18.8.2006   

EN

Official Journal of the European Union

C 195/1

1.1

The EESC values and supports the efforts made in the third five-year assessment and the engagement on a large scale of such high-powered intellectual resources and hopes that the recommendations from the various groups of experts, and particularly the panel responsible for the overall assessment (1), will serve as a constant point of reference in the implementation of the framework programmes, in the future framing of the research and innovation policy and, more generally, in the policies implementing the Lisbon Strategy.

1.2

The EESC has repeatedly expressed its support for substantially increasing the European R&D budget and therefore regrets the proposed reduction of this sum because it contradicts the priority of development imposed by competitive global challenges and called for by the Lisbon strategy.

1.3

The EESC stresses the importance of greater commitment by industry to research and innovative development to achieve the Barcelona Council goal and hopes to see more focused efforts at communication and at involving companies and producers' organisations and associations in order, among other things, to identify strategic fields of research in which European research excellence could emerge.

1.4

The EESC calls for instruments to be developed to encourage private funding of research and development (from risk capital and venture capital to targeted EIB funding and credit facilities for research) to smooth the path from research results to specific business initiatives.

1.5

The EESC agrees with the panel's position on the need to offer researchers greater autonomy and responsibility (albeit while respecting ethical principles), to give careers in science a higher profile, to guarantee greater interdisciplinary as well as spatial mobility and to integrate the Marie Curie system of grants with national and regional programmes and use them specifically to boost mobility between public and private sectors.

1.6

The EESC calls for priority to be given to policies aimed at developing university teaching in science and engineering, increasing the number of female researchers, making careers in science more attractive and bringing researchers working abroad back into the European Union. It would also be helpful to have more science and technical courses in upper secondary education and a policy for promoting science as a degree option at university.

1.7

In the interests of simplification, the EESC hopes to see calls for proposals which have clearer types of schemes and activities and categories of participants, greater flexibility and freedom of choice for the applicant, and simple guides on administrative and financial management, especially for the Contractual Agreement between participants.

1.8

The EESC suggests an ongoing evaluation of the effectiveness of the procedures used, including those for checking formal compliance and assessment, and, in well-defined development projects, the inclusion of checkpoints at which activities and anticipated results are monitored at precise and predetermined stages. Provision of funding and the continuation of the project itself should be conditional on such monitoring.

1.9

The EESC also suggests investing particular efforts into putting in place a series of indicators which would allow real measurement of performances in terms of competitiveness and development. Such research performance indicators should measure the efficacy of funded activities in terms of further scientific progress, the EU's global development and targeting the priorities in future activities.

2.1

The third five-year assessment (1999-2003) of the framework research programmes is an analytical exercise of great scope and depth (2). In the main, the EESC agrees with the analyses and recommendations put forward by the panel of experts and endorsed by the Commission. In the light of global competition and the Lisbon Strategy and Barcelona Council goals, the EESC stresses the necessity and urgency of giving careful consideration to the priorities and underlying aims of Community research, particularly with a view to increasing the involvement of the production sectors.

2.2

The reality today is that scientific and technological innovation is increasingly proceeding through the cross-fertilisation of different disciplines involving extensive multidisciplinary interaction between universities, companies and the outside world, rather than exclusively according to a linear model in which innovation is the work of basic research (mostly at the academic level), while development and application compete with industrial research — a model which has governed scientific research until recent years (3). The key characteristics of research today are cooperation, interactive learning, uncertainty and risk.

2.3

The interactive model explains the success of regional clusters: these form a ‘system’ which acts beneficially on the behaviour of companies and universities, as well as creating the right social and cultural context, an effective organisational and institutional framework, an infrastructure network, and regulatory systems equipped to take on the challenges of competition.

2.4.1

Europe is facing an unprecedented challenge in terms of global competition and potential for growth and is tackling this less efficiently not only than its traditional competitors, but also than the major emerging countries. Growth rates of R&D spending in India and China in particular are extremely high, reaching almost 20 % p.a. in the latter country, which is expected to match the EU's R&D spending as a percentage of GDP in 2010. Many European companies invest in China not only because of lower costs, but also because of the favourable combination of highly-skilled manpower and large and dynamic markets for technologies and high-tech products (4). Since research and innovation are key factors in responding to such challenges (5), Europe must mobilise sufficient funds and all its intellectual resources to promote science, technology and innovation (6).

2.4.2

The most recent figures, however, make disturbing reading, with spending on research stuck at around 1.9 % of GDP since 2001. If annual growth were to remain at the 2000-2003 rate (0.7 %) until 2010, the figure would be no higher than 2.2 % of GDP. It must be remembered that the USA's larger GDP means that its R&D activity is far greater in absolute terms, which means it can more easily achieve the necessary critical mass. The main reason for the gap in Europe's R&D spending and that of its main competitors is the lower private sector input (55.6 % of total spending in the EU in 2002 against 63.1 % in the USA and 73.9 % in Japan). More alarmingly still, private funding of research fell in the same period and better overall conditions seem to be attracting European private investments to other parts of the globe: in the 1997-2002 period, European businesses increased research investment in the USA by 54 %, in real terms, compared with 38 % in the opposite direction (7).

2.5.1

The EESC concurs with the analysis identifying four key goals:

2.5.2

Comparing and coordinating Community and national research policies is vital to meet the key challenge laid down by the Barcelona Council — allocating 3 % of GDP to research before 2010 and, in the process, increasing to two-thirds the amount of research financed by the private sector. This goal can only be achieved if a) Europe makes itself more attractive to investors in research, b) the right framework conditions are put in place to increase the efficacy of research, c) the stimulus effect of public investment in private research is boosted, and d) research policies are made more efficient and coherent at both Community and national level (8).

2.5.3

In the light of the analyses carried out in the assessment process and the views expressed by many stakeholders, the EESC believes a more incisive intervention is needed, with actions coordinated between the Commission and the Member States, to improve the insufficiently research-friendly environment. A package of direct measures needs to be conceived to make the system more innovative and competitive at EU level: fragmentation and inadequate coordination of forces is an obstacle to achieving critical mass and the necessary focus. The very different job also needs to be tackled of comparing and coordinating not only national research policies, but also policies of education and human resources development, intellectual property protection, innovation development through fiscal leverage, constructive and synergetic collaboration between universities and companies, and so on.

2.6.1

The EESC has repeatedly expressed its support for substantially increasing the European R&D budget in the future and in so doing has strongly backed the Commission's proposal for increased funding of the 7th Framework Programme and, eventually, for a subsequent long-term increase (9). It does not welcome the prospect raised by the Council that this amount would be substantially reduced to around 5 % of the EU's general budget instead of the 8 % envisaged by the Commission and believes that this contradicts the priority of development imposed by competitive global challenges and called for by the Lisbon strategy.

2.6.2

The EESC has always supported the creation of a European Research Area (10) and has endorsed the establishment of a body such as the European Research Council (ERC), which could, in particular, become a key instrument in promoting scientific excellence through frontier science areas identified via a bottom-up process. The EESC is pleased that its recommendations concerning, in particular, the autonomy of the ERC and the composition of its scientific council have been followed, and reiterates the importance of involving first-rate scientists, including ones from the world of industrial research (11).

2.6.3

The EESC agrees that a broad range of coordinated actions is needed for optimal integration of the new Member States, but does not believe adequate instruments have been put in place in this regard. The process of transition these countries have undergone in the assessment period under discussion makes it more difficult to pinpoint the best actions to take in order to build an economy firmly grounded on development of knowledge and research. The approach geared to ‘strengthening research’ is particularly relevant in these countries, but will have to be focused on the ‘production of innovation’ in order to activate the development levers which they require.

3.1.1

The EESC agrees with the panel's recommendations and stresses in particular the importance of greater participation and involvement by industry as a sine qua non for achieving the Barcelona Council goal. It will be easier to reach this goal if the world of business plays a more active role in strategic choices and in identifying fields of research in which European research excellence could emerge more fully.

3.1.2

To ensure such participation, the EESC thinks a more focused effort of communication is needed, involving companies and producers' organisations and associations, not least to facilitate involvement of SMEs and so raise participation from the far from satisfactory current level of 13 %. Their very nature requires that the 7th FP and the competition and innovation FP must not be seen as alternatives, but as complementary and synergetic.

3.1.3

The EESC believes the traditional financial instruments (12) and the new ones already provided for the 6th FP should not be substantially modified, in order to avoid inadvertently erecting new barriers to access (as the experts found at the outset of the 6th FP), but should be adapted in line with experience accrued to make them more user-friendly.

3.1.4

The Integrated Projects (IPs) and the Specific Targeted Research Projects (STREPs) are the instruments preferred by SMEs and should therefore be improved to further facilitate their participation. There is no doubt that the Technology Platforms and — even more — the Joint Technology Initiatives will help achieve this goal. The Networks of Excellence, which universities and public research centres value and participate in on a large scale, should be developed to further encourage involvement of industry and as instruments for boosting researcher mobility, with increased and more promising exchanges between private and public sectors.

3.2.1

Simplification of management and procedures is a recurring theme with every new Framework Programme: many improvements have been made down the years, from a number of documents on simplification to the sounding board of representatives of small research groups set up by Commissioner Potočnik. However, the proposals put forward appear not to have solved the difficulties and problems encountered by participants.

3.2.2

Drawing on experience gathered by the experts and directly by the stakeholders, the EESC suggests that the difficulties met by participants in the projects under the current Framework Programme be systematically collected and analysed so that mechanisms more tailored to the present reality can be proposed. These could be helpful to ongoing evaluation on the effectiveness of the procedures used and the procedures of formal control and assessment.

3.2.3

It would also be helpful, in well-defined development projects, to include checkpoints at which activities and anticipated results are monitored regularly. Provision of funding and the continuation of the project itself should be conditional on such monitoring at precise and predetermined stages.

3.2.4

As far as the modalities of participation and administrative and financial management are concerned, it could be useful to have more detailed and unambiguous guidelines for the Contractual Agreements between participants, greater flexibility and freedom of choice for the applicant, and calls for proposals which set out more clearly the kinds of schemes and activity and the categories of participants.

3.2.5

It has been noted that a relatively small core of organisations has participated a number of times and in a number of programmes, often acting as prime contractor (the case in around an estimated fifth of the projects) (13). Concentration of this kind is somewhat disturbing: on the one hand, it says something about the difficulty of participating, especially for those entering a research competition for the first time; on the other, it restricts the implementation of new projects aimed at radical innovation and greater risk (as called for in the second recommendation).

3.3.1

Ways of encouraging private RDT funding still need to be better defined, while the market forces capable of triggering a virtuous cycle of synergy are not clearly identified and so are not available, as they should be, in the short term. Fiscal incentives, strengthening of intellectual property rights and facilitating interventions of risk capital are goals rather than instruments of action.

3.3.2

The EESC would particularly like to see instruments developed to foster the spirit of entrepreneurship among European researchers, and other instruments put into place (from risk capital and venture capital to targeted EIB funding and credit facilities for research) to smooth the path from research results to specific business initiatives.

3.3.3

The recommendation of ensuring greater participation of high-tech SMEs, which (as made clear in many previous opinions) the EESC fully endorses, must be supported by specific instruments in addition to the Joint Technology Initiatives, the Technology Platforms and the opportunities provided by the ‘Ideas’ project. The EESC hopes that this will be a key objective and will accordingly receive special attention in the practice of the Open Method of Coordination.

3.3.4

In the EESC's view, if encouragement is to be given to more innovative research geared to improving competitiveness, unresolved intellectual property issues must be addressed, particularly the Community patent, the patentability of computer implemented inventions and inventions in new areas of knowledge, and the full implementation of the Directive on the Legal Protection of Biotechnological Inventions.

3.4.1

In the EESC's view, making careers in science and technology attractive by improving the social, as well as economic, standing of the researcher is a priority. There can be no doubt that the growing trend for people to undertake postgraduate studies and conduct research in other countries (in academia and elsewhere) is a form of mobility which helps researchers to develop, since the interchange of knowledge and working methods is a unique process of enrichment. It becomes problematic, however, when such mobility is in one direction only and the country of origin is unable to offer the conditions of work, career, social prestige and adequate economic reward to attract people back (14). All European countries must be attractive for young people embarking upon a research career. In particular, there should be easier access to the EU, including organised exchanges, for new human resources coming from emerging countries, including China and India.

3.4.2

Programmes involving human resources and mobility do not appear sufficient to deliver that qualitative leap capable of ‘attracting and rewarding the best talent’, as the first of the key objectives puts it. There is no clear prospect of the ‘European researcher’ status which should be the nub of such action.

3.4.3

Critical situations such as these call for innovative policies: investment is needed a) to develop university teaching in science and engineering (a prerequisite for which are more science courses in upper secondary education and promoting science as a degree option at university), b) to reduce the number of those who graduated, but are not employed, in such fields (an unwelcome situation prevalent in the new Member States and in Italy, Portugal and Austria), c) to encourage more women researchers (now little over a third, despite accounting for more than 63 % of graduates in science and engineering disciplines) (15), and d) to make careers in science more attractive.

3.4.4

The EESC considers that such policies, primarily the responsibility of Member States, should receive particular attention in the Open Coordination Method, which could also be usefully applied to higher and tertiary education systems and research systems in order to identify best practices, appropriate forms of peer review, concerted action between Member States and regions, and priority transnational research topics.

3.4.5

Researchers constitute a far lower percentage of the labour force than is the case in competitor countries (0.54 % in the EU — and no higher than 0.5 % in all the new Member States and the countries of southern Europe — compared with 0.9 % in the USA and 1.01 % in Japan). The age of those in the science and technology sectors is also becoming a cause for concern (35 % — above 40 % in some MS — in the 45-64 age group, compared with 31 % in the 25-34 age group) (16). There is a thought-provoking estimate that 150 000 European researchers are currently working in the USA and a further 500 000 to 700 000 (17) researchers will be needed over the next ten years to achieve the Barcelona goal.

3.4.6

The EESC agrees with the panel's position on the need to offer researchers greater autonomy and responsibility (albeit while respecting ethical principles), to give careers in science a higher profile, to guarantee greater interdisciplinary as well as spatial mobility and to integrate the Marie Curie system of grants with national and regional programmes and use them specifically to boost mobility between public and private research.

3.4.7

The EESC also supports the Commission's effort to create a European Charter for Researchers (18) as a first step in the right direction, but considers the Member States need to be more coordinated and committed to achieve more effective and better harmonised systems of training, career, remuneration (including social insurance, pensions and fiscal regimes) and social insurance incentives (19).

3.4.8

Addressing the trustworthiness and legitimacy of science and technology in Europe is an issue to which the EESC attaches great importance and is a sine qua non for giving legitimacy to the researcher and recognition to his work: if for no other reason, an active and coordinated policy between the Commission and Member States needs to be urgently defined and allocated the appropriate means and resources.

3.5.1

The EESC notes the considerable efforts made by the Commission to improve the assessment procedure, as instanced by a series of documents focused on the work of assessors. However, the real problem lies in the logic of ex-post assessment: if it is limited to verifying formal compatibility with the goals, it risks losing sight of the real strategic objective, namely assessing the structural impact of the Framework Programmes on the EU's economy and research as a whole, the priorities to pursue and consequent allocation of funds.

3.5.2

The EESC suggests investing particular efforts into setting up a series of indicators which would really measure performances in terms of competitiveness and development. Such research performance indicators should make it possible to measure the efficacy of funded activities for the EU's development as a whole and to steer future activities towards the priorities established. The EESC is aware, however, that no automatic evaluation can take the place of delicate judgements made on a case-by-case basis by appropriate experts.

