14.10.2005   

EN

Official Journal of the European Union

C 255/1

1.1

Districts have been the subject of a great deal of debate at all levels and in all the industrialised countries, particularly over the past 15 years. Developing countries and the Mediterranean partner countries alike have sought to emulate the district system that has become established in many European countries, in order to boost the development of their business sectors.

1.2

Furthermore, analyses had shown the positive impact of districts on employment policy and had given many examples of good practice (1) in the area of corporate social responsibility years before the Commission presented the related Green Paper (2).

1.3

Meanwhile, new economic and social phenomena and the new knowledge-based networks have altered the districts' traditional links, steering production systems towards metadistricts (3) and the need to create networks between individual economic areas.

1.4

In an attempt to sum up this vast theme, the present own-initiative opinion touches upon the following topics:

1.5

The aims of this own-initiative opinion on the new European networks of intelligent districts (4) are to:

1.6

The European Economic and Social Committee has emphasised on many occasions, the commitment made by the European Council when it defined the central aim of the Lisbon Strategy as that of making Europe ‘the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion’.

1.6.1

Now more than ever, growth strategies must be based on the capacity to:

1.7

More than four years on from the launch of the Lisbon strategy, one cannot help but be disappointed by the modest progress made towards realising its objectives and responding thoroughly to the process it champions. Even the Lisbon strategy report by the High Level Group, chaired by Wim Kok, concludes that ‘the disappointing delivery of the strategy has been due primarily to a lack of determined political action ’ adding that ‘the agenda has been overloaded, coordination has been poor and there have been conflicting priorities’  (6).

1.8

At the European Council meeting in Brussels on 4 and 5 November 2004, the president of the European Commission stressed that the Kok report ‘provides a realistic, but worrying, assessment of progress. It shows that we must act now to make up for lost time’ (7). More specifically, he stressed the need to ‘refocus priorities, measure progress and assume greater responsibility for following them through’ (8). The Committee has also stated its views on this subject in its recently adopted opinion (9).

1.9

The resetting of priorities under the Lisbon strategy should, in the opinion of the EESC, treat industrial districts and their development as a key element in the creation of new knowledge and, above all, more and better jobs. This will involve drawing on the considerable opportunities provided by the networks, which can generate repeated cross-fertilisation between the codified knowledge of research and the tacit knowledge (10) that spreads and takes root in production and distribution systems.

1.10

The promotion of initiatives at local level and the capacity to network them in furtherance of the Lisbon Strategy is essential: first, to encourage the setting-up and development of innovative businesses throughout the Union, particularly in the new Member States; and second, to increase the opportunities for these businesses to meet and cooperate, in a spirit of stronger economic and social cohesion.

1.11

The new ‘open technological districts’ enable the integration and networking of all the players operating in a given area with those of other areas.

1.12

In practical terms, European networks of open technological districts are essential for achieving the following objectives:

1.13

In today's increasingly globalised world economy, the development of a knowledge-based Europe has major implications for the national, regional and local order and for the international balance. These implications relate to the rapid acquisition and application of new technologies, the international-level recruitment of skilled human resources and, lastly, the opportunity to decentralise the organisation of the production and distribution process, while ensuring it remains cohesive and flexible and retains high standards of quality.

1.14

The phenomena of globalisation and the almost simultaneous appearance and development of network technologies have brought about short-, medium- and long-term changes for the production economy and, in particular, for the district economies.

1.15

The current districts have already developed their openness towards new markets and supported the more recent political changes, including for instance the increasingly frequent relocation of manufacturing activities, encouraged by the environmental conditions in certain countries and backed up by an increasing level of computerisation.

1.16

In EU-25, on average, 50 % of district output is destined for the foreign market. The districts thus already have an internationalised industrial structure, and their sights regarding sales are set increasingly on the international market.

1.17

There must be a shift from internationalisation to globalisation:

1.18

The widening of geographical borders, driven by economic benefits and made possible by technological support, has loosened the ties of territorial proximity that used to define the industrial districts and were the basis of their strength. This has led to the emergence of leader companies, whose frame of reference in terms of markets for both sales and supplies has shifted from a territorial rationale to a virtual one, based mainly on strategies of economic advantage.

1.19

Currently, European industrial districts are under the spotlight as they are going through a very delicate phase. They have two types of problem to deal with:

1.20

The new configuration of competitive models on the global market is imposing major changes. The new integrated platforms and networks must address themes relating to research and innovation, the design of new products and production processes, the management of new, more skilled human resources and new materials, promotion and marketing, finance and credit, logistics and market and client service management.

1.21

At international level, the region most strongly marked by the industrial district and cluster phenomenon is North America, where they have multiplied in number from the Pacific coast to the Atlantic; for instance: Silicon Valley, the San Diego industrial clusters and Route 128. Though they differ in terms of their level of industrial development, there are also districts in Latin America: in Mexico (the Guadalajara Cluster), in Brazil (Sinos Valley) and Uruguay (the Meat Cluster). As far as Asia is concerned, significant examples can be found in India (the Agra Cluster, the Tiruppur Cluster and the Ludhiana Cluster), in Pakistan (the Sialkot Cluster), in South Korea (the Consumer Microelectronics Assembly Cluster) and Indonesia (the Central Java Cluster). The district phenomenon has also reached Africa: there are even a number of them in some countries of Sub-Saharan Africa.

1.22

In Europe, apart from the dozens of examples in Italy, the most significant are to be found in France, where, as a result, the French Industrial Districts Club was founded in 1998, and Germany, where there are over 50 ‘Raumordnungsregionen’ and the especially important initiative in Baden-Wurttemberg. The British examples are also very important (in particular, the Cambridge High-Tech Cluster, the Motor Sport Cluster in Birmingham or those in Scotland or other regions). A number of positive examples have grown up in Scandinavia, where great importance is given to learning as the cornerstone of development, facilitated by proximity. In the new Member States, significant examples are to be found in various regions of countries such as the Czech Republic, Hungary, Poland, Slovenia, Malta and the Baltic States.

2.1

It is not easy to provide a single definition for a district phenomenon that is so varied, dynamic and diverse at world level.

2.2

In general terms, the industrial districts may be defined as local, homogeneous productive systems, featuring a strong concentration of industrial companies, mainly of small and medium dimensions, with a high level of production specialisation.

2.3

The final report of the European Commission's Enterprise DG expert group on Enterprise Clusters and Networks (12), defines districts as:

‘Groups of independent companies and associated institutions that are:

2.3.1

Over recent decades, the districts that began life encouraging the creation and development of production activities in the industrial and services sector, in areas with specific economic characteristics, have developed in a largely autonomous way, focusing their activities on specific sectors, in which they acquired and developed very significant competitive advantages. The need to meet ever higher quality and safety standards then led the district companies to focus on increasingly specialist market niches, as attested by the high quality of their products.

2.4

The districts are not only groups of companies that may be specialised and located in a given area: they are groups of companies that play according to team rules. Each grouping cooperates on projects and competes together, while the local area, far from being just a backdrop against which the companies operate and produce, is a genuine facility promoting integration socially, economically and in terms of the production cycle. In essence, the local area is a storehouse of production traditions and practical knowledge.

2.5

The acceleration of information transmission and the opportunity to explore the entire supply panorama within a short timeframe has both made companies' work easier and forced them to adapt. The balance within districts has changed. The emergence and consolidation of new technological models has involved the entire production chain, with an impact on professional profiles, work organisation, the development of workers and areas of growth.

2.6

Increasingly, the districts are linked to and integrated with specialised service centres, vocational training schools, universities, technology parks and research centres in the local area. The quality of the product provided, a vital factor in the survival of the district companies, is based mainly on their capacity to marry existing production traditions with the demand for innovation and specialisation expressed or perceived by the market.

2.7

More and more, the internationalisation of production demands that companies invest in a transnational network. In cases where the network within which they intend to build their competitive advantage goes beyond the local sphere, SMEs and major multinational companies alike have to be able to count on adequate technological facilities, to enable them to pool and process knowledge, and on a responsible and motivated workforce.

2.8

While tending to penalise companies that are used to operating in restricted markets, increased market integration provides others with major opportunities for new market outlets, particularly the more dynamic SMEs. Major technological changes do not always work to the advantage of the larger companies. Often, the net economy neutralises factors such as geographical distance or the availability of an independent distribution network, thus removing some of the traditional weak points of SMEs. They must however be able to take full advantage of the opportunities that technological development can offer, with support from assistance and service centres.

2.9

The internet has partially overcome geographical limitations. Essentials such as the rapid exchange of information or monitoring opportunities, that used to depend on a reduction in journey times, are now secured by IT connections.

2.10

Although there are a lot more opportunities and possible activities than previously, the internet still cannot compete with interpersonal contact. Face-to-face contacts, based on knowledge and experience, are still irreplaceable. Although the internet has partially negated geographical distances and changed district structures, prompting companies to operate increasingly with players beyond their local (and often national) borders, a relationship of trust between players is still essential.

3.1

Increasingly, traditional industrial districts are being joined by and in some cases transformed into metadistricts. In contrast with classic districts, these may be defined as integrated industrial platforms, within which technology sector players expand to take in new centres of knowledge processing and applied research and look beyond their immediate neighbourhood to develop production and distribution systems that focus on shared values and strategies.

3.2

Metadistricts enable the various phases to take place in geographically distant locations, chosen on the basis of economic factors and local opportunities, while maintaining productivity levels and, especially for manufacturing, guaranteeing quality by means of a ‘ learning by interaction’ process, that enables a shift from a mainly reactive to a proactive approach.

3.3

As the shift towards the metadistrict takes place, the district must increasingly act as a knowledge laboratory. The policies necessary to support the repositioning of the district within a global logic must be conducted by the public institutions (particularly the local and regional authorities) but also, first and foremost, by the companies, and must concern human resources and the level of innovation, in a process which fully involves public and private executives.

3.4

The metadistricts step up the network between small, medium and large companies, which interact together and tighten their cooperation and working links with the most advanced centres of scientific and technological research. The driving forces here are:

3.5

As a rule, there are four elements that help to identify a metadistrict:

3.6

The process of understanding the phenomenon with a view to planning support for metadistricts is undoubtedly still more complex and multifaceted, not least since, as already mentioned in relation to the definition of the metadistricts, the aim is to select, on an experimental basis, production areas of excellence, with strong existing or potential links with the world of research, production and innovation. Understanding these phenomena is complex however as there has been little empirical study on the subject and little statistical documentation.

3.7

The planning process must include all the elements needed to improve the analysis of the metadistricts' properties:

3.8

The shift towards a system governed by knowledge brings major governance problems:

3.9

New service structures that act as a cognitive interface between the local context and global networks seem, lastly, to be gaining in importance. New agencies are emerging, geared to the needs of local companies and to the original mechanisms of competition and cooperation, and designed to facilitate the development of the production context.

4.1

According to some estimates, there were already as many as 380 districts/clusters in the USA in the mid-1990s, operating in a broad range of manufacturing and services sectors and representing 67 % of the working population and 61 % of US output (14). Many such sectors were born out of crises in regional production, as was the case for the Californian San Diego Clusters that emerged from the restructuring of the defence sector. They have benefited from the prominent role played by state and local governments in launching a process that has since been taken up by the private sector. In Arizona, for instance, a government commission launched an initiative in local universities to identify local districts, grouping the main private sector players and thus promoting the creation of district organisations to assess and address the difficulties and opportunities for individual districts. Similar initiatives have been launched in other American states, such as New York State, Minnesota, Oklahoma and Oregon.

4.2

In Canada, the federal government has placed the creation and development of knowledge-based, internationally recognised industrial districts at the centre of its ‘innovation strategy’. This involved the main federal granting agencies identifying the research investment made in 27 of the country's regions and cities. As part of the Canadian innovation strategy, one of the main objectives of federal innovation policy is to develop at least 10 internationally recognised ‘technology clusters’ by 2010. In Canada, it is quite common for there to be a major research institute, often a university, at the centre of an industrial district (15).

4.3

In Asia and Latin America, examples are extremely varied. There are districts in India and also in China. In Pakistan, pressure from the new competitive drive sparked by market liberalisation and globalisation has accentuated the tendency to work with industrial associations and with the services they provide in order to meet internationally recognised quality assurance standards. In Brazil and Mexico, the districts have had to face international competition over prices as a result of strong Chinese inroads into the North American market. This competition has led to greater vertical integration on the one hand and to district differentiation on the other.

4.4

In New Zealand, local governments have taken various initiatives to promote industrial districts. In Australia, meanwhile, there have been a number of bottom-up initiatives, such as those taken by the local authorities in Adelaide, Cairns and Hunter Valley, which identified groups of companies, developed a dynamic between them in relation to their respective needs, and in some cases secured government grants for studies, consultancy and secretarial services.

5.1

In many parts of Europe, industrial policy, that until present had been generally directed towards sectoral policies and initiatives, has started to look to the local area as well, in order to sustain the conditions that contributed to the success of ‘Made in …’ labels around the world. Frequently, however, local production systems encounter difficulties in finding adequate answers from an organisational and managerial point of view. This has opened the door to new types of support, no longer directed at individual companies, but rather focusing on the local system as a whole.

5.2

Local government authorities, together with universities, research institutes, business associations and credit institutions, are committed to supporting measures aimed at disseminating innovation, promoting quality, boosting the marketing of local products, and, lastly, generating system projects, by means of initiatives geared towards business relations.

5.3

Industrial districts are now legally recognised in various European countries (in Italy, for instance, by Law 317/1991), and are unanimously considered to be a genuine success for national economies. This is especially true of Italy. Despite this, it is not easy to pinpoint them precisely, and official figures do not add up when it comes to their number or their sectors of specialisation.

5.4

Initiatives to promote districts have been conducted at regional level in Italy (in Piedmont, Lombardy, Veneto, Emilia Romagna and Tuscany), in Spain (Catalonia and Valencia) and in Germany (e.g. the BioRegio, Exist and InnoRegio initiatives). In France, DATAR (16), an interministerial department under the responsibility of the prime minister, has formulated specific policies to support the development of local production systems (SPL), which are part of the French Industrial Districts Club. There are many examples of districts in Scotland, Wales and Northern Ireland.

5.5

The Nordic countries too have developed their own approaches to district policy. In Denmark, the district method has had a major impact on the country's economic policy, and in Finland, the promotion of districts has influenced not only economic policy but also scientific research, technology and education.

