Examination of Witnesses (Questions 1-19)
HE Mr António Santana Carlos and Mr Israel
Saraiva
17 JULY 2007
Q1 Chairman: On behalf of the Committee, may
I welcome you very warmly, Ambassador, and also Mr Saraiva. Thank
you very much indeed for coming. May I begin by wishing the Portuguese
Presidency well. It seems to be off to a very active start and
it is a very important presidency, considering what is going to
happen in the IGC but not forgetting that there are many other
issues in which Portugal has a great interest in making progress
on behalf of all of us. Ambassador, as I think we are agreed,
you would like to make a brief opening statement and then we will
go to the questions. I understand that you have said you could
stay with us until midday. Is that possible?
HE Mr Santana Carlos: Yes.
Q2 Chairman: Then we probably will
be able to get a lot done. We are of course on the record. As
I explained, you will get a transcript of the exchanges as quickly
as possible, in the early days after the meeting. May I invite
you to make an opening statement.
HE Mr Santana Carlos: Thank you, my Lord Chairman
and Members of the Committee. I am pleased we are having this
opportunity at a very early stage of the Portuguese Presidency
of the European Union to exchange some views on our priorities
for the second half of the year. Before we start discussing in
more detail some parts of our programme, let me state that our
priorities are coherent with the plan traced for the 18 months
that started early in January with the previous German Presidency
and will end on 30 June 2008 with the Slovenian Presidency. This
is what we usually call the "Trio programme". The cooperation
with the Trio, with our German and Slovenian friends, could hardly
be more rewarding. It has shown that this innovative way of doing
business between Member States can bring clear gains in both coherence
and predictability of the actions carried out by the rotating
presidencies. This cooperation represents the diversity of States
within the European Union as well as its global balance. Thanks
to the excellent performance by the German Presidency, which we
have had great pleasure to work with during the last six months,
and the will to compromise of all Member States, we will do our
utmost to bring to a successful end the good work already achieved.
As you might have guessed, I am referring particularly to the
mandate for the new Treaty. Our heads of state and government
have approved a very precise mandate and a clear timeline. We
are now in a position to move forward in turning the mandate into
a new Treaty as quickly as possible and in any case before the
end of 2007. This task will constitute our main priority in the
months ahead and we are very determined to achieve it successfully.
We have to take advantage of the political momentum and that is
why my Prime Minister decided to convene the Inter-Governmental
Conference (IGC), starting next week, on 23 July, back to back
with the European Union General Affairs and External Relations
Council that is going to take place in Brussels. We shall also
circulate a draft Treaty drawn up on the basis of the detailed
instructions set out in the mandate which constitute the exclusive
framework. May I conclude this first remark by stressing that
we are relying on the determination and commitment of all Member
States. The contribution of the United Kingdom has always been
of extreme importance to Europe. We firmly believe that the UK
is a key partner and a driving force within the Union, therefore
we will count on its cooperation to take this work to a very successful
conclusion during our Presidency. My Lord Chairman, we have an
extensive list of areas where our views coincide. It is also true
that sometimes some differences arise. But more important we have
learned within the European Union how to compromise with the aim
to move forward in fields that really matter to our citizens.
This would be my second remark. European citizens demand answers
to questions that directly affect their everyday lives and where
they recognise that Europe can produce concrete results. These
are the answers we have to be able to find collectively. We have
the framework, the Lisbon Strategy, which has been a road map
for the modernisation of the European economy and society. This
agenda was set up with the aim to strengthen competitiveness with
social cohesion through collaboration in knowledge and innovation.
We have collectively achieved good results so far but much more
has to be done. Along with institutional reform of the European
Union, we will give priority to the preparation of the next three-year
cycle of the Lisbon Strategy which is to be launched in 2008.
My Lord Chairman and Members of the Committee these are some of
the remarks I wanted to make. Thank you for the opportunity to
do so. I look forward to starting our discussion that certainly
will allow us to debate in more detail these and other areas of
the Portuguese European Union programme which aims overall at
making a strong Europe for a better world. Thank you.
