23.12.2006   

EN

Official Journal of the European Union

C 318/1

A.

In January 2003 the EESC adopted an own-initiative opinion entitled Industrial change: current situation and prospects — An overall approach. The goal of that opinion was not only to provide an overview of the most pressing industrial change issues and trends, but also to highlight the role of the CCMI and its future work. Among the areas of responsibility assigned to the CCMI in this context the following were to be found:

The abovementioned opinion also stressed the need to ‘combine competitiveness with sustainable development and social and territorial cohesion’ in keeping with the Lisbon strategy. Moreover, it proposed a working concept of ‘industrial change’ that embraced both the developments affecting companies and the interaction of these with their environment.

So far, the CCMI has focused mainly on assessing the impact of industrial change on sectors, firms, employees, territories and the environment. The aim of the present own-initiative opinion is to examine how sustainable development can be a catalyst for industrial change.

B.

That same opinion concluded that change in the European industrial sector has often been approached from the restructuring angle but that it is a much more dynamic concept. The business world is closely linked to the European political and social environment in which it develops and which, in turn, influences the process of industrial change. Fundamental industrial change comes about in two ways: through radical action and through gradual adaptation. Precisely, the aim of this own-initiative opinion is to consider how sustainable development as Brundtland defined it (a development that meets the needs of today without endangering the supply of the needs of future generations) can act as a catalyst for gradual and proactive industrial change.

C.

The opinion provides, in the main, examples from the energy and related sectors but the same processes as described here can be applied to others. The reasons for this choice of sectors are several:

D.

The moment when a particular technology becomes available is determined by R&D. The moment when it is actually put in use is determined by the market, however. The gap between the two can also be influenced by politics. Thanks to a balanced mix of policy measures — subsidies, promotion, taxes — business in Sweden and Japan began at an early stage with the technological development of heat pumps and solar panels respectively. Partly as a result of this, these countries have succeeded in building a market-leading position.

E.

The EESC reaffirms that the three pillars of the Lisbon strategy are of equal importance. However, it is often stressed that there is scope for environmental and social considerations only against a background of a healthy, growing economy. That is an overly simplistic explanation of the strategy as the reverse is also the case. Certainly there is no scope for a healthy, growing economy against a background of a sick environment or of a society driven by social dissent. The Committee welcomes the actions that have been taken in this field and which are described in Annex 2 of the Commission Communication on the Review of the Sustainable Development Strategy — A platform for action (1).

F.

Sustainability is not just one of the options on a list; rather, it constitutes the only possible course of action in order to secure a viable future. The concept of ‘sustainability’ is an overarching one and is therefore not restricted to the environment, but also embraces economic and social sustainability issues. Continuity of a business is a form of economic sustainability which can best be achieved by maintaining profitability. Europe can contribute to this by strengthening competitiveness through innovation and by stimulating research and development through active policy and a mix of targeted measures (see, for example, Sweden and Japan).

G.

Social sustainability means allowing people to live healthy lives and to generate an income while guaranteeing a reasonable level of social security to those who are not able to do likewise. The EESC maintains that Europe can contribute in this area by striving for a society that enables people to maintain their vocational skills, by offering them decent work in a safe and healthy working environment and in a climate where there is room for both workers' rights and fruitful social dialogue.

H.

The eco-industry offers a lot of opportunity for economic growth. Europe has a strong position in a number of sectors in this industry. In order to retain and develop its strengths and to achieve similar positions in other sectors, the EESC feels that Europe has to display greater ambition.

I.

An industrial policy directed at sustainable development can contribute to the competitiveness of the entire European economy, including not only to the new rising sectors, but also to the traditional industrial sectors. The EESC wants the European Commission to support such a policy. Examples described in this opinion show that well thought-out and implemented support schemes (combination of taxation, feed-in tariffs, promotion and regulation) during the introduction of new environmental technologies can help to create a market for these technologies that can then be developed further without support. Any support mechanism must be clearly degressive as the cost of state aid should not restrict the international competitiveness of other industries.

J.

The EESC notes that subsidies and incentives are not always efficient and can incur large financial costs with little economic effect if used improperly. Subsidies and regulations should help the market start up and develop initially until the technology is ripe to permit survival without any support. The key factors of successful support are as follows:

K.

Sustainable development is not to be limited to a European context, as it has a global dimension. European sustainability policy should be endowed with instruments to prevent reallocation of labour to other regions. In order to ensure a level playing field, a two-pronged approach is needed: internally to the EU on the one hand and externally to the EU on the other. Regarding the former, appropriate instruments should be introduced to ensure that social and environmental costs resulting from non-sustainable production methods within the European Union be internalised in the price of goods to promote the main thrust of the report of the World Commission on the Social Dimension of Globalisation for policy coherence amongst the ILO, WTO, IMF and World Bank (see CESE 252/2005). In terms of the latter, the EU should make every effort in relevant international fora (in particular WTO) to include non-trade concerns such as fundamental social and environmental standards into international agreements on trade to facilitate the upgrading of the sustainability policies of Europe's competitors. Countries such as the United States, India and China have an unfair economical advantage compared to Europe as long as they are not bound by the Kyoto protocol's CO2 reduction targets. Those agreements should be implemented on a global scale as trade can only be really free when it is also fair.

1.1

Our economy is currently based on the availability of cheap energy and raw materials. But supplies are finite, which is partly why they are becoming considerably more expensive. Structural and technological change which are possible, are needed and Europe has to contribute to that change so as to help European industry to meet that challenge. Sectors which involve high levels of consumption of energy and raw materials have to turn to more sustainable production in the future in order to reduce the drain on natural resources. Because these sectors will still be needed in the future as the production of starting and semi-manufactured materials is the basis of industrial value.

1.2

Sustainably producing European energy-intensive industries which compete internationally must not be forced out of the market by competitors from outside the EU using less sustainable production methods. To prevent this occurring a level playing field must be created for those sectors in cooperation between civil society and government.

1.3

The greatest challenge confronting us is the development of a sustainable society which can maintain the present level of prosperity and at the same time neutralise the negative side-effects of current patterns of consumption. One of the main conditions for this is that we learn to cover our energy needs differently and transition to a different form of industrial production.

1.4

The need for gradual transition to a more sustainable model of society is beyond dispute. There are several reasons for that requirement. Experts differ on the period of time fossil fuels will be available for a reasonable price, but everyone agrees that they will become increasingly rare and expensive. In addition, and due to our consumption habits we are facing one of the greatest threats of our age: climate change.

1.5

Ideally, the best way to stop these processes would be to stop burning fossil fuels as we are at present. However, in the short term this is both politically and economically impossible. We have to adopt other approaches, for something has to change — if not as fast as desirable, then at least as fast as possible.

1.6

By applying the trias energetica  (2), a model whereby more efficient energy use can be stimulated in three steps, a start can be made in the short term on moving towards more sustainable consumption and production. These steps are:

1.7

For this a package of measures is needed both to put these three objectives into effect and to bring about a switch to more sustainable industrial production. These measures must be based on an economic and strategic calculation. When making such calculations, there inevitably comes a time when choices have to be made between conflicting interests. We must not avoid these conflicts. So-called ‘win-win situations’ do exist and policies should always be directed towards their creation, but, in practice, that can be very hard. In such a case, choices have to be made between opportunities for sustainable change and the protection of existing interests, taking into account the natural rise and decline of any one sector over another. Such existing and conflicting interests should be made transparent and addressed.

1.8

The concept of sustainability dictates that economic, environmental and social aspects of the development of European society are equally important. This opinion will:

2.1.1

Every year the Earth absorbs 3 million exajoules (EJ) of solar energy. Total reserves of fossil fuels amount to 300 000 EJ, 10 % of total annual insolation. Total annual energy use is 400 EJ. The 3 million EJ of energy absorbed are available in the form of 90 EJ of hydroelectric power, 630 EJ of wind energy and 1 250 EJ of biomass. The rest is available as solar energy (3). Thus, in fact there is enough sustainable energy to cover our needs. Accessing it is the problem.

2.1.2

As, given the cost aspect and the lack of appropriate technology, renewable energy sources will not be able to meet rising energy demand in the short term, other energy sources will be needed. There is potential for fossil fuels to be used cleanly, for example by removing the CO2 and subsequently storing it to prevent its release into the atmosphere. The development of technology for capturing and storing CO2 is in full swing: a dozen or so pilot installations are already either in the startup phase or under construction in Europe, North America and China. The use of this technology can be expected to break even as early as 2015/2020.

2.1.3

The duration of support schemes for renewable energy is crucial, as premature withdrawal may jeopardise the new industry, and on the other hand, prolonged support is not efficient. Typically, support can be gradually phased out, as R&D and economies of scale push the price of the technology lower. Proper specification of the support scheme is also of high importance. Finally, it is important that support schemes be announced in advance so that business has time to prepare for the new market conditions.

2.1.4

The nuclear energy debate is becoming increasingly important, as is shown by the Green Paper on a European Strategy for Sustainable, Competitive and Secure Energy (4) and the Conclusions of the March 2006 European Council on this subject. In some countries there is a majority in favour of nuclear energy, in others a majority against — mainly because of the waste problem (5). Nonetheless, nuclear power will for some considerable time continue to be indispensable for meeting strongly growing energy demand, as it is an emission-free energy source and as the volume of waste is relatively low by comparison with the energy generated. In the long term nuclear fusion may provide a solution to the drawbacks of nuclear fission.

2.1.5

It should be noted that hydro-electric power sources do not form a subject of a specific paragraph, as this technology (apart from tidal energy) is considered both fully-fledged and fully operational. This should not be seen as detracting in any shape or form from its importance in the sustainability context.

2.2.1

Biomass is organic material from plants and trees specially cultivated for energy purposes. Wood and fast-growing crops are used with a high yield per hectare. By-products from agriculture, the main emphasis being on food, are also used as biomass. Examples are straw and sugar beet crowns. Biomass streams can also be obtained from residues, e.g. waste arising from planting and maintenance and in households, businesses and industry. Examples are fruit, vegetable, and garden refuse, waste timber, manure, slurry, sawdust and cacao shells.

2.2.2

Biomass can be used to (partially) replace fossil fuels. Annual consumption of fossil fuel energy is 400 EJ. Annual availability of biomass energy is 1 250 EJ. But this does not mean that an immediate switch is possible. On the basis of available technology it is currently possible to produce 120 EJ of energy from biomass. Current world consumption of biomass energy is 50 EJ (6). A limited increase in the use of biomass for fuels is therefore possible in the short term, but technological breakthroughs will be needed to enable the potential to be exploited.

2.2.3

A number of initiatives have produced promising results. In Austria there has been a sixfold increase in the use of biomass for district heating, and in Sweden an eightfold increase has been achieved over the last ten years. In the USA more than 8 000 MW of the installed generation capacity is based on the use of biomass. In France 5 % of energy used for heating is produced from biomass. In Finland bioenergy already accounts for 18 % of total energy production and the aim is to increase this to 28 % by 2025. In Brazil ethanol is produced on a large scale as a fuel for cars, currently ethanol provides roughly 40 percent of Brazil's non-diesel fuels (7).

2.2.4

The development of biomass is important from a number of points of view:

2.3.1

Worldwide the theoretical potential of wind energy is more than twice forecast electricity needs in 2020. This potential and its steadily improving competitive position as a result of technological advances make wind energy an essential replacement for fossil fuels. Wind energy can never cover all needs because of its fluctuating supply.

2.3.2

Over the last few decades installed generation capacity using wind energy has increased spectacularly. The capacity of commercial turbines has grown from 10 KW (rotor diameter 5m.) to more than 4 500 KW (rotor diameter more than 120 m.) (9). Over the last eight years installed generation capacity using wind energy has grown at an annual rate of more than 30 % (10). According to projections by the European Wind Energy Association (EWEA), total wind energy capacity will be sufficient in 2020 to cover 12 % of electricity needs. This implies an increase in wind energy capacity from 31 GW at the end of 2002 to 1 260 GW in 2020, growth of 23 % per year. The market leaders and biggest exporters are the United Kingdom, Denmark and Germany, and the main export markets are China, India and Brazil. The situation is going to change in China where the wind energy machinery industry is growing rapidly. Compared to 2004 the number of producers in China grew by 60 % in 2005. This implies that the European wind machinery industry may face the same scenario as the solar panel industry and lose massive market share to its Chinese competitors.

2.3.3

The wind energy sector is still to some extent dependent on various support measures. The most important of these is the price which producers receive for the energy they sell to the grid, together with the certainty of a guaranteed price level for the next ten to twenty years. Thanks to these measures the wind energy sector is a fast-growing industry in some Member States. The disadvantage is that these measures lead to large, centralised wind energy parks making large profits rather than a fine-meshed network of small, decentralised wind energy power plants. Public opinion is increasingly turning against this large-scale phenomenon. Of course at the end of the day wind energy also has to be able to survive on its own without subsidies and feed-in tariffs.

2.3.4

The research and development effort needs to be stepped up in order to further improve the competitive position of wind energy. Constant attention also needs to be paid to legal guidelines and political objectives. Further major challenges are posed by the development of new locations for wind parks at sea and the elimination of uncertainties regarding the implementation of wind energy.

2.3.5

The development of wind energy is important from a number of points of view.

2.4.1

There are two ways of using solar energy: to provide heating and hot water, and to produce electricity (12). Solar heating systems are relatively simple and cheap and are already used in many countries.

2.4.2

The main reason to aim for the large-scale use of solar energy is the fact that it is inexhaustible. It has enormous potential worldwide and is, providing it is well designed and constructed, very environmentally friendly.

2.4.3

Solar energy can be harnessed almost anywhere in the world in the variety of ways: from very small systems in remote places through solar panels on the roofs of houses to large solar power generation plants.

2.4.4

Solar heating systems are in widespread use. The largest market for these systems is China, mainly because gas and electricity distribution infrastructure is lacking in rural areas. In such cases solar energy is the most efficient solution. Another large market is Turkey. Between 2001 and 2004 the worldwide sale of solar panels grew by between 10 and 15 % annually. China took 78 % of total world production and Turkey 5.5 %.