5.6

In the new Member States, since 2000-2001, various district development programmes have been launched, including the ‘cooperation’ programme in the Czech Republic and the NFT GVOP programme, which covers the development of industrial parks (17) emerging from an NGO (18) called the Association of Industrial Parks, in Hungary. Hungary now has 165 industrial parks, which account for 18 % of industrial employment and 28 % of industrial exports. Between 1997 and 2003, it invested EUR 46,182,000 (19) in industrial parks. The PGK (20) programme was launched in the western trans-Danube region and the SME Clustering/Networking programme in Poland. In 2000, Slovenia launched a three-year programme for district development involving over 500 companies and 50 institutions. Over 130 pilot projects and trials are under way in the Baltic States. In Malta, the local authorities have implemented a strategy to support key districts in sectors such as health, oceanography, information technology, aviation and services. There are also significant examples in the applicant countries, such as that of the Timisoara district in Romania. In 2001 in Bulgaria, as part of the Phare programme on Capacity building for accelerated growth of the SME sector in Bulgaria, five potential districts were identified. With a view to developing them further, the ministry of economic affairs decided to create a national agency with the specific task of managing their development.

5.7

In the Netherlands, the district method has been incorporated directly within government policy and programmes, while in Austria specific policies have been launched to strengthen the links between research institutes and the private sector, reducing regulatory and administrative obstacles to innovation, promoting specific districts and establishing competence centres.

5.8

District-promoting policies call for a systemic and integrated approach taking account of the links between companies, between industrial sectors, and lastly between companies, institutions and local authorities. Following this approach, the private sector should be the driving force behind initiatives, while the public sector should act as facilitator and catalyst.

5.9

The ‘district system’ is at the root of various forms of horizontal integration between companies, ranging from links between primary and ancillary companies, and within the sector, to out-sourcing. This integration paves the way for maintaining a high degree of flexibility, and also for securing the economies of scale typical of large companies, by means of integrated production. By breaking down the various processing phases, the district is able to provide autonomously for all the phases of the production chain within the sector in which it operates. Production costs can thus be managed flexibly and market requirements can be adjusted to more easily.

5.10

The success that districts' products have found on international markets is also the fruit of their great capacity to innovate and of ongoing research to improve products. This is encouraged by the competition between each district's companies and by interaction with local universities and/or academic institutions. As a result of these synergies, even sectors commonly considered to be less developed from a technological point of view, such as the textiles and clothing industries, have become competitive at international level.

5.11

Up to now, the factors taken into consideration to determine indicators for the possible presence of a district have included business density, sectoral specialisation, and percentage of employees in the manufacturing sector. It has always, therefore, been a matter of quantitative values, in line with the aim of deciding on an objective basis. Factors such as economic profile, product innovation, companies' overall strategy and, most importantly, the ‘network’ element must also be taken into account however. That last factor is vital both for determining the origin of the district structure and for pinpointing the future strengths of the metadistrict, with a view to a close link between business and research.

5.12

At EU level, various initiatives could contribute to the development of European technological districts. However, a genuinely integrated policy has yet to evolve to promote the development of innovative district networks, in line with the relaunch of the Lisbon strategy required by the European Council on 4 and 5 November 2004 and with the commitment to weave the economic fabric of SMEs in the old and new Member States into the enlarged single market as rapidly as possible.

5.13

The EU-15 had a series of Community instruments that could be used to promote the development and creation of knowledge-based district networks. These instruments fall largely under regional policy, research and development policy, business and innovation policy, information society policy and training policy.

5.13.1

Regional policy — Substantial financial appropriations have enabled the research-innovation policy of the Structural Funds to give a real boost to regional development, through the innovative actions of Article 10 of the ERDF, the RIS programme (Regional Innovation Strategies) and Community initiatives such as Interreg III–C. The European Investment Fund and the European Investment Bank meanwhile offer the ‘Growth Initiative’ as a means for SMEs to set up innovative networks.

5.13.2

European RTD policy — The Sixth research and development framework programme 2002–2006 is an important source of potential support for knowledge-based districts, especially in the realms of:

5.13.3

The ‘More Research for Europe: Towards 3 % of GDP’ action plan provides for a series of new actions at national/European level. Furthermore, it will be possible to develop support initiatives for Europe's knowledge-based districts via the services deriving from the Galileo radio navigation and satellite positioning programme.

However, as has been highlighted in recent reports, including in particular the one on small business involvement in the programme, access for small companies can be fraught with difficulty, particularly in the new Member States (21).

5.13.4

Enterprise policy — The following should be noted with regard to enterprise and innovation policy:

5.13.5

Interesting Enterprise DG initiatives include those for the development of district networks and the work done by the IDABC programme to support companies and company networks. The initiatives for cooperation between industrial districts on EMS-EMAS (Eco-Management and Audit Scheme) certification, financed at regional level, are of particular note in the context of the joint sustainable development measures managed by the Environment DG.

5.13.6

Information Society policy — Under the eEurope 2005 programme and, more specifically, within the eGovernment, eBusiness, eCommerce, eProcurement, Broadband networks, eInclusion, and Go digital initiatives, there is great potential for projects to support district networks.

5.13.7

Education and training policy — Various measures provided for under the Socrates and Leonardo programmes can be used to promote training for the knowledge-based networks, and initiatives can also be planned under the e-Learning and eEurope 2005 programmes.

6.1

At the Spring 2004 European Council, it was stressed that: ‘measures taken at the European level are only part of the formula for putting the Lisbon strategy on the right track; numerous reforms and investments, which are the responsibility of the Member States, have yet to be achieved’ (22). This stance was reaffirmed at the European Council on 4 and 5 November 2004, to which Wim Kok submitted his report (23).

6.2

The most significant challenges relate to three fundamental strategic areas for growth:

6.2.1

The development of intelligent trans-national networks: this is to be achieved using for instance the Community Growth Initiative and giving priority to investment in research, innovation and lifelong training. Another important element is the identification and skilling of new professional profiles, stepping up the use of network cooperation instruments under the sixth framework programme.

6.2.2

Bolstering companies' competitiveness on the global market and environmental sustainability: in part this will involve the development of broadband communications and high-speed networks, necessary for research and innovation (GEANT), use of the Galileo programme pilot applications, and the development of initiatives under the eEurope 2005 programme.

6.2.3

Building up ‘neighbourhood policy’ (24) in the enlarged Europe: the aim should be to generate better rooted and more consistent synergies with the new Europe's neighbours with a view to establishing an area of prosperity and security, implementing cooperation mechanisms on sensitive issues such as the management of common borders, the control of migratory flows and the fight against organised crime.

6.3

In all the EU countries, and especially in the new Member States, there is a growing awareness of the importance of district networks and industrial clusters as a means of strengthening competitiveness and productivity, reinforcing employment policy, boosting the quality of work and encouraging the development of small and medium-sized enterprises.

6.4

The EESC thinks that there should be a Union-level integrated policy to set up a European platform to support the establishment of new European networks of knowledge-based metadistricts.

6.5

The EESC is convinced that these metadistricts are a genuine key to success in a global market, as they can secure SMEs better access to high-level skills, modern shared services and new knowledge-based facilities, while also improving company management and making for a better informed and more mature workforce.

6.6

The EESC would argue that the creation of a European platform for districts could provide a much needed, coherent, transparent and easily accessible framework for SMEs and for old and new Member States, the applicant countries and the EU's European neighbours.

6.7

This European platform for districts should have the capacity to coordinate the many policies managed by the various DGs, currently available instruments and Community actions.

6.8

The financing allotted to this platform must be sufficient to enable it to support Union action. The measures coordinated through the platform and conducted under the Lisbon strategy could without doubt contribute to the development of SMEs that are especially rich in deep-rooted tacit knowledge. Community initiatives could codify that knowledge and convert it into a common fund, as well as transferring it to European networks.

6.9

The European platform for districts should provide a programme framework for:

7.1

Deindustrialisation is under way in all the more advanced countries. In the EU, value added of the tertiary sector has risen to 70 % of total GDP (22 % for industry, 5 % for construction and 3 % for agriculture) (26). The process should not, however, be encouraged, since a large part of the value added is channelled to, or originates in, businesses (27): trade and transport 21.6 %; financial and business services 27.2 %; public administration 21.6 % (28).

7.1.1

Policies capable of supporting and spreading a culture that heightens district experience can, indubitably, do much to enable districts throughout the enlarged EU to compete with countries where low labour costs go hand in hand with a lack of dialogue between the social partners and a disregard for health and safety standards at the workplace.

7.1.2

In the EESC's view, the new policy should aim to make greater use of the competitive edge which stems from adopting positive socially responsible practices in businesses (29). This would lead all workplace players to invest production with a sense of awareness and responsibility, meet delivery deadlines, establish a ‘fair price’ (30), and ensure a competent, punctual, thorough after-sales service.

7.2

The EESC calls for an approach that steps up new district networks, especially in the new Member States, in order to stimulate informed, market-led demand.

7.3

Degressive aid should be paid out over a period of three or four years to cover feasibility and start-up analyses, network brokerage and sustainable development costs and lab costs for certification purposes.

7.4

Technological environments and social relations change rapidly and call for the speedy creation of new professional profiles. Continuing training instruments (31) are therefore needed for:

7.5

Drawing on its experience, the EESC hopes that courses in the metadistrict field, based on technological innovation, can be organised for public and private stakeholders, the world of industry and work, universities and banks. To these could be added training scholarships that would involve exchanges between the public and private sector, and between businesses and academic institutions.

7.6

The Innovation DG, which does much to support the experiences of Europe in a global context, should increase its support for arrangements relating to the launch, monitoring and assessment of inter-district and trans-national technological foresight management and benchmarking with a view to steadily extending the cultural and information database of current changes and the instruments used to measure them.

7.7

In order to support credit arrangements, which have always been a critical issue in all Member States and the enlargement countries in particular, a contact centre could be set up at the EIF (32) which, through its guarantee instruments, would be responsible for providing guarantees for the credit lines issued by banks, financial institutions, consortia and cooperatives providing services for metadistrict companies.

7.8

In the EESC's opinion, the new knowledge-based district is also the ideal environment to trial the most advanced forms of corporate social responsibility through eGovernment, eBusiness and the new eBusiness2business relations that are crucial to the transnational development of district networks, with the support of the common IDABC (33) interoperable networks and close attention to the eEurope 2005 programme (34).

7.9

The EESC believes that it is also essential that the Commission creates a compendium of common terminology to be used by all districts involved in Community programmes, and a European interactive database covering all districts, according to sector and area of activity.

7.10

A Community centre for coordination and cooperation between the district set-up and the various institutions involved could also be established within DG Enterprise. This centre could, among other things, produce and update guides to good practice, to be distributed at regional level.

7.11

The culture underpinning corporate social responsibility sees business as a resource for the general public, and is antipathetic to red tape and its attendant costs, which make action less attractive. A ‘Slid’ initiative would provide a useful instrument to extend the experience gained from the SLIM programme (35) to districts.

7.12

In the opinion of the EESC, it would be advisable to set up a helpdesk to provide advice and assistance on intellectual property and other services intended for district set-ups which are rapidly becoming an integral part of European networks and the global market.

7.13

It is also necessary to facilitate the participation of district bodies in pre-normative and co-normative projects carried out under CEN, Cenelec, ETSI and NORMAPME (36) which promote technological development.

7.14

In the context of the 5th multiannual programme for entrepreneurship and competitiveness (2007–2013) (37), the EESC believes that it is important to draw attention to the situation and needs of industrial districts.

7.15

In the opinion of the EESC, which is based on experience gathered in the past years, particularly in the wake of the European Councils of Lisbon, Barcelona and Seville, it would be useful to set up a European platform for ongoing dialogue, subdivided by sector and area of activity. This platform would bring together district leaders, public authorities, the social partners, financial representatives, research centres and NGOs.

7.15.1

The EESC considers that thought should be given to granting Community recognition to European knowledge-based metadistricts, so as to:

7.15.2

In this context, the EESC thinks that it would be useful to hold a public hearing to build on the present opinion, inviting district bodies and other interested organisations from different regions. The aim would be to encourage crossborder cooperation and to highlight its benefits:

7.15.3

The EKD consortium should foster the spirit of enterprise, social responsibility, the creation of new activities and the development of further training, and should encourage crossborder partnerships. It should be:

7.15.4

Nature — The EKD should be a private body, and thus not make public calls for funds.

7.15.5

Approach — The EKD should be subject to similar criteria as those governing the establishment of consortia in the sixth RTD framework programme. It should run for a five-year (renewable) period (39) and should be entered in a special register within an EKD platform to be set up at the Commission.

7.15.6

Legal status — Dealings with the Community institutions should be handled by a single recognised EKD coordinator, as happens with the integrated projects and networks of excellence in the RTD framework programme.

7.16

In conclusion, the EESC considers that the experience developed in districts and now being focused towards knowledge-based metadistricts, provides an excellent opportunity for:

7.17

Therefore, for all these reasons, the development of metadistricts should be supported and encouraged at all levels, be they local, national or European.

14.10.2005   

EN

Official Journal of the European Union

C 255/14

1.1

As part of the EESC's ongoing efforts to finalise its position and put forward proposals to the tourism sector, it is drawing up an opinion to take account of the new situation in the enlarged EU, both as it is now and as it may develop over the next few years.

1.2

The EESC has already drawn up opinions on a range of tourism-related topics, but this will be its first examination of the impact on the tourism sector and its prospects in this new European context. Most importantly, it will also be the first time that members from the new Member States have been involved in the work.

1.3

Without wishing to cast doubts upon or disregard the work of previous opinions, it is not certain what kinds of threats and opportunities these new prospects open up, be it for the whole of Europe, for individual countries, for pre-enlargement Member States or for the new Member States.

1.4

In drawing up this opinion, we have tried to be completely open to information, considerations and suggestions from the new Member States, whilst noting the views already expressed by the Committee. At the hearing held in Katowice, Poland, the Committee heard numerous important contributions from old and new EU Member States alike, all of which consider tourism a source of economic and cultural benefit, that contributes to the construction of a Citizens' Europe and therefore to European integration. This is all the more important and necessary during an ongoing enlargement process that calls for even greater efforts to bring the Union closer to its citizens and to foster mutual understanding between cultures and peoples. In the near future, the drive to achieve European integration will be speeded up as it is essential for the new EU members. People who travel as tourists are without doubt in the vanguard of European integration.

