vote against. I await the reactions of my friends as well as those of the Commission.
Member of the Commission. - Madam President, I would like to start by thanking Mr Muscat for his work and the support he has given to the Commission's proposal, and I wish him success in his future role in Malta.
The Commission proposal addresses three major issues.
First, the existing provisions are increasingly subject to legal challenge in the European Court of Justice. Something needs to be done about this.
Second, we need more consistent application of the VAT rules on financial services and a more level playing field in the internal market.
Third, we must take steps to improve competitiveness in the sector.
There are concerns that the financial services and insurance industries in the European Union are less efficient than they should be, and consequently EU industry faces higher costs for financial services and insurance than its competitors in third countries. This is not solely a result of the EU's VAT rules, but they do have a role in contributing to this situation. I have to add that VAT exemption is not applied uniformly in the different Member States, and this causes competitive distortions within the European Union. For example, the possibility of recovering tax paid to specialist third-party service providers (outsourcers) varies depending on national interpretation of the VAT rules.
For the Commission, improving the competitiveness of our European financial and insurance companies was therefore a factor in making this proposal, but the reality is that this must be balanced against the need of the Member States to ensure stable tax revenues.
The proposal has three elements.
First, to increase legal certainty for all concerned, we propose a modernised definition of the exempt services.
Second, to avoid their business customers incurring non-deductible 'hidden' VAT, the proposal aims at allowing all banking and insurance companies to opt to tax their services.
Third, the proposal contains an exemption from VAT on cost-sharing arrangements, including those which operate across borders.
These proposals could result in some limited initial VAT revenue reductions for the Member States, but these can be justified if, as we expect, the proposed changes lead to increased competitiveness.
I therefore welcome the observation in the report on the problems of non-recoverable VAT and its relevance to business efficiency and the Lisbon strategy. I also welcome the fact that the rapporteur recognises that change may result in a reduction in VAT receipts.
For consumers, I agree that the implications are not always clear-cut, but I believe they will eventually benefit from cost savings achieved within the industry.
I also welcome the positive remarks about the scope of the proposal and the creation of legal certainty. The new definitions proposed by the Commission are necessary to bring the legislation into line with economic realities.
I sympathise with the remarks on the need for prudence and the absence of reliable figures which would allow the impact of change to be fully assessed. This latter lacuna should not, however, be laid at the feet of the Commission, as neither the industries concerned nor national administrations could provide the necessary data.
Like Mr Muscat, I am conscious that cross-border consolidation in the finance industry increasingly results in VAT revenue accruing to the Member State where the service is created, rather than where the consumer of the service is established. A move from exemption to taxation, which would result from greater access to the option to tax as we have advocated in this proposal, would correct this trend. I think this is the best way to deal with the concerns which have been raised.
Finally, I would like to inform you that detailed discussions on this proposal already started in the Council under the recent Slovenian presidency. The current French Presidency is also committed to making progress on this particular dossier, and I therefore welcome the positive engagement by Parliament which can further encourage the Council to make progress.
The report we have before us is particularly significant, especially when you consider that in the last few years the economy has taken a slightly different turn from previous years. Without doubt, this report aims to better reflect the current situation. That is why it is important to guarantee the legal basis so that the companies concerned can operate with less bureaucracy, as the rapporteur rightly pointed out. This could be achieved by removing the anomalies in the current law regulating VAT on financial services: a law that has been in existence for the last 30 years and is not clear enough. This is a report that will help as much as possible to provide more stability and we must ensure as far as possible that all the countries are harmonised with regard to the applicable rates to reduce discrepancies as much as possible. It has long been felt that there is a need for change in this situation and I think that the rapporteur was right when, while keeping in mind the need to simplify the work for financial companies, he also took care - and I think that this is the most important thing - to ensure that consumers would benefit from this proposed change.