2.4.5

In Europe, Germany, Austria, Spain and Greece are major markets for solar heating systems. The governments of Germany and Austria offer financial incentives for the installation of such systems. In some regions of Spain the installation of such systems in new buildings is compulsory. As a result of these support measures Germany and Austria are by far the largest producers of solar heating systems in Europe and account for 75 % of European production. This pales into insignificance, however, compared with the production of such systems in China. Europe has produced 0.8 million m2 and China 12 million m2. The main reason for this is that the Chinese government recognised the importance of solar heating early on and stimulated the production of these systems with a variety of measures in its five-year plans.

2.4.6

Despite its inexhaustibility, solar-generated electricity at present accounts for only a small proportion of our requirements. This is because the cost of solar generation is still considerably higher than electricity from gas or coal-fired power stations. In order to break the vicious circle of low use and high prices solar energy should be used as much as possible as this will lead to major economies of scale in production and installation. And only then can the technology be further renewed and improved.

2.4.7

Moreover, the generation of electricity using relatively small units of variable yield (depending on the sun) requires a different approach to energy than hitherto. The switch to solar energy is something for the medium term, but it is very important that development in the sector be strongly promoted.

2.4.8

Although the photovoltaic (PV) market is growing rapidly, there are in fact only three major markets: Japan, Germany and California. These three areas account for 80 % of global production of solar energy systems. This is encouraged by high subsidies and by paying households a good price for electricity generated in this way. Worldwide production of solar cells in 2004 was equivalent to generating capacity of 1 150 MW. Adding this to the approximately 3 000 MW of generating capacity already installed at the end of 2003 means that in 2005 total capacity grew to around 4 500 MW.

2.4.9

The Japanese market was created in 1994 by a programme of incentives involving 50 % subsidies. The subsidy was reduced by 5 % each year and 2004 was the last year of the programme, in which a 5 % subsidy was available. As the programme created significant demand, Japanese industry benefited from economies of scale. Prices fell each year by 5 %, which kept the consumer price stable. Although the subsidy is no longer available, the market continues to grow at about 20 % annually. This stable demand made it possible for Japanese companies to invest in R&D and in new manufacturing technologies. As a result Japan currently accounts for some 53 % of the world market.

2.4.10

Germany has gone through a similar process, but about five years behind, beginning in 1999. A combination of low-interest loans, subsidies and stable prices for the sale of electricity to the grid resulted in rapid growth of the PV market. As early as 2001 Germany overtook the USA in terms of installed capacity. Local producers developed and half European production (13 % of world production) now comes from Germany. The launch of a new support programme in 2004, with stable purchase prices for electricity guaranteed for the next 20 years, has given the process a new impetus. The German market is now the fastest growing in the world, some 40 % in 2004 and 2005. This domestic demand makes it possible for German manufacturers to develop their production and to switch production to export markets once the domestic market begins to be saturated.

2.4.11

The development of solar energy is important from a number of points of view.

2.5.1

Geothermal energy can be used by means of heat pumps for heating and cooling buildings. These pumps use only a fraction of the quantity of gas or electricity used by conventional heating/cooling systems. The energy used for heating (or cooling) is taken from the environment (air, water or earth) (13).

2.5.2

The largest markets for heat pumps are the USA, Japan and Sweden, which together account for 76 % of total installed capacity. They are followed by China, France, Germany, Switzerland and Austria. The European market has grown from 40 000 units in 1997 to 123 000 units in 2004. The total market grew by 18 % in 2004. The manufacture and installation of heat pumps is concentrated in countries where governments offered strong financial and other incentives.

2.5.3

Sweden is a good example of this approach. The Swedish government has encouraged the use of heat pumps since the 1990s with measures such as direct financial subsidies, tax breaks and promotional activities. But new legislation applicable to the construction sector laying down detailed temperature requirements for heating systems also contributed to the growth in the use of heat pumps.

2.5.4

In this way a market was created in Sweden for the manufacture of heat pumps. The country now has an established heat pump industry, with three major players on the global market and 50 % of European demand. The Swedish heat pump market is now self-sustaining. The number of heat pumps in use is growing steadily, even without government support measures. More than 90 % of new buildings in Sweden are now equipped with a heat pump.

2.5.5

A similar development has taken place in Austria, where regional government subsidies equivalent to 30 % of the cost of purchasing and installing heat pumps have been available. Austria now has seven heat pump manufacturers. In both countries it was the combination of direct financial support, building regulations and promotional campaigns which ensured that a heat pump industry could develop which is now able to operate without support.

2.5.6

The development of geothermal energy is important from a number of points of view.

3.1

It is not only energy from fossil fuels which is finite, but also reserves of metallic, mineral and biological raw materials for industrial production (15). There is extensive use of raw materials in the industrialised world: 20 % of the world's population consumes more than 80 % of all raw materials.

3.2

This consumption pattern is incompatible with the sustainable use of the natural resources available to us. Based on the assumption that reserves of raw materials are our common heritage and that current and future access to them is a universal and inalienable right, Europe will have to reduce its use of raw materials fourfold by 2050 and tenfold by 2080 (16). The EESC is satisfied with the initiatives in this field like dematerialisation and the Environmental Technology Action Plan (ETAP).

3.3

In the final analysis, every product involves damage to the environment: whether during production, use or disposal at the end of its life cycle. The cycle has many phases: the extraction of raw materials, design, production, assembly, marketing, distribution, sale, consumption and disposal. At each stage different players are involved: designers, manufacturers, dealers, consumers, and so on. An integrated production policy attempts to improve coordination of these phases (for example by taking optimum recycling into consideration at the design stage) in order to enhance the environmental performance of the product throughout its life cycle.

3.4

With so many different products and players involved, it is not possible to draw up one uniform measure that solves all problems. A whole array of policy instruments is required, both voluntary and binding. These instruments have to be implemented in close cooperation with the public and private sectors and with civil society.

3.5

Consumer organisations should also play a more stimulating and supporting role than hitherto. Up until now, many of these organisations have focused mainly on obtaining the best possible product for the lowest possible price. In practice this means that production is not achieved in the most sustainable way.

3.6.1

Using the heat produced in the process of generating electricity means a sharp improvement in the efficiency of energy use, despite the technical limitations arising from the distance between the place where the heat is produced (industrial environment) and the place where it is consumed (in the home), which causes a great deal of energy to be lost. Micro-CHP units can operate primarily to meet thermal needs of a building with electricity as a by-product. Alternative products can be configured for electricity demand first with heat as a by-product. Most sales to date have been heat-led micro-CHP, although fuel cells are more commonly configured to satisfying electricity demand.

3.6.2

CHP technology can circumvent this limitation, and at the same time it offers an economic challenge for European industry. CHP is mainly used to heat residential housing and shops and it produces electricity as a by-product. By 2004 some 24 000 units had been installed. CHP can be used with various energy sources. The most promising of these is hydrogen (fuel cell) technology, but this technology first needs to be further developed.

3.6.3

Thanks to subsidies for end users of CHP plant, Japan has made the most progress in developing this technology, partly because fuel cell technology is being strongly promoted there by the automotive industry. The Japanese government wants Japanese industry to develop a leading position in fuel cell technology, as it has already done in solar energy. To this end Japan is promoting and financing research and development and providing purchase subsidies to end users at an early stage of market development.

3.6.4

The development of CHP is important from a number of points of view:

4.1.1

The transport sector is one of the largest users of fossil fuels. In this sector there are promising opportunities for the sustainable use of energy as the numerous useful recommendations in the CARS 21 final report illustrate (17). In addition, better planning of urban development and infrastructure and more intensive use of ICT technology opens up prospects for improving transport efficiency. Combined with further improved combustion engine technology, this will lead to a substantial energy-saving. In the short term there are also promising opportunities for switching partially to other fuels, such as natural gas or fuel from biomass (BTL). In the longer term hydrogen offers attractive opportunities. The hybrid technology now being developed is also a promising interim solution.

4.1.2

The maximum potential market share of fuel from biomass is estimated at 15 %. The EU has set a target of a 6 % market share by 2010. An initial pilot project for producing fuel from biomass on a large scale is already up and running.

4.1.3

Natural gas produces lower CO2 emissions than either petrol (-16 %) or diesel (-13 %) and could take a larger market share given a favourable tax regime. In that way a stable market could develop for both producers and users. The technology is already there. The opportunities are particularly great in relation to urban public transport, as this would enable optimum use to be made of gas filling stations. A 10 % market share would be possible by 2020 (18).

4.1.4

Examples in other countries (particularly Brazil) show that this kind of market share cannot be achieved merely by ensuring that bio-fuel is available. Flanking policies –such as tax incentives, targeted legislation and regulation and promotion– are needed to encourage the consumer to make the switch.

4.1.5

Another side of the coin is that increased use of bio-fuels originating from environmentally sensitive areas (such as palm-oil from South-East Asia) may lead to a large scale destruction of rainforests as these are replaced by palm-oil plantations. The world knows 23 big ecosystems, 15 of which are exhausted or heavily polluted according to a recent study by the United Nations.

4.2.1

In construction — e.g. housing — there is enormous potential for more sustainable techniques. It is already possible to build zero-energy houses at little additional cost, particularly considering that any additional costs are quickly recovered from energy savings. Building in this way costs on average 8 % more than traditional construction methods. Economies of scale could narrow the gap to 4 % within ten years. Norman Foster, one of the world's most famous architects, once stated that, if you look at the total costs of a building over a period of 25 years, the actual building costs are only 5.5 %. The costs of occupying the building (energy, large- and small-scale maintenance, interest rate on mortgage/lease) account for up to 86 % over that same period of time. So, while building in a sustainable way may be slightly more expensive in the short term, it is considerably cheaper in the medium to long term.

4.2.2

In Germany and Austria energy-efficient construction is growing faster than in the rest of Europe. The Passiv Haus Institut in Germany has commissioned housing designs which use very little energy by using solar energy in combination with efficient, air-tight insulation. More than 4 000 houses of this type have now been built in Germany and more than 1 000 in Austria. The principle is also increasingly being used in the construction of commercial buildings.

4.2.3

The municipality of Freiburg has laid down new rules on energy-efficient construction. These rules are an integral part of every lease or purchase agreement which the local authority enters into with builders and property developers. In this way the local authority is making optimum use of its legal powers in order to promote energy management on a large scale. The agreements state that any construction on land purchased or leased from the local authority must be done in accordance with energy-efficiency guidelines; buildings are to be designed to make maximum use of solar energy and roofs must be suited to the installation of solar panels. In areas where buildings are constructed in this way savings of 40 % are achieved on hot water use.

4.3.1

The Committee welcomes the Commission's approach to industrial policy taking account of sustainability concerns, as promulgated in its Communication entitled Implementing the Community Lisbon Programme: A policy framework to strengthen EU manufacturing — towards a more integrated approach for industrial policy (19). The achievement of the Lisbon goals requires a competitive European industry. Therefore the EESC welcomes the setting-up of a High Level Group on Competitiveness, Energy and the Environment, one of the seven major cross-sectoral policy initiatives designed to reinforce the synergies between different policy areas in the light of competitiveness considerations. The Committee also welcomes the efforts made by the European industry itself in this field.

4.3.2

At present, industry remains largely dependent upon fossil fuels. However, in numerous instances the choice of electric process permits the use of all types of primary energy sources while, in the majority of cases, simultaneously making for energy savings (20). There are also ways of exchanging residual energy between industrial complexes and other sectors or residential complexes. Thus, the residual heat of the Europoort industrial complex is used to heat the largest greenhouse complex in north-western Europe, 20 kilometres away in Westland.

4.3.3

Crude oil is the basis for the chemicals industry but in the future less of it will be available. An alternative is biosynthesis, the production of basic chemicals from biomass using bacteria, a very complex but also promising area. In recent years a great deal of progress has been made in relation to our knowledge of the genetic make-up of micro-organisms such as bacteria. New technologies make it possible to modify these organisms genetically so that they convert the original material into specific substances. The bacteria become a sort of programmable mini-reactor.

4.3.4

At present the food and pharmaceuticals industries use this micro-organism technology, e.g. in the production of cheese, beer and penicillin. The opportunities for bioconversion are considerable in these sectors too, but the chemicals industry is now also beginning to take an interest in the technology. A whole series of reaction steps are needed to obtain substances from crude oil and purify them. The technology needs to be developed much further but it is theoretically possible to switch to the direct conversion of biomass into basic chemicals and other products. This will reduce the need to use oil, with all the attendant economic and environmental benefits — emissions reduction, closing of the circuit and management of the chain.

4.3.5

Energy-intensive sectors may encounter particular problems in ensuring gradual transition to renewable energy sources. The level of sustainability of production is a direct function of the level of technology employed and no major improvements in this domain are to be expected in the near future. The steel and aluminium sectors in Europe, for instance, are already performing well in this area. Whereas the steel industry is investing a great deal in new technologies for more sustainable production, especially through the ULCOS project (Ultra Low CO2 Steelmaking, the largest European steel project ever) and expects CO2 emissions to be halved by around 2040, the production of primary aluminium in Europe is characterised by a remarkably high–level use of renewable energy (44.7 %). Since the energy used in producing secondary aluminium out of aluminium scrap is only 10 % of the energy needed for the production of primary aluminium there is a major potential for energy saving in this sector. However, aluminium scrap in the European market is being purchased massively by China through governmental incentives aimed at saving energy.

4.3.6

The European steel industry also does well in the field of raw material efficiency and recycling. Half of the world's steel is produced using scrap metal. Optimum use is also made of recycled waste. At the Corus plant at IJmuiden 99 % of waste is re-used either on site or externally.

4.3.7

Although the use of fossil energy sources as a raw material for industrial production will, to a great extent, be unavoidable for the foreseeable future, the use of newly developed materials will help save energy in the applications area, e.g. by reducing weight in vehicle manufacturing. In order to promote such innovation the European industry has to preserve its international competitiveness, beginning with the extractive industries where the value-creation chain starts.

