Select Committee on European Scrutiny Twelfth Report




COM(00) 822

Annual Report on the Cohesion Fund (1999).
Legal base:
Document originated: 11 January 2001
Forwarded to the Council: 12 January 2001
Deposited in Parliament: 7 February 2001
Department: Trade and Industry
Basis of consideration: EM of 13 February 2001
Previous Committee Report: None
To be discussed in Council: No date known
Committee's assessment: Politically important
Committee's decision: Cleared


5.1  The Cohesion Fund provided 15.15 billion ecu (at 1992 prices) over the period 1993-1999 to support large-scale transport and environment projects in Member States with GNP of less than 90% of the Community average.[9] The qualifying Member States were Greece, Ireland, Portugal and Spain. The Cohesion Fund has helped these countries meet the requirements of Community Environmental Directives and develop transport projects of common European interest, the latter forming part of, or connecting with, Trans-European Networks (TENs).

5.2  This annual report covers the final year of operations of the Fund under the 1993-99 programme. We considered the Cohesion Fund regulations for 2000 to 2006, which are now in force, on 6 May 1998 and 10 March 1999[10] and, as part of the reform of structural funds, they were debated on 23 March 1999 in European Standing Committee C. Under the regulations, Member States will in future only be able to draw assistance from the Cohesion Fund if they not only qualify by having a GNP per capita of less than 90% of the EU average but also avoid excessive deficits as set out in Article 104 of the Treaty.

5.3  In the period 2000-06, as in 1993-99, the Commission intends to allocate about half of the Cohesion Fund budget to transport projects. The Cohesion Fund also supports projects relating to two Directives, the Environmental Impact Assessment ("EIA") Directive (85/337/EEC) and the "Habitats" Directive (92/43/EEC), which are designed to increase environmental protection. The former requires an assessment to be made of the effects of certain public and private projects on the environment, whereas the latter is concerned with the conservation of natural habitats and of wild fauna and flora.

The document

5.4  The document sets out details on the allocation of funding from the Cohesion Fund to the four recipient Member States for 1999. Table 1 shows the main areas of spending for 1999 and table 2 shows the figures for the 1993-99 programming period as a whole.

The Government's view

5.5  In his Explanatory Memorandum of 13 February 2001, the Minister for Trade (the Rt. Hon. Richard Caborn) says:

"Compared with 1998, appropriations for commitments increased by 9 per cent in 1999 while those for payments fell by 30 per cent. This was because the money allocated for 1993­99 had to be committed by the end of 1999. Over the six year period of the Fund, commitments for each country have been in the middle of allocation target ranges in each case, as planned, with Greece receiving 18 per cent, Spain 55 per cent, Ireland 9 per cent and Portugal 18 per cent. The balance of transport and environment expenditure has almost reached the target of a 50/50 split with 48.7% committed to transport projects and 51.3% to environmental projects between 1993-99".


5.6  During the debate in the European Standing Committee in 1999 on the reform of Structural Funds, the Parliamentary Under­Secretary of State for Trade and Industry (Dr Kim Howells) commented on whether countries that had adopted the euro should continue to benefit from the Cohesion Fund:

"The UK view on the Cohesion Fund has been that it is difficult to justify countries that have joined European Monetary Union continuing to receive money. The fund's original purpose was to assist Member States in which gross national product was below 90 per cent of the EU average to prepare for EMU. If they meet at least part of the criteria, the case for continuation is lessened. If funding is to continue, there should be a strategy for phasing it out for recipients that are likely to meet the second criterion — 90 per cent of average EU GNP during the next programming period."

5.7  A mid-term review will take place by the end of 2003 and, on present trends, is likely to show that Ireland is no longer eligible since its rapidly rising GNP per capita exceeds the GNP threshold. However, Ireland will still continue to receive some project funding from the Cohesion Fund for a number of years.

5.8  Greece's eligibility will also be questioned if, as has happened in the past, it is identified as having an excessive government deficit. The annual report describes the procedure that has allowed Greece to continue receiving funding from the Cohesion Fund:

"Greece has been considered by the Council to be a country whose deficit has been excessive since 1994, within the meaning of Article 104(6) of the Union Treaty. Under paragraph 7 of that Article the Council has since then made annual recommendations to Greece with a view to putting an end to this situation. In 1998, the general government deficit fell to 2.5% of GDP, marginally above the Convergence Programme target. The general government debt ratio reached a peak of 112.3% of GDP in 1996 but declined thereafter by 6.0 percentage points to 106.3% of GDP in 1998.[11] On 17 December 1999 the Council abrogated its decision that an excessive deficit existed in Greece.[12]

"In 1999, the budgetary position of Greece turned out to be better than projected in the Convergence Programme. The general government deficit was 1.6% of GDP as against the 2.1% set in the Programme. The debt/GDP ratio also fell further, to 104.4%.

"In December 1999, Greece submitted the first update of the Convergence Programme covering 1999/2002. This was assessed by the Council on 31 January 2000.[13]

"Accordingly, Article 6 of the Cohesion Fund Regulation ceased to apply to Greece and so the Commission did not produce an assessment of compliance with conditionality by Greece in autumn 1999."


5.9  In his Explanatory Memorandum of 13 February 2001, the Minister comments on the near-absence of any reports of fraud:

"The continuing near-absence of recipient Member States reporting cases of fraud remains an area of possible concern. However, since the period to which the report relates, the Commission has substantially stepped up its efforts to combat fraud and is re-organising the anti-fraud unit."

5.10  As regards irregularities and suspension of assistance, the annual report states:

"Under Article 12 of Council Regulation (EC) No 1164/94, the Commission has adopted Regulation (EC) No 1831/94 concerning irregularities and the recovery of sums wrongly paid in connection with the financing of the Cohesion Fund and the organisation of an information system in this field.

"Article 3 of the Commission Regulation requires the beneficiary Member States to notify the Commission of any irregularities which have been the subject of preliminary administrative or judicial investigations.

"Since the entry into force of Regulations (EC) Nos 1831/94 and 1681/94 (which applied to the cohesion financial instrument), the Commission has been notified of five cases, three of them during 1999. One case notified by the Greek authorities concerned non­compliance with the rules on public procurement and the other two, notified by the Spanish and Irish authorities, concerned ineligible expenditure.

"The anti­fraud unit carried out no investigations concerning the Cohesion Fund.