1.5

This opinion does not attempt to go into great detail on the current situation or on future prospects for the tourism industry in each country but to look at the common elements of a future European tourism policy and to examine and propose measures that will help to ensure that tourism is a significant driving force for economic and social development for all countries, and which also meets the criteria for sustainability.

1.6

The European Constitution is a new factor that must be taken into account in any analysis of relations between the Member States themselves and between these countries and the European institutions. This opinion attempts to diagnose how enlargement affects tourism as a whole and how the new framework provided by the Treaty establishing a Constitution for Europe might help or hinder this outstanding contributor to development that is tourism in Europe and throughout the world. In short, it sets out to analyse the factors that might shape European tourism policy.

1.7

It is in relations between the various peoples of Europe, between the citizens of this political, economic and social entity that is Europe, that we find one of the best ways in which tourism can contribute to a greater understanding between all peoples and consequently to the construction, cohesion and consolidation of the new Europe.

1.8

We must bear in mind that tourism is currently going through a hard time, due to various factors, including international terrorism and consequently the need to reconcile security with freedom, and also the world economic crisis and its impact on people's desire for travel, at least for long-distance travel. Tourism is an instrument for world peace, and can continue to be so in the future.

1.9

Global, and in particular European, tourism must be based on the development of the real cultural values of both sending and receiving countries and help to shape these values. The exchange of customs and cultures, mutual respect, appreciation for the diverse environmental, heritage and social characteristics of each locality, can and must contribute to a united Europe and a world where countries support and respect each other.

2.1.1

Tourism policy in the European Union and the European Constitution: Although tourism does not as such form part of EU common policy, some European institutions nevertheless put forward measures and actions which, because of their cross-sectoral nature, have an impact on tourism or use it as an instrument to achieve some of the EU's fundamental aims, such as sustainable development, employment and economic and social cohesion; in short, to provide a better quality of life for Europe's citizens.

2.1.2

Section 4 of the Treaty establishing a Constitution for Europe, entitled Tourism (Article III-281) sets out its position on tourism:

2.1.2.1

Article I-17 includes tourism in its areas of supporting, coordinating or complementary action:

‘The Union shall have competence to carry out supporting, coordinating or complementary action. The areas of such action shall, at European level, be:

2.1.3

These Treaty articles show that, although the economic nature of tourism and its potential to generate wealth through businesses is recognised, there is no suggestion of a move towards European harmonisation in this area. The intention is simply to acknowledge that it has a role to play in complementing and coordinating national policies. Furthermore, the desire to exclude any regulatory activity that could be used to harmonise these policies is made quite clear. This, in the opinion of the EESC, does not exclude but indeed facilitates agreement on identifying the values that define a European tourism model.

2.1.3.1

The Treaty could possibly have set out more interventionist models for tourism, but a reading and analysis of the proposed text, reveals a generally positive line, in harmony with the rest of the constitutional text. The section on tourism in the Treaty enables us to continue trying to achieve the main objectives as regards the role of tourism and how to improve it. On this basis, the EESC will continue working in the future with other institutions and stakeholders in the sector.

2.1.4

The aim of this Opinion is not to set out and analyse each of the policies developed by the different countries of the Union and compare models: those more or less integrated into a European framework; those more or less ‘nationalist’; diversity within European tourism, etc. As already noted in a Committee opinion, tourism starts with the local and regional dimension, and from there, spreads to the national and international stage. The beneficial and fruitful hearing in Katowice, revealed not only the diversity of tourism activity in each Member State, but also the range of strategies that each State, region and local community could use to promote their tourism model both now and in the future.

2.1.5

Nor is the aim of this opinion to make judgements on this range of models for action, although it is clear that some are more open than others to cooperation at whatever level, while others opt exclusively for competition in a free market.

2.2.1

The enlargement of the European Union is a new situation which is certainly going to bring new opportunities to the whole of Europe and clearly also to each old, new and future Member State.

This opportunity can be seen from various standpoints:

2.2.1.1

Supply: It is clear that enlargement is greatly increasing the already large range of European tourism products, not only in terms of the number of tourist locations, but also and possibly more importantly, in terms of cultural, heritage and environmental added value. Here it is necessary to refer once more to the hearing in Katowice, where this expansion of product range brought about by the new Member States became clear through the various natural, cultural and even industrial tourism initiatives that were presented. Without doubt this expansion will make the European industry more competitive, both internally and with other countries of America, Asia and the rest of the world. The new Member States are also seeking to increase their range of tourist products as a key factor in the development of their tourism industry and, ultimately, their economy. Although this desire for growth is absolutely legitimate and advisable, it should not be forgotten that growth has its limits and that the speed of growth must be sustainable to ensure that social, economic and environmental values are safeguarded in the future. Other Member States' experience of tourism development, with its failures and successes, should serve as an example of prudence and success in choosing a model for the development of new tourist destinations.

2.2.1.2

Demand: The increase in tourism demand associated with enlargement is undoubtedly triggered by three key factors. Firstly, the increased number of EU citizens wanting or needing to travel to other places and other countries of the EU which until now were difficult to get to, either because the individual was not part of the Community and so had difficulty travelling, or because they were an EU citizen and had difficulties travelling to other countries outside of the EU. Secondly, the higher standard of living that will certainly be reached in the new countries will increase peoples' desire to travel. Lastly, it is hoped that the new and improved transport and communication infrastructures will serve as an incentive for travel and tourism, for relocation for professional or personal reasons and in short, that travel and the associated tourism industry will grow.

2.2.1.3

Market: As a consequence of the increase in supply and demand due to EU enlargement, the tourism market will grow bigger and stronger. This will undoubtedly have a positive impact on all economic activity of the EU, where tourism is a very influential industry. It is difficult to predict the impact that enlargement of the market will have on prices of tourism products, the products themselves or companies' profits, but everything seems to indicate that the positive effects will outweigh the negative. The enlarged market will certainly increase competition, but in order that the positive effects have a snowball effect, the increase in competition will have to be based on an improvement in the competitiveness of businesses and of Europe's tourist destinations.

2.2.2

However, in order to create a strong industry from the new and great opportunity provided by enlargement, various principles, conditions and common rules that ensure the general viability of the activity, as well as its socially desirable future, must be adhered to. These criteria were defined at the Lisbon Summit, where a Strategy was mapped out on the basis of the following objectives: sustainability, a knowledge-based society, employment and social cohesion.

2.2.2.1

Sustainability: In a previous opinion on Socially sustainable tourism for everyone  (1), the EESC, like other international and European institutions such as: the Commission, the Parliament, etc., described the sustainability of European tourism as invaluable to its balanced and productive long-term economic development. The 100 initiatives set out in this opinion present a specific range of factors that help to achieve sustainability.

The growth in tourism will tempt the new countries to expand their tourism industry. The scale and speed of this expansion must be managed in such a way that it is economically, socially and environmentally acceptable. The demand for sustainability in tourism activities is not easy to meet, since contradictions continually arise and the criteria for applying sustainability differ according to the players involved.

2.2.2.2

A knowledge-based society: Tourism can contribute very constructively to achieving this Lisbon Strategy objective, due to the very nature of the activity, based on cultural exchange, travelling to other places and bringing different social and cultural customs and realities closer together. In particular, the acquisition of knowledge by young people is greatly stimulated when they travel, when they live with other people from other environments, when they become more open, tolerant and caring. The acquisition of knowledge is not only a question of academic study but also of gaining experience; this can be done in any circumstances, at any age and tourism provides a perfect opportunity for this.

Information and communication technologies are key contributors to both the creation and consumption of tourist products, and they will certainly help to make tourism a competitive industry accessible to all.

2.2.2.3

Employment: The Lisbon Strategy stated that Europe should take the lead in creating more and better jobs over the next few years. There can be no doubt that tourism, which accounts for 5 % of European GDP and employment — up to 10 % in some Member States — can be a source of more and better jobs in an enlarged Europe. For this to be socially sustainable, both old and newly created jobs in the tourism sector must fulfil the basic requirements of quality, specific training, stability and, in particular, recognition of the rights of workers employed part-time or on a temporary basis.

2.2.2.4

Social cohesion: Tourism is a powerful force for cohesion, enabling us to get to know other people and places, and therefore helping to give substance to the concept of citizenship in the enlarged Europe. To be able to share common goals with others, it is essential to know about them and tourism facilitates this. Tourism, will further progress in the enlarged Europe by improving cohesion between all the peoples of Europe.

3.1

The key question that we can and should ask is: Can tourism policy be covered by the general development of a comprehensive industrial and economic policy for the European Union? We know that the answer must be and is affirmative, if by tourism policy we understand all the criteria, objectives and instruments capable of steering European tourism towards satisfactory levels of competitiveness, wealth creation and sustainability. The Treaty establishing a Constitution for Europe thus states that actions in this sector shall support, coordinate and be complementary to other European policies.

3.2

Features of industrial policy applicable to the tourism sector. Some of the features of tourism policy that can be drawn from Europe's general industrial and economic policies are:

3.2.1

Employment and Social Policy: Aside from the very specific features of jobs in tourism due to its highly seasonal nature, all EU employment policies are perfectly applicable to employment in the tourism sector. That said, all additional initiatives to reduce seasonality should not only be welcomed but also encouraged and fostered by the EU institutions. There is still a lot of work to be done on this issue, since seasonal employment is still considered normal in the main tourism areas. The staggering of holiday dates could make a positive contribution to prolonging the season and therefore enable better use of the capacity of tourism infrastructures.

3.2.2

Quality: In the same way, Community policies to promote quality and to introduce quality benchmarks in industry must be applied in the tourism sector and lead to improved quality. Due to its very nature as a service industry and its core tenet of personal service tourism, is very sensitive to this variable. The efforts of all European tourism players in promoting quality should be supported, coordinated and complemented, as stated in the Treaty establishing a Constitution for Europe.

3.2.3

Research and development: Tourism in particular is undergoing major structural change in the way in which services are advertised and purchased via the internet, and the positive impact that this will have on tourism should be studied and promoted. R&D work on tourism should be the responsibility of all institutions at all levels and all businesses.

3.2.4

Consumer protection: Tourism is an economic activity in which there is a strong interrelationship between service providers and consumers. All general EU consumer protection policy must be applied directly to the tourism sector and increase business and consumer responsibility. The promotion and distribution of quality labels and eco-labels must be supported and encouraged in the tourism sector.

3.2.5

Environmental protection: All European environmental protection policies are applicable to and benefit the tourism industry. If tourism is fundamentally an industry based on the rational use of natural resources, all initiatives, activities and regulations can only encourage tourism today and in the future.

3.2.6

Other EU policies: In general, and due to its cross-sectoral nature, the tourism industry is affected by all of the EU's economic and industrial policies. However, the strategic importance of tourism to employment and social cohesion should be recognised in the institutions; policies should be applied appropriately on the basis of studies and pilot projects.

3.2.6.1

In short, the tourism policy of the enlarged EU, as set out in the European Constitution when it comes into force in due course, should be a policy of support and coordination, and complement all other EU tourism-related policies. The competitiveness of businesses, sustainability in its broadest sense, the creation of high quality employment, infrastructure policy, etc. should all focus on tourism as a key activity for the development of the whole Union.

3.2.7

Relation to other activities: Tourism acts as a catalyst to boost the effects of other activities, such as sport, as analysed by the EESC in its opinion on Tourism and sport: the future challenges for Europe  (2).

3.3

The status of tourism policy in the EU. The question as to whether tourism in Europe and in EU policy is truly accorded the role, importance and strategic position that it merits as a human, economic and social activity, can be answered from various points of view.

3.3.1

The EU, its countries, regions and cities are world tourist destinations: the new situation in Europe, together with the accession of the new Member States, has resulted in a wide-ranging and diverse product range, full of contrasts, enabling Europe to develop into a pre-eminent tourist source and destination. In the future, expectations are for continued, more modest growth, but with higher expectations than other industries. A policy of quality — the linchpin of competitiveness and sustainability — must underpin this product range; the development of a European quality tourism mark or marks should be the means whereby this quality is achieved and expressed.

3.3.2.1

It is acknowledged that the European institutions, including the Commission and the Parliament, are carrying out ongoing work to coordinate measures impacting on tourism. The European Tourism Forum initiative, which has already been implemented, should be noted. This annual meeting brings together all players in the tourism sector and is of great scientific value — as well as of value for planning and cooperation policy — for the improvement of European tourism.

3.3.2.2

This and other work to promote awareness of European tourism with the participation of all the sector's players, is very positive. The conclusions of the Forum held in Budapest in 2004 are to be found in Appendix 1.

3.3.2.3

Here it is worth mentioning again the EESC initiative presented in the opinion on Tourism policy and public-private cooperation  (3), proposing that the Commission analyse the possibility of creating a European Tourist Board, in either the medium or long term.

3.3.2.4

This Board could comprise a wide range of institutional officials and private players, in particular social partners and civil society organisations, and would analyse tourism information, propose guidelines and follow up agreements reached in the European Tourism Forum. The EESC will cooperate and participate actively in its creation.

3.3.2.5

The EESC wishes to express its determination to continue working on this issue, on its own behalf and in cooperation with the Commission, the European Parliament, the Committee of the Regions and other institutions, to boost the profile and development of European tourism.

3.3.2.6

To aid progress in this area, it is proposed that more use be made of institutional meetings to analyse, coordinate and promote the application of the Resolutions of the European Tourism Forums.

3.4.1

The current opinion is intended to be consistent with the EESC's previous opinion, Socially sustainable tourism for everyone  (4), adapting the principles that shape tourism policy to the new European situation. In this case tourism policy is not seen as a set of regulatory powers for the Union but as principles and values that must be borne in mind and must imbue tourism measures adopted by all public institutions at all levels, as well as the business activities of the private sector. Below is a list of those elements which, when taken as a whole, shape this system of guiding values that can contribute to improving tourism and to ensuring its sustainability.

3.4.2

The definition of tourism in the enlarged Europe must be based on values identified in European tradition and culture, and have the tourist him/herself at its heart. The idea of the tourist as a consumer of services that are complex, varied and profoundly personal in nature and composition cannot be abandoned. But the fundamentally economic and commercial nature of tourism, which necessitates the application of the principles of profitability and competitiveness in this economically influential industry and substantial contributor to Europe's GDP, cannot be forgotten either.