18.8.2006   

EN

Official Journal of the European Union

C 195/7

1.1

The draft directive is intended:

1.2

The EESC in general supports the Commission draft directive but makes the following recommendations.

1.2.1

The Commission should consider a longer period for transposition than that allowed for in the current Article 20. The period allowed for fireworks is only 24 months after publication of the directive, whereas for other pyrotechnic devices it is five years. Given the long lead time for importers of fireworks from China and other sources, estimated by distributors in the EU to be at least three years, the EESC recommends that the same length of time should be allowed for fireworks as for other pyrotechnic devices, i.e. five years.

1.2.2

The Committee points out that the arrangements for testing fireworks and for meeting the CEN specification impose responsibilities on importers and distributors. It recommends therefore that it should be made clear in the directive that importers must specify the standards to be obtained for the CE marking when placing their orders with manufacturers throughout the world. The responsibility for testing and for CE marking should rest with the manufacturer, with the importer having a secondary responsibility for ensuring that products bearing the CE mark are genuinely able to meet the CEN standards to avoid counterfeit products being put on the market.

1.2.3

The Committee believes that customs and other authorities in the Member States should also be involved in monitoring that products bearing the CE mark are genuinely meeting the standard.

1.2.4

Accident data supplied by Member States to the European Commission are incomplete. The Commission is aware of this. The Committee urges all Member States to improve their monitoring of consumer accidents.

1.2.5

Article 14 sets up arrangements for rapid information on products presenting serious risks. The RAPEX system could also be used as an interim measure until the directive comes into force.

1.2.6

For pyrotechnic products used in the automotive industry, Article 12 (1) requires manufacturers to ensure that they ‘are properly labelled in the official language(s) of the country in which the article is sold to the consumer’. The Committee beliefs the reference to the consumer is misleading as most pyrotechnic articles are fitted to motor vehicles at the manufacturing stage. The information for Original Equipment can therefore continue to be used in the current language (English). However, manufacturers of this equipment are concerned about the obligation to print instructions in all the official languages of the 25 countries because they have no control over which country the device will be used in. The Committee believes that the manufacturers' Safety Data Sheets should be sufficient as the information they contain is mainly diagrammatic and statistical.

1.2.7

Article 8.4 of the draft directive obliges Member States to inform the Commission if they believe that products do not fully satisfy the essential safety requirements referred to in Article 4 (1) which will provide a legal base. In the meantime, however, the Committee recommends that the RAPEX system might be used to convey accident and hazard data to the Commission so that the information will flow to other Member States.

1.2.8

The Committee has learned that in some Member States there are a number of micro enterprises involved in the manufacture of fireworks for special local occasions. Member States must ensure that these enterprises also respect the safety requirements of the directive.

1.2.9

Automotive pyrotechnical devices should be covered by a UN/ECE regulation under the 1958 Agreement (WP 29 in Geneva) rather than in a standard.

1.2.10

The Committee believes that for automotive pyrotechnical devices, the Commission should be prepared to accept some form of type approval.

2.1

‘Fireworks’ are commonly used for entertainment or to mark a special event such as a religious festival. They form part of the cultural history of many EU Member States. The directive deals with these separately from ‘pyrotechnic articles’ which, for the purposes of the directive, cover explosive devices used to trigger airbags and seat restraints in motor vehicles.

a)

Fireworks

b)

Other pyrotechnic articles

2.3.1

Article 7 of the directive forbids the sale of:

Other pyrotechnic articles may not be sold or made available to anyone under 18 unless they have the necessary vocational training.

2.4

The rules for placing pyrotechnic articles on the market differ widely across the present 25 Member States as do the statistics on accidents and their compilation. Currently, Member States' data refer only to fireworks and not to other products such as those used in the automotive industry, in stage effects or in distress flares.

2.5

The market for automotive articles is the more important of the two branches with a value of EUR 5.5 billion annually (EUR 3.5 billion airbag systems and EUR 2 billion seat belt pre-tensioners). (The export value in 2004 was EUR 223 438 297 and the import value of EUR 16 090 411.)

2.6

The vast majority of fireworks on the EU market are imported from China so that the main employment in the EU is in SMEs. The consumer market is estimated at around EUR 700 million per year and the ‘professional’ market about the same. The Commission's impact assessment reckons that employment is around 3 000 mainly involved with purchasing, storage, distribution and professional firework displays. Malta is an exception in having a large number of religious festivals involving displays of hand-made fireworks, which are not sold to consumers.

2.7

Accident levels vary according to the accuracy of the national statistics and vary from 1.36 per million population in Estonia to 60.1 per million in the United Kingdom. The Commission extrapolates these statistics to arrive at a total number of firework accidents of between 7 000 and 45 000 for an EU population of 455 million.

2.8

There appear to be no separate statistics for automotive pyrotechnic accidents compared with those for traffic accidents in general.

2.9.1

There is no current requirement for fireworks to carry a CE mark though a CEN standard was published in May 2003. Articles 9 and 10 propose that they shall not be placed on the market unless they conform to the procedures laid down in these articles.

2.9.2

Member States will be required to inform the Commission of who has been appointed in their territory to carry out the procedure.

2.9.3

No fireworks will be permitted unless the manufacture has satisfied the assessment procedure.

2.10.1

There is no uniform approval process for placing on the market inflators, modules and other automotive safety devices.

2.11.1

The Commission estimates that their harmonisation will lead to considerable cost saving for both fireworks and automotive pyrotechnic articles. Currently, there are believed to be as many as 50 000 different types of approved fireworks in use in the EU and approval for one firework can cost between EUR 500 and EUR 3 000per firework per country. It calculates that the cost of a new system with one procedure covering all 25 States will be cheaper.

2.11.2

For automotive products, the cost of one airbag approval can be EUR 25 000 in one country (Germany) and the Commission hopes that competition among testing authorities will bring down the price.

3.1

The Committee while welcoming the objectives of the directive — free movement of pyrotechnic articles, a high degree of consumer protection and essential safety requirements — has some reservations in particular about fireworks.

3.2

Bearing in mind that the vast majority of them are made in China and that the manufacturers there may well not have the resources to comply with an EU standard, who will assume responsibility for testing — the importer, the manufacturer's agent or the retailer?

3.3

What reassurance will there be that the CE mark attached to an imported firework is genuine and that the device to which it is attached is not counterfeit?

3.4

What degree of cooperation is achievable between consumer-protection bodies in the EU and the authorities in the country of origin?

3.5

The EESC is somewhat sceptical about the statistics in the Commission impact assessments, especially the wide range of accident figures — between 7 000 and 45 000. It shares the Commission opinion that ‘… any attempt to estimate a figure for the total number of accidents across the EU must be treated very cautiously’.

3.6

The same reservations apply to the economic impact assessment and the rather optimistic reliance in the case of automotive pyrotechnic articles on ‘… increased competition of testing authorities’ to bring down the cost of appliance approval.

3.7

The EESC notes that the Social impact assessment is positive in aiming to reduce the number of firework-related accidents and neutral for employment in both firework and automotive sectors.

3.8

The Environmental impact assessment draws attention to the influence of Council Directive 96/82/EC (Seveso II) of 9 December 1996 and its extension in Parliament and Council Directive 2003/105/EC of 16 December 2003 to establishments where pyrotechnics are present.

3.9

In spite of its reservations, the EESC welcomes these impact assessments.

4.1

The automotive sector is far more important economically than that for fireworks. It is a major exporter and employs large numbers. The EESC welcomes any step which will assist EU manufacturers in holding their own in a sector in which competition from ‘off shore’ is becoming more intense.

4.2

The Committee would hope that the introduction of uniform standards for putting on the market safe fireworks may lead to a revival of manufacture in the EU by offering economies of scale in a market worth EUR 1.4 billion (consumer sales EUR 700 million; professional sales also EUR 700 million) currently prevented by the existence of too many national standards often in conflict with each other.

18.8.2006   

EN

Official Journal of the European Union

C 195/10

1.1

The proposal follows an announcement by the leading manufacturer of perfluorooctane sulfonates (PFOS) that it would cease to manufacture and market consumer products based on these entities. This decision was based on the manufacturer's determination of possible risks to human health and the environment. Since then these risks have been quantified and the decision confirmed as being correct for the end-use in question. The major risk has been eliminated and action here is to ensure no recurrence of the problem. Meanwhile the needs of other users need to be protected until alternative materials or processes become available and/or until full impact assessments are undertaken.

1.2

The EESC supports the proposal, with particular reference to the restriction on marketing and use of PFOS-related substances, the derogations for the specified residual end-uses, and the need for continuing research.

1.3

The EESC notes that the end-uses to which derogations must be given differ significantly in the quantities used, in the likelihood and extent of human or environmental exposure, and in the time required to identify, develop and gain acceptance for, suitable and safer materials or processes. The EESC therefore believes that the derogations should be subject to review by the Commission on a case-by case basis on the advice of the Scientific Committee on Health and Environmental Risks (SCHER). Indications of the factors affecting these reviews are given in the specific comments. The timing of any risk or impact assessments should be consistent with the increasing demand for chemicals risk assessment under REACH. It is essential that the Commission maintains sufficient in-house resource to enable it to fulfil these obligations in a timely and informed manner.

1.4

The EESC notes that the actions described above, in reaction to an unexpected change in external circumstances, contrast with the normal process of risk management where measures are defined following risk assessments by the competent authorities in the Member States of previously identified priority substances. This approach is however likely to be, and indeed is specifically intended to be, a more frequent occurrence under REACH. A proportionate, acceptable and effective outcome for PFOS should provide a model for the future application of REACH.

2.1

The Commission bases its proposal on an OECD hazard assessment completed in November 2002 and on a UK risk evaluation report finalised in July 2005. These and other studies, primarily in the US, were prepared following the announcement on 16 May 2000 by 3M of a voluntary withdrawal of PFOS-related substances from their principal application in providing grease, oil and water resistance to textiles, carpets, paper and general coatings.

2.2

The Commission accepts the SCHER Opinion of 18 March 2005 that, despite limitations in the available methodology for testing these entities, the data so far available indicate PFOS to be very persistent, very bio-accumulative and potentially toxic and that risk reduction measures are justified to prevent any recurrence of wide-scale use.

2.3

The Commission and SCHER also agree that there are specific low volume applications where effective substitute products or processes are not yet available. Given that the continued use of PFOS-related products in these residual applications does not appear to pose any additional risks to human health and the environment, derogations from the overall restriction on marketing and use should be given. The end uses to which derogations must be given are set out and discussed in the proposal.

2.4

Further work is required under the Research Framework Programme (PERFORCE) on exposures, sources, routes and physico-chemical parameters of these PFOS-related substances.

2.5

The proposal is intended to guarantee a high level of protection for health and the environment. The Internal Market in such products will be preserved. The costs to the affected sectors are believed to be minimal. Considerable consultation has taken place.

3.1

Fluorinated chemicals were developed in the late 1940s and have been used in increasing quantities to generate inert liquids with low surface tension (very spreadable) or solid surfaces with specific (usually non-stick) properties. A sub-group of these, PFOS-related products, were developed by companies such as 3M to provide grease, oil and water resistance in a range of industrial and consumer applications. By the year 2000, approximately 4 500 tonnes per year were being manufactured and marketed worldwide in products such as 3M Scotchgard™ carpet and fabric conditioner. Following the withdrawal of PFOS-related substances, these products have been reformulated around other fluorinated chemicals with similar surfactant properties but with reduced impacts on health and the environment.

3.2

As the name (‘PFOS’) suggests, these are products where all (‘per’) the hydrogen atoms on an eight-member (‘octane’) carbon chain have been replaced by fluorine (‘fluoro’) atoms and one SO3 — (‘sulfonate’) group to form a stable negatively charged entity (‘anion’) which can in turn form a water-soluble, crystalline salt with metals such as lithium, sodium or potassium, or with other positively charged groups (‘cations’) such as NH4 + (‘ammonium’). ‘PFOS’ is not a single ‘substance’ but refers to components (‘entities’ or ‘moieties’) of ‘substances’ under EU laws on ‘substances’ and ‘preparations’. PFOS-related substances are made by a specific chemical process called ‘electro-chemical fluorination’.

3.3

The combination of ‘organic’ (carbon-based, oil soluble) and ‘inorganic’ (metal salt, water soluble) properties makes PFOS-related substances extremely effective as surface active agents (‘surfactants’) in a range of specialist applications. The entities resist oxidation (are inert and do not burn) or any other environmental breakdown (are stable and therefore persistent). Given their solubility in both oil and water, they are likely to bio-accumulate. They may or may not be toxic to different species under different conditions of exposure. Their unusual physical and chemical properties mean that, as SCHER noted, laboratory test methods may prove unreliable in determining their effects in the environment as a whole.

3.4

Fully fluorinated short-chain polymers with similar properties to PFOS-related substances as surfactants but with lower or negligible impacts on human health and the environment can be made by a process known as ‘telomerisation’. These products (‘telomers’) are not the subject of this proposal.

3.5

According to an OECD estimate in 2004, later quoted by SCHER, total annual usage of PFOS-related substances in the EU in 2000 was approximately 500 tonnes, of which 98 % was used to treat fabrics, paper or coatings. Annual emissions were believed to be around 174 tonnes. By 2004, worldwide usage had dropped significantly. Annual emissions in the EU were by then estimated in the worst case at 10 tonnes, assuming 9 tonnes from unrecovered waste water from metal plating. According to more recent German data, much of this too can be recovered..

3.6

SCHER also noted that it is only in recent years that analytical techniques have become sufficiently sophisticated to detect and reliably determine PFOS concentrations in environmental samples. It is therefore difficult to track changes due to the above reductions. SCHER could however conclude that emissions from the ongoing uses for which derogations are proposed will affect PFOS concentrations only on the local level and will insignificantly affect the overall concentration in the environment. More specifically, SCHER concluded that the overall risks for the environment and the general public were negligible with regard to their continuing use in the photographic, semiconductor and aviation industries. Usage in the plating industry was however a cause for concern and should be restricted.

3.7

Occupational hazards for each of the sectors require separate assessments. However, in the case of the photographic, semiconductor and aviation industries, given the nature of the industries involved and the high levels of protection already in place, it is difficult to see how the use of PFOS-related substances would present any additional hazards in the workplace. Usage in the chromium plating industry is however again a cause for concern. In the case of fire-fighting foams, the health and environmental risks of the proposed substitutes must be assessed before any decision is taken. Proper disposal routes for existing stocks and for run-off from major fires must also be agreed.

3.8

The EESC endorses the above and trusts that the necessary actions will be included in the work plans of the Commission.

4.1

The EESC supports the two restrictions on PFOS-related substances as defined in the proposal, i.e. (1) they may not be placed on the market or used as a substance or constituent of preparations equal or higher than 0.1 % by mass and (2) they may not be placed on the market in products or parts thereof in a concentration equal or higher than 0.1 % by mass.

4.2

The EESC also supports the derogation in paragraph (3) that paragraphs (1) and (2) above shall not apply in the six specific cases set out in the proposal and discussed in the paragraphs following.