5.1

The need for gradual transition to sustainable production is unavoidable and undisputed. Deindustrialisation, the transfer of production to other regions and increasing competition from developing economies has led to uncertainty and fear. In this climate people have tended to believe that switching to more sustainable production will adversely affect Europe's competitiveness, hinder the growth of industry and destroy jobs, and that it is bad for the economy and for employment.

5.2

There have been negative effects on employment in Europe. In Germany studies predict that 27 600 jobs will be lost by 2010 due to the Emissions Trading Scheme (ETS), rising to 34 300 by 2020 (21). Yet another 6 100 jobs will be lost in Germany by 2010 as a result of the implementation of the renewable energy law (22). Finally the implementation of the Kyoto-protocol agreements will have destroyed another 318 000 German jobs by 2010 (23). These figures must be set against the number of jobs created, which shows that a policy geared towards climate protection goals really entails ‘industrial change’: for example, the EUR 16.4 billion for which the renewable energies sector in Germany accounted in 2005 and the 170 000 jobs that have so far been created in this sector (24). With production amounting to EUR 55 billion (2004), the environment and climate protection sectors in Germany currently provide some 1.5 million jobs and contribute EUR 31 billion to German exports (2003), thus helping to secure many more jobs (25).

5.3

However, the impact is not only negative. A survey of job losses in Europe shows that less than 5 % of jobs lost have disappeared as a result of the transfer of production to other regions (26). In spite of methodological limitations arising from data collection techniques, this survey remains a useful source of information, particularly when taken in tandem with other relevant indicators. It could be argued further that only a small percentage of that job-loss is due to environmental legislation.

5.4

There has also been a growth in jobs. The eco-industry engaged in research and development in the field of sustainable technologies is a dynamic sector which is increasing employment by 5 % annually. This sector, with more than two million direct, full-time jobs, now provides as many jobs in Europe as the pharmaceutical and airspace industries (27).

5.5

An OECD study (28) has shown that sustainable production does not by definition lead to higher costs. In the long-term it can even reduce costs to some extent. Moreover, sustainable output can be counterbalanced against these costs. Clear commercial advantages, environmental legislation and ancillary regulation lead to investment in sustainable innovation, encourage more efficient use of raw materials, strengthen brands, improve the image of businesses and ultimately lead to greater profitability and employment. In order to be successful this process needs a common approach based on shared responsibility from business, labour and government.

5.6

To be avoided at all costs is that European industry suffers a significant competitive disadvantage when compared to regions outside the EU due to higher costs resulting from environmental and social laws and regulations. When Europe sets standards for sustainable production for its own industry it is unacceptable and beyond reason if, at the same time, it allows producers from outside the region to bring products to the market that are not produced in compliance with those standards. To stimulate sustainable production a two-pronged approach is needed: internally to the EU on the one hand and externally to the EU on the other.

5.6.1

Regarding the former, appropriate instruments should be introduced to ensure that social and environmental costs resulting from non-sustainable production methods within the European Union be internalised in the price of the goods to promote the main thrust of the report of the World Commission on the Social Dimension of Globalisation for policy coherence among the ILO, WTO, IMF and World Bank, as pointed out in the EESC opinion on ‘The Social Dimension of Globalisation’.

5.6.2

In terms of the latter, the EU should make every effort in relevant international fora (in particular WTO) to include non trade concerns such as fundamental social and environmental standards into international agreements on trade to facilitate the upgrading of the sustainability policies of Europe's competitors. Countries such as the United States, India and China have an unfair economical advantage compared to Europe as long as they are not bound by the Kyoto protocol's CO2 reduction targets. Those agreements should be implemented on a global scale as trade can only be really free when it is also fair.

5.7

The European eco-industry now has roughly a third of the world market and generates a trade surplus of more than EUR 600 million. In 2004 exports grew by 8 %, and this is a growth market because in the future all countries, even China and India, will increasingly switch to sustainable products and production processes.

5.8

The sustainable, innovative society towards which we have to move needs a thorough information campaign aimed at citizens and consumers to raise awareness and to provide a broad social basis. It also needs well-trained workers. In the recent past, Europe paid too little attention to this. The English text of ten European directives in this area (sustainability, innovation) has been scanned for the words ‘training’, ‘learning’, ‘skilling’ and ‘education’, and only the first of these occurred, once, in one directive.

5.9

A number of Commission communications which preceded these directives dealt at length with the need for training. That interest was entirely missing in the directives, however. Communications are just words, whereas directives are deeds. A policy is not what you say, it is what you do. The EESC welcomes the fact that a lot of attention is paid to the importance of education in the new EU industrial policy and encourages the Commission to continue in the same vein.

5.10

In the Lisbon Strategy Europe has set itself the objective of becoming by 2010 the most competitive knowledge-based economy in the world with more and better jobs and greater social cohesion. A well-trained workforce is needed to build and maintain this kind of society. If we do not invest enough in training our workers, not only will we not achieve the Lisbon objectives by 2010. We will never achieve them.

23.12.2006   

EN

Official Journal of the European Union

C 318/12

1.1

The March 2006 European Council centred on the relaunch of the Lisbon strategy for growth and employment and on an integrated, governance-based approach to the new challenges of globalisation.

1.2

The EU must be committed to securing innovative, competitive and sustainable development for its people, in order to secure greater economic and social cohesion and spark the generation and development of new businesses, new professional profiles and more and better jobs, while preserving the European social model and focusing on a knowledge-based economy.

1.2.1

The Committee is strongly convinced that without ‘a new governance cycle based on partnership and ownership’ (1), all Europe's efforts at boosting competitiveness and employment will be in vain, and that new models for governance must be adopted and implemented rapidly and widely.

1.2.2

The Committee feels that both the seventh RTD Framework programme (FP7) and the new CIP are still excessively top-down in their outlook and do not yet allow for the appropriate level of integration and responsible participation of public and private development players at local and regional level, optimising the essential role of the social partners to promote sustainable and lasting growth.

1.3

The European Union ought to encourage this type of partnership at local level with authorities and economic players and especially with the social partners, not least through the two instruments mentioned above, in order to nurture a new generation of territorial pacts for development within the context of globalisation (2).

1.4

The EESC is convinced that there is no one form of governance to suit all. Each regional/local tier must seek the formula that best services the requirements of local or regional governance, while remaining compatible with the national, European or international frame of reference.

1.5

There are however certain common features:

1.5.1

Lastly, it is absolutely essential that this integrated regional policy include a structured social dialogue, not least by making more of existing local/regional economic and social councils with the social partners and representatives of organised civil society and by establishing effective forms of economic and social partnership (3).

1.5.2

In this respect, the route indicated by the EESC should be followed, involving the ESCs and similar bodies of individual European countries in a structured dialogue with the EESC.

1.6

The success of this new form of governance depends increasingly on the capacity to pinpoint the most effective degree of proximity for managing problems and finding solutions, in accordance with the principle of subsidiarity, while also maintaining a coherent framework and shared vision with other levels of intervention (4).

1.7

The Committee is convinced that the practice of exploring possible routes, actions and measures with a medium- to long-term view, shared by means of foresight exercises, can make a real bottom-up contribution to the cultural growth of society and can help to enrich the choices of politicians and administrators. Most importantly, it can also nurture and strengthen the local interaction between technological, economic, social, political and cultural sectors necessary for ensuring sustainable and competitive development.

1.8

First and foremost, the social partners and representatives of organised civil society must be involved in forming a clear understanding of strengths and weaknesses with a view to finding new niches on the internal and international market.

1.9

Globalisation generates competitive pressure to modernise, innovate and move up the value chain, and enables goods and services to be produced and distributed more efficiently and cheaply. However, there is a danger that if nothing is done in time, it will generate new divisions and fragmentation in the economic and social fabric, particularly at local and regional level.

1.9.1

This, in the Committee's view, necessitates the formation of new areas of responsibility as soon as possible in order to guide the public through the changes. Joint training measures should be set up for district managers, business leaders and financial and credit system managers, to be implemented in conjunction with politicians, public sector officials and local and regional authority managers.

1.10

Only an integrated and jointly-framed territorial approach will ensure that knowledge accumulated through investment in research and development, innovation and education can generate the capacity for innovation, giving the European industrial base a competitive edge and enabling it to attract human and financial resources.

1.10.1

In that context, it is of the utmost importance to examine new ways of attracting human resources to a region, not least by improving work-life balance and introducing incentives, especially for white collar and highly qualified workers, such as managers, researchers and industry experts, securing for them sufficiently attractive benefits in their working life.

1.11

The new CIP programme (2007-2013) cannot be looked at in isolation from the Community's other regional policies and programmes. It aims to address the issues by means of a three-pronged approach: the Entrepreneurship and Innovation Programme; the ICT Policy Support Programme; and the Intelligent Energy Programme.

1.12

In that light, the Committee is in favour of strong coordination of the CIP with regional and cohesion policy and cross-border, transnational and interregional cooperation measures as well as with the VIIth RTD framework programme (FP7). A significant part of the latter's ‘Capacities’ programme is also devoted to developing R&D in SMEs, the Regions of Knowledge, support for innovation and innovative services for companies and the necessary links between the world of training and that of enterprise.

1.13

The Committee believes it is essential that these initiatives be carefully coordinated to secure synergy and avoid overlaps or inconsistencies. They should be restyled and taken on board by each region, giving priority to partnership for jointly-framed local development.

1.14

The Committee would reiterate, lastly, the views it has already expressed in a recent opinion on the subject of modern industrial policy: ‘What is missing is a clear link between the efforts at EU level, and the necessary involvement of governments, industry and stakeholders at national and regional level.’

2.1

Governance: anthropological literature draws a distinction between three types of Governance (5). Grassroots governance involves the local coordination of all players, and is characterised by a marked orientation towards all kinds of technology-related activities. Network governance shows a high level of coordination between networked players, in particular firms, research organisations and funding organisations. Dirigiste governance is based on a high level of coordination and central management of key aspects such as funding and research competence.

—

building social and environmental considerations into economic decisions;

—

using a shared system of values and a participatory methodology in decision-making processes;

—

encouraging good practice and continuous pooling of ideas among stakeholders, in order to boost innovation and competitiveness.

—

identify the community living there;

—

identify its guiding values.

—

Institutional capital: the capacity of the formal institutions in an area to concentrate on problem- solving, their capacity to act, their speed in decision-making, the quality of information available to organisations, their flexibility, and lastly existing inter-organisational relations.

—

Cultural capital: the heritage of a region's traditions, values and beliefs, the richness of its language, and lastly social relations and behavioural patterns (7).

—

Symbolic capital: the potential of a region to mobilise the energy necessary to secure its own development and its potential to provide an emblem for local companies.

—

Psychosocial capital: this is based largely on trust, on the conviction that there is a community and that it has the potential to develop and, lastly, on an awareness of the possibility of cooperation with groups and associations.

—

Cognitive capital is represented by collective know-how, not to be confused with the human capital of individuals. Cognitive capital resides in the knowledge infrastructure of organisations such as universities, research centres, cultural and professional organisations, companies and bodies responsible for social dialogue (8).

2.4.1

With a view to underscoring the guidelines established by the Lisbon European Council, the Commission laid the foundations for the European Research Area (ERA) (10), the financing for which was built into the VIth Framework Programme, with particular attention to territorial foresight (11). Later, in 2001, the Commission launched its ‘Science and technology foresight; links with the IPTS (12)’ unit, designed to promote foresight as a model for innovation.

2.5.1

The idea of grassroots has gained importance in recent years along with other concepts such as subsidiarity. A grassroots culture enables members of the public to show they want to play a part in decisions relating to the social sphere. Thanks to new technologies, knowledge is spreading at a speed and on a scale that were previously unthinkable.

3.1

As the third millennium begins, the EU is facing profound structural changes that in the space of just a few years have revolutionised the world environment in which the European economy works and competes. These include the following in particular:

3.2

The Aho (13) report reiterated the need for new models of governance, in order to make Europe competitive and aware of the challenges to the system brought by structural change.

3.2.1

The adoption of this new model for governance requires:

3.3

Research and development, design, manufacturing systems, logistics systems (16), marketing and client services are increasingly integrated as functions, acting together as a single entity that links clients with the inventors of new products.

3.4

Modern company structure has ever less to do with the availability of physical infrastructure and ever more to do with the ownership of intangible assets. It requires an equipped region, with structures for territorial governance, able to sustain the capacity to produce and distribute goods and services and to provide the best possible after-sales service.

3.5

Developing a clear regional or local identity, reflected in the social capital, is proving to be fundamental, both to prevent the risk of relocation, and because new business developments demand specific characteristics and a high quality of locally available services. These standards can be obtained only with well-trained staff with a high level of awareness.

3.6

Awareness of regional/local identity among the public, political decision-makers and social partners allows an integrated approach to environmental and social sustainability, which brings added value when it comes to attracting new investment.

3.7

Regional/local identity as a quality is based on a combination of belonging, recognition and empathy regarding a set of shared values and a shared vision of the future. Promoting regional/local identity involves:

4.1.1

There are various priority areas for actions when it comes to making the most of local human resources:

4.2.1

An integrated territorial approach can encourage and promote the creation and development of businesses, SMEs in particular, by establishing a favourable environment. This involves:

4.3.1

The March 2006 European Council set out the priorities to pursue in the context of the renewed partnership for growth and employment:

4.4

More specifically, the CIP Entrepreneurship and Innovation Programme ties into a coherent framework many activities designed to address key problems affecting competitiveness and innovation in the EU's economic and social fabric, by directing development towards innovative and productive measures, protecting the environment and making efficient and socially acceptable use of resources.

4.5

The FP7 specific ‘Capacities’ programme is intended to enhance capacity for research and innovation, in particular:

4.5.1

Optimising the participation of SMEs in research and innovation activities will also involve the other FP7 specific programmes (i.e. ‘Cooperation’, ‘Ideas’, and ‘People’).