3.4.3

The tourism policy of the enlarged Europe should be based on sustainability, both in its wider sense, as an instrument of economic, social and environmental development — but development subject to stricter conditions. One of the most important issues to debate in this area concerns limits to growth. Have objective and quantifiable limits been set for tourism? Have economic limits been set on the pace of developing tourist destinations throughout the world?

3.4.3.1

The answers to these questions are not simple ones, but the idea of limits to growth — but not to development provided it is balanced, sustainable development — seems to be gaining ground. It might be worth quoting the example of the Mediterranean, where the number of tourist locations is increasing, a development that poses a serious threat to the entire tourist industry in the medium term and to its profitability. Tourism investment initiatives, subject to sustainable development conditions and in cooperation with the southern Mediterranean countries, must be welcomed as instruments for the economic and social development of a vast and currently underdeveloped geographical area.

3.4.4

The adaptation of the tourism industry to a changing situation to improve its competitiveness: R+D, new technologies, investment, promotion, design, marketing, networks, business associations, etc. is a requirement for all European businesses, particularly those that want to find a niche in the newly enlarged Europe. The role played by the internet today and the role it will foreseeably play in future must convince all sectors that the way forward is to be involved in its development, in using the internet to improve productivity, for research and ultimately to ensure that the tourism industry's development is more balanced.

3.4.5

Tourism and Employment: Labour relations, vocational training and promotion, specialisation, social protection, free movement of workers, etc. are key factors in the shaping of a tourism policy of the enlarged Europe. Particular attention must be paid to creating and training the new professions in the tourism sector; the institutions must be involved in this to ensure that the criteria of creating of high-quality jobs are met. Furthermore, the range of tourism qualifications should be expanded and improved.

3.4.6

Tourism in relation to the promotion of European culture and heritage: customs, art, architecture, history, folklore, gastronomy, etc. should all play a very important role in an appropriate European tourism policy. The new countries, with a rich heritage to add to the range of tourism products, will have to base their tourism development on these values. Experiences like those of the paradores in Spain, the pousadas in Portugal and the ville e castelli in Italy among others, can serve as good examples of integration between heritage and tourism underpinned by commercial promotion.

3.4.7

Access to tourism for all is a challenge that should not be ducked. Tourism is every individual's right, even if they suffer from disability: a campaign to encourage tourism in the enlarged Europe is proposed, aimed particularly at schoolchildren and adolescents and at older or retired people and pensioners.

3.4.8

The growth of the tourism market in the wake of enlargement must act as a driving force for internal European tourism and consequently as a basis for a general promotional policy.

3.4.8.1

Given the special significance of internal tourism and its effects on internal demand and consumption in the EU, particularly the current and potential importance of social tourism, the EESC will draft an opinion on a Social Tourism Policy for Europe .

3.4.9

Stakeholders in the tourism sector must take a leading role in the analysis, design, monitoring and evaluation of tourism policies in various fields. This must be the modus operandi at all times, a principle to be adhered to in any tourism policy. Cooperation strategies and methods of participation should be agreed between bodies.

3.4.10

The seasonality of tourism is possibly its biggest weakness; the pursuit of stable employment and activity must be at the heart of a new tourism policy for the enlarged Europe. Methods of compensating for the under-use of human resources and capital due to seasonality should be researched through pilot projects. This research should explore fully the changing tourism models and how to ensure tourism remains a significant instrument of development.

3.4.11

The diverse situation of European islands merits special attention. Some of the very characteristics that provide them with the right conditions for tourism development can have huge repercussions. The communication, transport and regional development policies are of strategic importance to these islands and to mountainous areas, due to the effect their specific characteristics can have on tourism.

3.4.12

Once more, it is important to emphasise that, in today's world, security and prevention are at the heart of tourism development. In the case of both natural and man-made disasters, prevention through rules that ensure people's freedom to travel and move about should be a key factor in tourism development.

3.4.13

It should not be forgotten that a tourism policy for the enlarged Europe must contribute effectively to helping tourism fulfil the role it can play in accelerating the process of social, economic and political cohesion in the EU, through various actions:

3.5.1

When applied to an analysis of the enlarged Europe and tourism, appropriate coordination and cooperation between the public and private sectors must be considered not only at local and national level, but can — and probably should — go beyond these barriers; cooperation must also be a vector for transmitting sustainable policies and measures to improve investment and competition from one country to another. Countries and social sectors with longer traditions of tourism can offer the benefit of their experience to the countries that form the enlarged Europe, helping them to avoid mistakes in developing tourism models, providing concrete experience of successes and failures; in short, working together on this new model of economically, socially and environmentally sustainable tourism.

3.5.2

Training must be one of the cornerstones of improving the quality of tourism, but it is advisable that its contents meet the real demand of the different tour operators; this should make institutional efforts more effective. Public-private cooperation can and should play a vital role in this area.

3.5.2.1

The EESC wishes to state that it would fully support the initiative creating a European Masters Degree in Tourism; this would help to shape, develop and apply the European tourism model, based on the values of the European Union as an area of co-existence and economic development.

3.5.3

The European tourism policy should ensure the promotion of networks of tour operators, as well as of business associations at all levels: local, regional, national and European.

3.5.4

The role of transport infrastructure in the enlarged Europe is crucial to ensuring that competition remains central to the development of tourism in all countries. The Union must make efforts in this field to guarantee safe, swift and high-quality access and intermodality of transport for all regions, bearing in mind that the use of infrastructures for tourism has a greater economic and social impact. Particular priority must be attached to the accessibility of the islands of EU countries in policies to improve internal and external communications.

3.6.1

European institutional cooperation can take many forms:

3.6.1.1

Pilot projects: For example, the European Social Tourism Project, that could contribute substantially to the growth of internal tourism and to ensuring access to tourism for all, as well as help in overcoming the seasonality of tourism. The project should possibly be promoted by various countries with similar successful experiences, together with the Commission, and should investigate the long-term viability of the global European Social Tourism Project. It is proposed that the European Commission analyse the possible impact of a European Social Tourism Project on the European tourist industry.

3.6.1.2

Cooperation on research: For example, into new forms of tourism, in particular tourism compatible with sustainability, which could be given a boost by enlargement. It is proposed that the Commission consider carrying out an investigative study on this subject, to which the EESC would contribute.

3.6.2.1

EU economic solidarity is best reflected in its policy of economic and social cohesion, implemented through the Structural Funds. This policy, which has proved an effective tool for progress, will be particularly relevant with enlargement. This is why actions which have a positive effect on the development of cohesion policies should be supported through the development of a tourism policy. These policies can in their turn boost tourism activity in all countries, so that tourism can exercise a multiplier effect on such actions. Cross-border measures can help to create tourism products shared by various countries, through common actions and products.

3.6.2.2

To explore this issue further, the Committee proposes that a study be carried out on the effect of the Structural Funds on the tourism sector.

4.1

Tourism is a key economic sector and industry for the effective construction of an enlarged Europe, which should grow with due respect for sustainability in the broadest sense and should contribute effectively to European social cohesion.

4.2

The new Member States see tourism as a great opportunity for economic development that can bridge the gap, in terms of income, between them and the old European Union countries. The great variety that they bring in terms of culture, heritage and nature will mean an expansion both of the product range and of internal and external tourism demand.

4.3

An enlargement taking in other countries will have a very positive impact on the future of the tourism sector, particularly if the European model of tourism is applied with due respect for sustainability.

4.4

One of the proposals that the Committee would like to see approved and forwarded to all Member State institutions is to mount a wide-ranging education and motivation campaign based on the concept of tourism as an industry of strategic importance for Europe. This campaign would essentially target school children, with the aim of teaching them to value tourism as a human activity that involves getting to know people, places and cultures, which can be of vital importance to their own personal growth and enrichment. This campaign should involve European, national, regional and local institutions, as well as business organisations and unions from all sectors, and should invite pupils to learn about their nearest tourist attractions (city, province, region) as a means of motivating them to travel in their own country and discover the delights of the rest of Europe.

4.5

Creating a database of good tourism practice, covering destinations and private operators such as hotel owners, tour operators and additional offers etc., could provide a means for exchanging positive experiences from which the newly integrated countries and those yet to join will certainly benefit greatly.

4.6

By the same token, creating and encouraging various networks of destinations which aim to promote the best values of sustainability and quality will ensure that tourism develops on the basis of criteria geared to a new model of European tourism guaranteeing greater continuity.

4.7

Consumer protection should be at the heart of a European Tourism Model intended to continually generate sustainable economic activity. All general consumer protection policy should be applied to tourism, mainly because of the strong consumer — service provider relationship found in this sector.

4.8

The Committee welcomes the Commission's initiative to carry out a study of the effects of sporting events on tourism, based on the EESC opinion on Tourism and sport: the future challenges for Europe.

4.9

In order to find reference points and bases for future actions in support of European tourism, the EESC calls on the Commission to carry out, within a reasonable timespan, studies on tourism and the situation of social tourism, as well as on tourism for people with disabilities, given its social importance and possible positive effects on tourist activity.

4.10

The EESC would like to reiterate two particular proposals already set out in this opinion:

5.

The EESC has decided to publish and distribute this opinion under the title the ‘Katowice Declaration on Tourism Policy in the enlarged EU’ and that it should be the Committee's contribution to World Tourism Day 2005, organised by the World Tourism Organisation.

14.10.2005   

EN

Official Journal of the European Union

C 255/22

1.1

As per the Single Market Observatory's (SMO (1)) work schedule, the section for the Single Market, Production and Consumption is proposing an additional opinion on The priorities of the single market for the period 2005 to 2010. As in the past, the SMO is contributing to a review of objectives and methods to reflect progress towards the single market.

1.2

The achievements of 2004 for the European Union cannot be underestimated. On the heels of an historic enlargement bringing in ten new members, citizens of the now 25 Member States elected a new European Parliament, and in late 2004 the 25 members of the new European Commission began their five-year term of office.

1.3

In the meantime, the Kok report has been published (2) as has the Committee's opinion (3) on the implementation of the Lisbon Strategy, both following the requests expressed in March 2004 by the European Council. Ideally, the Committee's own-initiative opinion on single market priorities for precisely the period of the new Parliament and new Commission would tie in with this work and provide a practical input from civil society.

1.4

It is important, therefore, to prepare the groundwork for the EESC's involvement in the consultations planned by the new Commission.

1.5

This opinion is a follow up to the Committee's opinion on the Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions: Internal Market Strategy — Priorities 2003 –2006 COM(2003)238 final. In this opinion (4), for which Mr Cassidy was the rapporteur, the Committee focused on a number of priority aspects for the smooth operation of the single market: reducing the impact of tax barriers, improving conditions for business, securing a sound legal system and high and transparent quality standards, especially for services of general interest, providing more and better public information, etc.

1.5.1

In this opinion, the Committee also stressed that additional welfare benefits cannot be achieved by liberalisation and enhanced competition alone, but that a supporting macro-economic policy geared towards growth and employment will do much to help complete the internal market. In the same way, the discussion about the future shape of the social systems must not focus solely on the internal market and budget requirements but must look at the systems as a whole, and reflect their objectives.

1.6

This opinion also rests on the ‘25 findings’ by the Single Market Observatory published on the occasion of the 10th anniversary of the creation of the Observatory (a brochure issued in October 2004 and entitled ‘What is the state of the enlarged Single Market? 25 findings by the Single Market Observatory’). With these various findings, the SMO stressed the persistence, despite very significant progress achieved in recent years, of far too many delays as well as malfunctioning of the single market which penalise European users and affect the performance of the EU in terms of competitiveness, of growth, of innovation and of employment vis-a-vis our principal world partners.

1.7

The multiannual strategic programme prepared by the Six Presidencies (5) for the period 2004 to 2006 constitutes a basis for studying this matter and for drawing up recommendations on the crucial period of 2005 to 2010 which saw, in addition to the process of integrating the new Member States, the establishment of a new Commission and a new European Parliament. The idea is thus to set the EU's priorities in a broader context, addressing the operational problems that have long been put on the back burner. The Six Presidencies' programme represents welcome policy continuity. Too often in the past, incoming presidencies have sought to impose their own agendas leading to confusion and the belief that the EU has no clear policy objectives.

2.1

As regards the single market, the priorities of the Six Presidencies are based on the Lisbon Strategy. The aim of the strategy is to make Europe ‘the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion.’ The Commission has drawn up an action plan entitled Simplifying and improving the regulatory environment  (6). Since 1 May 2004, this operation has involved a large market composed of 25 States. The Committee again notes that, in connection with the Lisbon Strategy, careful attention must also be paid to the difference between, on the one hand, an unnecessary regulatory and administrative burden and, on the other, the standards and regulations required to ensure that living and working conditions are maintained and developed in accordance with the common goals of the EU.

2.2

Important sources of concern arise from the way in which certain Member States add unnecessary complications at the time of the Community directive transposition in their national legislation. Stakeholders are frustrated by the opaque ‘Comitology’ procedure whereby the detailed regulations to implement framework directives are discussed behind closed doors without even scrutiny by the European Parliament or national parliaments.

2.3

One of the most serious difficulties is the time lag between a directive receiving Council and Parliament approval and its transposition into national law.

2.4

Member States often fail to transpose Community directives into national legislation, thereby creating a set of barriers, which cause economic disadvantages. The removal of barriers requires a carefully-judged mix of harmonisation, mutual recognition and simplification.

2.5

The complexity of the conditions governing activities in the single market is a handicap that has been singled out by operators. Although simplification is largely a matter of good practice and of implementation, essential simplifying provisions are still lacking, in particular as regards the Community patent, abolition of double taxation, a European law statute open to SMEs, standard European rules on mergers and simplified intra-Community VAT rules.

2.6

The Commission itself is not blameless. Some initiatives for Community legislation are not always sufficiently justified by preliminary impact analyses, which sometimes lack rigour and transparency such as for example the proposal for a second Directive on Port Services (7). European directives are often the result of complex political compromises between States or between the Council and the European Parliament, which do not make life easy for the users of such rules.

3.1

It is precisely in order to simplify the regulatory environment that the actors in the single market should be allowed to have their say. Self-regulation and co-regulation within the European single market thus developed initially in two areas: reference to standards, to flesh out the directives on technical barriers, and autonomy of the social dialogue recognised by the Maastricht Treaty.