4.2.1

Photolithography: this is, broadly, the process by which computer chips are patterned. New developments in semiconductor manufacture require specialised process fluids to allow the patterning to take place with very high reliability, density and uniformity. The PFOS-related substances provide unique electrochemical and surfactant properties and are regarded as ‘mission critical’ by the semiconductor industry. The process fluids, which do not remain in the finished products, are subject to rigorous specification and testing for each technology at each plant of every manufacturer. Used in ‘clean room’ manufacturing environments where all contamination must be eliminated, there is no possibility of workplace exposure. According to a 2002 mass balance for the industry, total emissions were below 45 kg per year. Product development times are up to 10 years. Despite extensive global R&D, no substitutes have been identified for these remaining uses. The most probable route for the removal of PFOS-related substances could be a new method of chip manufacture, yet to be invented. In the absence of this derogation, manufacture could not take place in the EU, although it could be continued without difficulty elsewhere. Given all of the above, and in the absence of any new evidence for concern, the EESC recommends that no time limit should be set for the removal of this derogation.

4.2.2

Photographic coatings: PFOS-related substances are purchased in concentrated solutions then extensively diluted to provide a range of properties essential for both workplace health and safety and overall product performance control in specialist photo imaging applications. These desired properties include electrostatic charge control, friction and adhesion control, dirt repellence and other surfactant properties for high performance imaging. Production techniques require as many as 18 imaging layers to be applied on to a fast moving film base to provide a uniform layer typically less than 0.11 mm thick. The fluids used must not be photoactive but must allow even spreading and good adhesion of subsequent layers. The antistatic properties are essential to minimise the risk of fire or explosion and subsequent injury to employees or to operating equipment. Usage of PFOS-related substances has been reduced by at least 60 % in recent years by substitution in less critical applications and by the overall decline in film usage v. digital for many consumer, health and industrial applications. The remaining usages contribute less than 8 kg to the environment per year. It is likely that further moves towards digital will result in continuing decreases in the quantities required for film manufacture, although demand for photographic paper, for instance, for printing digital images, is expected to continue. Despite extensive research, no replacements have been identified for these few remaining uses of PFOS-related substances. New processes, not yet invented, requiring 10 years or more to develop, implement, test and accredit, will be required to complete the process. In the absence of this derogation, manufacture could not take place in the EU although could be continued without difficulty elsewhere. Given all of the above, and in the absence of any new evidence for concern, the EESC recommends that no time limit should be set for the removal of this derogation.

4.2.3

Mist suppressants for chromium plating: PFOS-related substances in dilute solution protect the health and safety of workers engaged in the decorative and protective chromium plating of metal or plastic substrates for the automobile and other consumer-driven industries. They also act as surface tension reducers and wetting agents, in particular in plastics etching. The working environment for chromium plating is recognised to be harsh and potentially dangerous, in particular in processes based on Cr(VI), a known carcinogen. The suppression of mists and increased human exposure is therefore essential. The situation can be improved through the use of processes based on Cr(III) but these are not yet fully available. Only PFOS-based surfactants have so far proved to be stable in either of these circumstances. Annual usage in Europe in 2000, according to SCHER, was around 10 tonnes. Estimates of the total annual release to the environment differ considerably, depending on the processes used and the degree to which these are controlled with respect to emissions, recycling and waste incineration. A German industry estimate, based on local best practice, suggests that total emissions could be as low as 500 kg per year if extrapolated across Europe. If less good technology and controls are used, the emissions could be higher. Given that chromium plating is the largest remaining ongoing use of PFOS-related substances, and that the technology is evolving and to some extent alternatives are already available, it seems appropriate that a time limit should be set for this proposed derogation and further, that, as suggested by SCHER, occupational exposure analyses and longer term assessments of the risk to the environment should be conducted without delay. These should be undertaken in cooperation with the industry to ensure that manufacturing can continue in the EU. There is no incentive to drive out one critical stage of automobile manufacture, with the obvious risk that the remaining production would eventually follow. Neither should any premature removal of PFOS-related mist suppressants lead to increased risks for worker health. The EESC recommends that this derogation should apply for a period of five years only before review by the Commission and SCHER.

4.2.4

Hydraulic fluids for aviation: these are the fluids used to drive the control surfaces and other components of commercial, military and general aviation aeroplanes. They are used, and must continue to function on a daily basis to the highest possible operating standards to maintain aircraft and passenger safety, under the most extreme conditions of temperature and pressure. The business is global, and products, components and systems are subject to extensive testing and certification by aircraft manufacturers and by relevant national and international bodies. A typical approval cycle for a new formulation can take up to 20 years. PFOS-related substances are used in small quantities (around 0.1 % by mass) to provide erosion resistance for mechanical parts, valves, tubes and orifices. Despite extensive testing, no substitutes or, to date, any indications of possible substitutes, have been found. They are used in closed systems under tightly controlled conditions. Total releases to soil and water were estimated by SCHER to be below 15 kg per year. Given all of the above, and in the absence of any new evidence for concern, the EESC recommends that no time limit should be set for the removal of this derogation.

4.2.5

Fire-fighting foams: fluorinated surfactants have been used in high-specification fire-fighting foams for many years. PFOS-related substances have been largely replaced in new foams manufactured to replace stocks used to extinguish actual fires or to provide stocks for new developments, airports, petroleum refineries and chemical plants, marine vessels and tank farms. However, the health and environmental impact of these alternative products has not yet been fully assessed. All foams have to be sold with 15-20 year guarantees, as ideally they are never used. Significant stocks of PFOS-containing foams therefore still exist and disposal of these stocks is now the key issue. The surfactants must allow water-based foams to spread quickly on the surface of the burning hydrocarbons, rather than sinking below them, in order to cut off the supply of oxygen and prevent burn-back. Both surfactants and foams must be stable under intense conditions of use and both must resist oxidation. Performance standards for foams for different fire scenarios are set by national and international bodies. Stocks of 3 % or 6 % concentrates are stored in central depots, for distribution and dilution on site when a fire occurs. Large volumes may be required and the problems of waste disposal of the run-off after the fire may be considerable. The run-off is inevitably contaminated by the products that were on fire, by the by-products of uncontrolled low temperature carbon incineration (polyaromatic hydrocarbons (PAHs) and dioxins) and by the components of the foams. The recent fire in a storage depot in Buncefield, UK, for instance, has left a residue of 20 million litres of contaminated waste. High temperature incineration is the only assured approach, but this is inefficient and costly where the bulk of the material is water. Annual emissions to the environment are therefore hard to determine, being dependent on the number, scale and circumstances of each fire, and critically on the extent to which the run-off can be contained by bund walls. SCHER quoted an annual release in the EU of under 600 kg and noted that this could overstate actual releases. The EESC agrees with SCHER that the existing stocks of PFOS-based foam concentrates should not be incinerated until the alternatives have been fully evaluated. The EESC therefore recommends that the necessary impact and risk assessments should be undertaken as quickly as possible and that remaining PFOS-based foams should be used only where essential on performance grounds and where the run-off can be contained by bund walls. The Commission should work with the industry and with national competent authorities to ensure that there are adequate disposal routes for the large volumes of waste generated. Given the many uncertainties, the EESC believes that there is no point in setting a time limit for the removal of this derogation, but every point in resolving the outstanding questions as fast as possible.

4.2.6

Other controlled closed systems: this is, or should be, a standard derogation for the majority of substances subject to EU marketing and use restrictions. Provided that raw materials can be safely delivered to the system, and products and waste products safely removed, then very low emission systems allow continuing manufacture of essential intermediates with minimal risk to human health or the environment. Workplace reviews of the operating conditions should be undertaken under routine health and safety inspection. In the absence of any new evidence of concern, the EESC recommends that no time limit should be set for the removal of this derogation.

4.3

The Commission will continue to have a key role in ensuring a satisfactory outcome in each of the above sectors. A continuing programme of research will be required, in and outside the affected sectors to develop alternative products and processes. The Directives affecting these sectors should be modified when necessary to reflect changes in current or proposed global practice.

18.8.2006   

EN

Official Journal of the European Union

C 195/14

1.1

The EESC welcomes the Commission proposal, which has long been awaited by the Member States and operators in the sector. Its objectives may be endorsed, and the proposals are generally sound. However, the EESC offers a number of practical suggestions aimed at furthering the aims of legal certainty, clarity, simplification and health protection.

1.2

The EESC calls for greater clarity as to which authority is responsible for the overall evaluation in cases of a combination of medical devices, medicinal products, human blood derivatives and human tissue. It also asks that a deadline be set for the evaluation by the competent authorities, and that a guide to the specific competences and procedures for this evaluation be drawn up.

1.3

The EESC believes that it should be compulsory to send information regarding registration, clinical data, certificates and vigilance to the existing European databank, which should be strengthened. It also asks that means be found for securing wide circulation of non-confidential information, not only among the notified bodies and the competent authorities but also among the operators concerned.

1.4

Health operators' role and responsibilities in the post-marketing surveillance system should be made clearer, and steps should be taken to ensure appropriate dissemination of information and results arising from this surveillance.

1.5

The EESC appreciates the proposals regarding clinical investigations, which relate to the safety and performance of a device. It suggests a few changes designed to make them even clearer, more particularly as regards the point at which clinical research may begin, once the relevant ethics committee has given its authorisation in accordance with the classification of the device.

1.6

The EESC is against the exclusion of ‘reprocessing’ from the proposed text. The re-use of medical devices designed and produced to be used only once poses a danger to patient health. The EESC therefore asks that the reprocessing company be at least required to submit a set of data on the type of operation conducted and provide similar guarantees of quality and safety to those that apply to the original product, informing users and patients of this.

2.1

Although, on the whole, the experience garnered from implementing Directives 90/385/EEC (1) relating to active implantable medical devices and 93/42/EEC (2) concerning medical devices has been positive, legislative modification is necessary in the interests of better implementation, both to clarify certain existing requirements and to provide a legal basis for planned initiatives.

2.2

Directive 93/42/EEC requires the Commission to submit a report to the Council within five years of the implementation date, concerning certain aspects of the functioning of the directive. The review process gave rise to a report on the functioning of the Medical Devices Directives, published in June 2002. Its conclusions were taken up by the Commission in its Communication COM (2003)386 (3), which was welcomed by the Council in its Conclusions of December 2003 and by the Parliament.

2.3

The communication highlighted the most important areas where improvements should be made:

The Commission began its consultation in 2003, primarily through the Commission services' Medical Device Experts Group (MDEG). This was followed by a public consultation over the Internet (5).

2.4

Since the proposal deals more with regulatory clarification than regulatory change, there are no significant economic impacts expected. Similarly, no environmental impacts were identified. The Commission intends to use the proposal to promote:

2.5

The legal basis for the proposal is Article 95 of the EC Treaty (formerly Article 100A) upon which Directive 93/42/EEC is based. In order to achieve the objective of abolishing technical barriers to trade and clarifying existing provisions in Directives 93/42/EEC and 90/385/EEC, it is necessary and appropriate to harmonise the laws, regulations and administrative provisions in the Member States on certain aspects concerning the placing on the market or putting into service of medical devices.

3.1

The EESC welcomes the Commission proposal, which has long been awaited by the Member States and operators in the sector. Its objectives are wholly laudable and the practical proposals should improve harmonisation in this highly complex and diversified sector, by providing clearer, simpler rules. The Committee does however have some reservations and these are outlined below.

3.2

Medical devices are an increasingly important health-sector segment, with a major impact on both health and on public healthcare spending. The provisions in the directives in question concern over 10 000 types of product, ranging from simple devices (such as gauze, syringes and glasses) to extremely sophisticated and complex instruments (such as life-saving implantable devices and diagnostic imaging equipment).

3.3

The sector has a high technological profile, as the public and the health authorities require ever safer and more sophisticated products. It is also of major economic importance: the European market is second only to the American, with a turnover of approximately EUR 55 billion, involving over 8 000 companies and some 450 000 employees.

3.4

It should be noted that a large and growing number of devices are imported into the EU. A clearer and more effective legal framework and more open cooperation between the relevant authorities could inject new life into the sector and minimise the risk of losing market share and jobs.

3.5

Although the Commission rightly judges that there will be no significant macroeconomic impact, the combined effect of the additional requirements could increase costs quite considerably for certain processes or product lines.

3.6.1

The proposal defines changes to be made to the above-mentioned directives and clarifies certain implementation procedures for other directives and regulations in cases where it was not entirely clear which rules applied (devices incorporating a medicinal product (6), human blood derivatives (7) or human tissue engineered products (8)). It also provides clarification that in vitro diagnostic medical devices (9) are not covered by the biocides directive (10), which is modified accordingly.

3.6.2

The EESC agrees with the principle that if medical devices contain medicinal products or human blood derivatives or human tissue engineered products ‘with action that is ancillary to that of the device’, the medical devices directives should apply. It wonders however why there is no specific mention in the body of the regulation of tissues of animal origin, which are mentioned in certain annexes. It also fears that the definition of ‘action ancillary to that of the device’ could give rise once more to varying interpretations between Member States and notified bodies, and would therefore like to see this concept defined more precisely.

3.6.3

Greater clarity is required regarding which authority is responsible for the overall evaluation in cases of a combination of devices incorporating medicinal substances, blood derivatives and human tissue: in such cases the notified bodies may involve national or Community authorities (such as the EMEA) which do not always have the necessary expertise to assess medical devices as such and apply procedures designed for a different type of product, often leading to excessively long timeframes.

3.6.3.1

The EESC thinks that a deadline should be set for the evaluation, bearing in mind that in this sector an innovative product can very rapidly become obsolete. It also asks that a guide be drawn up regarding the specific responsibilities and procedures for evaluation by the competent authorities, in cooperation with the authorities responsible for the devices. Lastly, on the basis of the experience which manufacturers have built up over the years, it asks that the notified bodies be allowed to seek a scientific opinion from any recognised competent authority, and not just from EMEA.

3.6.4

By their very nature, the way they act and the manufacturing techniques used, a large proportion of human tissue engineered products are more similar to medical devices than to drugs. In order to avoid possible legislative vacuums, the EESC thinks that such products should come under the present proposal, with the exception of those that act on or in the human body by primarily pharmacological, metabolic or immunological means.

3.6.5

The EESC is against two directives (i.e. the Directive on medical devices and the Directive on personal protective equipment) simultaneously applying different requirements for the shared objective of protecting the user. It could complicate matters in practice and increase costs without bringing any benefits in terms of safety.

3.6.6

The EESC welcomes the new procedure based on comitology, added in Article 13, that paves the way for rapid, binding decisions on issues concerning the misinterpretation of a product as being or not being a medical device. It notes however that for an optimal result, the flow of information between the relevant authorities must be improved and data managed effectively by means of the European databank.

3.7.1

The EESC believes that clearer and more wide-ranging provisions are needed for the collection and dissemination of information, and on coordination and communication with regard to surveillance activities.

3.7.2

It believes that the proposal is lacking in terms of the capacity of the notified bodies to carry out the tasks assigned to them. This shortcoming was already highlighted in the 2003 communication (11). New therapeutic advances and the growing complexity and sophistication of devices require scientific and technical expertise that cannot always be provided at national level. There should be a European plan or at least coordination to ensure that certain notified bodies are specialised in certain types of particularly complex and sophisticated products.

3.7.3

The EESC agrees on the need for every non-Community manufacturer to designate an authorised representative in an EU Member State to act on their behalf and to respond to the authorities with respect to the obligations arising from this directive. There are gaps and inconsistencies in the text, however, and clarifications are necessary (see point 4.3 below). In principle, the EESC is in favour of a flexible system allowing real freedom of choice for the industry.

3.7.4

The EESC believes that it should be compulsory rather than optional to send all information relating to registration, clinical data, certificates and vigilance (including serious undesired effects and events) to the EUDAMED European databank, which is already operating but in limited fields. Its duties should be redefined as soon as possible, in particular as regards the provision of non-confidential information for interested operators, and it should be endowed with appropriate facilities and resources.

