Select Committee on European Scrutiny Twelfth Report
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.
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
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.
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
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.
On 17 December 1999 the Council abrogated its decision that an
excessive deficit existed in Greece.
"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,
"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.
"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
"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
5.11 The annual report also comments on the ex-post
"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
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.
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, it takes
up the four themes identified in its Communication on strategic
objectives between 2000 and 2005
and indicates that it will pursue the following priority objectives,
" Promoting new forms of governance;
" Stabilising our continent and strengthening
Europe's voice on the world stage;
" towards a new economic and social
" a better quality of life for all."
6.2 The Work Programme describes work which is
proposed in relation to each of the above themes, as is summarised
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
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
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
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
"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
"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
"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
"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
"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
"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
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
"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
"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
6.31 We clear the document.
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
(i) that the BSP should be amended by:
removing the existing provision allowing Member States to raise or waive the 90 animal headage limit;
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:
for a herd to include at least 20% (but no more than 40%) heifers;
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.
8.1 The Culture 2000 programme was adopted on
14 February 2000. We cleared the Joint Text agreed after conciliation
on 2 February 2000.
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
" 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
of creativity, with a strong emphasis on young and socially disadvantaged
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
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
9.2 The eEurope Action Plan, which was
drawn up after the Lisbon Summit in March 2000,
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
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.
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.
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
"Europe risks running out of IP addresses by
2005 if action is not taken now.
At present, the new Internet Protocol Version 6 (IPv6), which
enables almost limitless address space,
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;
for teachers and trainers in digital technologies;
adapt school curricula
to enable new ways of learning;
access for learning and training establishments;
availability of high-quality educational multimedia content;
on e-Learning advanced technologies; and
tackle the skills
9.15 The Commission calls for:
of the e-Signature
and e-Commerce Directives;
of online dispute settlement systems and codes of conduct; it
undertakes to provide concrete proposals; and
of the Commission's go digital initiative which it expects
to launch shortly, to increase SMEs' awareness of e-commerce.
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.
9.18 Public administrations should:
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
marketplaces for e-procurement.
9.19 The report says that:
Response Teams (CERTs) should be established nationally and co-operate
be improved co-operation on network security in the EU; and
there should be
support for R&D in this area.
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
9.21 The Commission then calls for:
of the Decision on a regulatory framework for radio spectrum policy;
of IPv6; and
for technological development.
eEurope+: an initiative by and for the
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.
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,
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
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.
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.
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.
10.2 The Minister has now deposited two new documents
based on the Framework Strategy and Action Programme documents
(a) and (b).
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:
equality in economic life;
participation and representation;
access and full enjoyment of social rights for women and men;
equality in civil life; and
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.
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,
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
9 This is approximately £14 billion in 2001-02 prices. Back
-; see HC 155-xxvii (1997-98), paragraph 3 (6 May 1998) and HC
34-xii (1998-99), paragraph 3 (10 March 1999). Back
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
No. L 12, 18.1.2000, p.24. Back
Opinion - OJ No. C 60, 2.3.2000, p.4. Back
6344/00; see HC 23-xix (1999-2000), paragraph 5 (24 May 2000). Back
6343/00; see HC 23-xvi (1999-2000), paragraph 11 (10 May 2000). Back
3638/99; see HC 23-vii (1999-2000), paragraph 8 (2 February 2000). Back
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
See Annex IV to the Conclusions. Back
address space of IPv4 is limited to a few hundred million unique
identifiers, of which 74% are already allocated to North American
IPv6 would bring a million billion billion addresses/m2
of the earth's surface. Back
13596/99; see HC 23-i (1999-2000), paragraph 12 (24 November
- ; see HC 23-ii (1999-2000), paragraph 16 (1 December 1999). Back
11117/00; see HC 23-xxix (1999-2000), paragraph 18 (15 November
the Presidency Conclusions, Part VI, Harnessing new technologies,
paragraphs 35 to 37. Back
8638/00; see headnote to this paragraph. Back
integration of equal opportunities in all Community and Member
State policies and activities. Back
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