4.5.2

The need to make full use of research results is also fundamental and a common feature of all the programmes, and this is done most effectively at territorial level. In this light, there must be high levels of coordination, consistency and synergy with the Community's regional and cohesion policy instruments and other Community support instruments for regional cooperation and education and training.

4.5.3

Furthermore, the above-mentioned actions must be coordinated with regional policies related to the reformed European Structural Funds.

4.6

In order to be properly assimilated in the field, these initiatives, as well as being closely coordinated in order to secure synergies and prevent overlaps or inconsistencies, must also give priority to:

4.6.1

The Committee feels that both the seventh RTD Framework programme (FP7) and the new CIP, on which it has already issued opinions, are still excessively top-down in their outlook and do not yet allow for the appropriate level of integration and responsible participation of public and private development players at local and regional level as is both necessary and desirable. This approach does not in effect give local players their rightful role as joint guardians of European governance.

4.6.2

The European Union ought to encourage this type of partnership at local level with authorities and economic players and especially with the social partners, not least through the two instruments mentioned above, in order to nurture a new generation of territorial pacts for development within the context of globalisation (23). These should involve all the stakeholders in economic and employment development, with a view to responding effectively to the challenges of the market and competitiveness, moving beyond local mindsets that are becoming dangerously restrictive in a world of interconnected realities.

4.7.1

A considerable proportion of sustainable competitiveness measures fall within local and regional responsibility, making governance systems and cooperation between the various local and regional authorities, the various bodies and institutions, the social partners, companies, and civil-society players active in the field a priority.

4.7.2

With regard to the concept of governance, reference should be made to comments made previously by the Committee on the subject: ‘private stakeholders must act and take responsibility through tangible contributions and actions. […] Social and civil dialogue are important accompanying measures’ (24).

4.7.3

As far as strengthening social dialogue is concerned: ‘The EESC agrees […] that, by virtue of their sectoral knowledge, the social partners are able to play a special role in alerting the authorities.’

4.7.4

In the Committee's view, it is a matter of implementing streamlined, proactive and reactive jointly-framed social engineering and decision-making systems, able to maintain a high quality of political, economic and social democracy, without weighing down and holding back the development of actions and initiatives.

4.7.5

The development of a shared medium- to long-term vision is essential here, as is the identification and division of responsibility regarding agreed intermediate objectives, and the use of advanced and proven tools at regional level such as foresight.

4.8

The ITA is a governance strategy for the development of socially responsible regions.

4.8.1

In a context like ours, open to global competition, any governance strategy for socially responsible local and regional development must secure a sustainable trend towards economic development and high social standards. Such a strategy should in particular involve:

23.12.2006   

EN

Official Journal of the European Union

C 318/20

1.1

The European Economic and Social Committee is convinced that the use of electronic media in teaching and training — (e-Learning) (1) should help the European Union to carry out activities aimed at increasing the effectiveness and quality of education, including job-based education and training. This, together with other measures, will reduce staff training costs, substantially improving the competitiveness of businesses, especially small and medium-sized enterprises.

1.2

The Committee believes that learning and training supported by information and communications technologies (ICT) are still inconsistent in the EU. This is caused by linguistic and cultural diversity and the immaturity of the relevant markets.

1.2.1

In order to change this, all educational institutions, including those active in the field of lifelong learning (LL) (2), should be more open to new forms of learning and be ready to use them on an ever wider scale, supporting the integration of knowledge and experience with a view to achieving synergy with the planned technological and economic development.

1.2.2

The Committee believes that the European Commission is best placed to establish a new policy in this context. The issue of communication and coordination is therefore particularly important for the Commission services, especially in the fields of education and the information society.

1.2.3

The time has come to acknowledge that e-learning has moved into the mainstream and the consolidation of professional knowledge in this field. This will ensure the application of consistent approaches and help to realise the added value of e-learning.

1.3

The EESC is convinced of the need for a greater awareness in the EU of ICT, in particular of the way these technologies can support training in industry and lifelong learning, e.g. through:

1.4

The EESC appeals to the EU institutions and the Member States to remember, when implementing development programmes connected with the establishment of the information society, that these processes must not lead to any form of exclusion. In other words, there should be no social, economic or regional barriers to access to electronic infrastructure as a learning tool.

1.4.1

The Committee stresses that the key condition for using ICT in lifelong learning, particularly in the Community's rural areas and small towns, is support from the EU and the governments of Member States for broadband internet connections (3) that provide access to e-learning systems. The situation is exceptionally difficult for such areas in the new Member States. This adds even more weight to the argument that there can be no place for any kind of barrier as far as access to broadband connections is concerned.

1.4.2

In this context, the EESC appeals to the Commission to recognise access to broadband as part of a wider strategy aimed at ensuring that eAccess is accorded the status of general interest.

1.5

The Committee believes that, as far as e-distance learning and training are concerned, special consideration must be given to the risk of a generation gap emerging, especially since an increasing number of activities in the field of adult lifelong learning will be undertaken using ICT.

1.6

In addition, the EESC would like to draw attention to the fact that e-learning should also be designed in a way that meets the needs of blind people. Given that the technical solutions in this area are well known, the authors of e-learning textbooks should take as a basis the set of rules drawn up by organisations representing the blind community.

1.7

The EESC is convinced that e-learning should be an effective tool for improving the competitiveness of enterprises and increasing their business potential, especially the potential of small and medium-sized enterprises, which have a key role to play in generating economic growth and creating jobs.

1.8

The Committee believes that broadening the scope of ICT-supported lifelong learning in the EU will have a major influence not only on increasing the competitiveness of businesses but also on enhancing the social capital of the people they employ, which should increase the value of European business capital.

1.9

The EESC notes that there is an urgent need to define a new role for civil society and for dialogue among the social partners as regards the promotion and establishment of IT-assisted lifelong learning in the EU's labour markets. Preparing all European societies for ICT-supported lifelong learning will help to build a European Knowledge Area as well as a knowledge-based society (4).

1.10

The Committee notes that less progress than expected has been made in the integration of ICT into learning and the professional consolidation of e-learning. Therefore, the competent authorities at EU and national level are called upon to take measures that will significantly increase the number of people taking up e-learning. Such a development has the potential to make a considerable contribution to the competitiveness and productivity of industry.

1.11

The EESC calls on the EU institutions to pay particular attention to the needs of SMEs, their networks and representative organisations with a view to ensuring they make the most of ICT for training purposes.

1.12

The Committee believes that teachers of modern technology and methodology (IT education) should be given long-term, systematic support through comprehensive programmes and incentives.

1.13

The EESC would like to stress that the European Commission should also pay special attention to the question of intellectual property rights in the field of IT education.

1.14

In the final conclusion of its proposals and recommendations, the Committee suggests following the example of terms already in use in the EU such as e-Europe, e-learning, e-skills etc. by introducing the term — e-LL (e-lifelong learning), thereby stressing the role of this form of learning and the need to develop and extend it within the eEurope action plan and the subsequent i2010 initiative.

2.1

This opinion will examine the contribution of ICT-supported lifelong learning to competitiveness, industrial change and social capital development in the European Union.

2.2

In connection with the implementation of the Lisbon Strategy, lifelong learning is becoming one of the most important concepts in the EU's education policy and new educational programmes for the period 2007-2013 (5). Flexible and open methods of learning and training using ICT will certainly play a key role in the development of the knowledge-based economy.

2.3

Following the groundbreaking eEurope programme and measures to introduce e-learning, which have already led to some promising developments, there must be consideration of how to build on these accomplishments in terms of changes in industry, how to develop opportunities related to these accomplishments and how to sketch out future prospects.

3.1

The importance of information technology in developing human resources was recognised by the European Parliament and the Council of the European Union (6), which approved a multi-annual programme (2004-2006) for the effective integration of ICT in education systems in Europe. The basic aim of this programme is to use ICT to facilitate high-quality education and training in the context of lifelong learning.

3.2

Open, flexible distance learning, together with e-learning, dominated the last decade, but it is now being looked at once again, this time in a broader context. ICT-supported learning or e-learning make our lives, education and work more flexible and are regarded as one of the main paths to achieving the goals of the Lisbon Strategy. Non-formal (7) and informal learning (8) and also job-based training are becoming more important.

3.3

The EESC opinion of 2004 on Improving the implementation of the Lisbon Strategy  (9) highlighted the need to examine the new opportunities provided by the knowledge-based economy and the importance of the increased expansion of information technologies and innovation processes.

3.3.1

It also drew attention to shortcomings in education systems and to the need for better integration of the social dimension.

3.4

Some of the initiatives taken by the Union in the last decade in the field of ICT-assisted learning produced exceptional results, while others demonstrated a lack of consistency and did not have the intended outcome in terms of numbers and quality.

3.4.1

Early models for e-learning were focused on individuals and the transfer of predetermined knowledge. They included virtually no tutorial support or assessment and were something of a disappointment to those who made early attempts to adapt to this form of learning.

3.4.2

Rapid technological progress, increased economic pressures and the different pace of government policy measures over the past few years, which were supposed to introduce ICT into education and training, have not done enough to promote the development of vocational skills.

3.5

It is planned that in 2010, 12.5 % of adults in the EU aged 25-64 will be involved in various forms of lifelong learning, compared with a current average of 10 % (10). Only by stepping up the expansion of ICT-assisted education and training can these objectives be achieved.

3.5.1

The challenges facing the education and training programmes of the Commission and the Member States are all the greater, given that over the next five years only 15 % of new jobs will be for unskilled workers while 50 % will require highly qualified staff (11).

3.6

A new EU initiative undertaken in connection with the i2010 Commission communication (12) is the e-Inclusion initiative. The term e-Inclusion refers to both the inclusion of ICT and the use of ICT as a means of achieving inclusion (13). The e-Inclusion policy aims to remove barriers to ICT use and to promote ICT usage with a view to preventing exclusion, improving economic productivity and employment opportunities.

3.6.1

An important aspect of e-Inclusion is e-distance learning, which is aimed at reducing or preventing the social marginalisation of occupational groups with limited access to traditional forms of education owing to their geographical location, social situation or special educational needs.

3.6.2

The benefits of distance learning are: not being tied to a fixed place of learning, the possibility of adapting the pace of learning to meet individual learning needs, the opportunity to make use of modern information technologies, the possibility for people from disadvantaged groups to improve their skills, etc.

3.6.3

In its recent opinion (14), the EESC called upon representatives of governments and business sectors to draw up and support measures on the subject of ICT education and training for the various social groups facing e-exclusion (15).

3.6.4

The implementation of the e-Inclusion programme is also linked to the promotion of digital literacy (16), which has become synonymous with the modern knowledge-based society. The recognition in the near future of digital literacy as one of the key skills in lifelong learning in the context, inter alia, of the recent EESC opinion (17), seems not only necessary but indisputable, too.

3.7

The promotion of e-skills  (18) is having an important influence on various aspects of industrial change. The term e-skills covers ICT practitioner, ICT user and e-business skills. Within the framework of the promotion of a wide-ranging e-skills agenda, the Commission recently proposed a series of measures, many of which were concerned with industry and boosting e-skills in the labour market as well as developing and promoting new e-competences (19).

3.7.1

The partnership between stakeholder representatives plays a key role in measures relating to both e-skills and the body of issues linked to the introduction of ICT-supported lifelong learning. Such stakeholders include:

3.8

The expansion of broadband Internet access is of central importance to the achievement of the goals of the i2010 Strategy and those of the e-Inclusion projects. It cannot be limited exclusively to large towns and cities, but should also be available to the inhabitants of less developed regions (20).

3.8.1

It is worth considering that in the EU 15 some 90 % of businesses and households in urban areas have access to a broadband connection, but only 60 % in rural and remote areas; these differences are much greater in the new Member States.

3.8.2

Broadband is vitally important not only for enhancing business competitiveness and for the economic growth of regions, but also for the education and training sector, especially where e- learning is used in training programmes.

3.9

A policy discourse on this matter would currently be highly advisable if we are to improve the practice of lifelong e-learning and thus make this form of training more effective. The EU is best placed to give policy in this area a new direction.

3.9.1

Current policies give de-facto priority to introducing ICT into formal education institutions, notably schools and universities; far less attention is devoted to ICT and far fewer resources are allocated to promoting ICT usage in lifelong learning and non-formal/informal learning among adults.

4.1

In keeping with the general thrust of the Commission communication of 2002 (21) and the EESC opinion on Training and Productivity, productivity can be said to be the key to making businesses and the European economies more competitive and also to economic growth. Improved productivity is to a large extent dependent on progress in ICT usage by businesses and on the ability of the workforce to adapt to the requirements of modern industry.

4.1.1

Despite the fact that electronic technology, which was the subject of much hype, failed to meet expectations in the initial stages of development, the e-sectors of society and the economy are actually showing unprecedented development and still have great potential.

4.1.2

In this context, the European Commission rightly recognises and values the importance of modern ICT in stimulating competitiveness and innovation and in the knowledge-based economy, especially in small and medium-sized enterprises.

4.2

The path to improving the competitiveness of the European economy has to be vocational education, through programmes and training that make use of ICT. The creation of cohesive, mobile and flexible education and training systems for job seekers, those preparing for work as well as for people employed in industry will increase the growth rate of knowledge and lead to important technological changes and innovations in manufacturing enterprises, which will increase their competitiveness.

4.2.1

In this context, the introduction of IT-supported lifelong learning in businesses and related areas should make them more competitive and help to enhance the social capital of the people they employ, and in so doing increase the value of European business capital.

4.3

Around 1994, there was a breakthrough in the implementation and use of e-learning when the industry — chiefly large corporations — started using this method on a wider scale in their in-company training and human resource development. This was a sign of maturity, when e-learning demonstrated the ability to deliver consolidated and sustainable solutions, overcoming the earlier period of simplistic promotional and marketing messages. In the meantime, SMEs have, for a number of reasons, come to represent a practically disadvantaged group of users of e-learning, where the application of this training method — and frequently, that of ICTs as well — is limited, and most SME employees risk being excluded from opportunities in the field of continuing education. Greater e-learning uptake could be a considerable boost to the competitiveness of SMEs and help to make them more effective. Competent authorities, both at EU and national level, should raise awareness of this and implement measures to promote the use of ICTs for training purposes in the SME sector.