Today is the last day that my fellow Member from Malta will attend this plenary and I think that I too would like to wish him well in his work in the coming years. He has gained four years' experience in this Parliament, and this experience has, I believe, transformed his character from that of a politician who did not really believe in the European Union and the benefits it could offer Malta, to that of one who, through this report, has shown us that he truly believes that from here we can change politics not only in our own country, but also in the European Union. Today we have a transformation that I would like him to take back to my country because I believe that the experience he has gained in this Parliament can be taken back to my country and the way we do politics there can resemble the way we work in this Parliament: that is, the national interest remains important, as well as the interest of the European Union, because today we form part of it. I wish him well in his work, I wish him success in his role as leader of the opposition; I am not going to say I hope he has a long career as leader of the opposition, because I do not think that that is the way I should talk about my fellow Member, but I hope that he transfers the positive experience gained in this Parliament firstly to his party, and lastly to our country.
on behalf of the PSE Group. - (ES) Since 1977, most financial services, including insurance and investment fund management, have been exempt from VAT. During this period, two problems have essentially arisen: the definition of the scope of the exemption and the impossibility of recovering VAT incurred in order to provide exempt services, giving rise to the phenomenon of hidden VAT. Globalisation, European financial integration and market consolidation, which have affected the organisation and outsourcing of operations to provide these services, have further added to the complexities.
This report is the first attempt to update a directive which, in addition to being confusing - leading to the intervention of the European Court of Justice - is obsolete.
I want to congratulate the rapporteur, Mr Muscat, on his excellent work in producing this report on an issue which is so economically sensitive and technically complex.
His proposals to modernise the definition of insurance and financial services, which are consistent with the Financial Services Action Plan and strict in dealing with exemptions, have merited general acceptance. His commitment to preventing price rises for consumers as a result of taxable persons opting for taxation has also merited general approval.
The final result, encompassing a specific exemption from VAT for businesses involved in cost-sharing arrangements, will increase certainty for the industry and budgetary security for the Member States, prevent competition distortions and improve competitiveness for the banks and insurers without increasing the costs to consumers.
I want to express my satisfaction at the incorporation of two aspects contained in these amendments: the reference to co-insurance, and the improved definition of the concept of intermediation, which is restricted to professional activities rendered as a distinct, direct or indirect act of mediation and which specifies that intermediaries are not counterparties to the subsequent transactions.
I want to end by wishing Mr Muscat great success. I am confident that he will soon be enjoying this success through his participation in European integration from the Council.
on behalf of the UEN Group. - (PL) Madam President, as I take the floor on behalf of the UEN Group in this debate, I should like to draw attention to three issues.
Firstly, the European Commission's proposals on changes to VAT on financial and insurance services improve legal certainty not only for economic entities providing these services but also for fiscal entities in the individual Member States.
Secondly, the solution whereby Member States commit to allowing taxpayers a choice regarding VAT on financial and insurance services, whilst leaving many detailed arrangements applicable in this area within the scope of activity of the Member States is a good one. It amounts to decentralisation of taxation powers, and therefore to implementation of the principle of subsidiarity.
Thirdly, ongoing analysis of the financial implications of the proposed changes is essential. In particular this should concern reduced VAT income in the individual Member States as a result of increased levels of deductions by entrepreneurs. The impact of these changes on the cost of financial and insurance services for consumers should also be studied.
(MT) The rapporteur has upheld the framework of the Commission's proposal so that we are confronted with the problem that we have been putting off for more than 30 years. This sector is very important for an ever increasing number of countries, Malta being one of them. In the report we find regulations that facilitate the work of important companies and facilitate a true free market without borders, leading to the creation of wealth, jobs and more choice. One of the priorities is that there are provisions in place so that consumers are protected and by no means have to pay additional taxes. In fact, consumers should benefit from every reduction in expenses and from every increase in the efficiency of the system. If the need arises, further analysis should be made in the future to include other safeguards.
Mr Muscat's report leads to more clarity and legal certainty in the area of taxation in the field of financial services, especially at this time, when we are going through a major change in the financial markets.
To conclude, I would like to thank Mr Muscat, who has made a significant contribution in the last four and a half years.