Q3 Chairman: Thank you for that very
clear exposition of the broad outlines of the European Presidency
and the wide range of issues you will be dealing with during your
part of the Trio programme. You have raised the matter of the
IGC, so let us begin with that, if we may. As you know, the Constitution
Committee of the European Parliament and through its Chairman
Jo Leinen when they discussed the mandate in the European Parliament
made a specific point about transparency and how important it
was that the documents in the IGC should be made available to
the public. Does the Portuguese Presidency support this idea?
HE Mr Santana Carlos: Thank you, my Lord Chairman.
As a general statement I would like to stress that Portugal recognises
the need of a more open and transparent Union, closer to its citizens.
We have been supporting the initiatives towards those goals. This
is precisely the reason why the Portuguese Prime Minister suggested
that the representation of the European Parliament in the upcoming
Inter-Governmental Conference increase from two to three representatives.
Mr Sócrates also proposed that the European Parliament
is represented by its President whenever the IGC meets at heads
of state and government level. Regarding the IGC papers, those
submitted to the 2003-2004 IGC are available to the general public
on the internet. As to the upcoming IGC, is it up to the 27 Member
States to take a common decision on that. As the Presidency we
will be relatively open on that issue provided that there is an
understanding agreed by all Member States.
Chairman: That decision presumably will
be taken at the IGC itself. They will have to decide on what is
made public and what they need to keep confidential. I think that
is clear. Lord Blackwell has a supplementary question on this
one.
Q4 Lord Blackwell: Ambassador, in
your opening remarks you said that you had a precise mandate for
the IGC. The outgoing President, Chancellor Merkel in recommending
the mandate said that the substance of the Constitution is preserved
in this mandate and Mr Barroso said something like 90%. Does Portugal
share that assessment? Are there any areas of the mandate which
are still open for discussion?
HE Mr Santana Carlos: Thank you for this question,
Lord Blackwell. Our line is to strictly follow the agreed mandate.
It was very difficult, I think, to reach that agreement at the
very early hours on 25 June last, so we shall pursue the agreed
mandate. Neither do we intend to reopen issues agreed at the highest
level at the June European Council nor to engage in brainstorming
about how should it be and it is not in the mandate. As the Presidency,
our task is clear: to draft a Reform Treaty and to promote an
early agreement on it, hopefully at the October informal European
Council meeting.
Q5 Lord Blackwell: The first part
of my question is whether you agree that it is, in large part,
the Constitution; that the Constitution has been retained in this
Treaty.
HE Mr Santana Carlos: I do not think so. I think
that you are going to have a quite simple Treaty instead of the
Constitution. It will be one more treaty. That I think is a significant
change and that is due to the reason that we have reached a consensus.
As you know very well, this is quite a difficult matter. I would
also like to remind you that the Constitution was already ratified
by 18 countries, Member States, so there were some concerns among
them as well. We will stick to the mandate that we have received
from the German Presidency. Thank you.
Q6 Chairman: I think there is a general
feeling that was well expressed by the one of our own British
MEPs Richard Corbett in the European Parliament who said that
in his view 90% of the Constitutional Treaty was in the new Treaty
but that the 10% that was not was significant and that this was
what made it a very different document. I think the general feeling
around this table was that we accept the fact that a lot of the
old Constitution is there but the Constitution is dead and so
these proposals are part of a new Reform Treaty. Of course we
all recognise that a lot of what is said in the Reform Treaty
is familiar to us for those of us have who studied the original
Constitution. But, as I say, we accept the fact that the Constitution
is dead. Long live the Reform Treaty. Perhaps I could just go
on to the question of the yellow card. This is of particular interest
to national parliaments, obviously. We have been thinking long
and hard about this. In Lisbon last week we had long discussion
on whether the yellow card which was in the original Constitutional
Treaty would remain as an addition to the so-called orange card.
Furthermore, Vice-President Wallström and Commission President
Barroso have given certain political undertakings to the national
parliaments that the Commission will receive and respond to concerns
expressed by national parliaments that do not necessarily cover
subsidiarity and proportionality and are rather broader. We are
concerned about the fact that that is not reflected in the mandate.
You have said—and it is equally the position of the Commission—that
you are not going to reopen the mandate. National parliaments
are very anxious to get some kind of a political undertaking,
in a declaration if necessary, that the undertakings given by
President Barroso at the 2006 June Council meeting that the Commission
would respond to national parliaments on a broader range of issues
beyond subsidiarity will not be lost. We want to be sure we still
have that set in stone. Can you comment on that.