4.4

Social capital covers skills, information, culture, knowledge and individual creativity as well as relations between people and organisations. The importance of these resources for economic growth and its accompanying industrial changes should be assessed by examining the relationship between the development, promotion and use of such resources and the added value they create.

4.4.1

A high level of social capital has a direct impact on the ability to form a knowledge-based society that is creative, innovative, open to change and capable of forging long-term economic and social ties. One of the cornerstones of such a society is investment in research, education and training.

4.4.2

Social capital may be increased through the ability of the relevant stakeholders (see 3.7.1) to cooperate in the form of a partnership in all programmes and activities relating to ICT-assisted education and training, especially lifelong learning.

4.5

E-distance learning and training can enable the systematic, faster and cheaper transfer of knowledge that is of key significance particularly in industry where it forms an important element of its human capital and facilitates the transfer of knowledge from research institutes to industry.

4.5.1

Well-educated workers who continually improve their qualifications are an important factor in determining the value of a particular firm or enterprise. They facilitate changes in production technology, its profile and adaptation to meet the needs of the labour market.

4.6

The European Commission has stressed (22) that, given rapid technological development and changing economic conditions, there is a need for long-term investment in the development of human resources, involving private individuals, businesses, social partners and public authorities. Unfortunately, EU countries show no clear trend towards greater public expenditure on education, which averages around 5 % of GDP, with significant and sometimes even dramatic differences between individual States.

4.7

Investment in the development of human resources has a direct impact on productivity growth and is also an attractive form of investment on both a microeconomic and a social level. Studies (23) show that each year of learning directly increases economic growth by around 5 % in the short term and by around 2.5 % in the long term. This is confirmed in the proposals of the European Council (24), which stressed that investment in education and training brings considerable benefits which far outweigh the associated costs.

4.8

Rapid technological development is leading to the emergence of modern production equipment that often has IT systems that can only be operated by ICT-literate staff. It is not always possible to recruit such staff immediately, but thanks to the large scale use of ICT in teaching and training, particularly in lifelong learning, it will certainly be easier to find such staff in the labour market.

4.9

For the reasons mentioned above, given the current changes in industry, it would be worth taking active steps to introduce ICT into lifelong learning without delay. This action should enable employees of European manufacturing firms and unemployed persons undergoing training to acquire new knowledge and skills more quickly. Unemployed people in particular should be guaranteed access to State-funded ICT training (25).

4.9.1

Unemployed people have little motivation to learn independently as they still have too few opportunities to apply the knowledge they have acquired. The best motivation is the real possibility of a new job resulting from a specific form of training or retraining, ideally provided by the company offering the employment.

4.9.2

This could create favourable conditions for ICT- supported lifelong learning, but in the areas where this would be most appropriate (agricultural areas with bankrupt production businesses, which is becoming common in the new Member States), the infrastructure is inadequate.

4.9.3

Infrastructure in these areas requires government and Union support, since IT companies are unwilling to cover the costs of Internet access for poor areas (small towns and rural areas).

23.12.2006   

EN

Official Journal of the European Union

C 318/26

—

direct and complementary actions to complete the internal market for business services and especially the removal of obstacles to the smooth operation of the sector (barriers hampering market integration, labour mobility and economic growth);

—

urgent recognition of business services as an integral part of any industrial policy; the European Commission should note this and take action to widen the scope of European industrial policy by integrating business services;

—

creation of a European Business Services Observatory to collect information, encourage research, stimulate debate and suggest and monitor implementation of policy recommendations;

—

reinforcement of social dialogue to follow up and assess changes in labour conditions and job opportunities resulting from the structural changes underpinning the new business service economy.

—

promotion of business services as a means to improve business and industrial performance and to achieve competitive advantages with low-cost and other competing countries in the global market;

—

encouragement of more extensive and effective use of business services by SMEs;

—

boosting of employment and enhancement of working conditions in business services as a means to improve productivity, service quality and living standards;

—

targeted training and re-training programs to strengthen the adaptability and improve the employability of workers affected by structural change.

—

R&D public-funded programmes, at national and EU level, should give particular attention to actions and projects aimed at boosting the production and use of innovative business services.

—

Attention should be paid to specific projects in the field of knowledge-intensive services in manufacturing, resulting in innovation and high productivity and growth prospects (e.g. ICT and R&D services).

—

Business services are a source of innovation in the knowledge economy. Research should be encouraged to further develop ‘service science’, in particular methodological know-how to be applied in business processes.

—

Intellectual property rights (IPR) and other protection mechanisms should be strengthened through enactment of pending patent legislation to encourage companies to invest more in R&D and innovation.

—

The role of ICT in service innovation has to be recognised and promoted with objectives such as ensuring delivery of services, particularly in SMEs, via high-speed broad-band internet access across Europe, while endeavouring to solve security and privacy issues relating to digital e-business networks. The European Commission's ‘i2010’ initiative plays an important role in this context.

—

Service engineering is a new discipline useful as a basis for improving business services output quality through improved systematic planning. This innovative approach deserves to be developed as a speciality for research and education at universities, business schools and other training organisations.

—

Standards may play a useful role for higher quality services and more integrated EU markets. For that purpose, promotion of voluntary standardisation of services in general and of business services in particular should be encouraged.

—

Finding solutions to strengthen human capital in the EU and to reverse the growing brain drain from EU research activities.

—

Introduction of new incentives to the private sector to increase its share of R&D activities in line with the Lisbon Strategy.

—

Improvement of data and information on business services and on services provided by industrial companies.

—

Improving transparency of business services' supplier markets.

—

Provision of more resources for better education, training, e-learning and language skills to enable development of cross-border business services.

1.1

This Opinion examines the impact of business services on employment, competitiveness and productivity in European manufacturing industries and how this sector can be developed further, in line with the Lisbon programme. Attention is given to developments in the new discipline known as ‘service engineering’ and to the impact of externalisation/outsourcing of business services.

1.2

There is concern about the prospects of the European economy and how it will face up to the emergence of strong competition from low-cost economies. In Europe both manufacturing and services have lost many jobs to other countries with a comparative advantage in terms of costs and skills (e.g. China, in terms of manufacturing, and India, in terms of business services). In spite of these developments manufacturing continues to play a key role in Europe's economy. According to latest available statistics for 2004 the EU leads as the highest exporter of merchandise trade with a figure of over US $ 1 200 bn (1).

1.3

Manufacturing industry is considered to have remained the main source of technological change and innovation in the EU, but it is also noted that it failed to increase its activities in the high technology and higher value-added areas during the previous decade. Business-service related growth, in particular through the use of knowledge-intensive services, is a complementary channel for development of new technologies, new employment opportunities and acquisition of new competitive advantages. Business services provide also sources of non-technological innovation (e.g. organisational), which improve the intangible assets of firms and know-how of workers.

1.4

The remarkable shift in consumption towards services in highly developed economies does not indicate a trend towards de-industrialisation as is sometimes assumed. These developments can be seen as a statistical reflection of a deepening division of labour within developed economies and a disaggregation of previously integrated vertical value chains. Specialised service providers are now offering services that were previously performed in-house by manufacturing enterprises. New service enterprises have evolved and are supporting the effort of European industry to increase efficiency and to absorb new technologies that will spawn new and higher value-added products.

1.5

Recent research shows that the type of economy being developed is one in which services and manufacturing are integrated and complementary in nature. Demand for services exists wherever there is a strong industrial economy and develops as a consequence of this. They do not represent an exclusive alternative (2).

1.6

This Opinion does not advocate a special promotion of services at the price of neglecting manufacturing industries but it stresses the interdependence between manufacturing and the service sector (3). It highlights the positive potential for improvement and expansion of business services. The EESC emphasises the positive contribution of business services to increased productivity and competitiveness of the European manufacturing sector. Simultaneously, the business service sector improves its own productivity through innovation, including the rapid uptake of new technologies, by attracting more highly qualified employees and by improving working conditions (4).

1.7

Externalisation/outsourcing of services to specialised service providers who can exploit economies of scale and continuous process innovation has a positive impact on costs and productivity. Yet the uptake of knowledge and innovative business services by SMEs does not yet seem to be sufficient. Also the ability of employees to move from manufacturing to business services needs to be facilitated through appropriate re-training programs.

1.8

Today, domestic suppliers are providing most of business services. Yet, there is no guarantee that this will be the case in the future. A range of business services can be sourced from abroad at wider European level including new Member States and candidate countries or even globally, according to cost and opportunity (near-shoring and offshore outsourcing). The latest figures show that in 2004 the EU-25 had a positive balance of EUR 42.8 bn in trade in services (an increase of EUR 5.8 bn from 2003) (5).

1.9

There is a need for a permanent and thorough analysis of company structures and processes in order to identify those functions which can be bought from specialised business services' suppliers or networks of companies (shared services) who can handle such functions more efficiently by operating on a larger scale and by pooling their expertise. Though this might have an impact on employment in manufacturing, it may sometimes help to offset the potential negative effects of offshore outsourcing, maintain manufacturing industries in Europe and increase the demand of employment in business services. The reinforcement of qualified service jobs in businesses provides new competitive advantages.

2.1

All sectors of the European economy feel the effects of globalisation and the need for change in order to adapt to new circumstances. Industrial policy can play a positive role in this context. In its Communication Fostering structural Change: an Industrial policy for an enlarged Europe  (6), the European Commission stated that it intends to develop an appropriate industrial policy to accompany industrial change:

2.2

More recently, the European Commission published a Communication on Implementing the Community Lisbon Programme: A policy framework to strengthen EU manufacturing — towards a more integrated approach for industrial policy  (7). Under this framework for industrial policy the Commission identified seven major cross-sectoral policy initiatives:

The neglect of services in general and of business services in particular is a serious shortcoming of this Communication. The EESC calls for business services to form an integral part of any industrial policy and urges the European Commission to widen the scope of future industrial policy approaches by integrating business services. An effective industrial policy will also have to take into account the social and employment implications of industrial change. This means more emphasis on lifelong learning and support to facilitate mobility of employees.

2.3

Europe needs to embrace more widely and deeply Information and Communication Technologies (ICT). Intensification of ICT and its integration in industry is as important as it is in business services. In terms of IT take-up, Europe lags behind its key competitors. The IT expenditure in 2004 per capita was EUR 732 for Western Europe, EUR 1 161 for the USA and EUR 1 012 for Japan. The IT spending in terms of percentage of domestic GDP was 3.08 % for Western Europe, 4.55 % for the USA and 3.59 % for Japan (8). The European Commission's task-force on ICT competitiveness plays an important role in this context.

2.4

The productivity gap of European manufacturers is often attributed to the lack of technology take-up and insufficient exploitation of the potential of ICT, in particular by SMEs. The problem does not seem to be caused by the costs of hardware. The problem is the lack of ICT knowledge and expertise in SMEs, which makes it difficult for them to cope with the rapid changes in, and the increased complexity of, ICT. A ‘digital divide’ that separates small from medium-sized companies exists with the consequence that the full potential of ICT and e-business models has not yet been realised (9). The role of business services is important to make the ICT sector efficient and thus procure sustainable productivity gains.

2.5

The internal market for services in general, and for business services in particular, is not complete and many obstacles do exist hampering efficiency, competitiveness and creation of new employment opportunities. A large number of barriers were recognised in the Report on ‘The state of the internal market for services’ (10), but some progress has been made by implementing the Lisbon Strategy. On top of the regulatory aspects of the business services markets, complementary policies such as those indicated in this document are needed to ensure the necessary EU competitiveness in the global market as well as social and economic progress.

3.2

Business services is a group of very heterogeneous activities ranging from professional services (e.g. engineering, accountancy, legal services) to high-value-added services (e.g. ICT services, management consultancy), personnel services (e.g. selection of personnel, outplacement, temporary work) and business support services, including those with low added value (e.g. cleaning, security, catering) and those with rising added value (such as energy management, supply and treatment of water and other fluids, and air and waste processing). In these groups of activities, labour and social conditions deserve particular attention.

Table 1.   Major services required for the performance of enterprises (functional approach) (12)

3.4

Today more and more manufacturing companies venture into services themselves. Not only do they offer after-sales services, but to an increasing extent discover the value added through selling their expertise in engineering, design or process innovation to other companies as part of their business. A new hybrid company model is emerging that includes enterprises with manufacturing/service activities. Customers are increasingly looking for ‘solutions’ rather than simply products, and it is often the ability to provide additional services that gives a manufacturing company its competitive advantage.

3.5

Lack of specific statistical data on business services  (14). There is a lack of statistical information on the demand for services. The interrelationship between the various sectors is not sufficiently documented. Information on service activities and their contribution to the EU Member States' economies should hopefully be improved through a revision of the NACE classification system, which is expected in 2007. The revised classification will provide better insight into the structure and development of the services sector (15). Information on the extent to which industrial companies provide services is also lacking.

3.6

Fragmentation and scarcity of information and analysis related to business services. The EESC finds that there is a need for a European Business Services Observatory to collect information, encourage research, stimulate debate and suggest and monitor implementation of policy recommendations. An observatory or similar action would lead to a better understanding of the new high-speed developments of the sector and serve as a meeting point between policy-makers and stakeholders.

3.7

Standardisation of services. The further acceleration in voluntary standardisation of services based on market needs and sound evidence includes raising base-line safety, quality and performance and promoting competition and innovation in service delivery. This challenge has to be taken up by CEN, ISO and national standardisation bodies. The development of voluntary standards in the service sector would certainly stimulate the trade in services across borders and help to foster the internal market for services.

4.1

Business services are of major importance in helping the SME sector realise its potential contribution to innovation and growth. There is evidence that the most dynamic SMEs make extensive use of business services. In the face of the pressures of internationalisation, greater use of these services by a wider range of SMEs needs to be promoted.

4.2

National innovation capacity.