"Furthermore, budget heading B2­301, which had Î300,000 for measures to combat fraud against the Cohesion Fund, was not used because the authorities concerned did not seek funding and because of the reorganisation of the anti­fraud unit."


5.11  The annual report also comments on the ex-post evaluation programme:

"The ex-post evaluation programme was launched for three years starting in mid 1998. A total of 120 projects will be evaluated over this period, 60 in each of the two fields of Cohesion Fund assistance. So far, 71 projects have been evaluated, 40 in the transport sector and 31 in the environmental field."


5.12  The UK's share of financing the Cohesion Fund is approximately 18% before abatement is taken into account and 6% after. The UK therefore has an obvious interest in ensuring the highest level of effectiveness of the Cohesion Fund. Like the Government, we find it difficult to justify countries that have adopted the euro being eligible for funding from the Cohesion Fund. The mid-term review will be an opportunity to assess the case for continuing to fund the current recipients. We also note that Ireland could still receive large amounts of funding for existing projects for several years, even if, as seems likely, its Gross National Product per capita has exceeded the qualifying threshold.

5.13  We call upon the Government to ensure that the eligibility criteria are applied strictly, especially when the mid-term review takes place by the end of 2003. Meanwhile, we clear the document.

Table 1

















Environmental Projects Total









Transport Infrastructure





































Traffic control systems


















Transport Infrastructure Total









Total support










Table 2





Total 1993-99

Total 1993-99

Total 1993-99

Total 1993-99









Environmental Projects Total









Transport Infrastructure





































Traffic control systems


















Transport Infrastructure Total









Total support













COM(01) 28

The Commission's Work Programme for 2001.
Legal base:
Document originated: 31 January 2001
Forwarded to the Council: 1 February 2001
Deposited in Parliament: 23 February 2001
Department: Foreign and Commonwealth Office
Basis of consideration: EM of 8 March 2001
Previous Committee Report: None
To be discussed in Council: No date set
Committee's assessment: Politically important
Committee's decision: Cleared


6.1  The Commission's Work Programme for 2001 sets out in general terms the legislative and policy priorities of the Commission in the coming year. As in the Work Programme for 2000,[14] it takes up the four themes identified in its Communication on strategic objectives between 2000 and 2005[15] and indicates that it will pursue the following priority objectives, namely:

"—  Promoting new forms of governance;

"—  Stabilising our continent and strengthening Europe's voice on the world stage;

"—  towards a new economic and social agenda;

"—  a better quality of life for all."

The document

6.2  The Work Programme describes work which is proposed in relation to each of the above themes, as is summarised below.

1. Promoting new forms of governance

6.3  The Commission considers that if Europe is to consolidate its efforts to achieve closer integration, it will need institutions which are responsible, transparent, efficient and open to new forms of democratic governance. It observes that harnessing public support is the key to successful European integration, although it recognises that "the feeling of belonging to the Union is far from equally shared".

6.4  The Commission will bring forward in 2001 a White Paper on Governance to bring together various proposals for ensuring that the institutions of the Union "function more clearly, more responsibly and in a more decentralised way". The Commission remarks that certain elements of the White Paper could help to contribute to the wide debate launched by the Nice European Council prior to the next revision of the Treaties in 2004.

6.5  The Commission will also pursue the process of administrative reform of the Commission itself. This began in 2000, and the Commission indicates that this must now enter a "decisive phase". In addition to a proposal for amending the Staff Regulations of EU officials, further measures relating to training, middle management and performance evaluation will be introduced in 2001.

6.6  In mid-2001, the Commission will propose a Communication for a new framework for the Union's communication and information policy seeking to establish a comprehensive and coherent approach by the EU institutions and "promoting a partnership with civil society and with national, regional and local authorities". The Commission also refers to work already under way to consolidate Community law, and to the opening to the public in mid-2001 of a single portal for gaining electronic access to legislative and other legal texts.

2. Stabilising our continent and strengthening Europe's voice on the world stage

6.7  The Commission indicates that it is resolved to support the strategy for the accession of new Member States, to consolidate relations with Europe's neighbours, to play an active part in crisis management and conflict prevention and to work more effectively to combat global poverty.

6.8  Negotiations with the applicant countries will enter a new phase in 2001, when the most complex matters, such as the transition periods, will be dealt with. The Commission indicates that priority will be given to establishing a final common position for the Community on 18 additional chapters presently under negotiation, so that they can provisionally be brought to a close. The Commission will also submit regular reports on the steps taken by individual applicant countries to implement Community provisions.

6.9  The Commission will pursue its reform of external aid by reforming its external service and by proposing that discussions with Member States focus more on overall strategies and less on individual projects, with a view to implementing the concepts of complementarity, coordination and coherence.

6.10  As far as policy towards neighbouring countries is concerned, the Commission will pursue the stabilisation and association strategy with the Balkans in the light of decisions adopted at the Zagreb summit. Relations with Russia and Ukraine are to be cultivated within the framework of existing agreements, paying particular attention to nuclear safety and the case of Kaliningrad. The Commission also hopes to speed up the relaunch of the Barcelona (or Euro-Mediterranean) process.

6.11  With regard to the Common Foreign and Security Policy (CFSP) and the European Security and Defence Policy (ESDP), the Commission is shortly to submit its proposals on crisis management and conflict prevention.

6.12  On external trade, the Commission favours a comprehensive Round and will reinforce efforts to build strategic alliances with WTO partners, particularly the developing countries. The Commission will work to finalise the arrangements for China's accession to the WTO and will take steps to ensure that trade disputes, mainly with the United States, are settled in a way which is compatible with WTO rules.

6.13  The Commission intends to put action against poverty "at the heart of its development policy". It will take measure to speed up aid and make it more efficient.

3. Towards a new economic and social agenda

6.14  The Commission recalls the new strategic objective of the Union, agreed at the Lisbon European Council, namely "to become the world's most competitive and dynamic knowledge-based economy capable of sustained economic growth with more jobs of better quality and greater social cohesion". In the economic field, the Commission will actively help to strengthen economic coordination between the Member States, which it describes as one of the cornerstones of economic and monetary union. The Commission also draws attention to the need to finalise arrangements for the introduction of euro notes and coins on 1 January 2002.

6.15  On employment and the social agenda, the Commission will bring forward employment guidelines for 2002, as well as legislative proposals on industrial relations and health and safety in the workplace.