HE Mr Santana Carlos: Thank you, my Lord Chairman.
I think this is a two-fold question. First, we will have a two
stage procedure to monitor subsidiarity which will allow national
parliaments to draw concerns to the attention of the Commission.
If a majority share the same concerns about a particular proposal,
the Commission can simply withdraw that proposal or if it decides
to maintain it, it needs to explain its goals and subsequently
to submit to the European Parliament and the Council of Ministers.
I understand that this last part of the procedure is new. Secondly
there is a new article in the amendments of the EC Treaty enhancing
the role of national parliaments. Our line is to strictly follow
the agreed mandate. As I mentioned in my introductory remarks,
the mandate provides the exclusive basis and the unique framework
for the work of the IGC. We take this very seriously. The boundaries
for the IGC are clearly defined and we will abide very strictly
to the mandate we have received from all Member States without
exception. Thank you.
Chairman: Thank you. Lord Marlesford
has a question.
Q7 Lord Marlesford: Perhaps the area
of greatest controversy about the future Treaty which you hope
to conclude in December, is on the balance between areas in which
unanimity or qualified majority voting applies. This of course
goes back to the Luxembourg compromise of January 1966 which is
still in force and which provides for an overriding national interest
to provide a veto. The passerelle clause, which
was in the Constitution, is in the mandate and it would allow
a unanimous decision of the Council to move a policy area from
unanimity to QMV. There is provision in the mandate for a parliamentary
red card on the passarelle in certain areas connected with
justice. Would it be possible for this to be extended to all policy
areas by negotiation at the IGC?
HE Mr Santana Carlos: If I may, my Lord Chairman,
I will turn this question to the First Secretary Mr Saraiva.
Q8 Chairman: Yes, please do.
Mr Saraiva: Thank you very much, Lord Marlesford,
for your question. Very briefly, I just wanted to say that indeed
the mandate foresees that the passerelle clause on some
areas could apply in order for those to be transferred from one
pillar to another. As far as I understand, where Member States
have some difficulties with these areas, some opt-outs were agreed
on. I think it was the case for the UK. But the general understanding
was in order to move forward, to speed up the decision on those
areas as well.
Q9 Lord Marlesford: In other words,
the passerelle clause as it was in the Constitution
will apply in the new Treaty.
Mr Saraiva: I believe that the general understanding
is the same. I do not know more in details about technicalities
to be honest, but the general understanding will remain to work
more speedily in those areas as well. But of course, providing
that Member States' interests are taken into account, and I think
it is the case when we are talking about the type of opt-outs
for the United Kingdom. The general understanding is that it is
trying to speed up decisions on those areas as well.
Q10 Chairman: I think this is something
that one hopes might be clarified at the IGC. It is a rather grey
area where we are not really sure whether it does apply in the
broader terms outlined by Lord Marlesford. It is something which
I think we should probably follow up with our own Government to
see if they can get clarification of this in the IGC itself. At
the moment it seems an open issue. Thank you very much indeed
for helping us there, Mr Saraiva. Let us now move along. I now
call on Lord Sewel.
Q11 Lord Sewel: Thank you very much,
my Lord Chairman. Good morning, your Excellency. You very rightly
and properly attach great importance to sticking to the mandate.
You are helped in that by the fact that the mandate is pretty
precisely defined and tightly worded. But even since the agreement
on the mandate we have had noises coming out of Poland questioning
the possibility of reopening the deal on voting rights. Do you
think the Poles will persist in that? If they do, what will be
the response of the Presidency?
HE Mr Santana Carlos: Thank you for your question.
I think that will be not an ideal scenario, so I will say that
we shall avoid it at all costs, because if one Member State starts
coming back to reopen again issues as important as those that
were settled in June, then you can have a really big problem and
all the negotiations can be affected regarding the Treaty. The
intention of the Portuguese Presidency is of course to keep dialogue
going, but also, to be very firm. Fortunately, Member States have
changed their previous positions in the spirit to reach a compromise.
We will keep the dialogue going but we will be very firm in not
rolling back to the past situation.
Q12 Chairman: Perhaps I may ask a
supplementary to that. My understanding is that President Kaczynski's
understanding was that countries mustering a near-blocking majority
that were unsatisfied with a particular measure could, up to 31
March 2017 under the Ioannina principle, delay a decision for
two years. But the mandate does not mention two years. I suppose,
if the Poles are going to raise the issue, they are going to seek
clarification, are they not, on whether it is two years or a different
period of time. On that we do not seem to be clear. We accept
what you say, Ambassador, that the IGC does not want to reopen
the question at all. We will see what happens.
Q13 Lord Roper: In the statement
which your Prime Minister made through the Portuguese Assembly
on 27 June, there is, in the English text at the bottom of page
3 and the top of page 4, a reference to precisely that point.
He said, "In addition to this balance"—that is,
the voting balance—"the conditions in which the so
called `Ioannina Compromise' have been improved, thus safeguarding
the position of clear minorities in the Council of Minister votes."
I wonder if you could tell us what was the improvement on the
Ioannina Compromise to which he was referring.
HE Mr Santana Carlos: Thank you, my Lord Chairman.
I am afraid I am not in a position to reply precisely to that
question but we can forward to the Select Committee as soon as
possible a written reply.[1]
Chairman: On that point, thank you very much Ambassador.
May I state in general terms that on any issue where you would
prefer to refer back and let us know later, you are absolutely
free to do that and we would welcome that. Let us now move on
to enlargement.
Q14 Lord Tomlinson: Good morning,
your Excellency. Could I first of all thank you for the clarity
with which the Presidency Programme is written and translated
into English. It is very, very clear. On enlargement, it says,
"The reform of the Union should facilitate the fulfilment
of existing commitments on the enlargement process, commitments
that must be respected." I presume President Sarkozy, when
he called for "A reflection on the frontiers of the EU"
had probably not read your programme quite as carefully as we
have. Given that President Sarkozy has said this, what do you
think he means? Do you think it will be his intention to try to
halt or slow down the negotiations with Turkey and what would
be the response of your government were he to so try?
HE Mr Santana Carlos: Thank you, my Lord Chairman,
regarding the remark Lord Tomlinson has made. On our priorities
on enlargement, let me start by saying that we see the recent
wave of accessions from the East as being totally consonant with
the historic aim of the European ideal, to build peace and stability
on the Continent through shared democracy and prosperity. The
reform of the Union should firstly take the fulfilment of the
existing commitment of the enlargement process. Croatia, Turkey
and FYROM, as well as the European perspective of the Western
Balkan countries will be taken forward by the Portuguese Presidency.
Accession negotiations, all of them, have the final objective:
the accession of the candidate countries to the European Union
once the criteria agreed upon are totally fulfilled. Duties are
on both sides. Although not concerned the frontiers of Europe
we believe this is not the right time to engage in this kind of
debate mainly for four reasons. First, we have just concluded
an in-depth debate on enlargement, reflected in the conclusions
of the 2006 European Council. We need time to take in all the
useful work done by the Commission with the full contribution
of Member States. Secondly, we believe a new debate focusing on
the frontiers of Europe will be just a dividing issue at this
moment in time. For the time being, we need to concentrate our
efforts on what unites us rather than on what might divide us.
Thirdly, we are not even close to a breakthrough moment in what
enlargement is concerned. The accession of Turkey is not to happen
in the very near future, nor are the Western Balkan countries
ready yet to make defining steps. Fourthly the priority in the
months ahead is the Reform Treaty. This work could be affected
if we insisted in opening a new front of discussions on a very
complex and dividing issue while we are still strong in concentrating
our efforts on concluding the institutional reforms of the European
Union. As for Turkey, our commitments are very clear. Negotiations
have begun with a view to a final aim: Turkey's accession to the
European Union as soon as the stated criteria have been met in
full. Let me just stress that these are obligations on both sides.
That being the case, it is the European Union's duty to negotiate
in good faith and transparency. The undertakings given by States
and for instance by Turkey must be honoured and there must be
no changing of rules. The negotiations have to be pursued. Our
aim is to maintain the pace of the negotiations with Turkey. The
Commission is familiar with the details of the dossier and therefore
its role will be important to assess on how far we can go during
the current semester. But for Portugal, both in its national capacity
and acting as Presidency, our commitment could not be stronger
on enlargement.