The ability of a nation to produce new ideas and to commercialise a flow of innovative technologies over the long term are influenced by a range of factors (17):

4.3

85 % of EU research concentrates on manufacturing (US 66 %) and no reliable figures exist for a breakdown of service sector R&D activities. Out of total manufacturing R&D, 87.5 % is conducted in eight specific areas (chemicals, mechanical engineering, office machinery, electrical machinery, semi/conductor-communications, instruments, motor vehicles and air- and spacecraft).

4.4

In terms of absolute expenditure the EU has failed to close the gap with the US on R&D; indeed, this gap has increased over the last decade.

4.5

More focus on R&D funding into high-tech and knowledge-intensive (high margin) services is of paramount importance for the competitiveness of European industry. The ‘3 % objective’ (18) would be easier to achieve if governments increased their financial commitments and if the private sector was encouraged and assisted to invest more in this regard including business services.

4.6

A European Institute of Technology as proposed by the European Commission in a recent Commission Communication (19) is useful, yet technology needs to be accompanied by effective business and organisational strategies.

4.7

The impact of innovative functions of business services is tabulated below:

Table 2.   Innovative functions of business services (20)

4.8

Some of Europe's most innovative companies are to be found in business services, but the overall level of R&D in the service sector is too low and unstructured. New services and business models often emerge from costly and time-consuming attempts and failures by individual enterprises. It is necessary for the EU to support research in selected areas in order to update the know-how of companies in leading global cutting-edge technologies.

4.9

It is important to find ways to improve the access of SMEs to research results and underpin them in their short-term product development.

4.10

If companies are to invest more in innovation and R&D, appropriate protection of intellectual property rights has to be secured by the European Commission and action has to be taken to implement the pending proposal on the patenting of computer-implemented inventions.

4.11

Better legislation and regulation is necessary.

5.1

A radical overhaul of the EU knowledge creation system is needed. This includes:

6.1

Service innovation has been the subject of intense discussion and research mainly in Germany since the mid-90s. Service engineering generated much of the momentum for both academic and practical work in this field. This has developed into a technical discipline concerned with the systematic development and design of service products using suitable models, methods and tools. Although service engineering also embraces aspects of service operations management, the development of new service products is a key focus. At the same time service engineering is also concerned with the design of development systems, in other words with service-related questions of general R&D and innovation management.

6.2

Fundamental research into new business models, methods and tools will give service engineering a valuable boost. Integrated approaches for co-engineering physical goods, software and services will become an established feature. Finally, the growing harmonisation of service standards will encourage the specification and efficient development of new services (21).

6.3

Service engineering is one of the few fields in the service sector that has been substantially shaped by European research. Closer integration in international networks and the systematic development of an independent service engineering community are essential in order to sustain a leadership role in this field in the future (22).

7.1

A shift to intensification of online delivery. There is increasing attention to the growth and impact of ICT-enabled international sourcing of information technology services and business-process services. There is a re-orientation of business services by the application of ICT and a shift to more intensive online delivery. The emphasis is on digital delivery in areas such as software services, R&D and technical testing services, consulting services and HRD and labour-supply services. This is mainly market-driven because of:

7.2

Exploring the potential benefits of offshoring for the EU economy. New global challenges are building up in the ongoing provision of outsourced services from any point of the world. Europe should therefore be ready to provide and export high-quality services to the rest of the world. Digital delivery and related e-business support is bound to increase. International offshoring of business-related services is today focussing on back-office functions (e.g. IT services, financial and accounting services, call-centre functions). In the higher value-added services such as IT engineering, research and analysis, the EU is still holding its own. However, technological development, availability of skills and related costs in the global market are bound to affect decisions by European companies to a larger extent in the future. This is a challenge for the European labour market to provide more high skilled employment opportunities and avoid unemployment (23).

7.3

Impediments to general digital delivery of services. There are impediments to the development of digital delivery that should be thoroughly investigated and solutions found so that European business service firms can be more aggressive and expand more outside EU borders. Such impediments include the lack of standards and interoperability, trust and security in e-commerce, the lack of investment in fixed and mobile broadband infrastructure and the still too low uptake of ICT by SMEs.

8.1

Employment in business services has grown impressively over the past few decades. Annual growth rates between 1979 and 2002 stood at around 4.5 % annually, which was far above the rates of any other economic sector. The share of business services employment in total employment stood at 9 % in 2003 in EU-15 and at 8.6 % in EU-25. The services sector in general and business services in particular will play a key role in providing new employment in the future and compensate for decreasing employment in manufacturing industries.

8.2

Table 3 below shows how employment in business services increased up to 2002 as compared to the total economy.

Table 3.   Annual growth rates in business services employment, 1979-2002 (24)

8.3

Dynamic employment growth in services and in knowledge-intense business services in particular is a characteristic attribute of modern economies. Although the levels of employment in business services as well as the growth rates vary from country to country in Europe, it can be stated that ‘there is no poor country with many business services and no rich country where business-service jobs are scarce’ (25).

8.4

It can be expected that the growth of employment in services and in particular in knowledge-intensive business services will continue though at slightly more moderate rates. Nevertheless, according to the table 4, these will be higher than those projected in other economic activities. Growth rates are expected to be essentially higher in the new Member States where development of services starts from substantially lower absolute levels.

Table 4.   Employment trends across Western European sectors

Note: Western Europe is defined as EU15 + Norway + Switzerland.

Source: Cambridge Econometrics Press Release, What has happened to the Lisbon agenda? November 2005.

8.5

A special feature of employment in business services is the high levels of education attainment. As the EU labour force survey shows, in 2003 the employment share of ‘high-skilled’ jobs was at 41 %, up from 38 % in 1998. The level of low skilled was at 17 % down from 25 % in 1998. The fact that most of the jobs in business services require high- and medium-level skills also poses a challenge to the educational systems in Europe (and in particular the lifelong learning policies) as the structural change of European industries will require more people to move into business services from other employment areas. Rigorous application of the Lisbon education 2010 agenda will be of paramount importance against this background. Table 5 shows the education attainment levels across several sectors.

Table 5.   Education attainment levels by major economic activity and business services, EU15, 2003 (26)

23.12.2006   

EN

Official Journal of the European Union

C 318/38

1.1

The EESC welcomes the proposal from the European Commission concerning the setting up of a European Globalisation Fund (hereafter EGF). The EESC agrees with the objective of intervening via the EGF in cases where immediate and extensive social problems for workers arise as a consequence of serious and unforeseeable economic disruptions.

1.2

The EESC agrees that the Member States themselves have primary responsibility and that the EGF should intervene only at the request of a Member State and after a corresponding decision of the budgetary authority. The rules have to be clear.

1.3

During times of severe disruption, anticipatory policy, dynamic entrepreneurship, regional responsibility and timely measures and cooperation by the relevant stakeholders — business, the social partners, government, regional authorities and others — are key. The EGF as an instrument of EU solidarity has a complementary function. To be credible the expectations must not be raised too high.

1.4

The specific actions, financed by the EGF, must fit into the overall planning of all stakeholders concerned. The EGF should not intervene in areas where the Member States have exclusive competence. It should be made clear that the Fund is targeting specific employment opportunities for people in urgent economic circumstances.

1.5

The EESC calls on the Commission to ensure active involvement of the social partners in processes aimed at creating employment for workers made redundant. Achieving the objective of ‘quick reintegration’ of redundant employees into the labour market is usually a tough job. Evidence shows that such processes take a lot of time.

1.6

Strict coordination between the various existing instruments, particularly between the EGF and the Structural Funds, should be guaranteed in order to increase effectiveness and coherence.

2.1

In March 2006 the Commission submitted a proposal for a European Globalisation adjustment Fund (1). It is aimed at providing specific, one-off support to facilitate the re-integration into employment of workers in areas or sectors suffering the shock of serious economic disruption.

2.2

Serious economic disruption can imply economic delocalisation to third countries, a massive increase of imports or a progressive decline of the EU market share in a given sector. The major criterion for the EGF is more than 1 000 redundancies in a company or in a group of companies in regions with a higher than average rate of unemployment.

2.3

Eligible actions under the EGF should create conditions for a quick re-integration of people who have lost their jobs into the labour market. The assistance is supplementary to national provisions and targeted regional programmes. Measures to be included are: retraining, relocation assistance, assistance for business start-ups and supplementary income benefits.

2.4

The EGF will intervene only at the request of a Member State. The amount paid by the EU may not exceed 50 % of the total estimated cost of the complete set of measures envisaged by the Member State.

2.5

There is no specific financial provision for the Fund in the Financial Perspectives. It will be financed through under-spends and decommitted funds. Each deployment will be decided by the budgetary authority, which means that full responsibility lies with the Council and the EP.

2.6

A detailed budget procedure is foreseen. The Member States shall take responsibility for the management of actions supported by the EGF. The Commission shall have a supervisory role. In cases where the amount is under-spent reimbursement shall take place.

2.7

The Commission shall carry out an ongoing evaluation on the results, criteria and effectiveness of the regulation as well as an ex-post evaluation. From 2008 on, the Commission will present an annual report on the implementation of the Fund, including evaluations.

3.1

The proposal, aimed at demonstrating the EU's solidarity with workers made redundant as a result of sudden changes in world trade patterns, is based on the conclusions of the European Council of December 2005. As a compromise, it is part of the deal on the Financial Perspectives. An impact assessment has been carried out (2) containing relevant information about the content and scope of the EGF.

3.2

The EGF is separate from the Structural Funds and will serve as one of the EU instruments needed to further the adaptation and competitiveness of the European economy (3).

3.3

The Structural Funds aim at long-term anticipative actions based on a multiannual approach, whereas the EGF is not envisaged for restructuring purposes. It aims specifically to address individuals in regions affected by serious shocks in world trade patterns. Such infrequent but critical situations may require one-off, time-limited individualised support. Some objectives of the EGF are not covered by the Structural Funds.

3.4

To a certain extent the US Trade Adjustment Assistance (TAA) programme of 1962 has served as an example. The TAA aims to correct the asymmetry between the adverse effects of trade opening and international liberalisation for specific individual cases or regions and their overall benefits. A comparison between the TAA and the EGF, though, is not easy because of the difference in culture between the US and the EU and the different criteria involved.

3.5

The EGF should function in accordance with the best practice identified by OECD, which specifies the need for a clear identification of groups of trade-displaced workers and the provision of assistance for limited periods of time in line with the principles of cost-effectiveness, transparency and accountability.

3.6

The EGF aims to contribute to the development of a ‘flexicurity’ approach in the Union, a balance between flexibility and employment security and will complement the multi-annual strategic priorities and policies of the Structural Funds.

4.1

The Regulation initially refers to the overall positive effect of globalisation on growth and jobs in the EU. But the EESC notes that, at the same time, visible and adverse effects at sectoral and regional level are quite possible. The EGF will be a specific instrument in view to enhancing reemployment opportunities towards workers affected by serious economic disruption. It is a pity that the impact assessment (4) has not carried out an analysis of concrete cases.

4.2

Given that the fourth recital of the Regulation requires that activities of the EGF be ‘coherent and compatible with the other Community policies and comply with its acquis’, the proposals should be closely examined by a range of Commission policymakers, in particular DG Competition, in order to avoid any unjustified allocation of state subsidies.

4.3

The EGF represents a concrete step by the European Union towards tackling the consequences of serious shocks in external trade and the global market. For the future, a similar instrument might be considered to mitigate the negative consequences of the internal trade and EU single market (e.g. delocalisation within the EU, taxation policy).

4.4.1

Strict intervention criteria are required. However, the criterion mentioned in Article 1: ‘support for workers made redundant because of changes in world trade patterns leading to a significant adverse impact on the regional or local economy’, is rather vague. The Member States have primary responsibility for submitting applications for Fund contributions. The Commission should guarantee an equal application of the criteria in all cases and to all Member States.

4.4.2

The burden of proof regarding applications lies with the Member States. Application will be examined and close monitored by the Commission, involving the use of guidelines and financial support will be allocated by the budgetary authority on a case-by-case basis. This will involve a process of learning by doing and by practical experience, for the Commission, for the Member States and for the budgetary authority alike. Ambiguities must be avoided: the same rules and approach must be valid and applied across the Union.

4.4.3

As regards the minimum level of redundancies in specific regions, the intervention criteria laid down in Article 2 are clearly defined. The criterion ‘1 000 employees’ is not limited to one company, but it includes downstream and upstream producers.

4.4.4

Usually the rationale for reducing the number of employees will be based on a range of factors, such as modernisation, rationalisation, change of production methods, and, indeed, international trade patterns. Rarely will one specific factor prevail totally.

4.4.5

The American TAA has been taken as an example. But, again, in the Commission's description of the functioning of the TAA the link between changing trade patterns and governmental actions aimed at softening their effect on redundancies is rather vague. Moreover, the criteria and the history of application of the TAA are quite different from what is envisaged in the EU.

4.4.6

GF funding will be sought in the event of economic shocks and unforeseeable circumstances. However trends of change are usually already visible before the real impact of this change is felt. Good business management involves taking pre-emptive actions in good time.

4.4.7

This means that any planned national and EU support measures will have to take into consideration the way in which companies and the social partners themselves have anticipated change. For instance, how relevant are support measures, if business and social partners have neglected to identify in good time developments which might threaten markets and/or employment?

4.5.1

The difference between the Structural Funds and the EGF is threefold: a) difference in scale: EUR 44 billion versus EUR 500 million per year, for the future programming period 2007-2013; b) difference in approach: long-term and anticipative on broad issues of modernisation versus short-term and targeted on a quick re-integration of workers in the labour market; and c) because of their volume and scope the Structural Funds tend to be bureaucratic, whereas for the EGF a non-bureaucratic approach is aimed at.

4.5.2

A strict distinction between the Structural Funds and the EGF must be ensured. The EGF is by definition short-term and time-limited and is focussed on specific cases. In the longer run additional commitments of Structural Funds can be foreseen in the framework of a broader regional context. In cases where actions are complementary the different philosophy and structure of each Funds must be respected.