6.16  On the internal market, the Commission will continue to introduce structural reforms to strengthen the competitiveness of European markets and to implement the strategy for the internal market in services, with completion of the internal market in financial services a priority. On taxation, the Commission will introduce a communication on a new fiscal strategy and will propose a recasting of the Sixth VAT Directive.

6.17  On information and the knowledge-based society, the Commission will take forward implementation of the e-Europe 2002 Action Plan within the Union and with the applicant countries. In the energy sector, the Commission will bring forward proposals to speed up the completion and deepening of the internal market in electricity and gas.

6.18  The Commission describes 2001 as being a challenging year for the Common Agricultural Policy at the international level, with negotiations in the context of enlargement as well as discussions within the WTO. The Commission also describes 2001 as being marked by new efforts to integrate the Common Agricultural Policy and Community policies on food safety and sustainable development. The Commission will propose measures in favour of biodiversity, genetic resources and the protection of forests. Fisheries policy is to be the subject of a comprehensive review, beginning in 2001 with the publication of a Green Paper.

4. A better quality of life for all

6.19  Under this heading, the Commission refers to future work in relation to the environment, the area of freedom security and justice, food safety, consumer protection, public health and transport. Action on the environment includes development of a Sixth Environmental Action programme and the presentation of a sustainable development strategy to the Gothenburg European Council.

6.20  On the area of freedom security and justice, the Commission indicates it will pay special attention to the approximation of legislation and national practice on asylum and immigration, as well as judicial cooperation. In relation to the protection of the Community's financial interests, the Commission proposes to "revive the debate" on its proposal to create a European Public Prosecutor.

6.21  On food safety, the Commission indicates it will concentrate on getting the European Food Safety Authority "up and running", as well as proposals to enhance the rules on the traceability and labelling of foods containing genetically modified organisms, to improve the evaluation of risks related to pesticides and to increase protection from the risks associated with BSE and contaminants in foodstuffs.

6.22  On transport, the Commission will take new initiatives aimed at creating a "single sky" and will issue a White Paper on future developments in the common transport policy. In all these areas, the Commission indicates it will strive to consolidate the rights of consumers and improve their safety, particularly in road, air and sea transport. The Commission will also promote the Galileo (satellite navigation) project.

The Government's views

6.23  In his detailed Explanatory Memorandum of 8 March 2001, the Minister of State at the Foreign and Commonwealth Office (Mr Keith Vaz) comments on the Commission's work programme in respect of each of the identified priority objectives.

promoting new forms of governance

6.24  The Minister comments as follows:

"The Government supports the governance exercise and welcomes the Commission's wide consultation on this issue. The Commission has an opportunity to improve the quality of service it provides; and we strongly encourage a focus on quick, practical improvements, most of which should not require Treaty change and can be achieved relatively easily. Priority areas for action should include communication and consultation, better regulation, the use of scientific advice, joined-up policy making and a better use of resources.

"The Government supports the administrative reform process now underway in the European Commission to make it work more efficiently, improve the way it uses taxpayers' money and bring it into line with the best of public sector practice. We welcome the latest package of consultation documents on personnel management reform. We will need to look at the financial details carefully. We regard the priorities as being the return of the staff pension scheme to actuarial balance by 2003, more focus on pay and less on allowances, a need for more joined-up working in the Commission at all levels, a fundamental overhaul of recruitment policy and methods, and more promotion on merit. It remains important that the overall deadline for implementation of the reforms by the second half of 2002 is met. We look forward to regular updates from the Commission.

"The UK government has been one of the strongest advocates of improved financial management. To this end, we welcome the Commission's commitment to pursue measures necessary for a recasting of the Financial Regulation, a thorough reform of its financial management systems and measures designed to ensure the effectiveness and independence of the European Anti-Fraud Office.

"The Government recognises the need for a review of the framework for the Union's communication and information policy. It supports improved openness and a better use of IT to make the EU's institutions more accessible. It welcomes the opening to the public in mid-2001 of a single portal for accessing legislative and legal texts; and notes plans for the publication of a Commission Communication on an 'EU Information Strategy'".

stabilising our continent and strengthening Europe's voice on the world stage

6.25  The Minister reviews this part of the programme as follows:

"The Government welcomes the Commission's commitment to advance negotiations with candidate countries in line with the 'roadmap' endorsed by the Nice European Council. In line with this 'roadmap', the Government is encouraging the Commission to ensure that difficult issues are tackled, wherever possible, as they arise. This will be important in preventing the final stage of negotiations from becoming overburdened. The Government endorses the Commission's intention to focus not just on the process of legal harmonisation but also on candidates' ability to implement Community provisions. It supports Commission aims to use pre-accession funding instruments to assist candidates in their preparations and will continue to ensure that UK bilateral assistance complements Commission programmes. The Government agrees the importance of informing public opinion about the benefits of enlargement.

"The Government welcomes the Commission's commitment to reform external aid and the external service. It welcomes the commitment to ensure that EC external aid is credible, effective and visible. The Government urges the Commission to look at how to make its organisation, as well as financial disbursement, more flexible. The Government sees the reforms of the external service as a first step in this direction.

"On neighbouring countries, the Government welcomes the Commission's determination to pursue the Stabilisation and Association process, which is playing a vital role in building reconciliation and reconstruction in the Balkans. We welcome the Commission's intention to strengthen its relations with Russia and the Ukraine within the existing framework of the partnership and co-operation agreements. We agree that nuclear safety should remain a priority and look forward to a dialogue with Russia on Kaliningrad, on the basis of the Commission Communication.

"The Government welcomes the commitment by the Commission to relaunch the Barcelona (sometimes called Euro-Mediterranean) Process on the basis of the guidelines put forward in 2000 and the conclusions of the Foreign Ministers Conference in Marseilles last year. The Government encourages the Commission to work towards EC agricultural liberalisation for the Mediterranean countries as a further step towards the aim of regional free trade by 2010.

"We expect the Commission to bring forward proposals for the better use of existing resources and mechanisms available to it in order to use them in a more coherent fashion to support the objectives of the EU's common foreign and security policy, including its international crisis management activity.

"We fully support the Commission's stance on the launch of a comprehensive trade Round this year. The Prime Minister recently discussed trade in his meeting with President Bush. In that meeting the UK and US made the following joint statement: "we reaffirm our commitment to the multilateral trading system and strongly support the launch of a new Round of global trade negotiations this year. It is our goal to open markets both regionally and globally.