3.7.4.1

A reasonable amount of non-confidential information, in a concise form, should be made available to the stakeholders directly concerned. Information on product safety and quality and on post-marketing surveillance should also be made available to health operator associations, to enable them to use the medical devices more knowledgeably and safely.

3.7.4.2

The EESC also thinks that a guide should be drawn up, in cooperation with stakeholders, whereby the operators responsible can compile and publish a summary of product characteristics. This guide, and the information collected and validated with respect to vigilance, should be made available to notified bodies and competent authorities. Appropriate means should also be found for securing wider circulation of this information.

3.7.5

The proposal allows the instructions for use to be provided in non-leaflet form. This is in tune with operators' demands, particularly given the wide range of medical device types. There should be more research into the possibilities of using electronic instruments (such as CD-ROMs and the Internet), using a simpler and more flexible procedure than the current one, so as not to require a qualified majority of Member States.

3.7.6

The EESC thinks that the directive should explicitly mention the MedDev guidance documents drawn up by ad hoc working groups and issued by the Commission. Simplified arrangements for their approval should be introduced, so as to reduce problems of interpretation and encourage greater harmonisation in the practices of manufacturers and notified bodies.

3.8.1

The post-market surveillance system is well defined in the proposal as regards the manufacturer, but the role and responsibilities of health operators are not made clear. The system for disseminating information and results arising from the surveillance mechanisms is still unsatisfactory, as it is still too nationally-oriented and is in need of a more European dimension.

3.8.2

The EESC welcomes the changes relating to Annex X on clinical data, concerning the safety and performance of a device. It recommends that the article be further clarified as regards the point at which clinical research may begin, once the relevant ethics committee has given its authorisation in accordance with the classification of the device.

3.8.3

The EESC is against the exclusion of ‘reprocessing’ from the proposed text. The re-use of medical devices designed and produced to be used only once, which has already been outlawed in certain Member States, does not provide an adequate guarantee of patient safety, as the reliability and safety tests that led to the authorisation of the single-use product have not been carried out.

3.8.3.1

This is a frequent practice in hospitals in various Member States. However, the EESC thinks that it should be outlawed, as it poses a danger to patient health and makes it difficult to determine liability. Sterilisation does not give a full guarantee of safety, not least because the structural characteristics of the materials used may be altered.

3.8.3.2

The EESC is aware that this is a matter of national responsibility, but thinks that action at EU level is needed if only because the free movement of citizens and the recent recognition of the possibility of receiving care in another Member State bring a need for practices to be universally accepted. As a transitional step, the principle could be established that the reprocessing company should at least be required to submit a set of data in line with the classification of the medical device and the type of operation conducted, in order to provide similar guarantees of quality and safety to those that apply to the original product; at the same time, users and patients should be clearly informed of the situation.

3.8.4

The EESC fully agrees with the clarifications proposed for conformity assessment and the obligation to submit design documentation for the medical device, in line with the classification of the device and the novelty of the technology or treatment involved. It also agrees on the need for the manufacturer to apply adequate controls to any third parties it uses for design and manufacture.

4.1.1

The EESC feels that it is inconsistent with the principle of simplification and legal certainty to apply two separate directives to the same product, as is now being proposed for medical devices and personal protective equipment. It therefore calls for the original text of Article 1(6) of Directive 93/42/EEC to be re-instated.

4.1.2

Broadly speaking, the EESC feels that in the case of a medical device which could come under the definition of other directives (pharmaceuticals, cosmetic products, etc.), it should be specified that when deciding the applicable directive, the competent authorities and bodies must take account of the principal intended purpose of the product and the relevant mechanism of action.

4.1.3

In order to avoid any legal uncertainty, the EESC thinks that section 7.4 of Annex I should be amended (Translator's note: In the English version of the Commission document, the reference is to section 10). In particular, it should be made clear that if a medical device contains a substance which, considered separately, could be defined as a medicinal product, it is covered by the specific parts of pharmaceuticals legislation which refer to the safety and quality of the substance itself, and not by pharmaceuticals legislation in general.

4.1.4

In the case of medical devices which incorporate a product obtained through human tissue engineering, the EESC fears that the new paragraph 4b) does not resolve the difficulties of interpretation. Accordingly, the EESC would like these products to be explicitly defined in Article 1 in accordance with the directives in force and, in particular, with the regulation currently under discussion on advanced therapy medicinal products (12).

4.2.1

The EESC thinks that it should be obligatory for the various competent authorities and bodies, and for manufacturers or representatives, to send the relevant data, including clinical data and reporting of serious adverse and unexpected effects, to the EUDAMED European databank. However, for this collection of data to be effective, it will be necessary to redefine the duties of EUDAMED and establish an implementing programme that ensures it is appropriately structured and resourced.

4.2.2

In order to ensure the completeness of the data collected, and wider dissemination of relevant non-confidential information, the EESC thinks that a number of points in the proposal should be modified, in particular:

4.2.3

The EESC would also like Article 20(3) to be amended, so as to enshrine the principle that non-confidential information should be made available to users, in summary form, involving manufacturers and representatives as well as the relevant authorities and bodies.

4.3.1

The EESC notes an inconsistency in the definition of the representative of a manufacturer who does not have a registered place of business in the Community. In the 14th ‘whereas’ clause, the reference is to a single individual person for all classes of devices, while Article 10a(3) and Article 14(2) do not specify whether all or only some categories of device are involved.

4.3.2

Bearing in mind the wide range of medical devices which a manufacturer might place on the market, the EESC calls for greater flexibility: a single representative could thus be designated for each type of product and not necessarily for the whole production range (while also making it clear in the different language versions that in legal terms this refers to both natural and legal persons).

4.4.1

Provisions on information for the competent authorities to facilitate the monitoring and management of clinical investigation data should be included in Article 2(2), and should specify that the manufacturer or his representative must inform the authorities of all Member States where these investigations are conducted, of the suspension, interruption or end of the investigations, with appropriate explanations.

4.4.2

The EESC welcomes the new wording of Article 15(2) and (3). However, it wonders whether it might be advisable to specify in Article 15(3) that for Class I devices the clinical investigations can start as soon as the relevant ethics committee has delivered its favourable opinion on the investigation plan.

18.8.2006   

EN

Official Journal of the European Union

C 195/19

1.

The purpose of the proposal is to codify Council Directive 78/1035/EEC of 19 December 1978 on the exemption from taxes of imports of small consignments of goods of a non-commercial character from third countries. The new directive will supersede the various acts incorporated in it; it fully preserves the contents of the acts and does no more than bring them together with only such formal amendments as are required by the codification exercise itself.

2.

The Committee can only endorse the general codification of Community provisions undertaken by the Commission on the basis of the decision adopted on 1 April 1987 and confirmed in the conclusions of the Edinburgh summit. It therefore approves the proposed directive, as it has already done for similar initiatives on other occasions.

3.

The Committee notes that, in accordance with the interinstitutional agreement of 20 December 1994 between the European Parliament, the Council and the Commission, no changes of substance may be made in the codification. The Commission guarantees to respect this condition in the text of the proposed directive.

4.

The consultative role of the EESC and its sense of responsible mean that it must check the amendments before approving the document. The rapporteur has done this and finds no grounds for criticism or specific comment.

5.

The Committee supports the proposed codification which is part of the simplification and clarification of European law.

18.8.2006   

EN

Official Journal of the European Union

C 195/20

1.1

The European Economic and Social Committee feels that the proposal for a regulation on public passenger transport services by rail and road submitted by the Commission is an improvement on previous versions in terms of the option for direct award of contracts.

1.2

However, in order to achieve the objective of legal security desired by organising authorities and operators, certain points still need to be clarified:

1.3

In that context the Committee expressly endorses the obligation to draw up contracts and the balance struck between the competitive tendering and direct award options as conducive to the necessary transparency and improved quality of services within a competitive system.

1.4

The Committee would like to see the provisions of the regulation apply to all public service transport contracts.

1.5

In the context of the balance struck between competitive tendering and direct award to an internal operator the Committee declares itself in favour of restricting activity to a particular area to prevent distortions of competition and safeguard freedom of choice for local authorities and fair conditions for controlled competition.

1.6

In the event of direct award to an internal operator, the Committee would like to see a clearly defined and controlled margin of flexibility retained, where, in the interests of the unity of the networks and the integration of transport services, services need to be extended to neighbouring and/or adjacent areas administered by a different authority from that which awarded the public service transport contract.

1.7

The Committee feels that derogations for minor contracts and in order to ensure the continuity of services are warranted.

1.8

The Committee questions the option of direct award of public service rail transport contracts both to traditional and new operators, without laying down any precise rules ensuring fair competition of the kind applied to internal operators, thus giving rise to legal uncertainty and distortions of competition.

1.9

The Committee considers that the principles of transparency, equal treatment and quality and efficiency of public rail transport can be better guaranteed only if the same rules are applied as to local road transport.

1.10

The Committee calls for a return to the spirit of the 2002 proposal for a regulation with regard to service quality and compliance with the social legislation in force in the Member States.

1.11

This apart, the EESC would welcome speedy adoption of the regulation, which is necessary to ensure legal certainty within the sector.

2.1

The European Commission has published a new proposal for a regulation on public service obligations with regard to public road and rail passenger transport services. The document in question is the third version.

2.2

The EESC welcomes the Commission's work, which enables discussions — previously blocked at institutional level — to be re-launched.

2.3

The proposed text is intended to reconcile the varying positions voiced in previous discussions in the light of recent developments in case law, particularly the Altmark Trans judgment, and to address concerns about compliance with the principles of subsidiarity and of administrative freedom for public authorities.

2.4

It is very different from and simpler than the previous version. However, in order not to prolong the legislative procedure, the Parliament decided to treat it as a revised version of the same text and to examine it at second reading. The proposal is therefore now before the Council of Ministers, which has just begun its examination and has decided to study its correlation with the third rail package, particularly with regard to the opening-up of international traffic and the possibility of cabotage (2).

2.5

The Commission considers that the current legislative framework, which dates from 1969, is outdated and that the efficiency and quality of modes of transport must be improved in order to maintain or increase their market share. It would like to regulate competition, including for regions and towns, in order to ensure transparency in the way in which public service contracts are awarded and executed (3). In its 2001 opinion on the previous proposal for a regulation the EESC welcomed ‘the Commission's intention of introducing a market regime for public passenger transport based on controlled rather than full competition’ (4).

2.6

It also noted with satisfaction that ‘henceforth equality of opportunity and competition between all types of enterprise, irrespective of their legal form, will be achieved through legal and accounting transparency’ (5).

2.7

At the present moment, given that the proposal for a regulation is to be discussed by the European Parliament at a second reading, the EESC can only reiterate its desire for transparency, equal opportunities and controlled competition in public road and rail passenger transport management procedures, in compliance with the neutrality principle of Article 295 of the Treaty.

2.8

In that connection the recent case law of the European Court of Justice, especially the Altmark Trans and Stadt Halle judgments, has helped to clarify the issue. In exercising its right of initiative, the Commission is not bound by the doctrine of case law, the legal system of the European Union being mainly based on written law rather than the decisions of the courts. In practice, the proposal for a regulation incorporates the principles of the three main criteria identified in the Altmark Trans judgment (Article 4). Aspects of the fourth criterion can be found in point 7 of the annex.

2.9

It should be pointed out that the Altmark Trans judgment defined the criteria ensuring that compensation of public service obligations is not legally classified as state aid. The proposal for a regulation is broader in scope and covers points not dealt with in the case law, such as the questions of the compatibility with competition rules of compensation legally classified as state aid and the grant of exclusive rights. In 1969 there was no transport market; the question of exclusive rights did not, therefore, arise.

3.1

The Committee welcomes the Commission's initiative but would like to raise a number of legal questions which merit discussion, and stresses how important it is that the new regulation should genuinely guarantee the legal security that the whole sector needs so badly in order to ensure rapid adoption and implementation.

3.2

The Committee welcomes the Commission's efforts to achieve a new balance in local transport which respects the local authorities' administrative freedom and is satisfactory for all stakeholders.

3.3

It welcomes the fact that the local authorities are free either to put their transport services out to competitive tender, to provide the services themselves or via an internal operator, providing that precise criteria are met in order to prevent any distortion of competition.

3.4

The Committee reaffirms its support for the principle of controlled competition, rather than full competition, which has been incorporated in the new proposal for a regulation (Articles 3 and 5(3)). This principle seems to offer the best basis for reconciling public service needs with the need for a secure, harmonised framework of rules for the award of contracts. It reconciles public-service-related and commercial needs in the sector (irrespective of the legal status of the enterprises concerned).

3.5

The Committee considers that a competitive system offering the general use of contracts and freedom to choose between competitive tender or direct award is the best guarantee of improved public transport quality and efficiency. What will happen is that the organising authorities will need to establish clearly and in advance public service obligations, the areas concerned, the rules determining compensation and the arrangements for sharing costs and revenues, as well as arranging sufficient prior publicity.

3.6

At the same time, operators will have a clear understanding of the conditions which they operate under.

3.7

In addition, the proposal envisages that ‘each competent authority shall publish once a year a detailed report on the public service obligations for which it is responsible, the selected operators and the compensation payments and exclusive rights granted to the said operators by way of reimbursement’ (Art. 7). This will enable members of the public to find out about the exact conditions under which public transport services operate, thus putting them in a position to question the quality and cost of the services provided to them. However, it must be ensured that the report does not unduly increase the administrative burden on local authorities and thus, by extension, on operators. Too much bureaucracy is not conducive to full information.

4.1.1

The question of legal precedence arises, as there are two systems of law which can be applied to the sector.

4.1.2

At the first reading, in 2001, the European Parliament adopted an amendment requiring the future regulation to take precedence over public procurement law in order to create a clear and coherent legal framework. The solution proposed by the Commission is for the applicable law to be determined by the choice of the organising public authority.

4.1.3

On this point, the EESC believes that the provisions of the regulation should apply to all public service transport contracts, in line with the principles of transparency and equal treatment. This would be by far the simplest and clearest solution and would not call into question the freedom of the competent authorities to conclude contracts.

4.2.1

Unlike the two previous versions, the proposal for the first time allows a public transport contract to be awarded to an internal operator directly without competitive tender (Article 5(2)). This innovation responds to the wish expressed in the previous debates that the local authorities' organisational freedom be preserved.

4.2.2

There are a number of conditions for this:

4.2.3

At the first reading, the European Parliament came out clearly in favour of maintaining the option of direct award to a local operator controlled by the competent local authority alongside the competitive tender option. The discussions in the Council of Ministers have tended in the same direction, with most representatives of the Member States being in favour of the competent authorities retaining the freedom to provide local services themselves, using in-house enterprises, or to outsource them by competitive tender.

4.2.4

The Commission has attempted to take account of this consensus and has therefore sought to strike a balance between controlled competition and the direct award option; the EESC endorses this approach as it preserves the administrative freedom of the organising public authorities while taking account of the principles set out by the ECJ.

4.2.5

It should be pointed out that the Commission has introduced a geographical demarcation criterion into the definition of internal operator in order to take account of the principle of competitive reciprocity advocated by the Parliament for local services provided under local government control, but in a form which complies with the Treaty. The application of this criterion raises two questions:

4.2.6

Provision should be made for the possibility that, in order to ensure the unity of the network and the integration of transport services in areas which border on/are adjacent to that of the authority which awarded the public service contract, services operated by the organising authority itself or by an internal operator may also be of use to areas for which different competent authorities are responsible. In order to prevent this option being used to circumvent the principle of non-distortion of competition, it would be necessary to stipulate that services provided outside the area of territorial competence of the organising authority must not exceed a certain percentage of the value of the main contract.