4.5.3

It will not be easy to create conditions for a ‘quick’ reintegration of redundant employees into the labour market, if the context and circumstances are not favourable, such as in the case of regions primarily dominated by one industrial activity, backward regions, or where there is a lack of education and retraining facilities on the ground, etc. Special attention should be addressed to middle and senior management in order to avoid any brain drains. In these particular cases a combination of EGF and Structural Funds is probably needed, as well as the best possible use of the EURES network to promote opportunities for mobility across Europe. A lack of effective coordination might pose problems. In this respect the provision of Art. 5(3) requires special attention.

4.5.4

The eligible actions set out in Art. 3 must be taken together with the provisions of Arts. 5 and 6, in particular regarding the interrelationship and interaction between regional, national and EU actions. As EU actions are complementary to regional and national measures, experience gained in the past in the EU — like those in RESIDER, RECHAR and RETEX — and in other situations could be helpful, taking into account that the EGF has not been entrusted with any restructuring role.

4.5.5

In specific cases it may be useful to employ the sectoral approach used in modern industrial policy, in examining analyses and in determining the use of instruments.

4.5.6

It is of particular importance and concern to a number of Member States that income-related and labour market policies remain a national responsibility and that the Commission is prevented from interfering in national competences. Consequently, within the complete set of measures drawn up by a Member State to address a particular crisis, the EU contribution must focus explicitly on individuals and on fostering the re-entry of redundant employees into the labour market. At this point, the EESC refers to the application criteria of the former social chapter of the Coal and Steel Community which may help to avoid institutional overlap and conflicts.

4.6

The budgetary authority has a crucial role to play. We welcome the fact that the Regulation duly prescribes in detail the financial procedures to be followed.

4.7

The Regulation is drafted for specific emergency cases, which as a rule require fast and effective action. This means that in applying the rules bureaucracy must, of course, be minimised, whereas at the same time due caution is required. The objective should remain the provision of effective support in the shortest possible time frame.

4.8

In the (recent) past, in a number of cases, successful restructuring has been carried out, even in complicated cases. Although concrete cases are always unique, the broad spectrum of restructuring shows that concentrated regional efforts of all stakeholders, often supported by their governments, with a clear focus on creating conditions for new or reinforced industrial and service-related business and redeployment, have fostered success.

4.9

In most cases economic and social plans have been made in close cooperation between the national government, regional authorities and the social partners, who have generally organised round tables and involved all stakeholders in the region.

4.10

Regarding the new EGF, similar procedures need to be foreseen and implemented in order for the Fund to be a success. To that end, representatives of the Commission shall have to participate directly in such gatherings and meetings at regional and local level.

5.1

Although the budgetary allocation of EUR 500 million for the EGF has been established by the Commission through statistical simulations based on concrete cases, its amount should be assessed and possibly adjusted annually on the basis of the evolving situation and of the real feedback of the fund application.

5.2

Article 2 specifies serious economic disruption as the trigger for EGF intervention. The EESC calls on the Council to discuss the definitions of the phenomena mentioned in the introductory paragraph of this Article, before the Regulation comes into force. Overly broad definitions may hamper effective decision-making later on by the budgetary authority. Too narrow definitions may have the same effect. A Council discussion may help to clarify the dilemma and strike a balance. Such discussion may also be a useful input for the Commission's guidelines.

5.3

The reasons for such intervention must be clearly stated. Anticipative actions by business itself as well as by the social partners and other stakeholders should be taken into consideration. This could also be included in the Commission's guidelines.

5.4

As part of the annual evaluation, and also with a view to possible modification in accordance with Article 20, an assessment of the intervention criteria as laid down in Article 2 (number of workers involved, territorial dimension and employment indicators) should be considered in order to ensure that the intervention criteria are also flexible enough to cope with the diversity of specific regions, in particular regarding small countries with primarily small and medium-sized companies.

5.5

Article 3 sets out in (a) and (b) the actions eligible for EGF financial intervention. The EESC notes that income-related areas such as retirement rights and social benefits are an exclusive competence of the Member States. The EGF should be restricted to financing various kinds of education and training facilities and framework conditions. In specific circumstances this may include wage-support for individuals, who have a job or are job-seeking.

5.6

Article 10(1), fixes the maximum contribution by the EGF at 50 % of the total set of measures envisaged by the Member State. The EESC does not wish to query the level of this percentage. It points, however, to the fact that a relation exists between the level of financial contribution by the EGF and the number and the dimension of the cases that will be dealt with.

5.7

With regard to Article 12 the EESC proposes that paragraph 1(b) read as follows: ‘evidence that the criteria laid down in Article 2 and the requirements of Article 6’ are met.

5.8

The EESC considers that the social partners and other stakeholders in the regions have to be involved at every stage of the EGF procedure. The EESC and the Committee of the Regions should also be informed by the Commission.

5.9

From 2008 on the Commission will present annual reports on the EGF. Such ex-post evaluation may be subject to debate by the Council. Article 20 provides for a formal review of the Regulation by December 2013. The EESC recommends that the Commission also include an assessment of the EGF in its White Paper ahead of the interim discussion on the EU budget due by 2009.

23.12.2006   

EN

Official Journal of the European Union

C 318/42

1.1

The EESC welcomes the Commission proposal as barriers to cross-border voting provide distortions of the single market.

1.2

Share blocking, i.e. the obligation to deposit or block shares for a few days before a general meeting to be able to vote still exists in several EU countries. Indeed, the practice is mandatory in some. It is an expensive practice, which prevents shareholders from negotiating shares in advance of the general meeting. It is also considered by the majority of institutional investors as one of the greatest obstacles to voting. Article 7 of the proposed Directive eliminates any proposal to ‘block’ shares by requiring them to be deposited ahead of the general meeting. The EESC particularly welcomes this, though aware that the number of countries where this is still permissible is limited.

1.3

The EESC believes that the Directive should acknowledge the drive for better regulation and draws attention in particular to paragraph 34 of the Interinstitutional Agreement on better lawmaking of December 2003, paragraph 34 of which encourages Member States to ‘draw up, for themselves and in the interests of the Community, their own tables, illustrating as far as possible, the correlation between this Directive and their transposition measures, and to make them public’.

1.4

The EESC would like to see greater use of electronic voting to improve transparency and to encourage shareholder participation but believes this should be left to the companies concerned but wishes Member States to avoid imposing obstacles to wider use of electronic participation in general meetings.

1.5

Following from the preceding paragraph, the EESC expects a wider use of secure Internet voting perhaps including the use of SMS. This should be encouraged but not imposed by an EC Directive.

1.6

The EESC particularly welcomes the proposals for Proxy Voting set out in Article 10. It especially welcomes the removal of constraints on Proxy Voting whereby, in some Member State, ‘Proxies’ are restricted to relatives of the shareholders.

1.7

The EESC supports the idea that Member States may set a single date, with reference to a specified number of days before the general meeting, and may provide the company shall not be obliged to respond to questions which are submitted after that date.

1.8

The EESC would like to see a strengthening of Article 5 concerning the supply of information to shareholders prior to a general meeting.

2.1

Due to the recent spate of scandals connected with poor Cooperate Governance in the EU and in the USA, there is a need to encourage shareholders to play a more active part by voting at general meetings. The proposal under consideration is aimed at protecting the rights not only of shareholders in the EU but elsewhere in the world too.

2.2

This proposal aims to improve Corporate Governance in EU listed companies by enhancing the rights shareholders are able to exercise in relation to company meetings. In particular, it seeks to achieve this by ensuring that shareholders owning shares in companies registered and listed in another Member State may vote without difficulty at company meetings.

2.3

The draft Directive addresses the following four significant issues:

2.4

This proposal is one of the short-term measures put forward in the communication from the Commission to the Council and European Parliament of 21 May 2003 (1) entitled ‘Modernising Company Law and Enhancing Corporate Governance in the European Union — a Plan to Move forward’.

2.5

The Commission notes that the process of voting at company general meetings differs widely across Member States and is often a complex procedure. It is further complicated when shares are held across EU borders.

2.6

The Commission believes that existing legislation at EU level does not address sufficiently the cross-border voting problem. At present, under Article 17 of Directive (2004/109/EC) the ‘Transparency Directive’, companies are required to make a limited amount of information available in relation to company meetings. But the Transparency Directive does not deal with the shareholder voting process.

2.7

Voting can be a complex process. Shares are often held on behalf of investors by intermediaries. Where this is the case, voting can involve a chain of events which encompasses companies, registrars, custodian banks, investment managers, central securities' depositories and proxy voting agencies.

3.1

There is no guarantee that the market will react quickly enough to improve shareholders' rights nor that appropriate legislative change will take place in all Member States to deal with the problem of the complexity of the voting process.

3.2

A Commission Recommendation has no legal force but would offer flexibility for Member States to implement it into the national systems on the basis of Commission guidelines.

A Recommendation would not guarantee the introduction of minimum standards in key areas which are the origin of cross-border voting problems and increased costs, such as share-blocking where what deters investors is the possibility that such a requirement be present at national level.

3.3

A Regulation would introduce a uniform treatment, irrespective of Member States laws. It could also guarantee the introduction of a tight common framework for cross-border related issues. It would have the additional advantage of avoiding Member States ‘gold plating’ a directive.

The Commission believes that the costs of a regulation could be significant since it would not be possible to offer flexibility across the differences that characterise legal traditions in EU Member States.

3.4

A Directive would allow for differences in Member States' practices, preventing imbalance between different classes of shares and shareholders and favouring basic, minimum standards.

4.1.1

The main beneficiaries from the proposal, in the short term, will be institutional investors that currently own cross-border shares in their portfolios. The existence of costs, associated with obstacles to cross-border voting means that investors are unable to become as actively engaged in the governance of companies as they may wish.

4.1.2

Over the longer term, the proposal may encourage smaller investors, who are currently deterred from holding cross-border shares by the high costs associated with voting, to increase their holdings in such shares. This will enable them to further diversify their portfolios so reducing risk. Overall, in the longer term, the proposal should give rise to greater liquidity in European capital markets.

4.1.3

Currently, a number of obstacles to cross-border voting exist. Share blocking remains a problem in some countries and is perceived by many investors to represent a serious obstacle to voting. In this respect it represents an obstacle to the efficient operation of cross-border capital markets. In addition, there is confusion among investors as the precise nature of blocking arrangements across EU States. This too represents a serious cost for investors, which would be reduced by the draft directive.

4.1.4

There is an unfair distinction between domestic and cross-border shareholders regarding the information made available to cross-border shareholders relating to a general meeting. The Commission draft ensures that adequate and timely information is available across all markets and should, therefore, help to alleviate this problem.

4.1.5

The jurisprudence of the European Court of Justice (ECJ) emphasizes the need for Member States to avoid abuse by one class of shareholders prejudicial to other classes.

4.1.6

Proxy voting and re-registration requirements are often costly and there is some evidence based on the Commission Impact Assessment to suggest that the level of these costs effectively discourages small funds from voting. The Commission's proposal should simplify the process for the appointment of proxies and clarify who can be appointed as proxies and enhance the rights of proxies in certain countries.

4.1.7

In cases where the Chairman of the meeting holds shareholders' Proxies, he/she should be obliged to vote them strictly according to those shareholders' wishes.

4.2.1

A uniform notice period, as proposed, would introduce an element of inflexibility for those Member States, which require only a 14 days notice period for the calling of an Extraordinary General Meeting (EGM).

4.2.2

The requirement to produce written answers to shareholders' written questions is essential.

4.2.3

Articles 5 and 7 of the draft Directive laid on 30 days between the record date and the date of the meeting in order to assist shareholders in being able to vote their shares.

5.1

The EESC welcomes the Commission proposal as barriers to cross-border voting provide distortions of the single market.

5.2

As the financial sector is an important influence on the economy and on employment growth, anything which inhibits shareholder participation should be discouraged. The Commission proposal sets out to do that.

5.3

Currently cross-border voting is a priori more expensive for non resident shareholders than those resident in the country in which the company concerned has its shares quoted, it is an example of market distortion.

5.4

The Committee believes that there are too many constraints at present, which make proxy voting in some Member States unduly cumbersome.

5.5

Share blocking, i.e. the obligation to deposit or block shares for a few days before a general meeting to be able to vote still exists in several EU countries. Indeed, the practice is mandatory in some. It is an expensive practice, which prevents shareholders from negotiating shares up to weeks in advance of the general meeting. It is also considered by the majority of institutional investors as one of the greatest obstacles to voting.

5.6

The EESC shares the Commission's view that the late availability of information relevant to a general meeting or its incompleteness or resolutions in summary form or short noticed periods are among the major obstacles which non-residents face when seeking to exercise their rights as shareholders. All relevant documents including auditor's reports, replies to shareholders' questions and notices convening general meetings, and the motions to be submitted to such meetings should be made available electronically as well as physically.

5.7

Article 8 concerns participation in the general meeting by electronic means. As technology moves so rapidly, the Commission is proposing that Member States ‘shall not prohibit the participation of shareholders in the general meeting by electronic means.’

5.8

The Commission's text does not specifically deal with the problem of ‘barer’ shares, communication with whom currently is largely through newspaper advertisements. The EESC believes that electronic communication is more modern, quicker and certainly cheaper.

5.9

Article 10 clarifies the arrangements for Proxy voting and abolishes the arrangements whereby certain companies impose restrictions as to the person who can be granted a Proxy.

5.10

The option of doing nothing, in other words to leave the present situation as it is does not recommend itself to the EESC. The obstacles make cross-border voting prohibitively expensive for small shareholders and very costly for institutional investors.

23.12.2006   

EN

Official Journal of the European Union

C 318/45

1.1

The EESC welcomes the proposal for a Regulation establishing a legal basis for the implementation of Purchasing Power Parities (PPP), since this will improve the transparency, timeliness and quality of the whole process of PPP production, at both Community and national level.

1.2

Given the importance of the issue addressed by this proposal and the need for binding rules that define the competences of the Commission and Member States and establish uniform bases for the calculation and dissemination of information on PPP, the Committee recommends the immediate approval of this draft Regulation.