Member of the Commission. - Madam President, I would like to thank you for your comments and the valuable views you expressed during the debate. As I said in my opening remarks, obtaining a positive opinion by Parliament on the Commission's proposal for VAT on insurance and financial services is very important. We have taken note of the concerns raised in the report, in particular the lack of neutrality in recovery rates, the difficulties with statistics and the risk of diversion of tax revenue from non-recoverable VAT on inputs.
While the Commission could in principle look favourably at some of the amendments, such as those on derivatives, we will not formally amend our proposal. We will, however, endeavour to take the amendments suggested by Parliament into consideration as much as possible during deliberations in the Council.
I would like to express my gratitude for your positive endorsement of our proposal. A positive opinion from Parliament will be a good signal serving to raise awareness on the part of the Member States of the need to act.
Firstly, I would like to thank Parliament's services and the Commission for all their help with this delicate dossier, even though the work is not yet finished. However, as far as Parliament is concerned, like the Commissioner, I too hope that our message is very clear. I think what we have to agree upon - and there is unanimous agreement in Parliament - is that, yes, let us make regulations, let us make changes where changes are needed, let us ensure that the system is simpler, but let us be careful that the consumer does not have to foot the entire bill. I believe that this is the main message for the Commission, and even for the Council, from us in Parliament. I wish everyone well with the work until this dossier is finished. I thank my friends for their good wishes, especially Mr Casa, who has given us a fine acknowledgement of a new political season for the Labour Party and for the nation.
Thank you very much, Mr Muscat. I too hope that your work will be successful and will make Europe stronger and stronger.
The debate is closed.
The vote will take place on Thursday, 25 September 2008.
Written statements (Rule 142)
in writing. - Firstly, I would like to congratulate the rapporteur, Joseph Muscat, for a very comprehensive report allowing for the issue of a common system of value added tax for insurance and financial services from the point of view of businesses, tax administrations and consumers. I believe that, although it is difficult - on the basis of this proposal - to clearly assess what will be the extent of the benefits for consumers in terms of efficiency and cost reduction, we ought to ensure the legal certainty and consistency of insurance and financial service- VAT related issues. As a matter of fact, it is essential to ensure that VAT facilitation measures for businesses would not be implemented at the cost of the consumers. However, it is worth noticing, together with the rapporteur, that much flexibility is given to the Member States, which might lead to uneven implementation results from one Member State to the other. Finally, I would like to put the emphasis on the fact that, given the uncertainty of the impact of the implementation of these measures, we ought to remain vigilant and therefore support the obligation for the Commission to report on the issue to both the Council and Parliament.


Action taken on Parliament's resolutions: see Minutes


21. Mutual assistance and cooperation between customs administrations (vote)
- Report: Toma


Appointments to committees (proposal by the Conference of Presidents): see Minutes


An international treaty prohibiting cluster bombs (debate)
The next item is the debate on:
the oral question to the Council on an international treaty to ban cluster munitions; follow-up to the Oslo Declaration, by Josep Borrell Fontelles, on behalf of the Committee on Development - B6-0319/2007);
the oral question to the Commission on an international treaty to ban cluster munitions - follow-up to the Oslo Declaration, by Josep Borrell Fontelles, on behalf of the Committee on Development - B6-0320/2007).
author. - (ES) Madam President, Commissioner, Minister, the calls for a ban on cluster bombs are getting louder and louder. Use of these bombs in summer 2006 in the Lebanon war showed the extent to which they can cause a human disaster.
They are weapons that are a danger to both civilians and military personnel, but in practice 90% of their victims are civilians. In addition, 10% of these deadly bombs do not explode: they remain in the ground and have the same effect as landmines.
Therefore, clearing the land contaminated with these munitions is dangerous, both for the populations and for the international peacekeeping forces. These bombs are not only used for war; they act as a long-term obstacle to transport and agriculture, and they create trade barriers and obstacles to humanitarian aid.
They are thus one of the main problems affecting the development of poor countries: it is the poorest countries that are most affected by them, and in those countries the main victims are the poorest and least-educated sections of the population.
We can no longer say that bombing one's opponents from a height of 10 000 metres and showering them with bombs that remain in the ground is an efficient way of maintaining peace or taking military action.