3.2

Such an approach was gradually extended to other fields through codes of conduct and voluntary agreements: consumers' rights, especially in e-commerce (e.g. information, labelling, labels, security of payments), services, including financial services (e.g. mutual recognition of qualifications), and environmental protection (e.g. compliance with standards).

3.3

An inter-institutional agreement (8) concluded on 16 December 2003 between the European Parliament, the Council and the Commission defined and organised self-regulation and co-regulation within the single market for the first time. The Committee is astonished that the social partners, who play a substantial part in framing legal rules, were not consulted in this process.

3.4

Over the past ten to fifteen years the use of self-regulation and co-regulation on a European scale by the parties concerned has experienced strong growth, as the EESC's PRISM (9) database has shown. Among such initiatives, the SMO has noted:

3.5

The success of self-regulation and co-regulation depends in particular on the following:

3.6

Self-regulation and co-regulation can only provide case-by-case solutions to complement the work of the legislator, who will still assume essential prerogatives in their public interest mission. To help simplify the regulatory environment in certain spheres it would be desirable if self-regulation were more widespread in European professional organisations.

3.7

An information report on the current state of co-regulation and self-regulation in the Single Market, adopted by the EESC on 10 February 2005, develops these analyses and findings (CESE 1182/2004) (10).

4.1

The Commission proposal on amending the Community customs code aims to simplify existing legislation and to achieve greater harmonisation and integration. Enlargement will result in changes in both EU legislation and customs practices. Indeed, from one Member State to another, customs management at the EU's external borders varies greatly, especially as regards manpower and resources, if not thoroughness. This raises the issue, with a relevance that is heightened further by enlargement, of how effective customs checks are at European level, and therefore how safe the single market is from unfair competition, trafficking and counterfeiting. It could be worth exploring the possibility of a Customs equivalent of OLAF to safeguard the revenue from external tariffs and agricultural levies. One risk is that a loss of mutual confidence between the customs authorities of different Member States might lead to intra-Community checks being re-imposed, which would jeopardise the unity and freedoms of the single internal market.

4.2

The EU's customs services must be organised more efficiently and in a more homogeneous manner if the single market is to function properly. The ideal might be to set up an EU Customs Service but the governments of Member States have so far shown little enthusiasm for this step largely because they do not have sufficient confidence in the efficiency of each others' customs services. To this end, the EESC wants to see the progressive establishment of enhanced cooperation between the 25 national authorities. More joint training schemes and exchanges of customs officers are needed to move towards this objective but there is little evidence of the political will on the part of Member States.

5.1

There should be clearer identification of the barriers that violate the principle of a single market, and should therefore be eliminated (such as the blocking of the Community patent, double taxation, public purchasing contracts drawn up in such a way as to favour ‘national champions’ or the compartmentalisation of rules applying to intellectual property) as a matter of priority, and those that will remain because of the peculiarities of the different Member States, and which operators will just have to adapt to (such as cultural diversity, language peculiarities and tax differentials). The Commission SOLVIT network is not yet sufficiently well known but it has begun to show some results and should be developed.

6.1

Small firms are particularly handicapped by red tape and the persistence of trade barriers. Many want to have easier access to the single market, especially in border regions. They have no possibility of access to a simplified legal statute of European scope.

6.2

The EESC has called for a simplified European company statute (11) open to companies of all sizes to facilitate their activities within the single market. At present a feasibility study is being conducted, on the basis of which the Commission will decide whether and what kind of proposal for achieving this would be appropriate. (The Commission expects to have completed the study by June 2005).

6.3

The EESC also awaits the results of the Commission investigation into the wide range of double taxation agreements between Member States and between them and non-member countries (12). At present an investigation is being undertaken, the outcome of this investigation together with possible solutions will be presented later this year.

7.1

In all EU countries, it is recognised that the progress of the single market has enabled consumers to have a much wider choice, especially of goods (range offered, price-quality ratio). As well as the various EU rules to protect consumers' interests, voluntary or contractual self-regulation has developed in recent years, particularly for e-commerce, and covering the security of payments, guarantees, after-sales service and alternative methods of settling disputes. Among the priorities for improvement, particular reference should be made to analyses on the impact of planned regulations, realistic but not onerous implementation of the precautionary principle, effective protection of consumers' rights across borders and effective alternative machinery for helping to settle disputes.

7.2

It should be remembered that the Single Market has another purpose: job creation. This will only be possible if decisive action is taken to remove existing barriers. Now that enlargement has just taken place, the EESC considers it is more important than ever, in order to achieve a genuine multiplier effect, to have a proactive information policy that requires the participation of the Member States' national authorities and to ensure that States are held accountable. The information networks such as EURES and problem solving services such as SOLVIT in particular are in place but remain underused, as a result of a lack of support and information.

7.3

Job creation and worker mobility are also objectives of the single market and training and education programmes need to be more orientated to preparing for the ‘knowledge based economy’. However, as it made clear in the opinion mentioned in point 1.5 above, the Committee would again point out that, on its own, the setting-up of the internal market will not resolve the problems on the European labour market but that additional pro-active measures will also be required.

7.4

The EESC will fully support the Commission in achieving progress in these important policy areas and hopes that national governments will cooperate by doing all that they should be doing to speed up the adoption and implementation of their pledges. The EESC deplores the restrictions placed by some ‘old’ Member States on the free movement of workers from ‘new’ Members States, and urges a review of ‘transitional periods’.

8.1

The removal of barriers requires a dynamic balance between market pressure, mutual recognition and harmonisation. It means a new partnership between EU institutions, States, service providers and users, so as to better assess existing barriers, prevent new ones, coordinate approaches, simplify rules, provide for possible transitions and take account of trade globalisation.

8.2

The market potential of services remains largely untapped due to national requirements that are incompatible with the free provision of services. Completion of the single market in services has become essential because of: a) the internationalisation of trade, with the current WTO negotiations on services, b) the euro, which has increased competition and the need for a single market in services.

8.3

In the particular case of financial services such as insurance and banking, the slow progress in realising the Financial Services Action Plan and the slow implementation of it in pursuit of the Lisbon agenda are due to foot-dragging by some Member States. Too often, some heads of government agree policy pronouncements at a European Council instructing the Commission to take action and then forget all about it when they return to their national capitals.

8.4

With regard to the financial services, the legislative phase of the Financial Services Action Plan is now drawing to a close, crucial is now the consistent implementation at national level of the legislative measures.

8.5

The revival strategy proposed by the Commission is necessary. However, this involves taking into account the diversity of the sectors concerned. One way of coping with this diversity is to make more use of professional co-regulation and self-regulation at European level. The socio-economic interests concerned should take new initiatives so they can play a full part in this opening-up process.

8.6

An opinion adopted on 10 February 2005 sets out the comments of the Committee on the Proposal for a Directive of the European Parliament and of the Council on services in the internal market (CESE 137/2005) (13).

9.1

The Single Market, and with it the labour market, are under constant development. How to manage change is an important challenge to the European Commission and especially to the social partners.

9.1.1

The Commission should concentrate its work in order to simplify, consolidate and improve the consistency of existing European legislation so that both service providers and consumers can fully exploit the potential of the Single Market.

9.2

The EESC also urges Member State governments to show political will by setting up mechanisms for closer customs cooperation.

9.3

In the view of the EESC the main obstacles to the achievement of the Single Market are the Member States. Some are dilatory in implementation, others implement in an over detailed way, creating antagonism towards the Single Market and to the EU. Others obstruct e.g. by passing national legislation prohibiting cross-border takeovers of financial institutions such as banks. Others allow their nationalised industries to make cross-border takeovers without permitting reciprocity. The availability of unlimited funds to some countries' nationalised industries represents a distortion of competition and is one which the Commission has so far been reluctant to tackle.

14.10.2005   

EN

Official Journal of the European Union

C 255/29

1.1

The Commission has presented a Communication on enhancing trust and confidence in B2B e-markets. The Committee is of the opinion that:

2.1

The Commission Communication is to a large extent built on the work of an expert group with representatives from industry and the providers of electronic markets (‘the expert group’) (1). The Communication addresses the need to enhance trust and confidence in B2B e-markets in order to reduce economic risks stemming from unfair or illegal business practices in such markets. B2B e-markets have the potential to enhance efficiency by reducing transaction costs and strengthening competition, but such efficiency gains largely depend on the willingness of enterprises to participate in them. To remove the potential barriers to the use of B2B e-markets resulting from a lack of trust and confidence, the Commission foresees taking the following steps:

2.2

The Communication will encourage a more intense dialogue between stakeholders involved in B2B e-markets with regard to respecting fair trade principles and security requirements. As a consequence, potential barriers to the participation in such electronic trading forms should be removed. The Commission's services will regularly report on the progress made through the European e-marketplaces portal.

3.1

B2B e-markets can be defined as internet-based trading platforms where enterprises exchange goods and services. Following this rather broad definition, B2B e-markets can be grouped into the following categories, according to the different transaction functionalities offered:

The number of active e-markets has varied over time and is not yet stable. It is estimated that currently, about 1,000 e-markets are active worldwide, which is about 20 % less than two years ago [SEC(2004) 930].

4.1

The Commission Communication covers the area of ‘Enhancing trust and confidence in Business to Business Electronic Markets’. Electronic markets are an important part of the more general area of e-business. Some general comments can be made on this area of e-business.

4.1.1

Basically, well-functioning electronic markets are contributing to a more efficient business environment. In the longer run, this is beneficial to European business and to employment. Increased competition will stimulate European business to improve their efficiency. The EESC therefore supports actions that are beneficial for the development of electronic commerce. This has also been stated in previous comments.

4.1.2

In its opinion on the proposed directive on certain legal aspects of electronic commerce (2), the Committee noted that an uncertain legal framework is prohibitive for electronic commerce. The current communication aims to reduce this uncertainty and the EESC welcomes this.

4.1.3

The EESC, in its opinions on the Commission's communications ‘Helping SMEs to “Go Digital”’ (3) and ‘Adapting e-business policies in a changing environment: The lessons of the Go Digital initiative and the challenge ahead’ (4), has commented on the Commission's efforts to stimulate e-business. Basically, those comments are still valid.

4.1.4

For business and the public sector, electronic business is of great importance. It opens up possibilities for increased competitiveness, for trade across the internal market and for equal opportunities for SMEs. It is important to promote this new technology for usage, specifically among the SMEs. The Committee welcomes and supports the Commission's work in this area.

4.1.5

The Committee also welcomes the findings of the Expert Group on B2B Internet Trading Platforms. The group has done a thorough work on identifying problems. The expert group might however seem a bit unclear on the awareness among SMEs on the benefits. Page 10 says that ‘SMEs are, in general, aware and convinced of the advantages of e-business’; page 11 states that ‘SMEs still hesitate to fully engage in themselves in electronic trade’ and this is due to a ‘lack of awareness of the risks and benefits’. However, it is important to note the difference between e-business and electronic trade. It could be concluded that SMEs are aware of the general possibilities of using IT, whereas the more specific electronic trading still is more distant.

4.1.6

Even though there is an awareness of the possibilities of e-business and many SMEs are at the forefront in using e-commerce, there are some problems that still prohibit the full participation of the majority of SMEs in ‘the e-business society’. These problems are of a more general nature, and do not specifically limit themselves to electronic trading. Nevertheless, these problems are also relevant for this area.

4.1.6.1

The Commission has several initiatives for supporting SMEs using e-business. The Committee supports these, and would encourage the Commission to add or enhance initiatives that promote the specific need of SMEs for adapted software and standards.

4.1.7

The EESC also would like to make a special note of the need to stimulate an interest, in SMEs, in learning how to participate in electronic business. The area of electronic commerce and electronic business is moving rapidly. Stimulus to SMEs in life long learning could be worth looking into.

4.1.7.1

That is well in keeping with the recommendations in the Committee's recently adopted opinion on lifelong learning (5). In that opinion, the EESC recommends strengthening the lifelong learning programmes aimed at citizens currently in the workforce, while also making an immediate link between these programmes and the achievement of a knowledge-based economy. The EESC attaches particular importance to the possibility of SMEs having access to the programme.

5.1.1

The Expert Group, in its final report, has distinguished between different forms of trading platforms. The Committee supports the comment from the experts that ‘it would not be appropriate to focus only on e-marketplaces’. There are many different ways to participate in the ‘e-business society’. Different companies have different needs and different business principles. As the expert group takes notice of, ‘as most problems for SMEs are related to e-marketplaces, and here in particular to reverse auctions, this specific form of B2B Internet trading platform has … earned most attention’.

5.1.2

However, the Committee would at this moment also want to draw attention to the ongoing implementation at national legislative level of the two Directives on public procurement. The two Directives open up new methods for electronic procurement and, even though we might see some differences in different countries' implementations, it is of course of great value for business that public procurement can stimulate the usage of new electronic means. The Commission has also launched an ‘action plan for the implementation of the legal framework for electronic public purchasing’, which plays an important part in making SMEs more familiar with electronic business.

5.1.3

The Committee agrees with the notion that e-marketplaces have specific potentials that would be unwise not to support. The Communication is welcomed. It does, however, believe that lack in trust and confidence, although important, is not the only reason for the reluctant attitude from SMEs towards e-marketplaces, or, for that matter, the more general concept of B2B Internet trading platforms.

5.1.3.1

As the expert group states, ‘Enterprise policy can play a useful role in helping SMEs to adapt to the new challenges of Internet trading platforms, by promoting market transparency, interoperability and fairness. … public authorities should not promote specific forms of e-commerce but remain neutral with respect to different sales channels and different functionalities at Internet trading platforms. … A need for further actions has been identified in particular in the areas of awareness building, market transparency, standardisation, trust and confidence.’

5.1.3.2

In general, B2B Internet trading platforms have to be fed with information from SMEs. The more advanced, the more there is a need for standards. These standards are still a far way from being completed, and when completed, there must be SME-adapted software using it.

5.1.3.3

The lack of standards is not only technical, but also with regard to man/machine interface. Considering the amount of trading platforms, and adding the issue of multilingual complexities, it can be understandable that SMEs are reluctant. This area is needed to look deeper into from standardisation bodies, as well as from the Commission, especially if it is desired to promote cross border trade. It is also valid for the standardisation of product and service classifications and wordings, where the ongoing efforts in CEN/ISSS are supported by the EESC.