1.3

Nevertheless, the EESC notes that currently, due to cost reasons, the Commission (Eurostat) calculates PPPs by countries, not by regions (1). However, these calculations are used, inter alia, to evaluate the economic performance of regions. Existing information shows that — within the Member States — there are sometimes considerable regional differences in the prices of goods and services. Although the statistical institutes that gather basic information apply spatial correctors, it is essential that such correctors adequately prevent distortions in calculating PPPs. Therefore, it is recommended that Member States make every effort possible, both economically and technically, to ensure that spatial correction coefficients reflect as precisely as possible geographical differences in prices.

1.4

For the reasons stated above, the minimum period of six years for the revision of the spatial coefficients seems too long and should be reduced. Similarly, since the frequencies stipulated in the draft Regulation for the provision of basic information are minimum frequencies (2), information on prices should if possible be supplied every two years (3) (the draft stipulates a minimum of three years).

1.5

Generally speaking, it should be stressed that an effort is needed to increase the efficiency of the EU's statistical apparatus, in terms of both technical and human resources and coordination between Eurostat and national statistical institutions, which have important responsibilities in the calculation of PPPs.

2.1

The Eurostat-OECD PPP Programme was established in the early 1980s to compare, on a regular and timely basis, the GDP of the Member States of the European Union and of the OECD (4). As such, PPPs are types of currency conversion rates that convert economic indicators expressed in nominal national currencies to a common artificial currency called Purchasing Power Standard (PPS), which equalises the purchasing power of different national currencies.

2.2

Economic volume aggregates in PPS are obtained by dividing their original value in national currency units by the respective PPPs. GDPs of countries expressed in PPS by using PPPs as conversion factors reflect a pure volume comparison, since the price level component has been eliminated.

2.3

PPPs are both price deflators and currency converters. With the launch of the euro in the euro-zone Member States, for the first time prices can be compared directly between those countries, although the euro has a different purchasing power, depending on national price levels. Therefore, for the non-euro-zone countries PPPs are currency converters and eliminate the effects of different price levels, while for the euro-zone countries they fulfil only the latter, price-deflator function.

2.4

PPPs are calculated using a basket of comparable goods and services, taking into account, inter alia, the Classification of Individual Consumption by Purpose (COICOP (5))and the Classification of Products by Activity (CPA). The groundwork is carried out in one or various cities within the economic territory (generally only in the capitals of Member States). Most Member States apply spatial correctors in order to take account of regional differences, although there are some Member States that only take into account data from the capital because their small geographic area means that there are no regional differences.

3.1

GDP reflects the results of all activities of economic operators within a given economic territory and within a given period, usually a year. GDP is calculated in accordance with a system of national accounts, which, for the EU, is the European system of integrated economic accounts 1995 (ESA-95). GDP can be measured from the production, the expenditure and the income side. For PPP purposes the expenditure measure is particularly important. It reveals the extent to which the goods and services produced (or imported) by the economy of a country are used for private consumption, public consumption, capital formation or exports.

3.2

In order to obtain a real comparison, it is necessary to use conversion factors (spatial deflators), which reflect the differences in the level of prices between countries. Exchange rates cannot be used as they usually reflect elements other than price differences alone.

3.3

Therefore, PPPs between various countries' currencies have been specifically developed to be appropriate for use as spatial conversion factors.

4.1

Initially the major users were international organisations such as Eurostat, the IMF, the OECD, the World Bank and the United Nations. But over time the use of PPP statistics has spread and now there are many users: government agencies, universities, research institutes, as well as public and private enterprises. Banks use PPPs for their economic analyses and to monitor exchange rates; individuals and their employers use them to calculate remuneration when they move from one country to another.

PPPs may also be used in transnational collective bargaining on wages.

4.2

PPPs are vital indicators for the EU from both the economic and political angles. Firstly, the rules state that they are to be used for the Structural Funds (6). Secondly, they are an obligatory benchmark for the Cohesion Fund (7). Nevertheless, it should be pointed out that in the first case (Structural Funds) the calculation is based on per capita gross domestic product (GDP), while in the second (Cohesion Fund) it is based on gross national product (GNP). The draft Regulation under consideration here refers only to GDP (8).

4.3

PPPs are also used for establishing the correction coefficients to be applied to the remuneration and pensions of officials and other servants of the European Communities (9).

5.1

The purpose of the proposed Regulation is to fill a legal vacuum by establishing a legal framework for the calculation of PPPs. It is aimed at improving transparency and the quality of the data provided by the Member States, through common rules for the provision of basic information (Art. 1). The intended objective would not only benefit Eurostat as coordinator of the results, but also the statistical institutions of each country.

5.2

Definition of roles and responsibilities. The Commission is to be responsible, through Eurostat, for coordinating the basic information, calculating and publishing PPPs and adjusting methodology in consultation with Member States (Art. 4.1), while Member States are to provide basic information, issue written certification of the survey results and ensure the validity of the data (Art. 4.2).

5.3

The statistical institutions of the Member States are to transmit the basic information to Eurostat in accordance with common parameters and in a common technical format (Art. 5 and Annex I).

5.4

The statistical units are those defined in Council Regulation (EC) No 696/1993 or others to be established at a later date (Art. 6), and the Commission and the Member States are to set up a quality control system (Art. 7).

5.5

Eurostat calculates PPPs once a year (Art. 8) and will be responsible for publishing these at an aggregated level for each Member State (Art. 9).

5.6

The draft Regulation does not require Member States to undertake surveys solely for the purpose of establishing the correction coefficients to be applied to the remuneration and pensions of Community officials and other servants (Art. 10).

5.7

Temporal and spatial adjustment coefficients. PPPs are calculated from the national annual average prices (Article 2(2)). Given that ‘data collection may be limited to one or more locations within the economic territory’ and furthermore ‘to a specific period of time’, Member States should apply a temporal adjustment coefficient (dating back no more than one year) and a spatial adjustment coefficient (dating back no more than six years) (Annex I Methodology, sections 2 to 4).

23.12.2006   

EN

Official Journal of the European Union

C 318/47

1.1

The Commission's proposal concerns a new electronic customs project which should ultimately make the European customs system fully automated, interoperable, secure, accessible and efficient, on a completely electronic and paperless basis. This is the necessary adjunct to implementation of the new Community Customs Code proposed by the Commission (1), on which the EESC has issued a separate opinion.

1.2

Adopting the proposed computerised system requires a joint and coordinated effort by all the Member States, with respect not just to customs, but also to border agencies other than customs, which will have the task of putting the concepts of the single window and the one-stop shop into practice. These two objectives will make customs procedures easier, faster and less costly for operators, and facilitate risk management controls by customs authorities.

1.3

The Member States have already invested substantially in setting up computerised customs systems, but there are considerable differences between these, in terms both of their level of sophistication and of rules and data used. Thus the current state of harmonisation is inadequate, and there is the even more serious problem, as yet unresolved, of lack of interoperability between systems.

1.4

Interoperability will allow information to be exchanged between customs authorities in the different countries. Evidencing concern for citizens, the proposal also makes it possible to provide interfaces with trade, not just to allow implementation of the single window principle, but also to guarantee exchange of information. When it is fully effective, the new computerised system will represent a decisive step towards realising a single internal market, with only external borders — if only where customs are concerned. It is also important to remember that the global nature of markets means relations with third countries must be taken into account, a factor that is not mentioned in the Commission document.

2.1

The Commission notes that the computerisation objectives for interoperable systems could also have been achieved by setting up a centralised customs system. However, it says that such a solution is not possible for various reasons, including the difficulty of transferring responsibility from the Member States to the Commission, which would go against the principles of subsidiarity and proportionality. However, the real reason is probably that the Member States are loath to relinquish their prerogatives, knowing that a portion of customs revenues falls directly under the Community budget. The EESC believes that Community customs management should be one of the long-term objectives of the Union; this has advantages in terms of simplicity, reliability and cost, as well as the possibility of interconnecting with other EU and third country systems. With the potential delays to the implementation of the basic systems developed by each of 25 member countries, there is a need to evaluate whether it would not be preferable to implement fully automated systems such as the Automated Import System and Automated Export System linked through a Single European Access Point.

2.2

The Commission's initiative is necessary in the first place because introduction of the new Customs Code requires that procedures be consistent with the new rules. It is also one of a series of measures adopted in various sectors in the context of eEurope and eGovernment (2); more specifically it follows up on the commitments made in 2003 in the Commission's communication to the Council on ‘A simple and paperless environment for Customs and Trade’ (3). However, those commitments were already made — at least with regard to introducing a paperless environment — in the ‘Customs 2007’ programme (4) and confirmed in the 2004 changes to the Customs Code regulation (5).

2.3

The EESC welcomes the main innovations introduced with the system proposed by the Commission: networking of national systems, the setting-up of an interface for operators based on a single window, the possibility of submitting customs clearance requests electronically and integrated risk management are undeniably major advances, provided the costs to the tax-payer and to operators are sustainable. It would therefore be as well to consider the impact of these radical changes on customs officials (resources, training, career paths, adaptation).

2.4

However, the EESC wishes to make some comments on the integration of computer systems and their complementarity. The Commission aims to achieve full interoperability of customs systems: this means that customs authorities must be able to exchange information with each other and with ‘other authorities involved in the international movement of goods’. This definition clearly does not include authorities responsible for collecting VAT; however, a link between customs and VAT staff could be useful, at least in certain cases and for certain goods, in order to control counterfeiting of origin marking. This is nothing new, of course, but it is a phenomenon that is on the increase: goods imported from third countries are often circulated (with payment of VAT) within the Community bearing labels of European origin or false ‘European’ labels.

2.5

The EESC would also draw attention to the second recital of the proposal for a decision: ‘The pan-European eGovernment action … requires measures to increase the efficiency … to help combat fraud, organised crime and terrorism ….’ The intention is clear; what is less clear is how the objective can be achieved by the provisions contained in the proposal. Collection of customs data cannot be used for other purposes without setting up a system for communicating with other systems.

2.5.1

In December 2004 the Council adopted the Hague Programme based on a Commission assessment (6) and a European Parliament recommendation of 14 October 2004. This programme sets out a series of measures and actions to strengthen EU security, with a view to ‘securing police, justice and judicial cooperation’. A follow-up document (of 10 June 2005) presented an action plan for implementing the Hague Programme, which referred to a Council of Justice and Home Affairs ministers resolution of 30 March 2004 on customs cooperation, and a communication on the fight against cross-border trafficking in restricted or prohibited goods. In another follow-up document (7) customs cooperation was again cited as a priority issue. All the projects envisaged in the above-mentioned documents concern the availability of information for law enforcement purposes, a matter which is also mentioned in the Hague Programme. Given the overall context and the nature of the projects under way, it seems obvious to the Committee that in designing a computerised customs system intended to last, it is essential to ensure that, when the system starts operating or at a later point, the customs database interacts with other systems, especially with internal, European and third country security systems. Respect for privacy, professional secrecy and data protection must, of course, always be paramount.

2.5.2

This concern is not raised at all in the Commission document, except in the quote in point 2.5 above. Nor, on the other hand, does the Commission's explanatory memorandum anywhere mention the Hague Programme; the section ‘Consistency with the other policies and objectives of the Union’ mentions only the Lisbon strategy and the eEurope and eGovernment initiatives. Notwithstanding Article 3(d) — which is discussed below — such a major omission cannot be coincidental, and the Commission should clearly explain the reasons for it. In any case, the fact remains that it would not be acceptable to simply postpone an initiative which should be adopted without delay.

2.5.3

When it was drawing up this document, the Commission organised six seminars in the space of two years; it consulted users; and it discussed the matter in the Customs Code Committee, the Customs 2007 electronic customs group and the Trade Contact Group. But there is no mention of contacts with Europol, OLAF or other directorates-general of the Commission. A system cannot be planned solely according to the requirements of its direct users; if it must be designed to connect with other systems, there must be an understanding of their characteristics and needs. The EESC thinks that the reservations it expressed in its opinion on the Community Customs Code are now being borne out in so far as there is no proper awareness of the interdependence between different public administrations in the fight against crime.

2.5.4

A complete change in approach along the lines indicated in the previous point would probably be difficult owing to the time constraints fixed by the programme with respect to implementation. However, it would surely be possible now to provide for security measures for ‘sensitive goods’ (e.g. arms, explosives, nuclear materials, machines and equipment for the chemicals, nuclear or defence industries, narcotics, alcohol and tobacco). Such measures could form the basis for surveys that would be forwarded to the relevant authorities automatically or on request.

2.6

In accordance with the subsidiarity principle, the financial burden on the Community budget is that required to ensure system interoperability, a single interface and customs portals. This cost is estimated at EUR 180 million, divided into incremental annual appropriations, starting at EUR 4 million in 2006 and rising to EUR 111 million from 2011. The EESC endorses this, but is puzzled by the decision to charge the cost of national customs portals to the Community budget. Even though portals are in principle available to all operators, whether national or from another EU country, it is likely that each will be used principally by national operators. It would therefore make more sense for the cost of portals to be borne by individual Member States rather than by the Community. Of course, the terms would be different if the Commission were talking about European portals, which it does not refer to explicitly.

2.7

As regards implementation deadlines, the Commission has drawn up a list of milestones which are mandatory for all the Member States. These are based on the date of publication of the Decision in the OJ: three years for adopting interoperable automated customs clearance systems, registration systems for economic operators and information portals; five years for setting up a network of single access points and an integrated tariff environment corresponding to Community standards; and six years for providing single window services. The EESC considers these deadlines, especially the first one, to be rather optimistic: three years is not a long time bearing in mind that this has to include several months for testing the programmes and sharing information with the other parties involved. Moreover, not all Member States have the same level of computerisation or availability of financial and human resources. If failure by one or more Member States to meet the deadlines forced the Commission to grant extensions, this would jeopardise the efficiency of the system and above all its credibility. Therefore the current Multi-Annual Strategic Plan (MASP) needs to be revised taking into account: