Select Committee on European Union Minutes of Evidence

Examination of Witnesses (Questions 1-19)




  1. May I begin by welcoming you back to this Committee. We found last year's session with you extremely helpful. We are very grateful to you both, Mr Servoz and Mr Handley, for being with us again. I would first like to know if you want to make an opening statement and, if you would like to make one, I wonder whether you would in that statement give us some idea of any significant changes that might have been made during the adoption of the work programme, which came after we had received the papers from you.

  (Mr Servoz) Yes, thank you, my Lord Chairman, and thank you again for the invitation. Actually, the timing of the session today is excellent because it was only yesterday that the work programme was presented by the President of the Commission to the European Parliament in Strasbourg. I flew directly from Strasbourg this morning in fact. The President in his speech of course presented the work programme but, at the same time, he also spoke about the EUROSTAT aspects. I noted that there was no question in the questions we had about EUROSTAT. I am particularly glad of the fact that we can really focus on the work programme. Maybe the thing I should mention to you which really makes the difference with APS is that between the presentation of APS and now the Commission has recognised that 2004 is really a special case, a special situation. I would like to mention three elements. First, 2004 is the time of the accession of the 10 new Member States on 1 May 2004. Secondly, it is the time of the change of the Commission; it is the transition for the Commission. In fact, you know that on 1 May 2004 the Commission will have 30 Commissioners; on top of the 20 Commissioners, there will be 10 new Commissioners from the 10 acceding Member States. On 1 November 2004, we will have a new Commission, one which is completely changed. Finally, the third factor I would like to mention is a change of Parliament. Parliament will be non-operational from the end of April until late summer and that is a fact we have to take into account as well. The consequence of these changes is essentially that the Commission has decided to make a work programme which is focused and small in number, and so the priorities are the same as identified in the APS but the number of initiatives which is put forward is much smaller. There are only 126 initiatives, to give you the exact number. There are three priorities. The first priority is the accession of the 10 Member States, making sure that on day one of accession, 1 May 2004, the EU is fully operational with 25 Member States. The second priority is stability and security, with a focus on what the President is calling the "circle of friendly countries", which means the countries beyond the acceding countries. Then there is a focus also on security and JHA (Justice and Home Affairs) issues, and finally sustainable growth. This may be where there is an evolution as compared with APS. Since the APS, the Commission has decided to put the focus and the emphasis on sustainable growth. I am sure you have heard about and read the Initiative for Growth that the Commission put forward.

  2. Thank you very much indeed for that useful introduction. Specifically with the multi-annual strategic programme for 2004-06, you have given us some indication of what it will contain. Can you tell us, first of all, what has been the Commission's experience of working together with a team of presidencies? Has this worked smoothly?
  (Mr Servoz) Thank you for this question. May I ask you a question for clarification? I would ask your permission to share some of the answers with my colleague, Peter Handley.

  3. Yes, absolutely, and that is taken for granted.
  (Mr Servoz) On this specific question, our experience has been good. It is the first time that the Council has prepared multi-annual programming for the years 2004-06. We have participated in the work with the six presidencies, including the forthcoming UK presidency, and our experience has been positive, both on the work and also on the substance. In fact, the substance of the priorities identified by the Council coincides very much with the priorities we have ourselves established for that period. There are, in fact, three areas which the Council has identified for priority. First, shaping the future Union, which covers the constitutional treaty essentially and enlargement. Secondly, prioritising the policy agenda with a focus on Lisbon and sustainability. Finally, the Union as a global player with a focus on the European Security Strategy, which is the paper prepared by Mr Solana recently. We only see one problem with the arrangements which led to the preparation of this multi-annual programme and that is the fact that, for the time being, the European Parliament is only informed; it is not involved in the preparation of the programme. We think that the way for the future is to involve the European Parliament as an equal partner in the preparation of this programme.

  4. I cannot remember whether there is a reference to that in the Draft Constitutional Treaty about the involvement of the European Parliament. I do not know and I do not have the Treaty with me at the moment. I thought I had seen a reference to that.
  (Mr Servoz) Yes. My Lord Chairman, in the draft Treaty it is proposed that the multi-annual programme is prepared based on the proposal by the Commission but with full involvement of the two other institutions.

