Examination of Witnesses (Questions 1-19)
19 NOVEMBER 2003
MR MICHEL
SERVOZ AND
MR PETER
HANDLEY
Q1 Mr Marshall: May I welcome Mr
Servoz and Mr Handley to the Committee meeting? I understand that
you were both before a select committee in the House of Lords
this morning, so you are probably feeling a little fatigued. I
hope that you are not too tired and will be able to give your
full attention to the meeting this afternoon. The clerk assures
me that, whilst the themes of some of the questions may be the
same as you were asked this morning, many of the specific questions
that we will be putting to you will be different. I hope that
with both Houses combined we can cover a wide area of the work.
When you were here last year, Mr Servoz, you will recall that
Mr Connarty took the Chair on that occasion. Our Chairman, Mr
Hood, was away, attending a conference. I do not know whether
it is the fear of your presence at this Committee meeting, but
he is ill today and therefore not able to be here. That is the
reason why I am taking the Chair. On his behalf as well as the
Committee's behalf, may I welcome you both to this meeting. Moving
straight on to the business, we understand that the Commission
presented its Annual Policy Strategy to the European Parliament
and to the Council in March, and that a "structured dialogue"
took place in the following months. I wonder if you could indicate
to the Committee what were the main changes made to the programme
following the dialogue with those other institutions?
Mr Servoz: The presentation of
the Work Programme was done yesterday in Strasbourg by President
Prodi, and the reception by Parliament and Council was positive.
I should say first, therefore, that the timing of this hearing
this afternoon is very good. It is just one day after the presentation
in Strasbourg. You ask the question what has changed since the
Annual Policy Strategy. I would like to stress a number of facts
which affect 2004 and which have led to the Commission modifying
the APS a little when preparing the Work Programme. These facts
are as follows. 2004 is a special year for the European institutions
for the following reasons. First, we have the accession of 10
new Member States on 1 May 2004. Second, the Commission is going
to change greatly in 2004. On 1 May 2004 the Commission will have
30 Commissioners, 10 Commissioners from the new Member States,
for six months and then, on 1 November, the Commission will change
again to become a Commission of 25 members. Finally, the European
Parliament will be renewed in 2004. For all these reasons, therefore,
this is a special year, a year of transition. President Prodi
indicated yesterday that, in these circumstances, he wanted to
present a Work Programme which was well focused, which would concentrate
only on the priorities. May I briefly point out some of the differences
in substance? The first priority is the same. It is accession
of the 10 Member States. There was no reason to change that. The
second priority remains the same: security and stability, with
a focus on what the President called "the circle of friendly
countries", which is the circle of countries beyond the enlargement
countries. Finally—and this is maybe where there is a change
which is worth noting—the Commission has decided to put
the focus on what it has called sustainable growth. This is linked
to something which I am sure you are familiar with—the growth
initiative. In the present circumstances, the Commission wants
to focus in 2004 on growth, which it thinks is really the most
important issue it will have to tackle in 2004. In a few words,
these are the main elements of the Work Programme and, with my
colleague, I will present more detail when answering your questions.
Q2 Mr Connarty: Having chaired the
meeting last year, I remember re-reading the comments. You explained
that you were changing from a legislative programme to more of
a general policy statement. My concern is that, over this year,
something which I certainly did not know was going to be on the
agenda has caused a great deal of concern—as an example,
the attempt to do away with hallmarking. It appears to me that,
because you did not have a stated legislative programme, it is
not flagged up for anyone to know that there would be such a sustained
attempt to change something in the economic field which may be
very damaging to the consumers of this country. Are you still
happy that, in not giving people an indication of a legislative
programme, you have not damaged the reputation of the process?
People are certainly saying to me that here is a very important
item for this country which has been sprung on the process in
Europe over the last year, and which was not flagged up in any
way in the Work Programme that you talked about last year when
you were here.
Mr Servoz: I am not sure that
I caught the exact title of the proposal.
Q3 Mr Connarty: It was a proposal
to cease using hallmarking and to bring in a new system of guarantees
for gold and silver products within the European Union, which
seems to have been taking a lot of energy over the last five or
six months and causing a great deal of concern. What my constituents
and what the industry say to me is, "I thought you discussed
the Work Programme with the Commission last year. Why didn't you
know that they were going to try to do this?".
Mr Servoz: To be honest, I am
not familiar with this particular proposal. Maybe I should get
back to you in writing on this.