The deployment of peacekeeping forces and humanitarian aid are today essential to stabilise and rebuild the areas affected by conflict and these bombs now lack any justification, including from a military perspective.
Today we are going to talk to the Commission and to the Council precisely about the initiatives that have come about as a result of the widespread change of attitude among the international community towards cluster bombs.
The European Parliament has repeatedly adopted a very clear position: we want to see international regulation of a global nature prohibiting the use, production, transfer, financing and stockpiling of cluster bombs. Pending this, the EU Member States should implement unilateral actions to prohibit the use and transfer of these bombs, as many states have already done and others are preparing to do.
Commissioner, Minister, the European Parliament wants to thank the Presidency of the Council, the Commission and the Member States for their efforts to negotiate a new protocol to the United Nations Convention on the Use of Certain Conventional Weapons, which deals with all the humanitarian problems associated with the use of cluster bombs. Unfortunately, however, we must recognise that very little progress has been made to date.
We therefore need a solid Oslo Process on the basis of which the states, the NGOs, the Red Cross and the international organisations can draw up and fulfil an ambitious agenda. For the moment, Oslo has been backed by 80 countries, including many developing countries, but it is far from clear yet whether this process will eventually result in a complete ban on cluster bombs.
What is clear is that we need an integrated, comprehensive approach that has a humanitarian slant and that focuses not just on disarmament, but above all on the protection of civilians, helping them to cope with the consequences of war while ensuring that the existing stockpiles of these bombs are destroyed and that the contaminated areas are cleared.
With a number of important events coming up, such as the Vienna meeting in December and the Brussels meeting the following week, as well as 5 November, the Global Day of Action to Ban Cluster Bombs, when there will be many events around the world, what are we going to do?
In this context I would like to ask the Commission and Council representatives what we are going to do, what our position will be? What is the European Union's position on the state of the discussions in the framework of the Convention on the Use of Certain Conventional Weapons?
Are we going to have a common position of the Council in this matter? What initiatives are we developing to encourage the Member States to adopt national measures aimed at prohibiting cluster bombs? What are we doing to support third countries in terms of clearing the areas affected by these munitions, providing education on the risks and destroying the stockpiles of munitions already prohibited?
Finally, is the Commission going to consider organising an international conference on the European Union's role in tackling the socio-economic, humanitarian and development consequences following conflicts in which these weapons have been used?
President-in-Office of the Council. - (PT) Madam President, Commissioner, ladies and gentlemen, Mr Borrell, I should firstly like to thank you for your three questions on this specific issue of the ban on cluster bombs. I will try to briefly and as objectively as possible answer each of the three questions put to the Council.
As regards your first question, I must say that, within the framework of the Convention on Certain Conventional Weapons - to keep my speech short I will simply refer to this as the 'Convention' - the Presidency of the Council of the European Union has, as you know, voiced its concern, on behalf of the European Union, about the humanitarian impact of cluster munitions. In particular, at the Third Review Conference of States Parties to the Convention which was held in Geneva from 7 to 17 November last year, the European Union expressed the view that cluster munitions represent a particularly important element of the future work of the Convention on Certain Conventional Weapons.
The EU presented a proposal supporting the establishment of an open-ended Group of Governmental Experts with the purpose of drafting recommendations for further action in the context of the Convention. This proposal was not adopted by the Conference of States Parties. However, it was agreed to convene, as a matter of urgency, an intersessional meeting of the Group of Governmental Experts on Explosive Remnants of War, with particular focus on cluster munitions.
This meeting was held in Geneva from 19 to 22 June 2007 when the EU submitted a draft negotiating mandate for a legally binding instrument to address all aspects of the humanitarian concerns raised by cluster munitions. This instrument should be adopted by the end of 2008.
The EU Troika carried out extensive consultations with third countries to promote the EU approach. The Group of Governmental Experts decided, however, to postpone any decision on a legally binding instrument until the 2007 meeting of the High Contracting Parties to the Convention which will be held next month.
In parallel with these efforts to address the concerns relating to cluster munitions, as you know, a number of EU Member States have subscribed to the Oslo Declaration and participated in a series of meetings organised within the so-called 'Oslo Process', aimed at a total ban on cluster munitions.