"HMG supports the EU's work for the accession of China to the WTO. China's full integration into the multilateral trading system and WTO membership on the right terms will help to reinforce that system as well as supporting her own internal reform process.

"The Commission's statement that action against poverty should be at the heart of EC development policy is welcomed by the Government. The Government urges the Commission to work to raise the proportion of EC spending going to the poorest countries. The Government welcomes the commitment to ensure that instruments of commercial policy and regional co-operation are fully mobilised in order to integrate developing countries in the global economy".

Towards a new economic and social agenda

6.26  The Minister's comments are as follows:

"The Government welcomes the emphasis placed on the Lisbon agenda and the Spring European Council in Stockholm. It agrees that the Commission's activities in the economic and social field should be guided by the outcome at Stockholm. The ten priority areas for action at Stockholm largely echo the Government's aims.

"The Government welcomes the focus on improving economic co-ordination and in particular the use of the Broad Economic Policy Guidelines to operationalise the strategic objectives agreed at Lisbon. The Government shares the Commission's aim to finalise the preparations to allow for the smooth introduction of euro notes and coins on 1 January 2002.

"On employment and the social agenda we welcome the Commission's proposals to build on the approach agreed at Lisbon. The Commission report to the Stockholm Council contains a number of welcome proposals, in particular the establishment of a Skills and Mobility Taskforce to define the skills requirements of the knowledge-based economy and to examine the practical barriers to mobility.

"The Government agrees that strengthening the internal market is a key part of the economic reform process. We welcome the strategy on services and will work to support the Commission on implementation. We agree that establishing the Community patent and completion of the internal market in financial services should be priorities. On postal services, we support a significant increase in competition in the postal services market by 2003, consistent with continuing a universal service at a uniform tariff.

"The Government recognises there is an urgent need to accelerate completion of the single market in financial services. In the Chancellor's strategy paper 'Completing a Dynamic Single European Financial Services Market' published in July 2000, he called for prioritisation of the Financial Services Action Plan so it can be completed by 2004 and of the Risk Capital Action Plan by 2003. The Government welcomes progress towards this objective.

"The UK welcomes Commission initiatives on taxation which promote efficient tax systems, counter unfair tax competition, increase transparency, and combat abuse and evasion. The Government remains firm that taxation policy should be based on the principle of fair tax competition. We welcome Commission initiatives that support that policy.

"The eEurope Action Plan 2002 contains over 60 initiatives to release the knowledge economy and achieve an inclusive information society. Responsibility for the initiatives is divided between the Commission, the Member States and the private sector. Many of the initiatives falling to the Commission came forward under their 2000 work programme and the Commission is largely on track to meet its targets. The work programme for 2001 includes tasks which will require co-ordination within the Commission and Member States. The non-legislative agenda forms an important part of eEurope, is vital for the development of e-commerce, and must be rapidly brought forward.

"We look forward to the Commission's proposals to accelerate the opening of the internal electricity and gas markets. We will be working to ensure early, complete and transparent liberalisation.

"The Government is committed to continuing reform of the CAP which gives a better deal to consumers, taxpayers, and pays due regard to the needs of the environment, public health and rural development. We therefore welcome the intention to further integrate food safety and sustainable development policies. The Government also welcomes the attention to the need to prepare for enlargement, and consider it essential to pursue CAP reform and enlargement in parallel. For enlargement to be successful in the long term, further reforms will be necessary. We therefore urge the Commission to bring forward the interim reforms envisaged under the Agenda 2000 agreement. We also support the ongoing negotiations on Agriculture as part of the WTO discussions. The Government also supports the planned comprehensive review of the Common Fisheries Policy, and urges that it take account of environmental and sustainability considerations"

A better quality of life for all

6.27  The Minister reviews the wide range of subjects covered in this part of the programme in the following terms:

"The Government welcomes the emphasis that the Commission and Swedish Presidency have placed on environmental and sustainable development issues in 2001. We support the development of a Sixth Environmental Action Programme with clear policy priorities for the next five to ten years, and strong messages both on implementation and enforcement and on the need for an evidence-based, objective-led approach to policy making. We will maintain an approach which avoids signing up to any arbitrary targets or detailed legislative commitments which are not underpinned by sound analysis. The Government is determined to ensure that climate change is highlighted as a priority and to continue the UK's leading role within the EU in tackling climate change through ratification of the Kyoto Protocol by the 2002 Johannesburg Summit.

"The Government looks forward to Commission proposals for a Sustainable Development Strategy in the run up to the Gothenburg Council. The strategy should address environmental, economic and social goals in a long-term context; encourage more integrated policy making in Europe; and help prepare the EU for the World summit for Sustainable Development (Rio Plus Ten) in 2002. The strategy should complement and add value to Member States' own sustainable development strategies and other significant EU programmes and policies, including the Sixth Environmental Action Programme and the Lisbon economic reform agenda.

"The Government welcomes the Commission's call for the European Union to step up its efforts to implement the programme adopted by the Tampere European Council, aimed at creating an area of freedom, security and justice. The Commission's proposal to pay special attention to the approximation of legislation and national practice on asylum and immigration is particularly welcome. The development of common standards and procedures throughout the Union on asylum and illegal immigration will help reduce the problems caused by 'asylum shopping' as applicants move from country to country to claim asylum. We also welcome the proposal to continue to focus on combating transnational crime.

"The Government sees no need for a European Public Prosecutor, on which the Commission proposes a revived but unnecessary debate. A previous proposal from the Commission was examined in preparation for the Nice European Council and decisively rejected. Member States chose, instead of the EPP concept, to write the intergovernmental mechanism Eurojust into the Treaty of Nice. The Government supports closer judicial co-operation within the EU to ensure that criminals cannot use the differences between Member States' legal systems to evade the law, and that British citizens can exercise their legal rights when they travel to other EU countries. We believe that the best way to achieve this is through measures such as Eurojust, increasing co-operation between national prosecutors and investigators, and through the mutual recognition of court decisions. We therefore welcome the Commission's proposal to pay particular attention also to judicial co-operation.

"The Government welcomes the importance the Commission Work Plan attaches to Food Safety and supports plans to have the European Food Authority up and running in 2002. We will work towards a European Food Authority that will help to ensure that food produced in the EU continues to be second to none in terms of both safety and quality. The Government supports EU wide solutions to food safety, including rules on traceability and labelling of foods containing GMOs. The Government also welcomes proportionate EU-wide measures to protect human and animal health from risks associated with BSE and Foot and Mouth Disease and is playing a central role in developing EU responses to these crises.