5.1.3.4

To a certain extent, there is a problem for SMEs to participate in electronic auctions and other electronic marketplaces due to the size of the requested tender. SMEs have a limited potential to deliver large volumes. Specifically in public procurement, this is an issue that should be given attention.

5.1.3.5

Other issues that might prohibit the use of Internet trading platforms are different national legislations and implementations of EU directives. It is regrettable that many directives allow for national options from the point of view of harmonising, e-Signatures being a major problem. The Committee welcomes and strongly supports the initiative from the Commission on analysing existing legislation.

5.2.1

Different B2B Internet trading platforms are suitable for different purposes. Electronic markets tend to promote ‘lowest price’. This is in many cases not the most important factor. Just in time delivery, service costs and cost for customising are as important — or even more so. These factors are difficult to include in more or less automated e-markets, which might explain part of the relatively slow uptake of the more automated versions of e-markets.

5.2.2

SMEs are often not primarily competing only with ‘lowest price’, but also with flexibility and customising. For SMEs, the personal relation is important. The use of e-markets represent a new ‘business culture’, to which SMEs not always are adapted. The anonymity of Internet might scare SMEs. Psychological reasons might well be of importance for the reluctance to use more advanced electronic markets. Codes of Conduct must take these circumstances in consideration.

5.2.3

In the discussion on competition rules for B2B e-markets, it is referred to the concern that the ‘so called network effects’ may result in a dominant position of a network operator. It is debatable to what extent this should be a matter of concern. The risk for abuse of such a dominating position seems to be limited in most cases. However, the Committee does support that the Commission follows this issue, in order to notice possible abuse arising from a significant power, but it strongly advocates that specific regulations for electronic markets in this respect should not be introduced. The regulation for e-markets shall, as much as possible, be equivalent to the rules for the traditional markets. Rules and directives must be neutral to technology and service delivery mechanisms.

5.3.1

The Committee supports the Commission in encouraging stakeholders to agree on or review codes of conduct. It also wants to support the ideas, brought forward by the expert group, on the usage of a check list.

5.3.2

The Commission remarks in the Communication (page 4) that many enterprises may ‘perceive it as difficult to distinguish between a shift of market power that has to be accepted for economic reasons, and unfair practices which do not comply with legal provisions of code of conduct’. When new business models are introduced, it often takes some time for the market to adapt. The Commissions remark is certainly valid, and more emphasis should be put into trying to explain the new market mechanisms.

5.3.3

Even though some suppliers might be negative to reverse auctions, this is certainly a tool of great potential for commodities (extremely well defined products with a low degree of service content and a low possibility for branding). The Committee agrees with the Commission that there must be more strict rules to this kind of auctions, be it electronic or by any other means.

5.3.4

The issue of trust and confidence has many dimensions:

These, and other, dimensions of trust and confidence should be taken into consideration.

5.4

In summary, the Committee does not disagree on any major subject with the conclusions in the Communication. However, it does consider it important to realise that this might be an important or even necessary step to promote the usage of B2B Internet Trading platforms, and specifically e-markets, but it is not the only step needed. Standards, suitable software, awareness building, national and EU legislation are other areas.

14.10.2005   

EN

Official Journal of the European Union

C 255/33

1.1

European Community proposals to protect public health and the environment currently centre around three long-standing legislative instruments on the classification, packaging and labelling of dangerous substances (Council Directive 67/548/EEC of 27 June 1967), on the classification, packaging and labelling of dangerous preparations (Council Directive 88/379/EEC of 7 June 1988 as replaced by Directive of the European Parliament and Council Directive 99/45/EEC of 31 May 1999), and on the marketing and use of certain dangerous substances and preparations (Council Directive 76/769/EEC of 27 July 1976).

1.2

Each of these has been maintained and extended over the intervening years by further EEC and EC Directives amending the legislative content of the instruments and by adapting to technical progress the various annexes which set out, amongst other technical points, the laboratory tests to be followed, the details of the risk and safety phrases to be used, and the chemical identities, CAS, EC and Index Numbers and applications, of the substances affected.

1.3

The directives, as amended, also seek to preserve the Internal Market for the substances and preparations affected and therefore must remain consistent with each other and with other legislative instruments affecting specific sectors (e.g. pesticides or cosmetics) or supporting particular action programmes (e.g. EU action plans to combat cancer).

1.4

The current proposal is the twenty-ninth amendment to Council Directive 76/769/EEC. It implements and is a logical consequence of the (coincidentally) twenty-ninth adaptation to technical progress of Council Directive 67/548/EEC by Commission Directive 2004/73/EC of 29 April 2004.

1.5

The adaptations to technical progress set out in Commission Directive 2004/73/EC include updates to Annex I of Council Directive 67/548/EEC for specific substances relating to their classification, packaging and labelling to reflect the latest scientific data, and to Annex V of the same Directive, to amend the methods for the determination of physiochemical properties, toxicity and ecotoxicity of substances and preparations in order to reduce to a minimum the number of animals used for experimental purposes.

1.6

Commission Directive 2004/73/EC setting out these changes was published in April 2004 (OJ L152 1-311). A number of substances were classified or reclassified as being carcinogenic, mutagenic or teratogenic (CMRs or c/m/r substances). The measures provided for were stated to be in accordance with the opinion of the Committee on the Adaptation to Technical Progress of the Directives for the Elimination of Technical Barriers to Trade with Dangerous Substances and Preparations. In such cases, there is no requirement for an earlier Opinion on the proposal from the Commission from either the European Parliament or the European Economic and Social Committee.

1.7

Under another Council Directive 94/60/EC (an earlier, fourteenth, amendment to Council Directive 76/769/EEC), c/m/r substances may not be used in substances or preparations placed on the market for sale to the general public. It follows that an implementing measure is required, i.e. the current proposal, to add these substances to Annex 1 of Council Directive 76/769/EEC. In compliance with Article 95 of the Treaty, in this case the co-decision procedure has to be followed with the European Parliament and the Economic and Social Committee has to be consulted.

1.8

In the course of 2004, the Commission consulted a number of organisations representing the relevant stakeholders, including CEFIC, CONCAWE, Eurometaux and BLIC (representing the chemical, oil, metal and rubber industries in Europe) and BEUC (representing consumers in Europe), together with experts from the Member States.

2.1

The proposal will insert 346 entries containing substances newly classified or re-classified under Commission Directive 2004/73/EC in the Appendix of Annex I to Council Directive 76/769/EEC. However, of these, 304 are already subject to restrictions on sale to the general public due to their earlier classification as c/m/r substances of category 1 or 2. Thus only 42 substances will be restricted for sale to the general public for the first time.

2.2

Of the 42 substances restricted for the first time, a large number are used as raw materials or intermediates in organic synthesis or for specific professional applications. No evidence was produced during consultation to suggest that they are used in substances or preparations placed on the market for sale to the general public or that any derogations are required.

2.3

Of the 304 substances now reclassified, 145 will move from being classified as carcinogenic category 2 to category 1. This will require two corrections for each substance, adding the substance to its new category and deleting it from its existing category. A number of changes are also required to the ‘Notes’ accompanying each entry.

2.4

The proposal is intended to preserve the Internal Market and at the same time ensure a high level of protection for health of consumers and for the environment. The costs are estimated to be low, due to the limited use of these substances by the general public. However, as usage of c/m/r substances by the general public cannot be properly controlled by other measures, the proposed restriction on sale is the only available approach.

2.5

Member States will have twelve months from the date of entry into force of this Directive to adopt and publish the laws, regulations and administrative provisions necessary to comply with the Directive.

3.1

As with the previous amendments to Council Directive 76/769/EEC, this proposal deals with a number, in this case a very large number, of unrelated substances. These include petroleum hydrocarbon streams, pesticides and fungicides, general industrial chemicals and inorganic and organic raw materials and intermediates.

3.2

Unlike other recent amendments, however, this is not the primary legislation affecting these products. This proposal is merely a necessary consequence of changes to their classification and labelling as already proposed and implemented under Council Directive 2004/73/EC. Any concerns over the validity of the classification should therefore have been resolved earlier and cannot be re-opened at this stage.

3.3

The Commission has however verified as far as possible that consequent restrictions on sale to the general public as a result of their classification or reclassification as c/m/r substances will not add significantly to the costs of manufacturers. Direct enquiries to CONCAWE for the oil industry in respect of the petroleum hydrocarbon streams listed and to CEFIC for the chemicals industry in respect of the two phthalates listed (BBP and DIPP) support this conclusion.

3.4

Confirmation of this lack of impact is more difficult for the pesticides and fungicides shown here under their proprietary names (Benomyl, Azafenidin, Dinocap, Linuron) or as inorganic chemicals (cadmium chloride) due to the absence of information on current manufacturers, if any, in Europe. Internet searches suggest that in most cases the hazards are already well known and again it must be assumed that the products can be withdrawn from sale to the general public without negative impacts on users, i.e. suitable replacements are readily available.

3.5

The proposal also highlights some general difficulties in understanding and following existing EU law with respect to so-called ‘substances’. Many of the ‘substances’ listed here and contained within the original EINECS inventory of ‘existing substances’, are properly classified as ‘UVCB substances’ i.e. complex mixtures of known or unknown composition as defined in an academic paper published in 1999 and subsequently referred to in a footnote on page 18 of the ‘Manual of Decisions for Implementation of the Sixth and Seventh Amendments to Directive 67/548/EEC’ published by the European Chemicals Bureau in 2002. Certainly they are not simple substances as generally understood, and in addition, in this particular case, few are currently marketed. This supports the view of the Commission when the EINECS list was first published that ‘EINECS overstated the number of commercially significant substances by a factor of four’, i.e. there were then around 25 000‘substances’ actually on the market in significant quantities. Presumably some of these have now been replaced by the 5 000 or so ‘new substances’ listed in ELINCS — with similar problems of definition and identification — to give a round total of 30,000 substances actually on the market in 2005. This is more containable that the 100 000 number often quoted but still raises questions of public and professional access to the data already collected (but not regularly updated) on at least half of these and to the problems for the competent authorities in Member States in defining whether or not a substance is ‘existing’ or ‘new’ and if so which regulatory procedure should be followed.

3.6

Given that the proposal known as REACH incorporates, depends upon and interfaces with this existing legislation, these concerns should be addressed as soon as possible. It is likely that additional resources will be required and these should be put in place as soon as possible.

4.1

The EESC supports the limitations on marketing and use contained in this proposal. These are necessary and desirable consequences of decisions on classification, packaging and labelling already taken by the Commission services in conjunction with experts from the Member States and after discussion with suppliers and other stakeholders.

4.2

However, as with previous amendments to Council Directive 76/769/EEC, the EESC regrets the linking of unrelated products in a single text which might, in other circumstances, require specific and continuing amendments to match external realities. This does not support good, timely, effective and, above all, transparent, governance.

4.3

The complex and seemingly random nature of the lists of substances provided in the Annex to this proposal and to Council Directive 2004/73/EC suggest that attention should now be paid to improving the quality and availability of the data currently held, before adding massively to that currently stored. If an improved system can be demonstrated, using the best of modern technology and techniques for data dissemination, then the benefits of REACH in respect of accumulating and sharing data relevant to the protection of human health and the environment will be more evident.

4.4

REACH is also intended to simplify the existing system, and in so doing bring benefits to all the stakeholders involved. Certainly there seems to be some scope for this. Above all, REACH, however formulated, must not add to an already complex and, on this occasion at least, somewhat opaque process.

14.10.2005   

EN

Official Journal of the European Union

C 255/36

1.1

The first Community legislation for ranges of sizes for pre-packaged products (1) dates from 1975. It includes regulation for both metrological requirements (2) and ranges of sizes for liquids. Twenty years later, in the framework of the SLIM-IV exercise (Simpler Legislation for the Internal Market), a team, comprising members designated by Member States and representatives of stakeholders identified by the Commission, advised on pack sizes legislation (3):

‘given their complexity (some 40 targeted products, complexity of certain ranges of values, etc.) the evolution of consumer patterns and preferences over the interim period and reservation as to the appropriateness of maintaining this type of legislation. Moreover, successive amendments of the Directives and an enlargement of the scope of the 1975 pre-packaging directive have made the application of this body of legislation problematic……. The application of the Directives has proved to be difficult, notably as a result of the variety of rules and practices applying to ranges: certain ranges were made mandatory (e.g. wine) whilst others remained optional. Moreover, Member States retained the right to fix ranges at national level because of the optional character of Community rules. The variety of rules led to the compartmentalisation into different national markets within the European Community. In addition, the arrival of new packaging formats and new products and their classification in the existing ranges system tended to exacerbate an already confused situation.’

2.1

In the 1960s, with the start of the European Community, different national rules on nominal quantities (4) of pre-packaged products (pack/bottle sizes) were seen as a major barrier for the free movement of goods between the Member States. Hence, these sizes were harmonised by means of Community rules.

2.2

At the same time, there was a concern not to impose such new Community rules on companies that worked only on the national market and did not intend to export to other Member States. Harmonising regulation was therefore of an ‘optional nature’: Member States adopted the Community rules, but were allowed to maintain existing national rules for their national markets. Only products conforming to the Community rules would benefit from free circulation.

2.3

However, for some products (e.g. wine, spirits) total harmonisation was introduced. Community sizes became mandatory for all operators in these product areas and all national sizes were abolished.

2.4

Over the past decades, huge changes have occurred in packaging — demographic changes, households have decreased in numbers, consumption of individual portions has increased and more wealth and consumer sophistication has led to increased demands for an enormous variety of packages and products. Additionally, super- and hypermarkets have grown to be the most important outlets to consumers, and through consumer demands for change, industry is pressurised to become increasingly innovative and competitive in a global market.

2.5

Elements that used to be covered by the prepackaged sizes legislation have now been consolidated in new legal instruments of consumer protection. This consumer protection legislation is designed to prohibit unfair business-to-consumer practices and has developed, in the main, a coherent and sufficient system of information to consumers by means of labelling and price per unit comparisons and hence the current prepackaged sizes legislation is being seen as counter productive.

2.6

Under the framework of the SLIM-IV exercise, members designated by Member States and representatives of stakeholders identified by the Commission were requested to review and advise on pack sizes legislation. This need for review was subsequently reinforced when the European Court ruled in the Cidrerie-Ruwet case (5) that the ‘Cassis de Dijon jurisprudence’ applied, stating that Member States must accept on their market products legally produced and marketed in another Member State unless there are overriding requirements of a public nature. The Court suggested that this would hardly be the case for pack sizes.