  5. Thank you very much indeed. If nobody wants to follow up on what has been said so far, then I can go to a second general question, which is on better law making. Can the Commission outline what progress is likely in 2004 and whether the programme for the high level technical group will be made public?
  (Mr Servoz) The agreement on better law making has been approved by the three institutions but it is not yet signed. It will be signed in the next weeks. Of course, we expect to see progress on all areas of this agreement during 2004. We know already that one of our partners, the Parliament, will be in difficulty because it will be absent for a certain part of the year, but we expect to see progress on all parts of this agreement. Concerning the high level technical group, to our knowledge, it has not prepared a work programme and does not intend to do so but our understanding is that this high level technical group will, at each of its meetings, review their implementation of the whole agreement.

  6. The third question I would like to ask before turning to Lord Hannay,who I know has a general question, and also Lord Williamson, is quite a long one. Regarding impact assessments, the agreement states that as soon as possible after it is adopted the three institutions should carry out an assessment of their relative experiences and the possibility of establishing a common methodology. Given that the European Parliament and the Council do not have a specific commitment to carry out assessments, when do you consider this to be likely? Are the European Parliament and the Council thinking about introducing assessment in the near future? Could we have your comments on that?
  (Mr Servoz) For the time being, the institution which has practical experience of impact assessment is the Commission. The Commission started in 2003 for the first time to proceed with the impact assessment of certain of its proposals but it is really a start-up phase and this start-up phase will continue in 2004. We understand that the other institutions have expressed the wish to proceed with impact assessment but they are not committed to doing it and we have no indication that they will, in the foreseeable future, proceed with impact assessment. So it puts us in a difficult situation in the sense that if we are to agree on the common methodology, for the time being the only methodology which exists is that of the Commission. I think our intention is to have a dialogue with the other institutions to try and find out with them if they agree that the methodology which is used by the Commission is the right one, but for that to happen, we think it would be useful that both Council and Parliament gain their own experience with real cases. In our view, that will not happen for some time. In any event, just a word to conclude, I think it will be important to wait until the three institutions have some experience with impact assessment. Probably after two years will be the best time to make a thorough review.

  7. You say that this will happen in time. That may be slightly optimistic, I do not know. Would you venture to suggest which of the two institutions, the European Council or the Parliament, might have the greatest difficulty in managing an impact assessment programme?
  (Mr Servoz) I would not say that one or the other institution is best placed or less best placed to carry out impact assessment. What we know for the time being is that these institutions have not organised themselves to carry out impact assessment. The Commission has done that. We think part of the international institutional agreement implementation will have to be devoted to reviewing what is happening with impact assessment. I think this will be an opportunity for the other institutions to check whether the Commission's methodology is the right one or whether it should be improved.

Lord Williamson of Horton

  8. It is always nice to meet old colleagues. Can I raise a couple of points? The first one relates to the volume of legislation and the second to timing. You did say that there were, and I am quoting you, only 126 initiatives. You are in a country where 126 initiatives are considered a lot; elsewhere that may not be the case but here it is considered a lot. I do welcome the priorities and they are very good. If you look at the priorities and then compare them with the actual list of proposals, there is still a large number of proposals, and we have seen them, which from our point of view, are outside the priorities; there are 55 legislative proposals I think, which are all outside the priorities. I do not know if you would like to comment on the balance of the programme. Could you say a bit about volume and balance? The second point is on timing. These proposals are not actually going to be on the table for a little while, and so in reality they are not, as I think you indicated yourself at the beginning, going to be settled, they are not going to pass into law, until quite a long time ahead. They are not going to the European Parliament for thorough investigation immediately; they are not going to come probably until the end of 2004. I would like you just to confirm that point because it relates to our scrutiny. It means that we have a lot of time for scrutiny, which means that it will be even more thorough than it normally is. Those are my first two points on volume and timing. My third one is a suggestion, which I would like you to take back to your authorities and that is: would it not be a good idea, when you publish a new legislative programme, if you published in one of the many annexes a list, which you do publish separately from time to time, of the legislation which is being withdrawn or abandoned or taken away? Here that would be extremely popular, and the Commission does publish that from time to time. I think it would be extremely helpful to annex to the new legislative programme the list of various proposals which are dead or taken away, and so on. Those are my three points.
  (Mr Servoz) Thank you for the question. On volume and balance, that is clearly a difficult question. May I indicate what has happened between last year and this year? This is a point that President Prodi really insisted on in the Plenary in Parliament yesterday. He said: "This year I present you with 126 priority proposals". He said, "Last year, you had a work programme with 250 items" and so it was double, which I think clearly indicates an evolution and the sense that the President wanted to give that the Commission will only focus on priorities. I understand that 126 may be on the big side. However, this is after a very long and I am sure Lord Williamson knows very well the difficult process of filtering down which was necessary to arrive at this 126. In fact, it took us a long time. I do not want to give any insider information but the process of coming from 250 to 126 took us a long time and a lot of energy for our political masters to get an agreement on this reduced work programme. On the question of timing, indeed the proposals mentioned in this work programme are for adoption by the Commission but that is clearly not the end of the story. The other part of the story is what will happen in Parliament and in Council. We know for a fact that a number of these proposals is going to be for the next legislator, that they are only going to be dealt with at the end of 2004 and most probably in 2005. Finally, on your suggestion regarding legislation which is withdrawn, there is now every year, and it is part of the better law making initiative, a simplification exercise which is done by the Commission. In fact, a simplification list is going to be attached to this report. However, I note your proposal and your suggestion with a lot of interest. It is indeed something which we will carry back to Brussels for examination, as to whether it could be annexed to the work programme.