"The Government welcomes the emphasis being given to measures in the field of transport and mobility and looks forward to seeing the Commission's forthcoming White Paper on the Common Transport Policy. The Government is also pleased to see emphasis given to safety and consumer rights, the development of intelligent transport systems and environmental and energy issues in the transport field. The Government is, in principle, supportive of the Galileo project. As set out in the conclusions of the Nice European Council the Transport Council should define the arrangements for taking forward the project. Ensuring sound financial management of Galileo will be particularly important".


6.28  We thank the Minister for his informative and helpful Explanatory Memorandum which summarises the Government's views on a range of subjects which are likely to be discussed in the course of the year. We have referred to it extensively in our Report, since we believe the House will be assisted by the general overview it provides of the Government's attitude on this wide range of subjects.

6.29  We welcome the fact that the Commission has produced its Work Programme early in the year, and that the Government has commented on it so promptly.

6.30  On the substance of the Work Programme, we are largely in agreement with the views the Government has expressed, and we note that these are, in the main, supportive of the Commission. However, we endorse the Government's comments on the question of the European Public Prosecutor. We, too, see no reason to revive a debate on this proposal, which has already been rejected. We agree with the Government's preference for encouraging closer judicial co-operation between national authorities, and do not see the need for a new institution with supra-national criminal jurisdiction.

6.31  We clear the document.




Draft Council Regulation amending Regulation (EC) 1254/1999 on the common organisation of the market in beef and veal.


Draft Council Regulation amending Regulation (EC) 1251/1999 establishing a support system for producers of certain arable crops.


Legal base: Articles 36 and 37 EC; consultation; qualified majority voting
Document originated: 13 February 2001
Forwarded to the Council: 16 February 2001
Department: Agriculture, Fisheries and Food
Basis of consideration: EM of 12 March 2001 and Minister's undated letter
Previous consideration: None
To be discussed in Council: (a) following receipt of European Parliament opinion

(b) 24-25 April 2001

Committee's assessment: Politically important
Committee's decision: Cleared, but request to be kept informed


7.1  Although the Community support arrangements for beef contain a number of elements, such as public intervention, import levies and export refunds, found in most commodity regimes under the Common Agricultural Policy (CAP), they also include a number of features peculiar to this sector, notably:

the Beef Special Premium Scheme (BSPS) payable each year on up to 90 bulls and 90 steers on each holding, subject to a ceiling within each region on the number of such animals which may receive aid;

the Suckler Cow Premium (SCP) payable on cows used to breed beef cattle, provided no more than 20% of the herd concerned are heifers; and

a so-called stocking density of 2 livestock units per hectare, aimed at limiting the number of animals qualifying for these two premiums.

7.2  The current detailed arrangements, including the premium levels to apply over the period 2000-2002, were put in place as part of the Agenda 2000 reforms, with the aim of reducing the Community beef surplus through a combination of lower production and increased consumption. However, according to the Commission, the BSE crisis has created a sharp fall in both internal beef consumption and exports, and special measures are therefore needed to re-balance the market and support the price. It has, therefore set out in the current document a number of steps which it says are essential in order to limit the potential for production increases in the future, whilst allowing producers' incomes to recover to a level which will contribute to their economic sustainability.

The current document

7.3  As regards the beef sector itself, the Commission proposes:

(i)  that the BSP should be amended by:

removing the existing provision allowing Member States to raise or waive the 90 animal headage limit;

replacing the regional ceilings on claims by a system of individual producer ceilings, based on the payments to individual farmers in 1997, 1998, 1999 and 2000, plus a certain percentage (between 1% and 3%) to create a reserve;

(ii)  that the SCP should be amended by:

requiring claims for a herd to include at least 20% (but no more than 40%) heifers;

suspending for the period 2002-2004 the scope for Member States to reallocate premium quota from the national reserve to newcomers, young farmers and other priority producers; and

(iii)  that the stocking density, determining the limit on the number of animals qualifying for the two premiums, should be reduced from 2 to 1.8 livestock units per hectare.

7.4  The Commission also proposes that the intervention arrangements for beef should be amended. At present, these contain two elements - so called "public intervention" available for annual quantities of fresh or chilled meat up to 350,000 tonnes, where the quantities bought in are based on tender arrangements, and "safety net" intervention, where the quantities offered must be bought in. In order to reduce recourse to the latter, the Commission is proposing that the quantitative ceiling on public intervention should be removed.

7.5  Finally as regards the beef sector, the Commission says that, once the testing of all animals above 30 months becomes obligatory, the purchase for destruction scheme (which has been operative since 1 January 2001) will cease to apply, and be replaced by a special purchase scheme, using the financial provisions set out in Regulation (EC) 1254/1999, and intended to withdraw from the market beef from animals above 30 months which are not currently eligible for intervention. Products under this new scheme may subsequently, at the choice of the Member State, be either destroyed or kept in store (at the Member State's expense) until such time as they can be placed back on the market in an orderly manner.

7.6  In addition to these steps, the Commission has also proposed one measure affecting the support arrangements for the arable sector. It comments that the BSE crisis has demonstrated the need for a return to farming methods more in tune with the environment and the interests of consumers, and that one such approach would be to encourage organic production through the use of set-aside to produce fodder legumes such as clover grown by organic methods. It has therefore proposed an appropriate amendment to the set-aside rules contained in Regulation (EC) 1251/1999.

7.7  This last measure would not give rise to any costs, but the Commission estimates that the measures proposed for beef would increase the Community budget by 157 million euros (£100 million) in the current financial year, by 1,145 million euros (£731 million) in 2002, and by 181 million euros (£116 million) in 2003. These increases would be due to increased intervention and to the operation in 2002 of the special purchase scheme.

The Government's view

7.8  In her Explanatory Memorandum of 12 March 2001, the Minister of State (Commons) at the Ministry of Agriculture, Fisheries and Food (the Rt. Hon. Joyce Quin) said that, although the Government can support the proposal to allow the production of organic fodder crops on set-aside land, its effect is likely to be very modest, given the limited area which would be eligible. However, she said that its attitude to the various proposals for the beef sector had not yet been finally determined, although it was unlikely that intervention would be needed in Britain.

7.9  We have since received on 23 April an undated letter from the Minister stating that the Agriculture Council on 24-25 April is likely to adopt the proposal on set-aside, since any further delay would make it impossible for any consequential planting to take place in the current crop year. She also outlines the Government's views on the beef proposals, which she describes as "high risk", and perhaps unaffordable and unworkable. She says that it makes no sense to take "vast" quantities of beef into store when there is no obvious outlet for it in view, and that it would be more sensible to reduce prices without compensation (by bringing forward to 2001 the cuts scheduled for 2002 under Agenda 2000), and thereby encouraging consumption. She also says that the proposed changes to the premium schemes — in particular the obligation on suckler cow producers to keep a minimum of 20% heifers, and the creation of individual quotas for the BSP — are directly contrary to the Commission's declared aims of encouraging the extensive production of quality beef and simplifying the operation of the CAP. The UK therefore intends to oppose them "vigorously".


7.10  We have noted the Minister's comments about the likelihood of the Council agreeing the proposal on set-aside at its meeting on 24-25 April, and, given the nature of the proposal and the timing consideration set out in the previous paragraph, we are content with this course of action and to clear this part of the document.

7.11  The part of the document dealing directly with the support arrangements for beef raises more significant questions, given the increased levels of expenditure that would arise under the European Agricultural Guidance and Guarantee Fund in 2001, 2002 and 2003, and more particularly, the strong reservations which the Minister has now expressed about its affordability and practicality. Having said that, the Minister has given a clear indication of the Government's views, and, in view of this, we are on balance minded to clear the document without recommending a debate. However, we would like the Government to keep us informed of the course of the discussions in the Council, and in particular to let us know if any significant changes are made to the proposal.


(22247 - 22256)

7072/01 - 7081/01

COM(01) 128

Draft Council Decision on the participation in the Culture 2000 programme of the Republic of Bulgaria, the Czech Republic, and the Republics of Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia.
Legal base: Article 151 EU; consultation; unanimity
Documents originated: 9 March 2001
Forwarded to the Council: 9 March 2001
Deposited in Parliament: 28 March 2001
Department: Culture, Media and Sport
Basis of consideration: EM of 6 April 2001
Previous Committee Report: None
To be discussed in Council: No date set
Committee's assessment: Politically important
Committee's decision: (All) Cleared, but further information requested


8.1  The Culture 2000 programme was adopted on 14 February 2000. We cleared the Joint Text agreed after conciliation on 2 February 2000.[16] The main point of disagreement between the Council and the European Parliament (EP) was the budget, which the EP sought an increase from the 167 million euros over five years proposed by the Commission to 250 million euros. The Conciliation Committee reached agreement on the original Commission figure, which the Government supported.

8.2  Article 7 of the Decision which established the programme provides for the participation of the ten candidate countries of Central and Eastern Europe (CEECs). All have taken part in previous Community cultural programmes such as Ariane, Kaleidoscope and Raphael.

The current proposal

8.3  In its explanatory memorandum, the Commission says that two of the main proposals in the draft Decision are that:

"—  projects and initiatives submitted by participants from the CEECs shall be subject to the same conditions, rules and procedures pertaining to this programme as are applied to Member States, regarding in particular the submission, assessment and selection of applications and projects;

"—  the CEECs will pay each year a contribution to the programme, as established in the Association Council decision. This contribution will not be reimbursed to the CEEC if, at the end of the year, the results fall short of the contribution paid."

The Government's view

8.4  The Secretary of State for Culture, Media and Sport (the Rt. Hon. Chris Smith) says in his Explanatory Memorandum of 6 April that the key aims of the Culture 2000 programme closely reflect the Government's own priorities for culture at a national level, notably:

the promotion of creativity, with a strong emphasis on young and socially disadvantaged people;

improving access to culture for as many people as possible; and

sharing best practice in the conservation of the cultural heritage.

8.5  The Minister says that Culture 2000 facilitates co-operation over culture at Community level, and adds value to national measures. The enlargement of the scope of the programme will further increase the possibility of co-operation, in his view. He adds that all the CEECs have confirmed their willingness to participate in the Culture 2000 programme from 2001, and to pay their financial contribution partly from their annual budget, and partly from their annual Phare allocation. The budget for the programme remains unchanged.


8.6  The adoption of this proposal will allow the candidate countries to become integrated in Community networks and other activities related to culture and will allow them to attend meetings of the Management Committee as observers when points which concern them are on the agenda.

8.7  We now clear this proposal, but we ask the Minister to seek a statement from the Commission on the prospects for the inclusion of Cyprus and Malta in the Culture 2000 programme. Both are applicant countries with an important cultural heritage to protect. We suggest that early participation in Culture 2000 would be of benefit to both and ask what considerations are delaying this.




COM(01) 140

Commission Communication: eEurope 2002 Impact and Priorities — A Communication to the European Council in Stockholm, 23-24 March 2001.
Legal base:
Document originated: 13 March 2001
Forwarded to the Council: 16 March 2001
Deposited in Parliament: 28 March 2001
Department: Trade and Industry
Basis of consideration: EM of 28 March 2001
Previous Committee Report: None
Discussed in Council: Stockholm European Council 23-24 March 2001
Committee's assessment: Politically important
Committee's decision: Cleared, but relevant to any debate on the eEurope initiative


9.1  The Nice European Council called on the Commission to present a report "on the contribution which the [eEurope Action] plan has made to a knowledge-based society as well as the priorities for its future implementation." This paper was presented to the Stockholm European Council on 23-24 March 2001.

9.2  The eEurope Action Plan, which was drawn up after the Lisbon Summit in March 2000[17], sets out a strategy to help the EU to attain its goal of being the most dynamic knowledge-based economy in the world by 2010. It consists of 64 targets, all for action by the end of 2002.

The Commission Communication

Part I

9.3  In the first part of the Communication, the Commission examines the Impact of eEurope on the knowledge-based society, under three headings. The indicators for the benchmarks used were agreed by Member States at the Internal Market Council on 30 November 2000. A list of supplementary benchmarking indicators was submitted to the Stockholm Council.[18]

Cheaper, faster, more secure Internet

9.4  Internet penetration in EU households is showing encouraging levels of growth, with an increase from 18% to 28%. Internet access costs have fallen considerably, with typical residential use 8.6% cheaper and typical business use 23% cheaper at the end of the six months of the survey.

9.5  Security problems, both real and perceived, are widely seen to be an inhibiting factor for ecommerce. Viruses are a major security issue. About 8% of EU users have experienced an attack. 2% have suffered credit card abuse. The USA has, per capita, six times as many secure servers as the EU.

— Investing in People and Skills

9.6  94% of schools are now equipped with computers, with 79% of those connected to the internet. About two thirds of connections are through high-speed ISDN lines. At work, 23% of employees have received formal training on computers, while 45% use them in their jobs. There is considerable variation between Member States in this area, as there is in teleworking. Denmark is a leading force, and an example of best practice.

— Stimulate the use of the Internet

9.7  The Commission notes that e-commerce has been slow to take off in the EU, with less than 5% of users buying regularly online. The figures for business take-up are more encouraging, though still only just over 25% of businesses sell over the internet. Government services online are developing but most people use them to search and download information, rather than truly interactively. Few government services (8%) allow users to submit forms electronically. The Netherlands, Finland, Sweden and Denmark have levels of interactivity that are more than twice the average.

— Conclusion of this section

9.8  The Commission concludes that the dissemination of digital technologies is advancing, with penetration into households increasing rapidly, but that the full potential of the technologies is not being exploited. Tackling this is not only a question of training but also of old habits and practices being adapted. The Commission calls for political leadership to increase take-up in both the public and private sectors. Most of the effects of eEurope will only be evident in the medium term.

Part II

— Priority areas to be addressed

9.9  The Commission highlights eight areas:

— New Framework for Electronic Communications

9.10  The Commission calls for the new electronic communications framework to be rapidly adopted and implemented.

— High Speed Infrastructure

9.11  Member States are encouraged to:

co-ordinate frequency allocation;

co-operate to facilitate the introduction of digital TV with internet capabilities;

make a commitment to introducing Internet Protocol version 6 (IPv6) into publicly-owned networks; and

set up an ad hoc group with industry to put forward proposals for accelerating the introduction of IPv6.

9.12  The Commission explains that a new internet protocol is required, in order to enlarge the Internet Protocol (IP) numbering space. This is needed to facilitate mobile internet use and the development of new and more secure services. The report says:

"Europe risks running out of IP addresses by 2005 if action is not taken now.[19] At present, the new Internet Protocol Version 6 (IPv6), which enables almost limitless address space,[20] is gradually being introduced. However this process needs to be speeded up to prevent bottlenecks and increase quality. This is an issue of importance to a wide range of industries which will be producing goods with embedded internet access, including cars and consumer electronics as well as mobile communications".

9.13  For its part, the Commission undertakes to increase support for testbeds through its research programmes.

— eLearning and eWorking Skills

9.14  The Commission calls on Member States to:

aim at a target of at least one multimedia PC per five pupils;

accelerate training for teachers and trainers in digital technologies;

adapt school curricula to enable new ways of learning;

upgrade internet access for learning and training establishments;

stimulate the availability of high-quality educational multimedia content;

support research on e-Learning advanced technologies; and

tackle the skills gap.

— e-Commerce

9.15  The Commission calls for:

rapid implementation of the e-Signature[21] and e-Commerce Directives;[22]

 rapid development of online dispute settlement systems and codes of conduct; it undertakes to provide concrete proposals; and

the promotion of the Commission's go digital initiative which it expects to launch shortly, to increase SMEs' awareness of e-commerce.

— e-Inclusion

9.16  The report says that the Stockholm Council should call on Member States to address e-Inclusion fully in the National Action Plans on Social Inclusion which they are expected to submit in June.

9.17  The Commission suggests that the High Level Group on Employment and the Social Dimension of the Information Society (ESDIS) should produce a report on e-Inclusion by the end of 2001 to support the process and the co-ordination of policies to prevent a digital divide in Europe.

— e-Government

9.18  Public administrations should:

develop internet-based services to improve access to public information and services;

use the internet to improve the transparency of public administrations;

ensure that digital technologies are fully exploited within administrations; and

establish electronic marketplaces for e-procurement.

— Secure Networks

9.19  The report says that:

Computer Emergency Response Teams (CERTs) should be established nationally and co-operate fully;

 there should be improved co-operation on network security in the EU; and

there should be support for R&D in this area.

Mobile Communications

9.20  Growth has been rapid, with overall penetration rates at over 60%. These high rates should give Europe a strong lead in mobile internet use when the Third Generation (3G) networks are rolled out. However, the Commission says, preparation for 3G has been hampered by the high cost of licences in some Member States at a time of uncertainty in high tech stocks:

"Discussions with Member States have revealed a strong interest in securing a supportive environment for mobile communications to ensure that one of Europe's most dynamic industries will continue to survive. This will require movement on the following issues".

9.21  The Commission then calls for:

rapid adoption of the Decision on a regulatory framework for radio spectrum policy;[23]

the introduction of IPv6; and

strong support for technological development.

— eEurope+: an initiative by and for the candidate countries

9.22  The eEurope+ initiative, the extension of eEurope to candidate countries, will be launched at the Göteborg European Council. The Commission calls upon the Member States to welcome the initiatives and efforts of Central and Eastern European countries to pursue eEurope goals.

— Next Steps

9.23  The Commission calls for continued high-level commitment to the targets in eEurope and for the Broad Economic Policy Guidelines and Employment Guidelines to take these targets into account. It concludes by calling for the benchmarking exercise to be consolidated and the results to be built into the identification of best practice and mutual learning.

The Government's view

9.24  The Minister for Small Business and E-Commerce at the Department of Trade and Industry (Ms Patricia Hewitt) comments that the Commission's document does not propose any new legislation, and that the Stockholm Council's Conclusions are likely to be politically acceptable to the UK and others. She adds:

"Policy in the following areas will need to be developed carefully, however: radio spectrum allocation; internet protocol version 6 rollout and the setting of targets for the ratio between the number of pupils and multimedia PCs in schools. Any initiatives emanating from the Commission's proposals would be subject to scrutiny in the usual way".


9.25  The Stockholm European Council endorsed in broad terms the Commission's recommendations,[24] but with differences in language. For instance, the Conclusions commit the Member States to "encouraging a gradual roll-out of next generation Internet (IPv6)". This does not reflect the sense of urgency in the Commission report. Nor is any particular urgency expressed in the Council's commitment for the Commission to work together with the Council "towards a supportive policy framework for third-generation mobile communications within the Union, including agreement on a regulatory framework for radio spectrum policy". However, the Council has put a deadline on the development by the Council and the Commission together of "a comprehensive strategy on security of electronic networks including practical implementing action". This strategy is to be presented in time for the Göteborg European Council in June.

9.26  The Council notes that the Commission intends to propose, before the end of the year, additional targets for connecting schools to the internet. No specific target for the ratio of pupils to PCs is mentioned in the Conclusions.

9.27  The Communication covers a broad range of activity, of varying degrees of political sensitivity. The Minister notes that policy will need to be developed carefully in three particular areas in which the Commission recommends that progress be made. If the Commission follows this paper with more specific proposals, we may wish to recommend a debate in European Standing Committee C on the issues raised.

9.28  We now clear this document, but we recommend that it be tagged to any debate on the eEurope initiative or measures emanating from it.





COM(01) 119




SEC(00) 382

Commission Communication — Framework Strategy on Gender Equality: Work Programme for 2001.

Commission Staff Working Party — Work programme for 2001 of each Commission service for the implementation of the Framework Strategy on Gender Equality.

Legal base:
Documents originated: 2 March 2001
Forwarded to the Council: 5 March 2001
Deposited in Parliament: 28 March 2001
Department: Education and Employment
Basis of consideration: EM of 20 April 2001
Previous Committee Report: None; but see (21438) 8638/00: HC 23-xxvii (1999-2000), paragraph 5 (25 October 2000) and HC 23-xxx (1999-2000), paragraph 8 (22 November 2000)
To be discussed in Council: Not applicable
Committee's assessment: Politically important
Committee's decision: (Both) Cleared


10.1  Last autumn, we reported on the Commission's Communication, Towards a Community framework strategy on gender equality (2001-2005) and its associated Action Programme.[25] We cleared both documents after the Minister for Employment, Welfare to Work and Equal Opportunities (Tessa Jowell) told us that the Government had secured wording aimed at ensuring that the programme would operate only within the scope of Community competence, and had negotiated a compromise on the legal base. The Action Programme was adopted at the Employment and Social Policy Council in November.

The documents

10.2  The Minister has now deposited two new documents based on the Framework Strategy and Action Programme — documents (a) and (b).

Document (a)

10.3  Document (a), a Commission Communication, provides an overview of the work programme for 2001, which confirms the Council's intention that the strategy should encompass all Community policies. It provides a brief definition for each of the five "fields of intervention" of the strategy:

promoting gender equality in economic life;

promoting equal participation and representation;

promoting equal access and full enjoyment of social rights for women and men;

promoting gender equality in civil life; and

promoting change of gender roles and stereotypes.

10.4  The Communication explains that the pledges made by each Commission service will be used as the performance indicators for that service. It also announces three priority actions for 2001: the undertaking of gender impact assessment of selected policy areas; the collection by each Commission service of gender disaggregated data; and the inclusion of a statement about the Community's gender equality policy in all calls for proposals and expressions of interest.

10.5  The Commission commits all its services to take action to improve gender balance in committees and expert groups. The Communication includes a table which shows that all services currently fall well short of the target of 40% minimum participation both for women and men.

Document (b)

10.6  Document (b) sets out a work programme for each Commission service, in relation to the Framework Strategy on Gender Equality. Each programme is divided into two sections — the first headed Integration of a gender perspective in a policy initiative, and the second Specific actions, within the policy area, addressed to women. So, for example, under the first heading, the Fisheries Directorate lists the possibility of Structural Fund support for the promotion of women as economic and social players in areas dependent on fisheries and, under the second, includes the promotion of specific projects for women involved in small-scale coastal fishing. The document reveals, however, that the extent to which Commission services can build a gender perspective into their planning varies widely. Several services, such as the Budget Directorate and the Publication Office, have no items under either heading.

The Government's view

10.7  The Government supports the "fields of intervention" set out in the Work Programme, and the principle of improving gender balance in committees and expert groups. It also supports the policy of mainstreaming,[26] but has some concern that the integration of gender in general programmes may lead to action and expenditure beyond the boundaries of the Community's competence. It will, therefore, be vigilant in scrutinising individual proposals as they take concrete form to ensure they have the correct legal basis.


10.8  We note with interest the work programme for each Commission service, and welcome the fact that their pledges will be used as performance monitors. Like the Government, we will scrutinise individual proposals carefully, to ensure that they do not go beyond Community competence. Meanwhile, we clear the documents.

9   This is approximately £14 billion in 2001-02 prices.  Back

10  (19033) -; see HC 155-xxvii (1997-98), paragraph 3 (6 May 1998) and HC 34-xii (1998-99), paragraph 3 (10 March 1999). Back

11  The changeover to ESA95, as from March 2000, implies a deficit of 3.1% of GDP in 1998 and a debt/GDP ratio of 105.4, down from 111.3 in 1996.  Back

12  OJ No. L 12, 18.1.2000, p.24. Back

13  Council Opinion - OJ No. C 60, 2.3.2000, p.4. Back

14  (21027) 6344/00; see HC 23-xix (1999-2000), paragraph 5 (24 May 2000). Back

15  (21026) 6343/00; see HC 23-xvi (1999-2000), paragraph 11 (10 May 2000). Back

16  (20903) 3638/99; see HC 23-vii (1999-2000), paragraph 8 (2 February 2000). Back

17  (21346) 9097/00; see HC 23-xxix (1999-2000), paragraph 45 (15 November 2000). Also (21911) 14203/00 and (22013) 14195/00; see HC 28-v (2000-01), paragraph 18 (7 February 2001). Back

18  7253/01. See Annex IV to the Conclusions. Back

19  The address space of IPv4 is limited to a few hundred million unique identifiers, of which 74% are already allocated to North American organisations. Back

20  Theoretically IPv6 would bring a million billion billion addresses/m2 of the earth's surface. Back

21  (20667) 13596/99; see HC 23-i (1999-2000), paragraph 12 (24 November 1999). Back

22  (20529) - ; see HC 23-ii (1999-2000), paragraph 16 (1 December 1999). Back

23  (21585) 11117/00; see HC 23-xxix (1999-2000), paragraph 18 (15 November 2000). Back

24  See the Presidency Conclusions, Part VI, Harnessing new technologies, paragraphs 35 to 37. Back

25  (21438) 8638/00; see headnote to this paragraph. Back

26  The integration of equal opportunities in all Community and Member State policies and activities. Back

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