Q4 Mr Connarty: It has been in the
news for six months. I am surprised that you have not heard it.
Mr Handley: The answer is perhaps
a more structural answer, in the following way. When the Commission
adopts its Legislative and Work Programme for the following calendar
year, it already knows precisely what it is going to do in relation
to the political priorities that have been identified and agreed
with the other institutions, and it provides as best a guess as
it can at that stage—so October before the year in question
actually starts—of what it intends to bring forward in the
course of the following year. This means that it cannot know everything
that is going to be brought forward in the following year. There
is always a number of proposals that are brought forward later.
Often it can be in response to requests from the European Council
or from the Council, so the Legislative and Work Programme is
the best possible indication, three months before the year starts,
of what the Commission is going to bring forward, but it cannot
ever attempt to be totally comprehensive at that stage.
Q5 Mr Connarty: Returning to the
general question, you gave evidence last year and you said that
there would be opportunities for some people outwith the European
institutions to influence the programme. You gave your evidence
to us as an example, and the Lords' committee are very closely
attached to the process of the European institutions. Have there
been any opportunities for anyone outside our committees to influence
the Work Programme this year? Can you give us examples of other
organisations that may have influenced the programme that we are
now looking at?
Mr Servoz: No, I think that this
is the only example. In fact, this is the only example of a national
parliament which has contacted us and with which we have had hearings.
Q6 Mr David: Could I ask a question
about the process as well? In the communication, the Legislative
and Work Programme, you state very clearly that the Commission
has presented its Annual Policy Strategy; but you also refer to
the fact that there is now to be a multi-annual strategic programme
drawn up by the Council and presented to the Council in December
of this year. I was wondering what the relationship is between
the two. It seems to me that one is obviously drawn up by the
Commission and the other is drawn up by the Council. We also know
in general terms that the Council wants to exercise a more strategic
role in terms of the development of the institutions as a whole.
Does that in any way impede or restrict the ability of the Commission
to initiate policies and legislative proposals?
Mr Servoz: To reply to your question,
I would say that the relation exists between the two but it must
be improved. To be more precise, we have worked together with
the Council to help them prepare the multi-annual programming
that will be approved by the Council in December, and we worked
actually with the six presidencies who are drafting this programme.
The result has been an excellent collaboration between Commission
and Council. Frankly, the draft we have seen recently shows that
there is a great coincidence between the priorities that they
have identified and the priorities that we have identified, but
it is incomplete. Normally what should happen—and this is
what is in the draft Treaty—is a programming which is done
between the three institutions: Parliament, the Council and the
Commission. This is the proposal which is in the draft Constitutional
Treaty.
Q7 Mr David: You say there is a coincidence—
Mr Servoz: The word is unfortunate,
I admit.
Q8 Mr David: Everybody is pulling
in the same direction. Supposing, however, there is a major, fundamental
difference about what are indeed the priorities, say between the
Council and the Commission. How is that resolved now, given that
you have two parallel programmes developing?
Mr Servoz: Legally speaking, you
could argue that the Commission has the right of initiative, so
it can put forward any proposal that it wishes. However, should
it do so, should it simply ignore the message from the Council
that a particular proposal will not be approved, would it make
sense for the Commission to make a proposal, knowing in advance
that the Council will reject it? I do not think so. This is why
we have worked with the Council and we are hoping that, in the
future, programming can be done within the three institutions.
Q9 Mr David: You mention the three
institutions. Again, taking Mr Connarty's point, what about organisations
and interests beyond the three institutions? Are their views taken
into account in any way at all?
Mr Servoz: That is not foreseen
in the draft Treaty. However, the Commission is quite ready, for
example, to include and involve national parliaments in the process—as
our presence here shows.
Q10 Mr David: On that point, I would
have thought it was very important, given that one of the key
recommendations in the draft Treaty is greater involvement of
national parliaments, particularly in terms of the Commission
bringing forward to national parliaments its initial thoughts
on draft regulations. Surely, if that is going to happen—and
the likelihood is that it will—would it not therefore make
sense to have national parliaments involved in the construction
of your Work Programme?
Mr Servoz: I think it does and,
if my memory serves me well, COSAC has discussed this very issue
for some time and they have not come out with a specific conclusion.
Our position on the Commission is that basically we are open to
proposals, and we would like to see some kind of consensus between
national parliaments on this.
Q11 Mr Davis: Does the Commission
publish any comparison of what has been done during a particular
year with what was promised in the programme for that year?