Lord Hannay of Chiswick

  9. I have two questions on economic affairs. One is about the new budgetary framework; not the Budget for 2005,which of course will come forward in the normal course of events in 2004, but the framework that has to be agreed in 2006. Could you give us an idea of the timetable, which bits of the proposal and the negotiation will fall within the lifespan of this Commission and which beyond that and how you expect the decision making to proceed on that? Secondly, could you comment on how far the Commission has got? It was reported in the press that they were contemplating some system of generalised controls on budgetary balances, both positive and negative, among all the Member States instead of the existing partial controls relating mainly to the United Kingdom and the consequence of that. The second question is, if you do not think it is unfair: could I ask you to put yourself into the perspective that the ECOFIN Council on 25 November does not levy fines on France and Germany; how do you see the Stability and Growth Pact developing in the next year? How is the Commission going to handle the situation in which the Council has decided not to proceed to the ultimate stage that the Stability and Growth Pact provides for?
  (Mr Servoz) On the financial perspectives, just to give you an idea of the calendar, the Commission is currently working on the communication to the European Council. This communication should be ready by the end of December or in early January. This communication will set out the political framework; that is, the political objectives, the instruments, and a first indication of the financial envelopes. This communication will be presented at the European Council in the spring under the Irish Presidency. That is the plan which is emerging, but I should put in a word of caution because all of these are indications which are not yet confirmed. In fact, in the recent weeks there was also an alternative plan to make a formal presentation of this communication at the December European Council under the Italian Presidency. However, the Commission had some indications that it would risk interfering with the discussion on the IGC. That is the first step, the political framework. Then would follow all the legislative proposals which are necessary to implement this framework which will be the concrete proposals to the Council and Parliament. This should be adopted by the Commission around the summer in a period which is between May and July, the idea being that the new Commissioners from the acceding Member States should participate in that discussion. These proposals would be adopted by the Commission and then transmitted to the Council for discussion. We expect that the bulk of the discussion would take place at the end of the Dutch Presidency and during Luxembourg's Presidency during the first part of 2005. Our goal is to try to secure adoption as soon as possible as we have been told that you need more than one year to organise the programming after the decisions are made by the Council. That is the calendar on financial perspectives. On the correction mechanism, I can confirm that the Commission is considering putting forward a proposal to introduce a generalised correction mechanism, which would replace what is called the UK rebate. That will be to take into account the fact that there are already several Member States which are in a net contributor position, and we confirm that this situation would increase with enlargement, and actually several of the new Member States would also be in this position. The idea is to try to correct these budgetary imbalances in a kind of generalised fashion. Finally, on the question of the Stability Pact, I will be brief and simply say that what the President said yesterday in Parliament was that the Council decides, makes it own decision and assumes its responsibilities, but of course the Commission cannot be requested not to implement the law of the Union. The law of the Union is the Stability Pact, and so the least we can expect from the Commission is to apply the Stability Pact. The Commission is bound by the Stability Pact because it is the law which applies to it.

Lord Woolmer of Leeds

  10. You said that there has been a change in emphasis to place one focus on sustainable growth, particularly in the context of the Lisbon agenda. Does the Commission still regard it as plausible to aim for the EU to be the most competitive economy in the world by 2010? What analysis have you done or are you going to do in the reality of that of the real underlying causes for falling, in my judgment, very much short of that ambition and in what timetable can we expect a review and clear proposals for action?
  (Mr Servoz) The Commission recognises that there is a problem of credibility with the Lisbon Objectives. For instance, this objective which is mentioned everywhere to be the most competitive economy in the world does not make any sense when you have 10 new Member States whose additional contribution to the European Union GNP is only 6 per cent. Clearly, it is impossible for them: it is impossible for Lithuania to think that they will be the most competitive economy in 2010. Clearly the Commission recognises that there is a problem with the objectives which have been set and the intention of the Commission is to propose a road map to change the process; in other words, to evolve towards a Lisbon agenda which will be more concrete in terms of objectives, concrete indicators, to measure progress and concrete delivery instruments. What the Commission also sees is that one of the main difficulties is implementation on the ground by Member States. The Commission thinks that there is a need to strengthen monitoring. The Commission will make proposals which will already be in its financial perspective proposal, to which I referred earlier. There will also be some proposals to improve Lisbon in its paper for the European Spring Council. I should note also that in 2005 there will be a formal, in-depth review of Lisbon.


  11. You mention implementation on the ground. It prompts me to ask you this brief question. In May 2004, the new Member States will being paying their dues. On the other hand, some countries, such as Poland, will probably not be sufficiently well organised at the administrative level to be able to take advantage of, for example, CAP funds that would normally be going to it, or even structural funds. Does that mean that there are going to be in a difficult position as far as their balances are concerned? Are they paying out a lot more before they start getting something in?
  (Mr Handley) My Lord Chairman, there has been a lot of preparatory work undertaken with the new Member States to reinforce their capacity to spend Community money. Of course, they already have a certain amount of experience with the pre-accession instruments of the PHARE, ISPA and SAPARD programmes. So far as the Common Agricultural Policy is concerned, there will, in any event, be a gradual phase-in of direct aid over a 10-year period. The new Member States can choose, if they wish, to operate a simplified scheme for the first three years after enlargement. We are hopeful there will not be major problems but this is just typical of the areas in which implementation of the Community acquis is a real management matter facing both the Community institutions and the authorities in the new Member States. It will be one of the areas which will be followed very closely by the Commission in the years to come. Similar considerations apply on the structural fund side, of course, where the responsibility for spending is gradually being transferred to the authorities in the new Member States. They have had substantial amounts of technical assistance provided and they should be in a position to spend the structural funds correctly from next year.

  12. Could I come on to this problem that we have of communications with delegations of Member States during WTO meetings? There were some problems, we understand, at Cancun, problems with the lines of accountability between the Commission and government officials. What have you got to say about that?
  (Mr Servoz) I would simply quote one situation. My country lost a rugby semi-final in Australia last week and I have seen several reports in the press this week suggesting, for example, that the coach did not do his job. Actually, there was even a report suggesting that he did not show them the right video before the match! I think it is very difficult when something as negative as Cancun happens; colleagues try to find somebody to blame. I can say, because I was in the Commission delegation in Seattle, that the Commission has very close contacts with the Member States. In fact, they are in the same offices during the ministerial conference and there is a 133 Committee meeting every day, plus constant ministerial contacts between Mr Lamy, Mr Fischler and the Ministers present. It is clear that there are always problems of communication, but I do not think that is really the issue. The issue is a major disaster for the European Union, which is the failure of the Cancun Ministerial, and that is another more important issue, if I may say so.

Lord Williamson of Horton

  13. I have one point on external relations. I have actually had a chance now to see the long text with all the proposals in it, the actual proposal on 29 October. I see that on the "Wider Europe" point, which is a very important point for us here, you do have two communications in the programme in relation to the overall strategy and plan of action, the two RELEXes, RELEX-001 and RELEX-012. I think that will be welcomed here. Do you know now whether, in order to move forward to the wider Europe change, you will in due course need legislative proposals? The reason for my requesting this point is that obviously the timing will be much influenced by that because if we spend a whole year, which we probably will, on discussing communication and non-legislative communication, and then we need legislation, it is rather a long timescale. I am not sure if you know the answer to that question.
  (Mr Servoz) I am not sure I can reply very precisely. I can say the following. The two proposals on the "Wider Europe" will be fast-tracked. I think it is the intention of the Commission to move forward very quickly and to make these proposals. I think the estimated dates are April or May, or something like that. The plan is that the Commission should put these proposals forward very quickly so that Council and Parliament can act extremely quickly as well, because there is a demand from the European Council, and for Mr Prodi this very important and something that he wants to leave behind him. It is quite important for him that it goes forward very quickly. The reason is that for President Prodi, now that enlargement is accomplished, there is a need to look at the wider circle of countries to make sure that we can organise something which is not enlargement but which contains all the elements of enlargement, like transposing the communautaire acquis, looking to the objective of an integrated market, even the Single Market. In fact, just to quote his words, he wants everything but the institutions, and so it is a very fundamental project for him. I am quite sure that he really wants to do his utmost so that that is done quickly.

Baroness Maddock

  14. I have three questions. It will be easier to take them one at a time. The first question is looking at enlargement. What is the Commission's latest assessment of the implications for environmental policy and also for the Common Agricultural Policy? What initiatives will the Commission be promoting in these fields to address the very particular challenges that are going to be posed by enlargement?
  (Mr Handley) Earlier this month, the Commission adopted its comprehensive monitoring report on the progress made by the 10 acceding Member States. As Commissioner Verheugen said on the day, if you were to ask whether there are problems, the answer is: yes, there are some problems. If you were to ask whether we will be ready to apply the Community legislation directly 1 May for the 10 Member State, I would say a confident "yes". Matters are under control. By and large, all of the new Member States have made substantial progress on adapting themselves to apply the Community acquis directly. There are some areas of concern in every one of the new Member States, and in some cases these do apply to the environmental area and to agricultural as well as to the structural fund side. By and large, in both these sectors, most of the new Member States are on track. On the environment, there are perhaps three areas of concern. One is nature protection. Many of the new Member States do not have the same kind of legislation the Community has had for some years. Then there is waste management and industrial pollution, given their very heavy industrial background in most cases. But, in response to these problems, the Union will be reinforcing the spending which it devotes to environmental investments through the structural funds. They will in fact be going through a three-fold increase in the next couple of years. It should also be mentioned that enlargement will bring certain added value to the Union's environmental policy because many of these areas are rich in natural biodiversity and wilderness areas. This will increase the amount of such zones within the European Union. The addition of the 10 new Member States will increase the European Union's role and responsibilities in dealing with certain global environmental problems, such as climate change and the depletion of the ozone layer.

  15. This question follows on quite well, and it is about the chemicals policy. We as a committee have looked at this. As you will know, we have done a report on this that was fairly critical of what is going to happen. To put it bluntly, I think this is not very realistic. My question is: how does the Commission now see the way forward on the EU Chemical Strategy and the proposed REACH system?
  (Mr Handley) At the end of October, the Commission adopted its legislative package on what is called REACH—Registration, Evaluation and Authorisation of Chemicals—which is designed to replace a rather ad hoc bundle of legislation which has developed over the last 20 years,and that needs to be updated and consolidated in any event. At the same time, it has sought to balance the needs of having a competitive European chemical industry with maintaining a high level of health and environmental protection. This balancing act is at the heart of the legislative package. Those issues are explored in depth in an extended impact assessment which accompanied the legislative proposals. Before adopting the legislative package, there was a very extensive consultation with all stakeholders, including industry, governments, and the NGOs, and that actually produced some material changes in the proposal finally adopted by the College. For example, the number of products subject to the new regulation has been substantially reduced; the cost to industry of maintaining the register of effective chemical products has been reduced from around

12 billion to around

2 billion. It is a much narrower scope and yet, in the view of the Commission, it still achieves this balance between, if you like, the sustainability side and the competitiveness side. The Commission has now delivered its proposal and it is in the hands of the Parliament and the Council to discuss the proposals in the course of the next few months.

  16. Time will tell. My third question: there have been various initiatives agreed and proposed for extended impact assessment and which does the Commission think will contribute most to effective policy-making on sustainable development?
  (Mr Handley) As you will see from the list of extended impact assessments for the next year, we have tried to apply this new procedure to the really important proposals that form part of the preparation for the next financial perspective. So the main spending programmes on structural funds, rural development and the Social Fund, which cover a large part of future Community policy, are going to be the subject of extended impact assessments. I think that is an important thing before you launch into defining a multi-annual structure for the European Union which reflects a lot of its actual expenditure. That category of proposals I think will make an important contribution to dealing with the sustainability and regulatory aspects of future EU policy. In addition, we are producing a number of thematic strategies in the environmental area next year. These are subject to extended impact assessments. This is an important complement to the actual communication and explain the whys and wherefores and the costs, benefits and various policy options that have been analysed. There are others but I would just single out those two areas which are worth close scrutiny. Of course, we have made all these preliminary assessments available to the public as part of our work programme.

  Baroness Maddock: Thank you for that. May I say that I think we have welcomed, in my particular sub-committee, the fact that you are looking at a thematic way of approaching it. We think that is helpful.

Lord Dubs

  17. Could I ask a follow-up on an earlier question Baroness Maddock asked about CAP? On the assumption that although Cancun failed, there will be follow-up talks in Geneva and that it may well be that in 2004 there will be some progress on CAP reform as originally envisaged in Cancun, to what extent has the Commission taken this into account in looking forward with the assessment of the implications of enlargement for CAP? It is a bit complicated. Have I made myself clear?
  (Mr Servoz) In fact, the Cancun talks I would say normally do not affect negotiations which are ongoing on agriculture and services because these negotiations were mandated irrespective of the launch of the Doha Round. They have to take place. In fact, for agriculture, there is even a deadline because there was a peace clause agreed and this peace clause ends in 2003. One of the questions which the Commission and the EU has to answer is: how do we carry out the work? We have, in any event, to negotiate agriculture and services. Our hope was to do this negotiation within the framework of the Doha Round, which involved several other subjects where we have also an interest. Clearly, one of the questions we have to answer is whether we carry on the work with agriculture and services only, or do we try to revive, resuscitate, the Doha Round so that we have a big undertaking with a lot of subjects which interest all the players? To answer your question specifically, 2004 should normally see some active work on agriculture.

  Chairman: In the interests of meeting our time deadline, which I am afraid is a strict one, I am going to go straight to justice and home affairs and then, if we have time, I will come back to one of the two law and institutions questions.

Baroness Harris of Richmond

  18. I understand that last week the Commission proposed a draft regulation on the creation of a European agency for external border management. Can you tell us what form that is going to take and do you not think that the initiative could lead to a centralised command unit managing a European border guard?
  (Mr Handley) May I, first of all, explain that it was in response to the European Council meeting in October that the Commission has brought forward its proposal so quickly because it is the hope of the Italian Presidency to reach a broad political agreement on the setting up of the agency before the end of this year. The nature of the agency is explained in the proposal that was adopted on 11 November. It is not presented as a central command and control organisation. It is not an agency that will be doing operational activities itself. It will not be making policies on external borders. It is essentially a co-ordinating mechanism which will work with Member States in the interests of solidarity. Let us not forget that we are talking about an enlarged European Union with 10 Member States that do not yet have experience of being within the Community's external borders. It is work in areas of co-ordinating implementation of the Schengen Agreement, for example, and it will provide assistance in the area of training and technical assistance for the border guards in the Member States. I think it will also provide assistance in the return of illegal refugees in Member States. The central point that I would say at the beginning, Baroness, is that it is not a direct operational organisation. It is a co-ordinating apparatus.

  19. Thank you for that. Could I commend the report of the sub-committee, which I chair, on the European Border Guard to everyone who is going to be involved in the proposals for this in future. Secondly, could I ask about the new approaches to the asylum process? Is the Commission proposing some sort of central examination of asylum systems; for example, reception centres near to the EU's external borders, or indeed outside EU territory?
  (Mr Handley) No is the answer to that question. We know that there were certain proposals being put forward by at least one Member State before this summer's European Council, but those ideas were not supported by everybody. What has been decided is that by the middle of next year the Commission should come forward with a report on a more orderly and managed approach towards entry into the European Union for people in need of international assistance. The ideas to which you refer are not on the Commission's agenda.

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