4.2.7

It should be made possible for the internal operators of several local authorities to cooperate, particularly in relation to research and development; otherwise they would become structurally less efficient than their potential competitors, which would not have the same limitations.

4.2.8

It will be necessary to clarify these points in terms of both legal certainty and the practical organisation of services. The criteria established by the case law of the European Court of Justice (Stadt Halle case of 11.1.2005) for defining an internal operator leave some room for doubt, e.g. the phrase ‘factors such as’, which suggests that the list of criteria is not exhaustive. However, recent case law (Parking Brixen case of 13.10.2005) once again underlines that the criterion of control similar to that exercised over the authority's own departments is fundamental.

4.2.9

Finally, it is surprising that strictly defined conditions apply to the general case of direct award to an internal operator, whilst the specific exception to the principles of the regulation, concerning direct award to a rail operator, is not subject to any conditions; no reason for this is given in the explanatory memorandum.

4.3.1

Apart from award to an internal operator, the proposal also provides for recourse to competitive tender. There are three derogations from the tendering obligation:

4.3.2

The EESC considers that the first two derogations are justified in principle, although the criteria used to define minor contracts are debatable. The third derogation on the other hand raises several questions. Partly because of the size of the sector concerned (turnover of about EUR 50 billion), partly because the award conditions are — in contrast to conditions for award to an internal operator — not particularly stringent, even though Article 7 contains useful provisions for publicity measures, and partly because rail transport is not a sector whose nature warrants its being permanently closed to competition, unless it is subject to provisions similar to those set out in Article 5(2) of the proposal for a regulation.

4.3.3

It may be asserted that transparency, the principle of equal opportunities and the interests of users and operators would be better served by means of controlled tendering procedures, and that the approach adopted, probably as the result of a political compromise, rather unbalances the text in terms of its legal coherence.

4.4.1

Article 6 of the proposal for a regulation refers to Article 4, which is based in part on the criteria of the Altmark Trans judgment. Any compensation, however it is assigned, must conform with these provisions. In the case of directly awarded contracts, compensation must also comply with the rules set out in the annex, which state that, to calculate the amount of the compensation, the situation of direct service provision must be compared with that of a service provided under market conditions if the obligation had not been met.

4.4.2

The text thus distinguishes between two situations:

4.4.3

This systems gives rise to a certain legal complexity, requiring clearer definition in order to ensure transparency and good management for customers and taxpayers.

4.5.1

The Commission stresses that the purpose of the proposal for a regulation is to regulate the question of public service obligations, and compensation for these, in the transport sector and not to deal with issues such as service quality, social legislation and consumer protection. Only Article 4(7) therefore deals with social rights in a flexible way. This is after all an area of national competence.

4.5.2

However, the 2002 revised proposal was more precise in defining a suitable level of quality for public transport and passenger information, as well as social legislation (old Articles 4, 4a) and 4b)).

4.5.3

The EESC deplores this excessively cautious new wording on quality, passenger information and the guarantees offered by national social legislation. It urges the Commission to amplify its proposal in the spirit of the 2002 proposal, while respecting the principles of subsidiarity and local authorities' administrative freedom. Without actually drawing up an exhaustive list of safety, quality and passenger information criteria, it would nonetheless be a good idea to indicate certain minimum requirements in these areas.

4.6.1

There is a certain amount of imprecision in Article 8(6), which regulates competitive tendering during the second half of the transitional period, but leaves the question wide open of what should happen during the first half of the period and in the case of direct award of contracts.

18.8.2006   

EN

Official Journal of the European Union

C 195/26

1.1

More than 75 % of the population of the European Union lives in urban areas. Urban transport therefore represents a very high percentage of the transport sector as a whole, influencing the parameters of air quality (carbon monoxide, hydrocarbons, nitrogen oxides, particulates, ozone precursors) and hence local pollution, as well as climate change (CO2 emissions).

1.2

There have been a succession of legislative and research measures in recent years, both in a European context and in that of international cooperation. The main aims pursued have been to improve energy efficiency and to reduce pollutant emissions as well as dependence on oil.

1.3

Thanks to the standards regulating vehicle emissions, known as ‘Euro’ standards, pollutant emissions due to vehicle traffic have been drastically reduced over the last 25 years.

1.4

Moreover, thanks to models such as CAFE (Clean Air for Europe, 2005), it has been possible to estimate a further reduction of 5 % in pollution levels for 2020.

1.5

The directive under consideration seeks to promote a sustainable urban environment: the proposal provides for a fleet of ‘clean’ heavy duty vehicles, which, as well as saving energy, would emit a smaller quantity of pollutants.

1.6

In particular, the proposal includes an obligation on public bodies to allocate a 25 % quota of their annual procurements of heavy duty vehicles above 3.5 t weight to clean vehicles. The Commission proposal also allows for the possibility of a later extension of this requirement to the other categories of vehicle acquired by public bodies.

1.7

Alongside an initial investment by the public bodies, timely implementation of this directive would encourage rapid development and wide distribution of clean technologies.

1.8

The directive, if approved, would offer the many local authorities who find themselves forced to impose restrictions on the free movement of vehicles an alternative solution capable of achieving positive results in terms of environmental, social and economic impact.

1.9

Cities such as Paris, Montpellier, Frankfurt, Helsinki and others, which have invested in a fleet of clean vehicles (buses or refuse collection lorries powered by natural gas), have achieved good results and are going on to acquire more vehicles to enlarge the available fleet.

1.10

Shortening the timescale for action, diversifying efforts and acting at various levels to reduce the overall environmental impact (Euro standards on control of vehicle emissions, measures aimed at improving energy efficiency and at security as regards energy supply and diversifying energy sources) must lead to social benefits and technological and economic progress.

1.11

The EESC therefore hopes that the directive can be adopted in 2006, complementing the other measures already taken by the European Community and new measures which are in the process of being approved.

2.1

On 21 December 2005 the Commission presented this proposal for a directive on the promotion of clean road transport vehicles (1) (legal basis: Article 175(1) TEC; codecision procedure).

2.2

The main objectives of the directive are:

2.3

The directive lays down that public bodies are required to allocate a minimum quota of their annual procurements of heavy duty vehicles (above 3.5 t) to vehicles meeting the ‘enhanced environmentally friendly vehicle’ performance standard. The minimum quota laid down is 25 % and concerns the replacement of heavy duty vehicles to allow the gradual introduction of environmental criteria in the procurement procedure and prepare public bodies and industry for a possible extension of these requirements to other categories of vehicle.

2.4

In the long term, the directive will lead to an improvement in the environmental performance of the entire fleet through economies of scale, a reduction in costs and wider deployment of enhanced environmentally friendly vehicle technologies.

3.1

The heavy duty vehicles covered by the directive are vehicles weighing more than 3.5 t, such as buses and utility vehicles (e.g. refuse collection lorries).

3.2

The term ‘clean vehicle’ signifies ‘enhanced environment-friendly vehicle’ as defined in the EEV (Enhanced environment-friendly vehicle) European performance standard (2), which lays down strict limits on CO2 emissions and on harmful emissions of carbon monoxide, nitrogen oxides, hydrocarbons, particulate pollutants and ozone precursors:

3.3

The Member States have always been encouraged to introduce tax concessions for those vehicles which have stricter limit values for emissions than those laid down in the current Euro 4 standard (3), as an incentive to bringing cleaner, more efficient vehicles onto the market.

3.4

The public bodies to which the directive is addressed are the national, regional or local authorities, bodies governed by public law, public enterprises and operators bound by contracts with public bodies for the provision of transport services.

3.5

The obligation to allocate a minimum quota of annual procurement to clean vehicles applies to both purchasing and leasing of heavy duty vehicles.

3.6

Promoting the use of EEVs is also in line with the Commission's recent proposal for a directive on car taxation (4): the latter would in fact be partially based on CO2 emissions to encourage the purchasing of cleaner, more energy-efficient vehicles, such as those using biofuels, natural gas, liquefied petroleum gas (LPG), electrical or hybrid motors.

3.7

The increased use of biofuels for vehicles is also an objective of the biomass action plan (5), which the Commission recently adopted and followed up with a communication on biofuels (6).

3.8

This proposal therefore forms part of a wide range of measures designed to deal with the constant increase in greenhouse gas emissions which jeopardise the Community objectives on climate change, the increase in local pollution phenomena due to vehicle exhaust emissions which have a negative effect on citizens' health, and the question of energy efficiency of fuels which makes Europe still heavily dependent on oil.

3.9

In the Green Paper on energy supply (7) questions linked with the growth of the transport sector, high energy consumption, CO2 emissions and oil dependence are analysed to identify measures which could influence the demand for alternative technologies and fuels and promote a generation of clean vehicles; the same questions are taken up in the White Paper (8) on European transport policy up to 2010.

3.10

In the communication on alternative fuels for road transport (9) and the subsequent directive on the promotion of biofuels (10) the diversification of energy sources is regarded as an effective system for reducing dependence on oil, CO2 emissions and local pollutant emissions.

3.11

The communication reviewing the EU strategy for sustainable development (11) covers the aspects related to climate change. This strategy explicitly proposes the development of a market for cleaner vehicles, within a programme of traffic management in urban areas involving the promotion of ‘eco-innovations’ and the adoption of ‘clean’ buses.

3.12

The Green Paper (12) on energy efficiency proposes concrete measures, among them the use of public procurement to develop a market for vehicles which are less polluting and more energy-efficient than conventional vehicles.

3.13

Production and use of vehicles which comply better with atmospheric pollutant limits represent an essential factor in the attempt to achieve the objectives set by the relevant European legislation (13).

3.14

In the context of the Thematic Strategy on air pollution (14), whereby the Commission intends to consolidate the relevant current directives, the need is once more emphasised to recommend that public bodies implement them annually by acquiring a minimum quota of clean energy-efficient vehicles.

3.15

The European Parliament has expressed its support for a Community action plan to improve energy efficiency in the transport sector, particularly stressing the importance of targeted public procurement programmes to reduce the price of energy-efficient vehicles and make them competitive with conventional technologies (15).

3.16

The European Council has advocated measures to integrate environmental management and sustainable development into transport policy (16).

4.1

This directive, if adopted, would introduce a range of obligatory measures on public procurement, with a view to speeding up the increase in market demand for ‘clean’ vehicles. At the same time, the proposal promotes the introduction of clean energy-efficient vehicles through a technologically neutral approach, as recommended by the Member States (17).

4.2

The procurement obligation for heavy duty vehicles exceeding 3.5 t weight, as compared with voluntary agreements or other types of regulatory measures, has advantages in terms of the cost/benefit ratio, the economic aspects of the competitiveness of European industry, and above all the environmental impact.

4.3

The 25 % quota of procurement corresponds to 10 % of the whole market, a percentage which is high enough to influence the development of the market for clean vehicles and to encourage economies of scale, thus keeping investment costs at an acceptable level.

4.4

The number of vehicles to be covered by this proposed directive is estimated at about 52 000, comprising 17 000 buses and 35 000 lorries. Introducing 25 % clean vehicles would thus correspond to 13 000 EEVs per year. The choice of a specific replacement sector (buses, refuse collection lorries or others) is left to the public bodies, which are entirely free to decide the specific replacement quotas.

4.5

Procurement for the systematic introduction of clean vehicles would encourage the development of the automotive industry and guarantee the expansion of a strong market for heavy duty vehicles in Europe, increasing its competitiveness.

4.6

Paris, Montpellier, Frankfurt and other cities already have fleets of clean vehicles and are preparing to enlarge them in view of the positive environmental and socio-economic results achieved.

4.7

The mandatory introduction of a percentage of EEVs in the fleet of heavy duty vehicles represents a further instrument available to public authorities to help them meet the obligations imposed by Community directives on air quality.

4.8

The replacement percentage suggested in the proposed directive would make it possible to obtain rapid initial results as regards improvement of air quality (18), as the EEVs meet standards which drastically reduce HC, NOx and PM emissions.

4.9

Moreover, the use of EEVs helps to reduce fuel consumption and encourage research to obtain increasingly significant results for the environment; on the other hand, promoting the use of alternative fuels and studying emission treatment technologies provide a strong stimulus to the growth of the automotive industry.

4.10

Considering that the average life of the heavy duty vehicles covered by the proposed directive is about 15 years and assuming that it comes into force in 2006, public bodies would have time by 2030 to recoup the investment, make technological progress and improve performance standards.

4.11

A substantial commitment to the speedy promotion of clean vehicles would also have beneficial social effects: improving air quality in urban centres means, among other things, reducing the incidence or exacerbation of respiratory diseases, with a resulting improvement in the public health budget.

18.8.2006   

EN

Official Journal of the European Union

C 195/29

1.1

The EESC has repeatedly mentioned the importance of sustainable development for Europe's future and for global development, and therefore welcomes the presentation of a ‘platform for action’ in which the Commission addresses the issue.

1.2

The communication presented by the Commission is one of five documents published in 2005 alone on the subject of sustainable development. Although he EESC is constantly stressing the importance of concrete steps, it deplores this large number of different documents produced, which makes it almost impossible for the average politically aware person to follow the dossier.

1.3

The links between the Lisbon strategy and the sustainable development strategy are unclear. Measures to provide information and improve coherence are needed to ensure that these links are understood by the general public. The impact analysis tool must be adapted so as to take account of the social and environmental dimensions to the same extent as the economic dimension. The research and innovation advocated under the Lisbon strategy should explicitly support sustainable development.

1.4

The EESC does not see the ‘platform for action’ set out in the communication as a new, revised strategy. Although it provides an accurate analysis of the current situation and notes that it is unsustainable, the communication does not really get beyond this. Far too little, if anything, is said about what specific action could be taken.

1.5

In this document, the Commission does not follow the EESC's recommendation of April 2004 or meet its own undertaking of June 2005. It does not set out clear goals to be reached under the sustainability strategy.

1.6

A strategy should normally describe the means of achieving objectives. The absence of objectives is bound to result in gaps when it comes to identifying instruments. This is a definite problem with the communication: if you do not know exactly where you are going, then you cannot decide how you will get there.

1.7

The key actions described in the communication are vague and very poorly defined. Some are former demands, or undertakings, which have been pending for more than 30 years without being carried out. But there is no discussion of why such long-standing objectives have not been achieved, or of whether they are still appropriate and above all sufficient.

1.8

Wherever a crucial statement is made, however, the Commission remains non-committal. Its stated intention to use international trade as an instrument for promoting sustainable development can only be welcomed. But a ‘platform for action’ can also be expected to answer the question of how to achieve such an aim.

1.9

The Commission should clarify the role of the parties concerned by answering the question of who should be doing what, depending on the remits of the EU, the Member States, the social partners and other players.

1.10

The EESC for its part intends to contribute to the debate by building up a database that can be used to promote best practice, identifying obstacles encountered by operators, etc. This should enhance the expertise which the Commission and other parties can draw on.

1.11

The communication thus leaves more questions open than it answers; it even raises new questions for which society is vainly awaiting a response.

1.12

The EESC deeply deplores this situation. The communication is not really bringing sustainable development policy forward, but rather proves that the process currently seems to have stalled.

2.1

On 13 December 2005, just before the EU Council of Economics and Finance Ministers in Brussels, the Commission presented a communication to the Council and the European Parliament on The review of the Sustainable Development Strategy — A platform for action  (1).