2.7

Recommendations from the review produced a working document on which between 8 November 2002 and 31 January 2003, the Enterprise DG held a public Internet consultation in 11 languages with consumers, producers and retailers. An impact assessment was subsequently produced and a new directive laying down rules on nominal quantities for pre-packed products, repealing Council Directives 75/106/EEC (6) and 80/232/EEC (7), and amending Council Directive 76/211/EEC (8) has been established.

2.8

The main instruments of consumer protection are:

Directive 2000/13 on labelling and presentation of foodstuffs (Art 2), Directive 84/450/EEC on misleading advertising (amended by Directive 97/55/EC to include provisions on comparative advertising), will be amended by COM(2003) 356 final, of 18.6.2003: Proposal for a Directive of the EP and of the Council concerning unfair business-to-consumer commercial practices on the Internal market, Directive 98/6EC on consumer protection on the indication of the prices of products offered to consumers (price per kilo/litre):unit prices, which are mandatory for all products in supermarkets.

3.1

The new directive removes the regulation of sizes and prevents Member States from imposing their own legislation on their national markets that differs from the Community rules. The only exceptions (excluding very small and bulk quantities) are the Community rules which are now set for Wines and Spirits, White Sugar, and Soluble Coffee. Aerosols are an additional exception and will remain under the current legislation for consumer protection under the health and safety regulations. However, aerosols will be regulated under a new directive currently under review, following which they will be removed from the nominal packaging directive.

3.2

The current document concerns only the legislation of ‘ranges of sizes/quantities’ and not the metrological requirements, which will be the subject of a later proposal.

3.3

The proposal aims to:

3.4

Current environmental regulation has no impact on sizes, nor do sizes have an impact on environmental regulation. Existing environmental regulation should remain applicable and the proposal should not impede the full and proper implementation of environmental law, notably the prevention of waste requiring the minimisation of packaging.

3.5

To allow industry to adapt to deregulation, and taking into consideration average investment cycles for packaging equipment, a time limitation of 20 years has been allocated for deregulation to take place.

4.1

Nominal pre packed quantities, where nominal refers to the declaration of volume specified, and quantity to the actual volume enclosed, are those determined only by the contents quantity sizes of the containers/packaging. The Committee welcomes the imminent review of the metrological quantity (control of contents enclosed) as a major priority for consumer and European industry protection.

4.2

The EESC praises the Commission for its public consultation and dialogue with stakeholders and notes that it has taken account of various sectors, including wines and spirits, sugar, coffee. The need to create greater competitiveness and innovation for European industry is essential for growth and the SLIM- IV exercise aids this priority.

4.2.1

The CEPS (European Spirits Organisation) has made separate comment to the Commission and highlights further, consumer protection issues, unit pricing and the potential abolition in 20 year time of mandatory spirits legislation, rightly pointing out that the legislation concerning the latter should be reviewed prior to the 20 year time frame.

4.3

Reference should be clearly made within the directive to a maximum volume capacity of mineral water of 10 litres. Beyond this volume there is evidence to suggest that the quality of mineral water could begin to deteriorate and may present a health risk to consumers.

4.4

The new directive allows for greater potential for innovation, market research and development opportunities creating wider choice and variety for consumers.

4.5

However, note should be taken that unit pricing does not appear to be universal across Europe and often appears in small print on shelf labelling. The unit pricing font size declaration is set at national level and in many cases is still not clear for consumers. This will not ease the problems for blind, poor sighted, illiterate or non-native speaking citizens, particularly those who are accustomed to buying the same size standard product.

4.6

The consumer organisations have pointed out that some consumers can be confused by excessive variations in packaging sizing and by packaging that may not qualify as deceptive but still gives the impression of greater contents. Clear and legible packaging labelling, including the ‘on shelf unit pricing’ and pack size, together with continued monitoring of deceptive packaging legislation, will overcome this issue. Greater emphasis should also be placed on immediate action where consumer protection legislation is breached or absent. These issues need to be more clearly emphasised in the directive, and further considered under the metrological review.

4.7

There is a strong fear from consumer organisations that free sizing will allow for price increases to be imposed on products more easily under the guise of new packaging sizes, in a similar way to the introduction of the Euro (Eurozone) and the change to metric sizing (UK). The Committee would therefore request that, as part of the internal monitoring procedures, product size changes are referenced to any unit product price changes when statistical data is collected.

4.8

Whilst the directive is not impacted by current environmental legislation, it is probable that with an increase in smaller sizes the volumes of packaging will increase, resulting in greater amounts of packaging waste.

4.9

It is imperative that the aims of the Packaging/Packaging Waste directive (PPW) are achieved, regardless of whether sizes are regulated or not. This message must be repeated to all Member States and industry, together with a clear communication to consumers to demand less packaging from the retailers.

14.10.2005   

EN

Official Journal of the European Union

C 255/39

1.1

With this proposal (COM(2004) 470 final of 14 July 2004), the Commission intends to follow up the Media Plus (1) and Media-Training (2) programmes, taking account of the results of their mid-term evaluation in conjunction with the preparatory action i2i Audiovisual: Growth and Audiovisual, (3) the results of the broad public consultation held between May and August 2003, and the impact analysis containing an ex-ante evaluation from July 2004 (4).

1.2

The Commission considers the audiovisual sector to be a keystone of European citizenship and culture and able to play a unique role in building a European cultural identity. It does however note that this sector is fragmented; although this reflects an important cultural diversity, it has prevented the European audiovisual industry from being genuinely competitive with respect to non-European imports, both on the EU market and worldwide.

1.3

With the Media 2007 Programme, the Commission aims to stimulate private investment in the audiovisual sector to enable companies operating in that sector, especially SMEs, to improve their competitiveness and financial solidity, building on experience gained in previous programmes.

1.4

In order to develop synergies and to avoid bureaucratic duplication and obstacles, the Commission wishes to have a single programme covering the pre-production and post-production phases and focusing in particular on European-scale distribution.

1.5

The specific aims of the programme are, in short:

1.6

In the Annex to the proposal, the Commission examines each operational objective in great detail, subdividing them and setting out, for each of them, the measures to be taken, arrangements for their implementation, the instruments to be used and the financial resources allocated to each one. Of the various forms of implementing measures, to be highlighted is the creation, along new lines, of a network of MEDIA desks and MEDIA antennae, with a long list of responsibilities and tasks.

1.7

The proposal concludes with a detailed budget covering the seven years of the Programme, with a budget for implementing the programme's implementation set at EUR 1055 million, specifying all the financial resources allocated to each action and measure planned.

2.1

As stated above, this proposal pursues the approach first adopted by the Media (1991/1995) (5), Media II- Development and Distribution (1996/2000) (6), Media Plus (7), Media Training (8), and Media Training (2001-2005) (9) Programmes, which have now been integrated into a single programme.

2.2

It is worth recalling in this connection the main conclusions of the opinions adopted by the EESC on these programmes.

2.2.1

The EESC concluded its Opinion on the Proposals on MEDIA II-Training (1996/2000) and MEDIA II — Development and Distribution (1996/2000) (10) (COM(94) 523 final), by drawing attention to the need to ‘reduce the risk of resources being wasted’ and to define in advance criteria which‘ensure that the programmes and their funding are as effective as possible’, as well as the need to better define‘criteria and instruments which can help to pinpoint eligible parties and ensure maximum transparency’.

2.2.2

In its Opinion on the Proposals on Media Training (2001/2005) and MEDIA PLUS — Development, Distribution and Promotion (2001/2005) (11) (COM(1999) 658 final), whilst supporting the Commission proposals, the EESC deplored the fact that these had not taken ‘account of the fact that the importance of the European audiovisual industry does not derive exclusively from its entrepreneurial dimension, but also from its role as a vehicle for the promotion of our culture and democratic values’.

2.2.3

It also emphasised the need ‘to evaluate the jobs which could be generated by […] application’ (of the measures proposed) and recommended that such measures should actively promote ‘greater participation by women, […] ensuring that women are […] better represented in the sector’.

2.2.4

The EESC also acknowledged the lack of incentives for ‘access to the market for independent [European] firms’ and ‘public access to the European audiovisual heritage’ by means of digitalisation, suggested that it might be useful to set up ‘pilot projects […] in the framework of e-Europe’, demonstrating its support for the promotion of subtitling and, regretting the paucity of the resources allocated, reiterated the proposal to create a European Information Society Agency ‘which would help coordinate the various initiatives in the field of multimedia convergence’. It also welcomed the creation of a Guarantee Fund as a means of promoting the audiovisual sector (12).

2.2.5

Lastly, in its Opinion on the Proposals for a Regulation and for a Decision to extend the Media Training and Media Plus programmes until 2006 (13) (COM(2003) 188 final) and COM(2003) 191 final), the EESC, criticising the fact that the Commission had not been able to present its new multiannual programmes for the audiovisual sector in good time,

2.3

When considering the proposal now under examination, it will look at the substance of the observations and recommendations made, in order to ascertain to what extent they have been taken into account and whether they remain valid.

3.1

The EESC welcomes the Commission initiative, which to a large extent takes on board a variety of the EESC's suggestions and recommendations set out in previous opinions.

3.2

One particular example of this is the fact that the new MEDIA programme is designed to simplify the structure of Community action for the audiovisual sector by setting up a single integrated programme that will come into play in the pre-production and post-production phases (MEDIA 2007), replacing the two current programmes (MEDIA Plus and MEDIA-Training).

3.3

A further example is that the new programme also takes account of horizontal priorities previously highlighted by the EESC, such as:

3.4

The EESC also notes and welcomes the sensible, well-ordered way that the draft Programme has been designed, in particular the way that the annex on the budget and the financial impact has been drawn up.

3.5

The EESC furthermore notes that, in the explanatory memorandum, the Commission has not been able, as it had intended, to give more detailed consideration to the role that industry can play in the lasting development of the European audiovisual and cinematographic sector as an important mouthpiece for European citizenship and culture. The EESC believes it to be crucial, however, that European cultural values are always safeguarded and that diversity and pluralism are guaranteed in all audiovisual media: this concern should form an integral part of all Commission initiatives under this programme.

3.5.1

In this context, the EESC wishes in particular to draw the Commission's attention to the need to strengthen initiatives to prevent too much concentration in the industry, which could harm pluralism and diversity and which could prove even more damaging where new technologies are being introduced, as this could be detrimental to production and distribution. The EESC also wishes to highlight the need to ensure that copyright is protected and to combat piracy, while consolidating resources for countering certain anti-competitive practices.

3.5.2

By the same token, the EESC can only welcome the Commission Communication on the follow-up to its communication on certain legal aspects relating to cinematographic and other audiovisual works (14) and support the adoption by the European Parliament and the Council of the Proposal for a Recommendation contained therein, as stated in an earlier opinion (15).

3.6

The EESC takes the view that including a definition of the main concepts underlying the programme in the decision itself — especially when these concepts are of particular importance in the context of the programme, such as the concept of the independent producer — would make it easier to understand the MEDIA 2007 programme, although it acknowledges that such concepts appear in other Community documents and that such definitions have traditionally been explained in ‘guidelines’ for the programme's implementation.

3.7

Having noted some differences in the various language versions of the proposal for a decision presented by the Commission, the EESC strongly recommends that these discrepancies be identified and ironed out in the definitive texts.

3.8

Lastly, whilst acknowledging that the funding earmarked for the proposed measures and the allocation of these funds over the years do not generally give rise to any further comments, the EESC feels that account should be taken of any implications arising from the remarks set out below under ‘specific comments’ and recommends that, in the mid-term evaluation, due thought be given to whether the resources allocated are adequate for fully achieving the programme's objectives.

4.1

The EESC recalls and reaffirms some of the strategic considerations set out in its opinion of 24 September 2003 (16) because it believes that the Commission's proposal for a decision still fails to give adequate coverage to some aspects relating to the need for the new programme to:

4.2

The EESC also reiterates its recommendation, as stated in its opinion of 15 September 2004 (17), that more emphasis be placed on training in new technologies and on new requirements as regards the collection, cataloguing, conservation and restoration of film and television works, database management and standardised methods for storing work in high-quality digital format.

4.3

The EESC considers that although the programme's objectives include specific incentives for SMEs, these should be better reflected in the funds allocated, so as to allow for more effective and consistent support: equally, support for introducing new digital technologies — in cinemas and online — and for new initiatives in technological innovation would also warrant more substantial funding.

4.4

As regards management of the MEDIA 2007 programme, the EESC notes that the Commission has just set up an executive agency for the management of Community action in the fields of education, audiovisual and culture (18), for the period from 1 January 2005 to 31 December 2008, with the possibility of a review or extension of the tasks of the Agency in the framework of the new generation of programmes, which would thus include management of the Media 2007 programme.

4.4.1

Given, however, that under the terms of point 7 of the explanatory memorandum, the Commission ‘will delegate the management of the programme to an executive agency’, reiterated in point 5.3 of the Annex and in point 6.1.1 — financial intervention — which also sets out the appropriations to be allocated to this executive agency, the EESC, having studied the aims and tasks of this Agency as set out in Article 4 of the aforementioned decision, urges the Commission to give a detailed, clear indication of i) what the agency's specific responsibilities will be for managing the Media 2007 programme in line with provisions 4(2), 4(3) and 4(4) and ii) how it will share competences with other Community bodies responsible for implementing, advising or evaluating the MEDIA 2007 programme and/or take over these competences.

4.4.2

In particular, consideration should be given to the need to provide the executive agency with human resources specialised in this particular area of the audiovisual sector; the Decision makes no mention of this.

4.4.3

Attention should also be drawn to the importance of ensuring that the integrated management of the programme is properly guaranteed by the agency, thereby specifically avoiding conflicts of responsibility — whether positive or negative — between the bodies involved in defining the programme's strategic aims and its management.

4.4.4

It should also be made clear what body or bodies will take over the Agency's responsibilities if, in mid-programme, there is no confirmation that it can continue to ensure the smooth, efficient running of the programme, without any alternative solutions being proposed.

4.5

As regards the financial provisions and because the European audiovisual market remains fragmented and its cultural heterogeneity is reflected in a dichotomy between (a) countries with a low audiovisual production capacity and/or a limited linguistic or geographical area, and (b) countries with a greater production capacity (19), the EESC considers that, notwithstanding the limitations imposed by competition law, the Commission — when defining the programme guidelines — could take account of the true situation in some Member States and regions that have demonstrably failed to develop their audiovisual industries to their full potential.