Q15 Chairman: Thank you. The views
you have expressed very much reflect the views of the Committee
when it published its recent report on enlargement. I have one
quick question: the European Parliament has by a large majority
voted to urge the Commission to open negotiations with FYROM as
soon as possible. I do not know whether the Portuguese Presidency
has it in mind to push for the opening of negotiations with FYROM
during your Presidency or is that not yet decided?
HE Mr Santana Carlos: Our idea is not to open
the negotiations with FYROM during and in the course of our Presidency.
But we will follow the issue, in dialogue of course with that
country. Very recently my Foreign Minister went to Skopje, so
we will keep a good contact with the Former Yugoslav Republic
of Macedonia, and I am sure that soon the forthcoming Presidency
will carry forward those contacts and perhaps negotiations can
be opened.
Chairman: Thank you very much indeed.
That clarifies that. Let us now move on to the Lisbon Strategy.
Q16 Lord Harrison: Good morning,
Ambassador. There can be no one more appropriate than you on behalf
of the Portuguese Presidency to answer questions on the Lisbon
Strategy. I was very pleased to hear in your preamble that you
emphasised the importance of the internal market, the single market,
of ensuring for citizens that it is able to affect their everyday
lives. I am also heartened that in relation to the Presidency
priorities you talk about the priority the Portuguese will have
in pressing further on the internal market in respect of the gas
and electricity markets and also financial services. But I wonder
if you share with me some disappointment that bringing these to
life has been a very long process since the beginning of the Lisbon
Strategy. What strategies do you now have to ensure proper transposition
and observation of the financial services internal market and
separately gas and electricity? What will you do in a positive
fashion to ensure that the slow pace is quickened?
HE Mr Santana Carlos: Thank you very much for
this question. It gives me the opportunity to mention the Lisbon
Agenda which was set up in the year 2000 during the second Portuguese
Presidency of the European Union. From the beginning its aim has
been to contribute to modernising the European economy as well
as the European society. The Lisbon Strategy is a very comprehensive
ongoing agenda on three different but complementary dimensions:
economic, social and environmental. Our aim is to keep a balanced
approach between those three dimensions, bearing in mind the overall
strategic objectives of the Lisbon Agenda, including the level
of competitiveness based on knowledge and sustainable growth with
more and better jobs and enhancing social cohesion. With regard
to the first part of your question, I would like to say as a general
remark that the Portuguese Presidency will pay particular attention
to the improvement of public finances and to the contribution
of the modernisation of public administrations for a competitive
business environment and wellbeing of citizens. We believe that
reinforcing the budgetary framework and the effectiveness of expenditure
and revenue is key to guaranteeing its long-term sustainability
of economic and social policies. In that regard, particular attention
will be paid to the internal market for financial services with
the aim to accomplish significant progress in European strategy
for these services. We believe that integrated and efficient financial
markets are essential to strengthening competitiveness. The Presidency
will also work towards an agreement concerning the revision of
the European Union solvency regime in the insurance sector. It
will also promote the deepening of the financial stability framework
and efficiency of the regulatory and supervisory structures. That
is the Lamfalussy process. On taxation, the Portuguese Presidency
will promote the definition of the European Union strategy to
fight against tax fraud, as it is something that jeopardises competition
rules at the European and national levels deteriorating the quality
of public finances and endangering the achievement of the Lisbon
Strategy goals. Regarding the internal markets for gas and electricity,
let me recall the ambitious decisions that were taken at the last
spring European Council on an integrated approach to energy and
climate change. We have to keep the momentum by starting with
its implementation. The first range of proposals from the Commission
will be in fact on the internal market for energy and are due
in September. The Portuguese Presidency will put an enormous amount
of effort in this dossier to make it progress during the current
semester. We know that there are complex and sensitive issues;
namely, unbundling and the regulator. As you are probably aware,
there is equally in the UK and Portugal unbundling on electricity
and gas. As a Presidency we will work towards reaching a consensus,
building on discussions we had in the last Council in June but
also on the results we are aiming to achieve with a seminar we
are organising in Lisbon on "Shaping energy market integration".