2.2

The EU's sustainable development strategy under review was adopted at the summit meeting in Gothenburg held in the summer of 2001. The EESC has expressed its views several times both on preparations for the strategy and on the strategy itself, most recently for example in its exploratory opinions on Assessing the EU sustainable development strategy  (2) (April 2004) and on The role of sustainable development within the forthcoming financial perspectives  (3) (May 2005). It also held a high-profile Stakeholder Forum with the Commission in April 2005 that was considered to be very constructive, and another hearing in March 2006 in connection with drawing up this opinion (the results of the hearing have obviously been taken into account in the opinion).

2.3

The Prodi Commission had announced that it would revise and adopt the Sustainable Development Strategy, but this never happened. Instead, there were considerable delays each time with drawing up the document(s). This may be a sign of how difficult the Commission — as well as the Council — find it to take forward the sustainable development strategy.

2.4

In February 2005 the Barroso Commission presented, not a revised strategy, but a communication entitled The 2005 Review of the EU Sustainable Development Strategy: Initial Stocktaking and Future Orientations  (4). In that communication the Commission talked about ‘the worsening of unsustainable trends’, noted that progress on integrating environmental concerns into sectoral policies was ‘limited so far’, that ‘poverty and social exclusion’ were a ‘growing problem’, and that ‘in a world of growing 'interdependence' we cannot continue to produce and consume as we are doing today’.

2.5

The communication now under discussion must be seen in the above context. The EESC can see the document as a further step towards revising the sustainability strategy, but not as the result of a completed revision. According to recent — though mostly unofficial — information, the current intention is that the European Council should adopt a revision of the 2001 sustainability strategy at its summit in June 2006 and that the conclusions of the summit should then present the common European sustainability strategy until 2009. The EESC would point out firstly that the Commission has not fulfilled its 2001 commitment to present a revised strategy at the beginning of each new Commission term. Now five documents (5) drawn up in 2005 are on the table which at best can be considered ideas and background material for a revised strategy, but in no way a new, revised strategy for the next four years that addresses current — and increasingly worrying — trends.

2.6

The EESC is surprised that the Commission has not provided any detailed comments on its recent exploratory opinion Assessing the EU sustainable development strategy  (6), although it had promised to do so. Many of the basic questions raised by the Committee in that opinion have not yet been addressed, which is reflected and confirmed in the lack of goals, ideas and direction in the present ‘platform for action’.

2.7

The Committee is also unable to find — as was the case in 2004 — any clear indication as to how the two major strategies that guide the EU's action, sustainable development and the Lisbon strategy for growth and employment, are defined and classified in relation to the objectives set by the Union in Article 2 of the EU Treaty (7). The national reform programmes for the Lisbon strategy show that sustainable development is not identified as a priority by the Member States. This conflicts with the conclusions of the European Council of March 2005, in which sustainable development was identified as the overarching strategy of the EU.

2.8

In this opinion, the EESC will consider mainly whether the statements, questions and recommendations that it presented in its above-mentioned opinions of April 2004 and May 2005 have been taken on board and applied.

2.9

The opinion also considers whether the Commission's own explicit undertakings are being fulfilled.

3.1

In the communication under consideration the Commission first outlines the general situation, as it has done in many previous documents. These two sentences from the third paragraph of the communication surely sums up the situation quite clearly: ‘Europe has made a good start in applying these principles of sustainable development. […] However, the rapid pace of change requires the stepping up of efforts … .’

3.2

The Committee agrees with this statement and with the general analysis: many exemplary initiatives have been taken at both EU and national level, as well as by companies, NGOs and private individuals. But these are not yet enough to signal a trend reversal.

3.3

There are concrete successful examples at national level (e.g. the positive environmental and employment impact of the German programme to promote energy-efficient building renovation and use of renewables) at sectoral level (e.g. not using climate-harming CFCs in car air-conditioning systems and the ‘Environmental Technologies Action Plan’) and even at company level (e.g. British Petroleum's undertaking in 1998 to reduce greenhouse gas emissions to 10 % below 1990 levels by 2010, a goal that was already reached in 2003 thanks to energy efficiency measures; see also the letter from major UK and multinational companies supporting the British prime minister in combating climate change (8).)

3.4

These examples show that sustainable production and consumption practices are not only technically, but also economically, feasible and help to maintain or create jobs. This message must be conveyed more clearly than before.

3.5

Sustainable development is an alternative, new, integrated social development concept; the economic, social and ecological dimensions of sustainable development are mutually reinforcing and help to uphold ‘European values’. Sustainable development thus promotes the general social good. In this context the Committee welcomes the joint efforts of the Commission and Eurostat to develop a ‘welfare indicator’ that is a more informative unit of measurement than GDP from the perspective of sustainable development. The ‘ecological footprint’ reported by the European Environment Agency, for example, could serve this function. Such an indicator would have to take external environmental costs, but also certain social costs, into account.

3.6

The point of sustainable development is not to correct deficits created in the development of one sector through measures taken in other sectors. That is how policy used to work. In June 2005 the European Council confirmed this interpretation of the concept of development, and several European Commission documents prove that such an approach is also effective (9).

3.7

However, a broad debate among political and social stakeholders is first required about the values we have in Europe — sometimes in contrast to other regions of the world — and which we must defend, and the objectives we wish to achieve in Europe through sustainable development. Indeed the debate seems to be long overdue. Only when the objectives and (European) values aspired to have been clearly identified can we begin to discuss ways of achieving these goals (i.e. the strategy). Once again, the EESC is not convinced that the matter has been adequately discussed. The Committee repeats its comment from two years ago that the concept of ‘sustainability’ itself is unfamiliar to many ordinary people, and those that have heard of it are often unable to understand what it means. This may be a poor basis for political action (the same applies to the Lisbon strategy).

3.8

The EESC is very aware that this debate about values and objectives is not an easy one, especially in the context of global markets. If Europe takes the lead in maintaining living conditions, this might for example cause unsustainable production to be transferred from Europe to other parts of the world (which would not be a positive achievement from a global perspective) and have a negative impact on the competitiveness of European companies. But it is precisely because many problems are likely to arise that the broad debate repeatedly called for by the Committee must finally take place.

3.9

In its communication the Commission focuses on six ‘key issues’:

3.10

As it repeatedly stressed in its above-mentioned opinions, the EESC considers a certain focus to be appropriate, but it would point out that at least those areas, such as agricultural and regional policy, for which the EU has full responsibility — including financial responsibility — should be addressed more thoroughly. These areas are notable by their virtual absence from the communication: the only reference is an internet link in Annex 2 to the Commission proposal for a regulation on the strategic guidelines for rural development 2007-2013 (COM(2005) 304), but no more details are given about the objectives and measures linked to sustainable development.

3.10.1

Reform of the agricultural and fisheries policy, for example, is mentioned briefly in the introduction to the communication in relation to the EU's efforts to date, where the Commission stresses that ‘the reinforcement of rural development policy’ reflects the commitment to integrated policy- making. But the EESC is completely baffled by this statement, since there is absolutely no question of any ‘reinforcement’. Contrary to the Commission's political commitment and the EESC's recommendations (10), funding for rural development in the 2007-2013 programming period will be significantly below the current budget outturn and the Commission's planned expenditure (11).

3.10.2

As regards fisheries, the EESC would simply point out that so far it has not even been possible to guarantee the agreed catch quotas, which means that seas continue to be overfished. Simply listing various internet sites with information on previous policies or possible planned Commission communications or green papers does not in the circumstances seem enough to achieve the stated ‘operational’ goal of achieving a ‘maximum sustainable yield in fisheries by 2015’ (12).

3.11

In its communication of February 2005 (COM(2005) 37 final), the Commission made an important and — in the Committee's view — correct analysis of the continuing unsustainable situation and trends, and in Part II (‘Responding to the challenges’) it announced approaches that the EESC had previously called for. For instance, the Commission emphasised that ‘economic growth, social inclusion and environmental protection go hand in hand, both in Europe and in other parts of the world’, and said that it wished to put ‘sustainable development at the core of EU policy-making’, pointing to ‘the need for clearer objectives, targets and related deadlines as a way of giving focus to action in priority areas and enabling progress to be measured. Although the trends represent long-term problems that will need long-term solutions, the only way to ascertain that society is moving in the right direction is by setting clear intermediate targets and measuring progress. Setting long-term objectives, therefore, must not come to mean postponing action.’

3.12

In its opinion of April 2004 the EESC also lamented the fact that the sustainability strategy contained so few clear, and therefore also measurable, objectives. It noted that this had not always been the case: the Commission communication on which the sustainability strategy was based set out clear objectives (13).

3.12.1

The EESC already made it clear in that opinion that a strategy would lack direction without appropriate objectives and interim targets. We asked what a ‘strategy’ actually meant, noting: ‘A strategy is defined as a detailed plan for achieving a specific goal, factoring in, from the outset, those elements that might potentially impact any action taken. Thus, the future EU sustainable development strategy should:’

3.13

Probably the greatest fault of the Commission communication and the ‘platform for action’ it describes is that again no real, clear targets and milestones are set and ways of reaching them outlined, although the Commission itself regards these as necessary. In fact the document only contains very vague key actions; Annex 2 mentions a number of ‘operational objectives and targets’, as well as ‘examples of key actions: ongoing and planned’, which either seem arbitrary, provide little information or are intended only to be ‘explored’ or ‘considered’.

3.14

There is no mention either of who would ultimately be responsible for what and of how the different political levels should be interlinked in order to achieve optimum synergy effects from the various remits.

3.15

The EESC was interested to read point 3.2. and the comments on the most effective mix of instruments. It is quite correct that: ‘Governments and other public bodies have a wide range of tools by which they can encourage people to make changes — how they regulate, tax, procure, subsidise, invest, spend and provide information. The challenge is to achieve the right policy mix […]. Perhaps the most powerful method to promote change is to ensure that markets send the right signals (“getting prices right”), thus providing a powerful incentive for people to change their behaviour and shape the market place accordingly. This can be done by making sure that all of us, producers and consumers alike, face the full costs and consequences of our decisions — when we are making those decisions. For example, this means building the cost imposed on others in society by “polluters” into the price of the product, … .’

3.16

The EESC can only endorse this approach, which is consistent with many of the opinions it has adopted over the past few years (15). However, the Committee deeply regrets that the communication gets bogged down in the analysis and gives no indication of how external costs are to be internalised in this way.

3.17

In its opinion of April 2004 the EESC called on the Commission to take action here by seeking and conducting dialogue with all the parties involved. These parties had not only every interest, but also a right, to learn how (and when) internalisation of external costs would be guaranteed. In that opinion the EESC also asked for clarification of the impact of internalising costs on economic competitiveness in general and transport in particular. The Commission itself had noted that ‘less than half the external environmental costs …. are internalised by the market prices’, thereby encouraging ‘unsustainable … demand’  (16) .

3.18

The EESC would like to know when and where the Commission finally plans to have this debate. We believe that Sustainable Development Strategy is exactly the right context for doing so. The Committee regrets that a communication on the use of market-based instruments for environmental policy in the internal market, which was promised over two years ago, is still not forthcoming.

3.19

The EESC also regrets the Commission's relative lack of commitment in the statement: ‘Member States should, together with the Commission, exchange experiences and best practice on shifting taxation from labour to consumption and /or pollution in a revenue-neutral way, to contribute to the EU goals of increasing employment and of protecting the environment.’ The EESC asks the Commission to take steps without delay to undertake the necessary research and pass on the findings with an evaluation and impact assessment in the form of a communication addressed to the European institutions.

3.20

As well as abandoning an old EU virtue, that of formulating clear goals and setting clear deadlines, the absence of discussion about possible instruments and their impact is another major failure of the communication. Of course, this avoids possible conflicts, but the EESC has called several times for such a critical discussion with all those concerned to be actively sought, since without it no substantial progress can be made on the sustainability agenda.

3.21

The Committee welcomes the announcement that national strategies are to be better aligned with European strategies. But as said, this requires a real European strategy, not just one on paper that merely blends long-established positions, declarations of intent and programmes that have so far not succeeded in adequately reversing negative trends.

3.22

The Commission document assigns impact assessments a key role in improving coherence between different initiatives and their different phases (planning, implementation, etc.). However, it is essential to bear in mind that such assessments should not be based solely on costs incurred, but must also take account of economic, social and environmental benefits (17). A criterion similar to the ‘competitiveness test’ should therefore be designed to ensure that these last two dimensions are not neglected.

3.22.1

The Committee reiterates its view that eligibility for project funding under the various programmes and budget headings should be based on the criterion of sustainable development (18). This should also be taken into account when evaluating the effectiveness of spending.

3.23

The EESC sees another weakness in the Commission document in addition to the absence of clear objectives and a discussion of instruments, namely that the Commission does not answer the question of how responsibility is to be shared. This is a delicate issue, since some of the measures planned fall within the remit of the Community (e.g. trade policy), whereas others are more a matter for national governments (e.g. energy) or for coordination at European level (e.g. social policy). Yet another dimension — the global — can be added to this range of remits (see above).

3.24

The EESC considers one of the reasons for the absence of real progress on sustainable development to be the sheer number of strategies, action plans, etc., as well as the changes they have undergone over the years to reflect political priorities. In accordance with the guiding principles for sustainable development set out by the European Council of June 2005 (19), the Committee believes that it is up to the Commission to clearly state which level of authority is responsible for measures taken. That level should then give an undertaking to the parties concerned to ensure stability, also in the longer term, and consistency with other measures.

3.25

In view of the principles set out in the White Paper on European governance and the intention stated in the White Paper on European communication policy to ‘close the gap’ between the EU and its citizens, and further to the consultative forum on sustainable development held on 20-21 March 2006, the Committee considers ongoing, formal consultation with stakeholders to be essential in order to translate mobilisation of operators on the ground into definite progress and to put sustainable development into practice. It will therefore take on the task of creating a database similar to the one it already manages on the single market (PRISM). The aim will be to identify obstacles encountered by operators, promote best practice, provide information on the organisations responsible for these innovative projects, establish a bottom-up approach and enhance the expertise available to the Commission in particular when it draws up proposals for directives, impact analyses and communications.

3.26

The Committee also believes that the reform of the International Monetary Fund announced in 2008 provides the European delegation with an opportunity to speak with one voice in order to ensure that the concept of sustainable development becomes one of the conditions for granting aid.

3.27

The EESC welcomes the Commission's stated intention to review the sustainability process every two years in a progress report, involving both the European Council and the European Parliament, and also making use of the EESC and the CoR in their role as social catalysts.

3.28

The Commission's recent communication on the new industrial policy (20) announced that a high-level group on competitiveness, energy and the environment would be set up and that there would be discussion of the external aspects of competitiveness and market access (spring 2006) and of managing structural change in manufacturing (end of 2005). The Committee welcomes the setting-up of the High Level Group (in February 2006) and its remit (21) and is willing to support it in its work if necessary. It also hopes that the discussions which will be defined by the Commission at a later stage will be consistent with its commitment to make proper use of synergies between European policies and to make trade-offs so that the objective of sustainability can be achieved.

3.29

Although the Committee fully supports the target of earmarking 3 % of GDP for R&D (with two thirds of funding provided by the private sector), it considers that this investment and the resulting innovation must be part of an overall plan to promote sustainable development. As far as possible, the Commission should present — in collaboration with Eurostat and its national counterparts — a regular report summarising the situation, in order to ensure consistency between the Lisbon strategy and the overarching sustainable development strategy. If necessary it should put forward recommendations in the integrated guidelines to guarantee that they are compatible and create synergies.