EU Member States have participated in their national capacity. So far no agreement has been reached on an EU position concerning the Oslo Process. The majority of Member States perceive these two processes as complementary and consider them to be parallel efforts leading to a common goal, namely an international legally binding instrument on cluster munitions.
As regards your second question, I must say that, in relation to the forthcoming meetings in Brussels and Vienna, as already mentioned, EU Member States, including the Presidency, will participate in a national capacity if they so decide. No EU common position is planned.
Finally, as regards your third question, I can say that the recent decisions taken by Austria and Belgium on the prohibition of cluster munitions, as referred to by Mr Borrell in his question, have been taken, as you know, on a purely national basis. The Council has not taken any specific action on this issue.
Let us hope that it will express its view soon.
Member of the Commission. - Mr President, I should like to thank Mr Borrell Fontelles for putting this oral question to us. I am glad because I think this is an opportunity for us to comprehensively answer this question on something which has particularly appalling consequences. It has a highly negative impact on human beings, particularly on civilians. The question is, therefore, very dear to me because things that affect human security are always very close to my heart. I fully agree with the position expressed by our Council President, but I would like to mention a few other things also.
Over the past year I have had the opportunity to discuss it in several formal and informal fora, including in meetings organised - the first in Paris and then a later one in Alexandria - by the Institute for Peace Studies and chaired by Ms Mubarak. She took on this issue very strongly and I think she has tried to bring things forward. As in the case for antipersonnel landmines, explosive remnants of war pose great threats to the lives and safety of civilian populations and I would like to comprehensively answer the questions that Mr Borrell Fontelles has asked here.
Their effects can be both immediate and long-lasting. By scattering explosives over wide areas they can kill and injure, as we all know, large numbers of civilians, very often children. In addition, many of the bomblets or submunitions fail to implode and to explode on impact, and their lethal effects remain after conflict so furthermore cluster munitions seriously hinder international humanitarian assistance. We have seen it in the war in Lebanon.
As regards crisis management and post-conflict reconstruction programmes during and in the aftermath of conflicts over the past several years, we in the Commission have been very active in countering the problems created by landmines and also by other explosive remnants of war, including cluster ammunition.
Through the two European Commission mine action strategies covering the period 2002-2007, over EUR 300 million have been committed worldwide in projects covering activities such as demining, stockpile destruction, mine risk education, mine victim assistance, rehabilitation and social economic reintegration. Projects covering cluster munitions have also been carried out in countries which are highly affected by these weapons, such as Afghanistan, Laos and Cambodia to name a few of them.
As for the future, we will maintain our engagement through mainstreaming actions against antipersonnel landmines and explosive remnants of war in our Community external assistance strategies and programmes - so this will be everywhere.
The Commission also makes use of the humanitarian aid instrument managed by ECHO to fund humanitarian demining efforts. The most recent case of humanitarian demining support has been in Lebanon, which received significant humanitarian aid following the conflict in December 2006, which I mentioned before.
Concerning the Commission's role in the negotiation of disarmament treaties or conventions, I would like to recall that such negotiations are sometimes not in our competence. If the Community is not a party to the disarmament treaties or conventions, it can then legally only encourage partner countries to engage fully in multilateralism, in particular via participation in treaties and conventions. I think our President has said a lot on this already.
We took part in the EU troika démarches carried out in key countries such as the United States of America, Japan, Brazil, South Korea, Canada, Pakistan and Ukraine, to promote the multilateral initiatives on cluster munitions in the framework of the Convention on Certain Conventional Weapons, and in particular a negotiation on a legally binding instrument addressing humanitarian concerns about cluster munitions. The objective is to conclude negotiations by the end of next year.
At the same time, the Commission closely follows the Oslo Process and intends to participate as an observer at the meetings planned in that context in Brussels and in Vienna.
In conclusion, I would like to assure you, Mr Borrell Fontelles, and also the European Parliament, that the Commission will continue to make its best efforts to support all the multilateral initiatives that are aimed at a comprehensive and effective ban on cluster mines.
on behalf of the PPE-DE Group. - Madam President, I should like to say to the Commissioner that I am encouraged by the fact that we share the same worries and goals and I thank her for her presentation and description of the developments. I am also glad about the good cooperation between the Members of Parliament in preparing a relevant motion for a resolution.
First of all, it is a matter of urgency. It has a human and political urgency because, in spite of warning signals from all around the world, cluster bombs are still being actively used. So there are two problems we need to address.
Firstly, the use of cluster bombs has an especially inhuman aspect. Those who launch these bombs are usually not able to target them very specifically. The failure rates happen to be much higher than might be expected. The tragic result is extremely high numbers of casualties among civilians, more than 90%, as has been said.
Another problem is the multitude of unexploded cluster bombs that lie in the former conflict areas. This is a major handicap to states that have resolved to start to rebuild their economies after conflicts. Against this background I think the EU should take the lead in trying to ban any kind of production, use and sale of cluster munitions.
The first step should be to introduce an immediate moratorium on the use of these weapons. Further, our resolution insists that EU troops should under no circumstances make use of any kind of cluster ammunition until the relevant international agreements have been achieved. We ask Parliament and the Commission to urgently increase financial assistance to communities and individuals who have been affected by both exploded and unexploded cluster munitions, using to this end all available instruments.
on behalf of the PSE Group. - (PT) Mr President, I am speaking on behalf of the Socialist Group in the European Parliament. These questions exemplify the leading role played by this House in relation to conventional disarmament, controls on the transfer of munitions and the strengthening of international humanitarian law.
We fought for the extension of the Ottawa Convention to all types of mines. Well before the European Council, we argued for a global treaty on the arms trade. The vital need to convert the EU Code of Conduct on Arms Exports into a legally binding instrument has also been a constant demand of this Parliament.
These questions on cluster bombs look to the future and to what Europe must do to eliminate these weapons which make no distinction between civilians and military personnel and which destroy so many human lives. We are calling for an immediate moratorium on using, producing, stockpiling and exporting these weapons. The moratorium must in due time be converted into a legal instrument which has the effect of banning these barbaric munitions, in the long term, from arsenals and battlefields in the same way as anti-personnel mines have already started to disappear.
In addition to calling on the European Union to begin a diplomatic offensive in favour of this new instrument, we want the Member States to lead by example and eliminate the use of these weapons by their Armed Forces. Not only that, they must also permanently stop their export, production and stockpiling. Every day in the Lebanon, Chechnya, Afghanistan and dozens of other countries where the wars have already ended, people are paying the ultimate price for the criminal and immoral irresponsibility of Armed Forces which have lost any sense of the ethical and legal limits that should guide the actions of civilised people.
It is up to Europe to lead a global alliance to re-establish, reaffirm and reinforce these limits. We urgently need a common position in order to eradicate cluster bombs and other cluster munitions.
on behalf of the ALDE Group. - Madam President, civilians - many of them children - are indiscriminately killed or injured by cluster bombs. Dreams are shattered and lives are destroyed. Take the case of the Iraqi boy, Ahmed Kamel. Attracted by a shiny object, Ahmed picked up a bomblet and it exploded. He lost both of his hands and his sight. How is a 12-year-old supposed to make sense of this?
And yet the shocking fact is that cluster munitions are stockpiled in over 15 EU Member States. Horrifyingly, at least 10 EU Member States are producing these weapons: France, Spain, Greece, Italy, the Netherlands, Poland, Romania, Slovakia, Sweden and Bulgaria. It is my view that these countries, as well as those that have used them, including the UK, have blood on their hands.
Whilst I welcome moves by countries such as Belgium to establish national legislation to ban cluster munitions, all other EU Member States must follow suit. I urge the Council and the Commission to endorse the Oslo Process, as we have already called on them to do.
Diplomatic manoeuvres by the UK Government and others to suggest there are 'dumb' and 'smart' cluster munitions must be given short shrift - they all kill and maim. The word 'smart' could not be more misleading or more inappropriate.
We need an immediate moratorium on the use, investment, stockpiling, production, transfer or export of all cluster munitions by all EU Member States. All states which have used them must accept responsibility for their clearance, and the Commission must urgently increase financial assistance to the communities affected by unexploded bomblets. I urge you all to support this resolution.
on behalf of the Verts/ALE Group. - (DE) Madam President, Commissioner, ladies and gentlemen, the Oslo Process offers an historic opportunity to achieve an international agreement - not just a declaration, but an international agreement - banning cluster bombs. For two decades, there have been campaigns and international initiatives, but they have been repeatedly bogged down in the diplomatic mire of military and economic interests. Now we have an opportunity to reach an agreement in 2008.
This requires support not only from Parliament, which has a clear position here across all parliamentary groups. I was very pleased and interested to hear, Mrs Ferrero-Waldner, that the Commission also supports this position, which is most welcome. The Council now needs to follow the clear stance that has been adopted by Parliament and the Commission; that is very important. It is not just about banning the use and stockpiling of cluster bombs and the trade in these weapons; it is also about production. We should have a ban on the production of these bombs, and the European Union is still one of the main producers of these weapons. They are still being manufactured in Germany, in the United Kingdom, in France, in Spain and Belgium. Legislation has now been adopted in Belgium and Austria to ban production but I know that production has still not stopped entirely in Belgium. There are loopholes in this legislation as well.
We must press ahead with a ban on these weapons. The Member States must move forward towards a ban, and the Council must defend the clear position that has been set out here. That is the only way to ensure that, in 2008, we actually get an agreement.
on behalf of the GUE/NGL Group. - (DE) Madam President, the first time I dealt personally with this issue was during NATO's war of aggression against Yugoslavia, one of the wars which I opposed and which like many other wars was waged by Western countries.
Some 98% of the victims of cluster bombs are civilians. Between 5 and 40% of the submunitions of cluster bombs do not explode. Let me be blunt: it is mainly the major Western industrialised countries which produce and equip their armies with fragmentation bombs and deploy cluster bombs in wars. There are 34 countries which produce cluster bombs, including 13 EU Member States. Cluster bombs are a factor in wars being waged by EU countries, for example in the former Yugoslavia, Afghanistan and Iraq, so please, let us not shed any crocodile tears here!
The EU must bite the bullet. In specific terms, this means that we need the European Union to adopt a common position condemning these murderous weapons. That means an end to the production of cluster bombs, and of course no use of fragmentation bombs as occurred in the Gulf War, Yugoslavia, Afghanistan, Iraq and Lebanon. It cannot be allowed to continue.
(FR) Madam President, Mr President-in-Office, Commissioner, much has already been said on this subject and we of course deplore - the word is hardly strong enough - the use of cluster munitions, which have caused so much serious damage in a number of countries, and I wish to thank Mr Borrell for having in fact raised this disturbing issue.
However, if this ban is to be effective, and if the resolve expressed in the resolution is to succeed, we of course need to go much further than banning the use of such weapons. We also need to deal with their manufacture and sale, because we cannot have a humanitarian debate on the one hand - and it is true that these bombs that do not explode but that lie hidden in the ground in all kinds of places, thereby preventing communities and refugees from returning to their homeland, also prevent the distribution of humanitarian aid - we cannot have such a debate that seeks to highlight the humanitarian side of the problem without at the same time taking effective measures against those industries here at home that, regrettably, are still producing and selling these weapons.
I would like to conclude by saying that this resolution perhaps gives us an opportunity to appeal to the Member States too. In this respect my own country, Belgium, has passed the necessary legislation, indeed I think that it was the first to do so, and I believe that we could be inspired by the law that has been adopted in Belgium to appeal to the other 26 Member States to follow suit.
(NL) Madam President, Commissioner, Minister, President-in-Office of the Council, I would like to use my turn to speak to support both the question and the way it has been worded by Mr Borrell, as well as our joint motion for a resolution on this issue.
I am all too well aware that all the efforts being made on arms control are always very difficult and are sometimes more like a procession of Echternach, where you take two steps forward and then one step back. I think that we must intensify these efforts, because it seems to me in the last few years as if people who are working for disarmament, for arms control, to control weapons, are old-fashioned specimens from a bygone age, because now rearmament is the order of the day. I find that extremely alarming.
When you think that a head of state of the only remaining superpower in the world recently threatened a possible third world war, that strikes fear right to my heart. In this context, which is far less conducive to joint efforts, I think that it is more important than ever that both the Council and the Commission continuously underline that the Member States must act together on this, which unfortunately has not been the case up to now.
(SV) Thank you Madam President. I am also speaking on behalf of my colleague Raül Romeva. He comes from Spain, I come from Sweden, and both countries produce these dreadful weapons and both countries have promised to ban them. But what is my own country doing? At the talks in Oslo, Sweden argued that we should have restricted use rather than a ban. That is a disgraceful position. No civilised country can defend these cruel weapons, and I am delighted to see the great unity that exists between the Council, the Commission and Parliament today in support of a total ban.
When these weapons strike, they constitute a weapon against innocent children. It is an effective weapon against human rights and economic development. We must therefore be highly effective in our fight to ban them. This is the beginning - let us complete the process as soon as possible, as another child is dying every minute. Thank you.
(ES) Mr President, I would like to echo those who have already talked about banning the production, export and stockpiling of these weapons - cluster bombs - which are so harmful to civilians, and to express my support for the Oslo Process, despite the fact that, as the previous speaker said, my country manufactures, stockpiles and exports these types of weapons.
I must make one point, however: on 21 September - i.e. just a month ago - the government, in the shape of the party that supports it, the Socialist Party, tabled in parliament an amendment to the Law on control of external trade in defence and dual-use material aimed partly at restricting - and, where appropriate, prohibiting - cluster bombs that are particularly dangerous for civilians.
In other words, the trend is changing in my country: the manufacture, stockpiling and export of these weapons were approved by previous governments. This government is fully committed to the Oslo Process and wants to see the gradual elimination and, eventually, complete prohibition of their manufacture, stockpiling and export. This was the important point that I wanted to make.
President-in-Office of the Council. - (PT) Mr President, Commissioner, ladies and gentlemen, I should like to raise two vital points, but I will be very brief as I know we are overrunning. The first is that this debate has given me a very clear idea and conviction that this issue will be followed very closely by the European Parliament and is something that concerns many Members. I will therefore of course duly take this into account.
Secondly, I would point out that the European Union is also playing a leading role in this issue, possibly not with the energy that many Members would like, and certainly with some difficulty, but, despite everything, with a certain optimism.
We have already voiced in the appropriate place, in other words in the Convention on Certain Conventional Weapons, the European Union's concern about the humanitarian consequences of this type of weapon. We have also already proposed the negotiation of a legally binding instrument to be adopted by the end of 2008 at the latest, although possibly not with the ambition that many of you desire. However, the fact is that we are here to take decisive steps. This is a process that I hope will amass ever more political will, enthusiasm and effort so that we can ultimately achieve the proposed goals.
Member of the Commission. - Mr President, I would just like to add one thing to what I said before. I can, of course, only speak on areas within the Commission's competence, and you know that this area is a particular competence of the Member States. However, I can speak on the financial assistance to those affected.
I can reconfirm what I said before, which is that we have already done our best to alleviate the problems caused by explosive remnants of war, including cluster munitions, in particular through our mine action strategies and the related horizontal budget line, which accounted for about one third of the funds spent in this domain.
I can assure you that actions against mines and explosive remnants of war will continue to be carried out through the new geographical instruments, and are even being mainstreamed now - and this is new - into our external assistance strategies and programmes.
Some actions can also be funded under the new instrument for stability, so we now have more instruments on hand to address this major challenge, and will take clearly into account the strong position expressed by Parliament in using these as effectively as possible, where necessary, because I totally share the objective that you have expressed.
I have received a motion for a resolution tabled in accordance with Rule 108(5) of the Rules of Procedure.
The debate is closed.
The vote will take place tomorrow.
(The sitting was suspended for a few moments before Question Time)