Mr Servoz: Yes, we do a comparison.
Actually, we monitor the execution of the Work Programme during
the year and at the end of the year. This is something we do more
and more regularly. Initially, I would say that the monitoring
was not done on a frequent basis but, as of this year, 2003, we
are doing more regular monitoring.
Q12 Mr Davis: Is it published? I
assume you do it, but do you publish it?
Mr Servoz: It is published, in
the sense that Mrs de Palacio made a presentation in July in the
European Parliament. She made a mid-term review of the execution
of the Work Programme, so it is public in that sense.
Q13 Mr Davis: That is the middle
of the year. What about at the end of the year?
Mr Servoz: At the end of the year,
in his address to Parliament yesterday, President Prodi indicated
to Parliament what was the state of execution of the Work Programme
for this year.
Q14 Mr Davis: Do we, as a national
parliament, get an opportunity to review it?
Mr Servoz: Through the Work Programme,
which is available to you and which you are going to scrutinise,
you can have a clear indication of the state of execution of the
Work Programme for 2003.
Q15 Mr Davis: Have I misunderstood
something? I thought that this programme that I am looking at
was all about what you promise to do in 2004. I am asking about
what has been achieved during 2003. At what stage do we get a
comparison of what you said you would do with what you have actually
done? It is all promises, you see. Jam tomorrow. I want to look
at what you have actually achieved.
Mr Servoz: There are two documents
in which you find some indications of the execution of the Work
Programme. First, in the Work Programme for 2004 the Commission
indicates some elements regarding the execution of the Work Programme
for 2003. Second, every year the Commission adopts a synthesis
report, which is a report based on the reports prepared by its
services. In this report you have a detailed account of what has
been achieved during the particular year. This synthesis is normally
adopted by the Commission in May. So the synthesis for 2003 will
be adopted in May 2004.
Mr Davis: I look forward to reading it.
Q16 Mr Heathcoat-Amory: I am rather
surprised that our visitors have apparently not even heard of
the directive on hallmarking, mentioned by Mr Connarty. How do
we expect the public to understand what is going on in the European
Union when the Head of the Strategic Planning and Co-ordination
Unit apparently has not even heard of it? This is perhaps symptomatic
of a malaise in the entire system. This relates to my main question.
We have always more initiatives, more draft directives, more ambitions,
more expenditure, but we meet this afternoon, when the accounts
of the European Union have been qualified for the ninth year running.
If the European Union was a public company, the directors would
probably be in prison by now, or disbarred from office. There
is a major scandal over some of the programmes, particularly the
Eurostat. Mr Servoz did not mention quality of delivery or budgetary
rigour in his priorities, but I think that this is really what
the public expect. You will be spending more money next year with
enlargement. There will be an expansion of your activities. My
question is this. Why do you not give more priority to proper
and effective delivery of perhaps a more modest programme before
you bid for even more expenditure and wider activities?
Mr Servoz: First of all, regarding
hallmarking—I am sorry, it is probably simply due to the
fact that my briefing notes did not contain some lines regarding
this particular proposal. I have offered to provide you with some
written information. It is simply due to the lack of preparation
on my side on this particular issue. On the budget and Eurostat,
you are quite right that there is an issue here which is quite
important. I would like to point out that President Prodi went
out of his way to address Parliament yesterday, in quite a long
and in-depth way, to show to Parliament how seriously he takes
the matter. I think that the decisions that the Commission and
the President of the Commission have taken recently show that
the matter is taken seriously—although in fact most of this
is an historical matter, in the sense that the problem arose in
a period before this Commission. Nevertheless, the President has
taken it very seriously. A number of disciplinary decisions have
been made, or a number of disciplinary procedures are under examination.
Second, the President has indicated that an action plan will be
presented which contains a number of decisive elements to prevent
the recurrence of problems like the Eurostat case. I want to stress
that the President has taken the matter extremely seriously. Concerning
the budget, you asked how we can be sure that the Commission is
taking things seriously and making a good case for the budget
and the expenditure it wants to make. Here I would mention the
proposal that the Commission will be making on Financial Perspectives.
In a few weeks, the Commission will present the Political Framework
that it wants to propose for the years after 2007 . This is not
only asking for more money to spend; it is also a political project.