4.1.1

The EESC is dismayed to note that the Commission concedes almost with resignation that climate change can no longer be prevented and that the only thing that can now be done is to soften the impact for those most affected.

4.1.2

The ‘key actions’ on this issue are no more than declarations of intent and cautious verbal undertakings to work towards further commitments and international agreements. The failure to set clear goals in this policy area is particularly alarming since it is already clear that current targets for reducing greenhouse gas emissions by 2012 will probably not be met, despite the mounting danger and the now undeniable occurrence of serious storms with catastrophic consequences for people and economies.

4.1.3

The EESC nevertheless welcomes the rather general statements about harnessing EU potential to improve efficiency and develop technologies in the sphere of renewable energy and energy consumption. The Committee endorses these Commission targets, but urges the Council and the Commission to establish clear and genuinely ambitious objectives, to define the instruments for achieving these objectives and to discuss them with all those involved.

4.1.4

It seems that industry may now be on the verge of a breakthrough with regard to CO2-free coal-fired power stations. Under a sustainability strategy the question should certainly be raised of what framework (and therefore instruments) policy-makers should establish in order to promote the application of this technology.

4.2.1

Although the Committee is pleased that the platform for action regards combating poverty and social exclusion as more than just a question of increasing low incomes, it considers the proposed key actions to be quite inadequate. In particular, the Commission should update the Laeken indicators (22) on quality of work (23) and strengthen this dimension in the guidelines.

4.2.2

The Commission says that it will consult the social partners on the issue of the work-life balance. If the social partners consider that measures are called for but fail to reach an agreement in accordance with Treaty Article 139, the Committee believes that the Commission and the EU legislature should take action. This approach should also be adopted in the other spheres mentioned.

4.3.1

The key actions for natural resources also sound rather non-committal or downright impracticable. Thus the Commission writes: ‘The EU and Member States should ensure sufficient funding and management of the Natura 2000 network of protected areas, and better integrate biodiversity concerns into internal and external policies to halt the loss of biodiversity’. Given the financial decisions taken by the EU Council in December 2005, which cut funding precisely in this sector, it will be immediately obvious to the general public just how much aspirations differ from reality in EU policy.

4.3.2

The ‘Operational objectives and targets’ for ‘Better management of natural resources’ set out in Annex 2 merely repeat already familiar and adopted policies, such as the target published in a 1997 (!) White Paper (24) of achieving a 12 % share of renewable energy sources in the energy mix by 2010, but which the Commission itself in its communication of 26 May 2004 (25) assumes it will probably not meet using current measures. But no new measures are proposed and no analysis is made of the reasons for the likely failure.

4.3.3

Here too, the EESC believes that setting out ambitious and forward-looking goals — like Sweden for example at the beginning of February 2006 — would give the sustainability strategy greater impact, attention and support than these vague declarations of intent that are neither new nor appropriate to the current situation. Sweden has famously set itself the objective of replacing fossil fuels and abandoning nuclear energy in the long term.

4.3.4

In addition, an objective could be set for energy saving and efficiency that would both go down well with the general public and be forward-looking and encouraging of innovation, e.g. that all new constructions in the European Union should by 2020 be ‘zero-energy buildings’ which need no extra energy input.

4.4.1

First, ‘current trends’ in transport are described as ‘unsustainable’.

4.4.2

The Commission then states: ‘The benefits of mobility can be provided with much lower economic, social and environmental impacts. This can be done by reducing the need for transport (e.g. by changing land-use, promoting telecommuting and videoconferencing), making better use of infrastructure and of vehicles, changing modes, for example to use rail instead of road, cycling and walking for short distances and developing public transport, using cleaner vehicles and developing alternatives to oil such as bio-fuels and hydrogen powered vehicles.’ This is consistent with the EESC's opinion on ‘Preparing transport infrastructure for the future: planning and neighbouring countries — sustainable mobility — financing’ (26). The Commission also says that ‘the benefits of more sustainable transport are wide ranging and significant’.

4.4.3

The EESC in principle welcomes these statements and references to the ‘win-win’ situation. Why then, we wonder, despite all these advantages and opportunities, does the Commission constantly refer to negative trends, e.g. in transport?

4.4.4

There must be reasons that people and businesses invest in and prefer non-sustainable transport despite all the advantages of sustainable transport described by the Commission. These motives are not analysed, but no proper counter-strategies can be developed unless they are.

4.4.5

The Commission mentions three key actions in relation to transport:

4.4.6

The EESC is very doubtful that these key actions will enable the EU to control the rising transport congestion that the sustainable development strategy (27) laments, so that traffic can be adequately reduced. The demands and statements set out in the key actions are far less radical than those contained in earlier EU documents, e.g. the ‘Citizens' Network’ Green Paper or in the White Paper on transport policy (28).

4.4.7

Setting an objective, for example, of Europe approving only emission-free cars by the year 2020 or 2025 would present the sustainability strategy to the general public in a much more appealing way, and is much more ambitious and likely to succeed. This would create strong incentives for research and development, accelerate technological innovation and increase the competitiveness of European cars, which in turn would benefit Europe's economic development. It is also a technological approach that could help prevent the rise in transport levels in certain developing countries towards the levels of the industrialised world from leading to environmental and climate collapse.

4.4.8

Such strategic goal-setting in transport, and implementation of EESC calls for sustainable transport development (29), would be worthy of a European strategy for sustainable development, and would allow the ‘win-win’ effects that are often evoked to become a reality.

4.5.1

The communication must be criticised for more or less recycling demands that the EU has been making for years, but which have not been implemented. One example of this is the key action of the sixth priority, global challenges, whereby ‘The EU and its Member States should increase their volume of aid to 0.7 % of Gross National Income (GNI) in 2015 achieving an intermediate target of 0.56 % in 2010 with individual objectives of 0.51 % for the EU-15 and 0.17 % for the EU-10.’ The EESC does not in any way question the legitimacy of this demand (30). But it notes that the industrialised nations already promised at the UN General Assembly meeting of 24 October 1970 — over 35 years ago — to commit 0.7 % of their GDP to development aid (which obviously was not enough to solve all the problems). Constantly repeating promises that are not kept does not exactly make politics more credible.

4.5.2

The Committee obviously commends all the measures announced to combat global poverty. The Commission undertakes to step up its efforts to ensure that international trade is used as an instrument for promoting truly sustainable development. This is undoubtedly an extremely important approach, perhaps the decisive one from a global perspective. The WTO agreement is a trade agreement and therefore contains no sustainability criteria, although global trade has crucial effects on sustainability trends. The Council and the Commission should therefore highlight this important point, while at the same time outlining how the principle is to be put into practice.

4.5.3

This is also important in terms of making the general public aware that this is not a mere declaration of intent. It is clear to the EESC that financial support alone will not sustainably improve the living and working conditions of people in developing countries.

The Committee also recalls that the EU Council Conclusions on the Social Dimension of Globalisation (March 2005) placed the concept of ‘decent work’ at the heart of EU external policy. The Committee is not prepared to accept that certain countries should enjoy a competitive advantage by flouting ILO or environmental standards. These standards are not a protectionist ploy on the part of the rich countries; they help to guarantee human dignity, social progress and justice. The EU should take steps to monitor progress in these areas and launch trade sanctions — if possible in conjunction with the trading partners recognised by the ILO in the countries concerned (or the recognised civil society organisations operating in those countries) — if evaluation shows that the situation has deteriorated. It is regrettable that the Commission does not refer to this in the present communication.

4.6

At a general level, the Committee calls on the Commission and the Member States to show their trading partners that sustainable development must not be seen as a cost factor, but rather as a wealth generator both for their economies, where they aspire to a higher standard of living, and for the planet as a whole.

1)

COM(2005) 658, Communication on the review of the Sustainable Development Strategy – A platform for action (13.12.2005) (http://europa.eu.int/eur-lex/lex/LexUriServ/site/en/com/2005/com2005_0658en01.pdf).

2)

EUROSTAT report: Measuring progress towards a more sustainable Europe – Sustainable development indicators for the European Union – Data 1990-2005 (13.12.2005).

3)

Presidency conclusions of the European Council on Guiding Principles for Sustainable Development (16-17.6.2005). (http://ue.eu.int/ueDocs/cms_Data/docs/pressData/en/ec/85349.pdf).

4)

COM(2005) 37: The 2005 Review of the European Union Strategy for Sustainable Development: Initial Stocktaking and Future Orientations (9.2.2005) (http://europa.eu.int/eur-lex/lex/LexUriServ/site/en/com/2005/com2005_0037en01.pdf).

5)

Commission Staff Working Document, SEC(2005) 225.

‘The effects of environmental policy on European business and its competitiveness: a framework for analysis’, SEC(2004) 769.

‘Commission staff working document on the links between employment policies and environment policies’, SEC(2005) 1530.

‘Employment and productivity and their contribution to economic growth’, SEC(2004) 690.

18.8.2006   

EN

Official Journal of the European Union

C 195/37

1.1

The EESC welcomes the Commission's Proposal for a Directive on floods, as called for in the Committee opinion (1) on the earlier Communication, especially since this proposal incorporates the methodology and instruments created by the Water Framework Directive (WFD). With the inclusion in the river basin plan of flood risk maps and plans, all activities relating to the management of inland waterways and the connected coastal areas are regulated.

1.2

The effectiveness of these arrangements depends heavily on the preliminary assessment of the situation in the river basins and associated coastal zones, based on a thorough analysis of the current situation, especially in those areas at high risk due to human activity and climate change.

1.3

It is also important to place emphasis on actions to prevent the harmful effects of flooding, including all public information and participation measures. To this end, we call upon the Commission to make particularly sure that these arrangements as provided for in Article 14 of the WFD and the Proposal for a Directive, are included in river basin plans.

1.4

The risk management plans and risk mapping, as set out in the proposal, must be extended. The classification of river basins at high risk of flooding should incorporate both priority measures (with adequate funding) and criteria to be met in order to reduce costs and increase the benefits to people. This should result in integrated and sustainable activity in flood areas.

1.5

Lastly, it should be added that, in the context of Community measures for multidisciplinary research and coordination, all policies that affect European waters should be strengthened.

2.1

There has always been something missing from Directive 2000/60/EC and the Water Framework Directive (WFD): the fixing of an objective to prevent, protect against and mitigate the effects of flooding. In fact, in the last decade, the EU has suffered more than 100 floods, causing great loss of life and significant economic losses. The Commission previously presented a Communication (2) which analysed the situation and proposed concerted action in the European Union. This proposal forms part of that action.

2.2

Both the Communication and the proposed Directive emphasise the need for all actions undertaken in the context of water policy to be coordinated with other Community policies for preventing and minimising the effects of flooding. Research policy, using research projects such as FLOODsite to help improve integrated flood risk analysis and management methodologies, and regional policy, through the use of the Structural Funds, in particular the European Regional Development Fund and the CAP, together with decoupling and cross-compliance (3), form an overall package that can deliver better results than action on water alone.

2.3

The aim of the proposal is to reduce and manage the risks of flooding, which affects people's lives and health, their property, as well as nature and the environment. The incorporation of this proposal into the WFD will make it possible to simplify organisational and administrative procedures, since it fits in with existing river basin districts, in line with the WFD. This means that all actions undertaken to prevent and minimise the risks of flooding should be carried out as part of the river basin plans for each river and that the responsible authorities are the same in both cases and take on this new competence. Furthermore, it is important to note that aligning the timetables of the new proposal with those previously set out in the WFD will increase effectiveness.

2.4

The EESC agrees with the proposed Directive, which it has examined carefully, and notes that it features many of the suggestions made in the Committee opinion on the 2004 Communication (4). Therefore all that remains is for us to emphasise the task that must be carried out by the Commission; its role in ensuring that the requirements of the WFD are met is the guarantee that they will be properly implemented by the authorities in the Member States, without losing sight of the potentially benefits for third countries that share river basins with the European Union.

3.1

The proposal is divided into seven chapters:

4.1

The EESC notes that the inclusion of this proposal in the methodology of the WFD encourages the incorporation of flood management plans into the river basin plans; this ensures that the necessary planning is undertaken for action over the entire length of the river basin and that the measures and actions undertaken by the competent authorities at the various levels (local, State, cross-border, etc.) are compatible and properly coordinated.

4.2

Furthermore, the integration of flood management in the WFD conceptually supports the definition of flooding as a natural and normal phenomena in river and coastal systems. Flood risk is defined in terms of the negative impact on human health, the environment, economic activity and consequently to damage to the bodies of water covered by the WFD.

4.3

The need for an initial flood risk assessment was one of our main conclusions (5); therefore, we believe that the provisions set out in both Articles 4 and 5 of the proposed Directive will aid the scientific preparation of flood management plans. It is important to mention some of the requirements, such as:

4.4

In addition, the classification of river basins and coastlines according to whether they are at risk of flooding or not seems very significant. The EESC agrees that the objective of this risk management is to reduce the probability and impact of floods, and to that end it is necessary to classify the actions and measures that can be adopted and the criteria for making the right choice in each case.

4.5

The EESC suggests to the Commission that the river basin plans provided for in Article 9 and in Annex A be specifically based on the following principles and measures:

4.6

In order to increase civil society's involvement in preventing the risks and effects of flooding, it is important that a system of information and participation is developed in all Member States, as provided for in Article 14 of the WFD. To this end, the arrangements for participation should cover both the risk management plans and the preliminary assessments.

18.8.2006   

EN

Official Journal of the European Union

C 195/40

1.1

The EESC welcomes the Decision adopted by the Council on the Community civil protection mechanism which, overall, takes up the observations made by the EESC in its Opinion of November 2005 regarding the Communication on improving this mechanism (1).

1.2

The EESC wishes to stress that, as a method for simplifying Community legislation, the recasting procedure makes it easier for civil protection authorities in Member States to understand and apply the legislation, enabling them to be more responsive to disasters of both natural and human origin.

1.3

By strengthening the action of the mechanism through the provision of greater powers and, above all, increased and improved resources, intervention can be facilitated both inside and outside the EU. The reference to coordination between the mechanism and the UN Office for the Coordination of Humanitarian Affairs is of particular importance. However, the EESC believes that it should be extended to the Red Cross and to the NGOs which operate in affected areas, and should also act as coordinator for the volunteers who play an important role in disaster work.

1.4

Sufficient budget resources are crucial in order for the mechanism to operate properly, and it is also important to recognise the need to improve information, provide transport means, make provision for expert training, etc. The EESC reiterates the necessity of this vital point, and believes that the Commission should have access to these funds and should require the Member States to comply with the obligations so that civil protection can be successfully achieved.

2.1

The Community civil protection mechanism was set up in 1981 (2); since then, together with the Civil Protection Action Programme (3), it has made it easier to mobilise and coordinate civil protection inside and outside the EU. The experience acquired over the years has made it clear that the mechanism needs to be improved, especially since both the European Parliament and the Council have been appreciative of its intervention in major disasters inside and outside the EU.

2.2

With the aim of making the mechanism more effective, the Commission issued a Communication (4) proposing a series of improvements, focusing on:

2.3

The EESC issued an Opinion (5) on the Communication. It welcomed the proposed improvements, but felt that there were some measures that could be modified in the light of experience, especially that acquired during the recent interventions in response to disasters in Asia. In its Opinion, the EESC made the following suggestions to the Commission aimed at improving the operation of the mechanism:

3.1

The Council Decision, which recasts the earlier Decision of 23 October 2001 and the aforementioned Communication in one text, falls in line with the Commission's programme to simplify legislation. The recasting method used will facilitate implementation, both for the mechanism and the national authorities responsible for civil protection. The content has also been improved considerably, both in terms of the functioning of the Community civil protection mechanism and the provision of resources required for it to be operational.