4.6

As regards communication, the EESC fully supports the Commission's strategic option of strengthening the substantive powers of Media Desks and Antennae as set out in point 2.2 MEDIA desks and MEDIA antennae of Chapter 2 in the Annex to this decision. The EESC suggests as a result that the Commission should bring the wording of Article 12 into line with the wider range of tasks listed in the aforementioned point in the Annex (20) and should provide appropriate funding for MEDIA desks to enable them to fulfil their tasks properly.

4.7

The Committee also wishes to highlight the need for Article 13(2) of the proposal to make explicit the Commission's obligation to ensure consistency and complementarity between the Media 2007 programme and the programmes and actions undertaken in the audiovisual sector as part of Community cooperation with third countries and with the competent international organisations, as provided for in Article 9(2) of the Council Decision of 20 December 2000 on the MEDIA Plus programme (21).

4.8

The EESC also considers that, given the estimated duration of the programme (7 years) and the way that markets and technologies naturally develop, it would be advisable to change the evaluation timetable set out in Article 14(3) of the decision, amongst other things bringing forward the first mid-term evaluation report on the results and the qualitative and quantitative aspects of the programme's implementation. This would mean that the conclusions of this evaluation might still be used for a possible revision of the operational objectives and measures to be carried out.

14.10.2005   

EN

Official Journal of the European Union

C 255/44

1.1

European retailers reacting to the social and economic changes during the last 20 years, in particular the changes in consumer needs, created the system of Large Multiple Retailers. The basic idea was to make the shopping trip more convenient for the consumer by putting a wide range of food items and other goods for sale under the one roof. In marketing terms, the Large Multiple Retailers aim to attract more and more consumers by means of attractive presentation of merchandise at competitive prices. Food retailing has seen the most profound changes, by its sheer size and importance, these developments have had the greatest impact on consumers. In the UK 80 % of food products are purchased from Large Multiple Retailers. This is among the highest in the EU. Superstores and Hypermarkets can offer consumers as many as 20,000 product lines.

1.2

Over the years, Large Multiple Retailers have brought significant benefits to shoppers in terms of range of products and competitive prices. In particular Large Multiple Retailers have provided consumers with a large range and variety of food products under one roof, combined with free and ample parking facilities. They are both child- and disabled person-friendly. Some are providing banking and refreshment services as well as recycling facilities. Many have online shopping facilities and provide a delivery service in the local area. The ability to do the weekly household shopping in one location at competitive prices makes supermarkets attractive to consumers and explains the growth in the Large Multiples' share of the total grocery market.

1.3

In the majority of new Member States the Large Multiple Retailers have a smaller market share than in the EU 15 but their market share is increasing rapidly.

The Large Multiple Retailers operate under varying business structures:

1.4

However, the market share of large retailers varies considerably from one Member State to the next. In Hungary, the top three retailers account for 29 % of the grocery market. In the UK; the top three retailers control 60 % of the grocery market while in Ireland the top three retailers control 66 % of the grocery market. The figures for the top three retailers' share of the grocery market in the following Member States is as follows: Poland 14.2 %, Czech Republic 25.4 %, Slovakia 42.6 %, Slovenia 77.3 %. The trend can be observed that over the last ten years, the retail food market is being dominated by a smaller number of very large retailers. On average, food sales account for 70 % of the grocery market. (Source GfK Consumer Scan/Household Panel).

2.1

DG Internal Market, using data collected by AC Nielsen, took a basket of Pan-European (1) branded items available in EU 14 in the period September 2002–October 2003 and compared prices. The following price index shows that prices varied considerably throughout the EU 14. Using the EU median = 100, the following are the lowest and the highest prices across the named Member States:

2.2

Pan-European branded goods such as those above have a large degree of consumer recognition throughout the EU.

Difference in prices are greater for generic branded and white label products. Here again, there is no obvious pattern to differences in prices between Member States:

2.3

While these price variations in branded and non-branded goods give us a snapshot of the situation today, the frequent monitoring of prices should also help to determine whether prices for these goods are converging over time, as one would expect a fully functioning Internal Market. DG Internal Market takes the view that in an efficiently functioning internal market the price differences should not be as great as shown. In a similar survey in the USA the price differences were found to be less than in EU 14.

2.4

There are a number of reasons for price variations — different operating costs such as labour costs, transport costs, waste-management costs, size of store and volume of turnover, local taxes and the level of price competition both on the buying side and the selling side. Different preferences and tastes amongst consumers, which are largely determined by cultural habits, can also play an important role. In addition local market conditions, such as population density, the climate and the state of the supply chain, must also be taken into account.

3.1

During the last five years, the major food retailers have been advertising along the lines ‘every day low prices’ — ‘more for your money’ — ‘good food costs less’ — ‘helping you spend less every day’. It is constantly being claimed that Large Multiple Retailers are the consumers' champion in driving down unjustly high prices. This is clearly because consumers attach a great deal of importance to price. In theory, this should be good news for consumers especially in the short term but the long-term consequences need to be taken into account. Reasonable prices must be paid to farmers to guarantee a constant supply of good quality food which is produced under good environmental conditions. All involved in processing and distribution must also get a reasonable profit.

3.2

The UK supermarket ASDA (owned by US giant Wal-Mart) has made price-cutting a philanthropic mission by declaring ‘our purpose is to make goods and services more affordable for everyone’. The new philosophy seems to be to spend as little as possible on food. In many cases the Multiple Retailers in their advertising would like to make us think that the most important thing about food is the price of food. The percentage of household income spent on food continues to decline throughout Europe (see Appendix 1).

3.3

Traditionally, the Multiple Retailers have carried out the most aggressive price promotions on basic products that act as ‘Traffic Generators’ because they have to be purchased frequently while hiking up margins on other items which consumers are not as aware of. In some Member States these ‘Traffic Generators’ are frequently sold below cost. Below-cost selling of food is banned in some Member States e.g. Belgium, France, Ireland, Italy, Luxembourg, Portugal, as well as in Spain and Greece under special circumstances.

3.4

Below-cost selling and aggressive pricing ultimately can lead to anti-competitive practices.

4.1

The growing Large Multiple Retail sector has created many thousands of jobs, many low-paid (often part-time) throughout the EU. In a recent study published on the website of the European Foundation for the Improvement of Living and Working conditions (Industrial Relations in the Retail Sector, October 2004, Comparative Study), it is stated that around 60 % of retail workers are women, and there is also a high proportion of young and poorly qualified workers. Pay is relatively low and there are high levels of part-time work and weekend working. The industry is undergoing major structural change, with processes of concentration and diversification, and pressure for the restructuring, deregulation and reduction of employment. Another characteristic trait is usually the large pay gap between women and men, due to the high proportion of women in part-time work and their concentration in low-status jobs.

4.2

Large Multiple Retailers employ people in a wide range of jobs but checkout operators and those who stack the shelves often represent the bottom end of the pay-scale and, depending on the employment situation in the Member State, pay-rates can be at the minimum rate or just above.

4.3

Flexible working hours can be beneficial to students and part-time workers, temporary workers and those who have family responsibilities or other employment. It is most important that no discrimination against part-time workers should apply.

4.4

European Multiples need to develop in the direction of quality consumer services produced by competent personnel working under secure and good employment conditions. The continuous concentration of the Large Multiple Retail sector is leading to new competitive strategies (e.g. price wars), severe pressure to control costs including labour costs, deregulation of opening hours and more late hours and weekend work.

4.5

While food prices have been reduced through competitive pricing, increased efficiency in purchasing, administration, storage procedures, marketing and good quality foodstuffs, nevertheless, the reality is that cheap food tends to mean cheap labour and we need to start thinking a lot more about this as we encourage supermarkets to vie with each other over price wars. Prof. Tim Lang, Thames Valley University.

4.6

In addition, when we import from third-world countries we should not ignore the labour conditions applying.

5.1

Concentration in food retailing has increased sharply throughout Europe. Between 1993 and 2002, the market share of the top five food retailers has increased on average by 21.7 % reaching an average of 69.2 % in the EU 15. In 2002 it ranged from 37 % in Italy, 52.7 % in Greece to 94.7 % in Sweden (Source-London Economics report 2003 to UK Department of Environment).

5.2

In some Member States both the buying and the selling side of the market tend to be equally concentrated. In other Member States buyer groups representing (technically) independent retailers (e.g. voluntary chains) so therefore at national level the buyer-side of the market is more concentrated than the seller-side.

5.3

Hypermarkets are expanding services and product mixes, while Discounters will continue to expand especially in the food sector and while concentrating on low prices and they may move to offer some higher quality products at the lowest possible prices.

5.4

The recent trend in the Fruit and Vegetable sector has been away from a commodity marketing approach. Multiples want to concentrate their purchases with a small number of large preferred suppliers that can partner them on a year-round basis. The ESC stated in a previous Opinion (2) that: The wide selection of fresh fruit and vegetables on offer is seen as a particular advantage of hypermarkets. Weekly markets, on the other hand, are praised for their better quality, fresh goods, wide choice, reliability and human contact.

5.5

The Multiples have encouraged consolidation in the area of product suppliers and especially food-product suppliers. One of the areas where this has happened is in the case of bread supplies. In Ireland and the UK, especially, price competition in bread sales has resulted in the closure of a vast number of bakeries and the market is now dominated by a few very large bakeries. It has enabled the supermarkets to provide low-cost bread to the consumer with reduced nutritional value. Bread with greater nutritional value is still available, but at a higher price.

5.6

Many supermarkets have also introduced in-store bakeries. Frozen dough products prepared in a factory are bought in and finished in the store.

6.1

London Economics in its 2003 report stated that in 2001 no Member State appears to have systematically the highest farm gate-retail price spread. In general the price spread falls in the range of one to five times the farm-gate price. In the case of bread whose main ingredient is wheat the farm-gate retail spread can be as high as 30 times the farm-gate price reflecting the large share of non-farm costs in producing bread.

6.2

In 2001 the farm-gate retail spread for Lamb prices increased in the UK and Ireland and declined in France and Germany. In the case of Fruit and Vegetables the farm-gate retail spread shows either no significant trend or a small decrease. Wholesale fruit and vegetable markets have been in decline for some time, while the spot market remained important for fresh produce sometimes resulting in large price fluctuations due to weather and the supply situation. Large multiple buyers are moving to seasonal or annual contracts from a small number of suppliers to bring stability to the fresh produce sector and reduce costs. This will stabilise the farm gate-retail price spread. When price wars arise it may mean primary producers taking lower margins and being subject to increased costs.

6.3

If the buying power of the Large Multiples leads to reduced prices to their suppliers and if these reduced prices are passed on to the consumer then the % margin going to the farmer may not necessarily fall but the actual farm-gate price will be lower and thus the farmer may have little or no profit.

6.4

In a survey carried out by the National Farmers Union in the UK in 2002 a basket of food which included beef, eggs, milk, bread, tomatoes and apples cost an average of EUR 55 at a supermarket, the farmer received about EUR 16 which is less than 1/3 of its retail value. In the case of individual items farmers got 26 % of the final retail price of beef, 8 % in the case of bread and 14 % in the case of bacon.

6.5

The producer price index (in real terms) for all agricultural products fell in the EU 15 by 27 % over the period 1990-2002. In nominal terms farm output prices remained broadly stable over the same period. The sharp difference in the trend of farm-gate prices and consumer food prices has attracted considerable attention but no general consensus as to the reasons underlying the divergence in price trends. (London Economics report 2003).

6.6

Large retailers are offering a growing number of fair trade products, and this is to be welcomed. In an article in the Wall Street Journal on 8 June 2004 by Steve Steckton and Erin White they write the following in reference to supermarket selling of Fair Trade Products: Sainsburys (British Supermarket) has sold Fair Trade Bananas as more than quadruple the price of conventional bananas — and more than 16 times what growers receive. Tesco recently tacked on $3.46 per pound for Fair Trade Coffee while the grower gets about 44c above the world market place. ‘Supermarkets are taking advantage of the label to make more profit because they know that consumers are willing to pay a bit more because it is fair trade,’ says Emily Dardaine, fruit-product manager at Fair-trade labelling organisation international, or FLO, a Germany-based federation of Fair-trade groups.

7.1

The divergent degree and nature of the market concentration in the various EU Member States is a factor that must be taken into account when examining Large Retailers' practices towards suppliers. As indicated above, since consumers attach great importance to price and given that consumers' demand also influences the offer, there is considerable pressure on retailers to lower prices. In their determination to provide low prices to the consumer, the Multiples put pressure on suppliers to reduce prices. This is true in the food sector and primarily in markets where the concentration is very high. They constantly hold a threat of product delisting as a weapon to get even better terms from the supplier. In addition, many of the very big Multiples change their buyers frequently from one section to another so as to prevent the development of personal relationships between buyers and suppliers. The role of the buyer is to keep on trying to get cheaper and cheaper food from the supplier. They can make or break a company by delisting products and switching to another company, especially in the case where the supplier has put in major capital investment to supply a particular line to one Large Multiple. Frequently suppliers, especially small suppliers, do not have the financial resources to comply the demands of the Multiples. What chance has a farmer to achieve reasonable prices in markets where the Large Multiples have such buying power?

7.2

Apart from the ability to extract discounts on transactions from suppliers, buyer power may manifest itself in the contractual obligations which retailers may place on suppliers, such as listing charges, slotting allowances, retroactive discounts on goods already sold, unjustified high contribution to retailer promotion expenses and an insistence on exclusive supply.

7.3

Food suppliers to large Multiple Retailers are frequently put under severe financial pressure because of long delays in receiving payment — sometimes as long as 120 days (180 days in rare cases) after delivery of food products. In contrast the consumer pays for the product immediately on purchase. Long delays in payment makes a major contribution to the Multiple Retailers' profits as suppliers are providing interest-free loans.

7.4

Sometimes Multiple Retailers force their suppliers to supply food below cost for a period in order to maintain their listing on the supermarket shelf. This can lead to severe financial losses for suppliers and farmers.

7.4.1

The introduction of the on-line auction system has also strengthened the position of the large Multiples in sourcing cheap product for own-label brands. Under this system, the large Multiples look for tenders to supply products (mainly own/private label) via the Internet. Suppliers compete with one another to supply at the lowest price.