In fact, before a political project, one where the Commission
will present its priorities for the future, the instruments it
proposes to use to deliver, and the expenditure envelopes that
it proposes for that. This proposal will be made by the Commission
in a few weeks' time. This is something on which Parliament, and
Council, have the decisive power.
Q17 Mr Tynan: I want to press you
on the issue of outside bodies having influence as regards the
programme. It has been raised by two of my colleagues. It would
be interesting to hear your views as to whether any outside body
should have the opportunity to look at the programme, to make
suggestions for change and to develop different avenues regarding
the direction of that programme. Do you believe that would be
a useful mechanism? Often people feel that the European Parliament
is remote; that the Commission does not apply to them. Under the
circumstances, the intention was to bring the European Parliament
and the Commission closer to the people of Europe. I think that
the opportunity to be involved with the programme would be an
essential opportunity. Could I have your views on that?
Mr Servoz: I presume that I have
to speak in a personal capacity. If I speak very openly, I would
say the following. In institutional terms, the Work Programme
is prepared by the Commission alone. It is then presented to Parliament
and then to the Council, and Parliament and Council may react.
The situation which has been created by the Seville European Council
is one where there is an evolution towards EU institutional programming.
In fact, it is a system where eventually the three institutions
will try together to identify the priorities and specific initiatives.
Unfortunately, in this system, in the preparation of this programming,
there is no legal organisation to take on board the national parliaments
and outside bodies. However, the Commission has shown its openness,
on an informal basis, to taking on board all the opinions and
advice which it can receive. That is why in this respect we welcome
advice given by outside bodies before the preparation of the Work
Programmes. That is to say, in the period between the adoption
of APS and the Work Programme.
Q18 Mr Cash: I would like to make
a quick observation on hallmarking. It is not just the question
of whether or not you knew: it is the fact that it does have a
very substantial impact on what is historically, in our terms,
a hallmarking system to maintain the level and quality of precious
metals in a way that guarantees their quality. It is therefore
an important matter and it is being taken very seriously here.
On the question which you answered with regard to the Court of
Auditors, I have been pursuing this one way and another for 15
years now and I want to ask you a very simple question. Do you
believe that it is possible, as I would like, to have the accounts
of the Commission or of the Union vetted, with a lock on it, by
the equivalent of a public accounts committee such as we have
here in the United Kingdom? The Court of Auditors does a good
job, but do you not agree that actually these matters will only
be properly looked into when, at a domestic level, there is access
to those accounts in the hands of, say, a public accounts committee?
Mr Servoz: There is a procedure
which is called the discharge procedure, which is organised by
Parliament. The accounts of the Commission are presented to Parliament
and then there is a procedure where the COCOBU examines these
accounts and then, eventually, at the end of the process gives
discharge to the Commission—of course always accompanying
this discharge with comments and recommendations for improvement.
I hasten to say that these recommendations are of course followed
up by the Commission.
Q19 Mr Bacon: You have just said
something which I would like to follow up directly. I have read
the Court of Auditors' reports, and the National Audit Office
reports that we carry out here on the Court of Auditors' reports
each year. I think that to say that they are "of course followed
up" is simply wrong. Every year one hears something along
the lines of what you have said—that Mr Prodi is taking
it seriously—and every year there is another report with
another qualification. You have said that the matters under discussion
related to a period before the present Commission. May I remind
you that Marta Andreasen was appointed in order to sort out those
problems. When she identified such problems, what was the response
of the Commission? Was she held up as an example of a fine public
servant? No. She was told, when she refused to sign the accounts
because they were dodgy, "Sign them. That's why you are paid
a high salary", and then she was disciplined. Why should
we believe your statement that Mr Prodi is taking it seriously
when, for the last nine years since 1994 when this system was
introduced, the same has recurred? When you got in an accounting
officer—that was her job title—to sort it out, and
she identified problems, she was hauled over the coals? Why should
we believe you?
Mr Servoz: You should believe
me because, first of all, the European Court of Auditors, this
year and the previous year, has noted an improvement in the management
of the Commission. We were very pleased in the Commission to note,
for the first time in many years, positive remarks from the Court
of Auditors. These remarks were in particular on the transparency
and the accountability of the Commission regarding its management.
I am not saying that things are perfect: far from it. We have
to improve, and we know it. The President has said that very clearly.
However, I think there is improvement; it has been noted, and
I think that the improvement is quite substantial. If I may, I
would prefer not to make any comment on the special case of Mrs
Andreasen.
Mr Marshall: Could we move on to the
problems arising from accession?
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