The outcome of this seminar could bring some food for thought
to this debate. Thank you.
Chairman: Thank you very much indeed.
Lord Blackwell, with a question on the Budget.
Q17 Lord Blackwell: Your Excellency,
the European Parliament in its report on the 2008 Budget indicated
it believed more funds were needed to support the EU objectives
for next year. As you know, a number of countries in the Council
have argued the other way, that the EU should live within its
budget and reallocate priorities, so there is clearly going to
be some negotiation and tension with the European Parliament.
What view will the Presidency take on the issue of the role of
the Budget?
HE Mr Santana Carlos: Thank you for your question.
Our objective is to secure an agreement with the European Parliament
with a view to approve the 2008 Budget within the framework of
the Inter-Institutional agreement on budgetary discipline and
sound management, thus allowing us the financing of the European
policies and priorities. The Inter-Institutional cooperation remains
in this context a main priority. The Council meeting on 13 July
has agreed on the draft budget for 2008 on a first reading after
a conciliation meeting with the European Parliament and the Commission,
the Commission has submitted its preliminary Budget in the spring
of 2007. That draft was approved by a clear majority of Member
States which constitutes a good basis for pursuing the Inter-Institutional
dialogue with the Commission and the European Parliament. Even
being only a first reading we understand the draft represents
the balance required between the respect of the budgetary discipline
and the need of preserving enough flexibility for any amendment
that might be needed during the process. The next step is for
the draft to be examined by the European Parliament at first reading
next autumn. The second reading by the Council is due to take
place in November. My Lord Chairman, let me stress as a final
remark on this subject that the Portuguese Presidency is strongly
committed to reach an agreement with the European Parliament by
December.
Q18 Lord Tomlinson: Perhaps I could
follow up that question, your Excellency, linking back to the
question of the Inter-Governmental Conference concerning the mandate
that you have following the German Presidency. Is it not the case
that on all these budgetary questions the existing arrangements
leave the question of ratification of any change in an own-resources
decision to Member States' national parliaments? Can you be very
aware during the Portuguese Presidency that there would be strong
resistance in some Member States—and I think of this one
in particular—were there to be any changes on the budgetary
procedure that might challenge the powers of national parliaments
in relation to ratification of own-resources decisions?
HE Mr Santana Carlos: Thank you for your remarks.
I do understand your position and it is good that I am sure the
Portuguese authorities are well aware and will keep dialogue going.
Chairman: Thank you. Let us move on now
to Lord Roper and a question about the Stability Pact.
Q19 Lord Roper: Your Excellency,
I was encouraged by your reference to public finance in your remarks
on the Lisbon Strategy, but I wonder how consistent this is with
President Sarkozy's defence of his decision to delay the elimination
of France's deficit from 2010 to 2012 and I wonder what position
the Portuguese Presidency will take towards that French position.
HE Mr Santana Carlos: Thank you very much. I
think that the Portuguese Presidency will promote the strict application
of the Stability and Growth Pact. Our commitment to the SGP and
to the respect of budgetary discipline should not raise doubts.
I would like to mention that Portugal has made a big effort in
the last year to comply with those provisions. We have been following
a quite strict budgetary policy that has affected, in a way, you
know, even the quality of living in my country. So, after all
that effort, we will stick to that. As for President Sarkozy,
at the last European Euro Group meeting he restated a French compromise
to engage in structural reforms in line with the Lisbon Strategy
and in respect of the Growth and Stability Pact. He pledged for
an updated information on the French Growth Stability Programme
in September. We have to wait until then.
Chairman: According to Jean-Claude Juncker,
the French President said that he would still regard 2010 as the
target but look for understanding if they went over. There was
one thing I did not quite understand and that was, that Prime
Minister Juncker said there was a commitment by France to apply
all additional tax revenue to reducing the budget deficit. The
problem is that President Sarkozy is in the process of reducing
taxation, so I am not quite clear where the additional money is
coming from. But perhaps we had better leave that one aside. Let
us go on now to the impasse between the two institutions at present
on the question of the budget for the European Institute of Technology.
1 Please see p 4. Back
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