3.2

The EESC welcomes this initiative, which aims to clarify the role of the Community body responsible for coordinating disaster intervention inside and outside the EU, particularly as its scope has been extended to include disasters of human origin and terrorist attacks, and accidental marine pollution.

3.3

Even more important is the inclusion of certain improvements to the mechanism, as suggested by the EESC in its Opinion of 2005. For example, it is worth highlighting the reference in Article 2 to the availability of support from military assets and capacities, which are often essential for swift, efficient intervention. Another of the EESC's proposals was also included: the adoption of measures for transport, logistics and other support at Community level.

3.4

The EESC reiterates its support for the intervention modules which are to be provided by the Member States and coordinated by the mechanism, and are to remain in constant contact with the CECIS so that, by means of an early warning system, it will be possible to deploy the appropriate resources, including additional means of transport .

3.5

One modification has been made that was not mentioned in the Communication, relating to intervention outside the EU. The modification stipulates that it will be the Member State holding the Presidency of the EU Council that will liaise with the affected country. Nonetheless, the CECIS will have information and the Commission will appoint the operational coordination team which, in turn, will coordinate with the UN. The EESC believes that the Community civil protection mechanism should involve EU representation at the highest level in its actions, and it therefore calls for the intervention of the EU's foreign policy high representative; however, it does not consider that the system finally proposed is capable of full implementation.

3.6

It is important to note the new Article 10, which establishes how the Community mechanism will complement national civil protection bodies, which can be given assistance with transport, and the mobilisation of modules and teams able to intervene on the ground.

3.7

Lastly, Article 13 establishes the Commission's power to implement all the measures provided for in the Decision, particularly the availability of resources for intervention, the CECIS, the teams of experts and their training, and any other form of additional support. The EESC welcomes the reference to availability of resources, but believes that these should be quantified so that it is possible to act in each one of the attributed areas of competence.

18.8.2006   

EN

Official Journal of the European Union

C 195/42

—

Covers several different aspects, namely:

—

Defines objectives:

—

Draws up recommendations, specifically:

—

Determines best practice for promoting the social inclusion and protecting the rights of people with a mental illness or psychiatric disability, which should be one of the responsibilities of the European Union's Fundamental Rights Agency.

—

the explosion in mass demand throughout society, driven by a shift from psychiatry to mental health,

—

the irreversible entry onto the scene of patients and/or their representatives, who now have an impact on all policies,

—

the imbalance between hospital and outpatient care and problems of flexibility across the whole spectrum of healthcare from emergency to medico-social services.

2.1

Five of the ten leading causes of disability worldwide are psychiatric conditions, meaning that mental ill health has devastating social and economic consequences for individuals, families and governments.

2.2

People with mental health problems often experience discrimination or exclusion and serious violations of their fundamental rights.

2.3

There is an association between mental ill health and poverty, which increases the risk of mental illnesses and reduces access to the medical treatment essential to mental health. Accordingly, states should put mental health problems high up on their public health agenda.

2.4

However, mental health is often not a priority, partly because not all countries have the requisite capacity to establish comprehensive and efficient mental health services.

2.5

The Community's mental health instrument comes under the European Union's public health programme for 2003-2008, which is based on Article 152 of the EU Treaty. However, the ensuing actions must take account of Member States' competences in relation to organising health services and providing health care.

2.6

The Commission's Green Paper aims to launch a broad-ranging debate on managing mental ill health and promoting mental health, at EU level, within the framework of the European Action Plan. Its reasons for doing so are:

2.7

Following the January 2005 World Health Organisation (WHO) European Ministerial Conference on Mental Health, in October 2005, the European Commission, a collaborating partner of the conference, published a Green Paper on Improving the mental health of the population: Towards a strategy on mental health for the European Union, based on the provisions for public health set out in Article 152 of the EC Treaty, and launched an EU-wide consultation process on mental health.

2.8

The clearly stated purpose is to improve the mental health of the European population, as an element in a strategy whose policy objectives go beyond the health field itself to include putting Europe ‘back’ on the path to long-term prosperity and improving solidarity, social justice and quality of life.

2.9

The Green Paper is intended to stimulate debate and launch a consultation process with the public authorities, health professionals and patient organisations in 2006, resulting in proposals for action at Community level at the end of 2006, that will constitute the EU's strategy on mental health.

3.1.1

According to informed estimates, 27 % of adult Europeans are estimated to experience at least one form of mental ill health during any one year, of which 6.3 % are somatoform disorders, 6.1 % major depressions and 6.1 % phobias.

3.1.2

Currently, in the EU, more citizens die from suicide than from road traffic accidents or HIV/AIDS.

3.1.3

The implications for society are manifold and the report gives a cost analysis covering loss of productivity, and the expenditure incurred by the social welfare, education, penal and judicial systems.

3.1.4

There are significant inequalities between, and also within, Member States.

3.2.1

The European Union's public health programme currently has several objectives:

3.2.2

A Community mental health strategy could have the following objectives:

3.2.3

Possible initiatives at Community level could include Council recommendations on the reduction of depression and suicidal behaviour, modelled on a pilot project on the creation of regional information networks linking the health sector, patients and their relatives and community facilitators, which led to decreases in suicide rates of 25 % amongst young people.

3.2.4

In connection with its work to promote the social inclusion of people with a mental illness or psychiatric disability, the European Commission invites the Member States to speed up the process of deinstitutionalisation. In recent years, it has funded a study that has confirmed that replacement of psychiatric institutions by community-based alternatives improves quality of life for patients. In June 2005, a call for tenders was launched for a new study to analyse and present how current financial resources could be best used and provide evidence about the cost of de-institutionalisation.

3.2.5

Other initiatives could be envisaged within this framework at Community level:

3.2.6

The European Union wishes to improve knowledge on mental health by supporting research programmes and establishing interfaces between policy and research.

4.1.1

The past few years have been marked by a number of phenomena, including an explosion in demand throughout society, a paradigm shift from psychiatry to mental health and the now irreversible entry onto the scene of patients and their relatives. Each of these aspects has led to changes in laws and regulations, at different rhythms in different countries, depending on the degree to which they have been taken into account at political and administrative levels.

4.1.2

The extensive demand, which has brought all the available services to saturation point, is linked with the complex interaction between society's changing image of mental illness and psychiatry, which has become more generally accepted or less stigmatised, and the services on offer. This change, which has been experienced in all developed countries over the same period, is reflected in the epidemiology, which shows: 15 to 20 % of the diagnosable mental disorders prevalent in any one year in the general population, 12 to 15 % — as many as cardio-vascular disease and twice as many as cancer — resulting in disabilities, and 30 % of all the years lost to premature death or invalidity (WHO, 2004). This pressure is also reflected in the expansion of health planning, which has attributed psychiatry a growing range of tasks over the years.

4.1.3

The combination of increasing demand and changing perceptions has led to increasing demands for outpatient care, thus blurring the traditional polar distinction between illness and health by drawing attention to the continuum of clinical states, up to and including mental suffering. It is now impossible to separate mental disorders from the social environment in which they emerge and necessary to include the social impact of mental disorders in needs assessments. One of psychiatry's main tasks is now to distinguish between psychiatric and non-psychiatric cases and to define what warrants psychiatric intervention, but without narrowing the approach to this aspect alone, so that other partners can share the burden or be supported in resuming their position as the main actors in assistance or therapy. This dialectic and the sometimes-conflicting tensions between clinical, ethnical and organisational issues bear witness to the paradigm shift from psychiatry to mental health. They also sometimes give rise to contradictory terminology, particularly in official documents. However, at international level, the literature generally makes a clear distinction between psychiatry and mental health.

4.1.4

Lastly, the final and far from least important aspect has been the growing power of users and representatives of families. This is evidence of a wide-reaching change, both in France and worldwide, which is not confined to psychiatry and has been intensified by various diseases (such as HIV/AIDS), which have transformed the relationship between doctors and patients. One of the most noteworthy signs of this change is the emergence of legislation on patients' rights and the reference to users and their families in administrative documents relating to the organisation of psychiatric services and response to needs and their actual implementation.

4.1.5

Community representatives and representatives of all potential users have also taken a more active role. There are increasing interfaces between municipal policy and health policy. Elected representatives are increasingly drawn in by the repercussions of the changes in psychiatry, which increasingly require their involvement.

4.1.6

These changes have made the imbalance between hospital and outpatient care and the problems of flexibility along the whole care spectrum, from emergency to medico-social services, all the more acute. They have also drawn attention to the frequent failures of deinstitutionalisation, the incomplete integration of psychiatry into general hospitals. Given the porous nature of the boundaries between the medical and social fields and between professions and training, initial and continuous training for new functions are a key to future solutions. In addition to these profound changes, new issues have emerged, including those of prisoners with mental disorders and elderly people with neurodegenerative pathologies that translate into mental disabilities and particularly deprived groups of the population.

4.1.7

In most developed countries, the accumulation of factors including the end of the Second World War, the awareness of the experience of concentration camp victims and human rights, a critical view of psychiatric hospitalisation as practised at the time, the development of psychoactive drugs, the emergence of patients' movements and budget constraints, have plunged psychiatry into a process of transformation that the international literature refers to as ‘de-institutionalisation’. This means moving the focus of care and services away from hospitalisation towards approaches based on keeping patients within their own environment.

4.1.8

However, a number of stumbling blocks have emerged whenever deinstitutionalisation has been based on dehospitalisation: a tendency for society and psychiatry to hold large numbers of people with mental disorders in prison or transfer them to it, vulnerable or marginal patients left to their own devices, whose care has been broken off or finished, without housing or welfare benefits and becoming homeless; the so-called ‘revolving door syndrome’ whereby some patients enter into a vicious circle of being admitted to hospital, discharged, and admitted again. Over time, the combination of these phenomena, successive budget cuts and the increasing demand have brought emergency psychiatric departments and hospitals to saturation point, ultimately resulting in the creation of additional full-time hospital beds, that could probably have been avoided. Serious incidents, such as attacks by or on people with a mental illness or psychiatric disability have sometimes contributed to this trend. Policy makers have then been susceptible to public opinion, which has pushed them either to introduce measures prioritising public safety or to draw up mental health strategies.

4.3.1

The EESC supports the Commission initiative on developing an integrated European strategy on mental health. It believes that the discussion on researching, identifying and developing such a strategy must take place in the context of the knowledge society. This means, among other things, that European society must acquire:

4.3.2

Consequently, in order to meet needs on this scale, it is necessary to draw up an ambitious programme and define a common strategy based on a small number of shared principles. It is worth pointing out that other, smaller scale, health problems are already given priority attention. There are also considerable differences between European countries in regard to the mental health situation. Furthermore, the states which are due to join the EU in the long-term have considerable ground to make up in this area and the gap may well widen before their actual accession.

It is already possible to list a number of prerequisites:

4.3.3

Before a common strategy can be defined, there has to be a common definition and explanation of terms and concepts, such as ‘mental ill health’ and ‘person suffering from mental disability’.

4.3.4

Another considerable advance and prerequisite for action is that mental health be recognised as a priority, in accordance with actual needs.

4.3.5

From a different angle, this will require cataloguing of evidence of existing needs and current responses to those needs.

4.3.6

In terms of action, the proposals in the Green Paper are to be welcomed. The proposals concerning mental health focus on children and adolescents, the working population and the elderly.

4.4.1

Mental health is concerned with the suffering of individuals within their family and community environments in a given society. The issue requires a combined approach, including:

4.4.2

From this perspective, emphasis must be placed on the three aspects of prevention (primary, secondary and tertiary), with the balance between them depending on the particular area concerned. Initiatives need to be developed in a number of areas, including the promotion of mental health and public information, the acquiring and maintaining of healthy ways of living and the creation of an environment favourable to individual self-development. The same goes for other prevention measures aimed at reducing the incidence of mental disorders by addressing risk factors and pathogenic situations, including:

4.4.3

There is no question that meeting children's and adolescents' needs is a priority. The demands are not only expressed or borne by families, but also by educational, judicial and social institutions, the police and local authorities, experiencing increasingly serious situations affecting ever-younger children and families with multiple problems. It is primarily families and children who are affected by societal change.

4.4.4

Coherent and coordinated organisation should lead to provision of a basket of services, coordinated and structured around three basic modules or programmes:

4.4.5

In addition to offering programmed outpatient care and services, each module should also offer options for more intensive care within institutions, correlated to age, care during acute incidents and long-term care. To ensure that programmes are flexible and responsive, psychiatric services should be involved in early diagnosis, crisis prevention and outpatient support for families and their partners.

4.4.6

These basic programmes should be complemented by specialised programmes for at-risk groups or situations that would make primary as well as secondary prevention a realistic option in areas such as early diagnosis of developmental problems, disorders affecting young children, dysfunctional early-years parental care, young single mothers, families with multiple problems and addiction problems suffered by youths. Further attention must be given to the social, educational and judicial structures (including prevention services and prisons) that admit individuals with serious social problems who already have, or are likely to develop, mental health problems as a result of the gravity of their situation or its cumulative effects.

4.5.1

In view of their impact on mental health, attention should be paid to improving conditions for those both in and out of employment. The issue of work and mental health touches on questions such as the value attributed to work and its personal cost, the impact of unemployment and invalidity.

4.5.2

The responses that need to be found to these issues in connection with social exclusion are equally important for mental health.

4.5.3

Lastly, the ageing of the population will require appropriate responses. Only 20 % of elderly people have what the WHO terms an ‘successful ageing’, meaning that 80 % suffer from various illnesses and loss of autonomy. Mental illness does not disappear with advancing age, quite the reverse. Senile dementia, which affects only 1 % of 60 year olds becomes more common with age, affecting 30 % of the over 85s. Over 70 % of these individuals have behavioural problems.

4.6.1

The issue of mental health arises in connection with support for asylum seekers during the reception procedure, their living space and conditions and their personal lives, which embody their personal history and psychic temporality. The seriousness of the traumas they have suffered, often involving extreme, intentional and collective cruelty, bears witness to situations of organised violence. Within this population, post-traumatic stress is often worsened by multiple bereavements and very painful experiences of exile.

4.7.1

The same issue arises in connection with the sizeable prison population with mental health problems, who receive very little in terms of care provision.

4.7.2

Support must be given for the establishment of depression, suicide and addiction prevention programmes.

4.7.3

With regard to deinstitutionalisation and the new model it proposes, a new period began in the late 1990s, marked by the end of both the downward trend in hospitalisation model and the illusions about de-institutionalisation, with a resulting need for a combined approach offering both effective community-based care and full-time hospitalisation. Too much focus on hospitalisation means that resources are not available to develop the range of services in the community needed by patients and their families. Conversely, too much focus on outpatient services is ineffective without back-up from hospital services that are permanently available, and accessible at short notice, for patients with acute symptoms requiring brief periods of in-patient hospital treatment. Lastly, it is only possible to avoid over-use of hospitalisation if outpatient services have the resources to prevent it, for example, by supporting patients undergoing long-term in-patient care, to ensure that they are adequately prepared for their discharge from hospital, supporting patients receiving care in the community to ensure that such care is adequate and meets their needs and supporting patients who need to alternate between outpatient care and hospitalisation.

4.7.4

The decision to treat a person suffering from mental illness by means of hospitalisation or outpatient care is strongly influenced by specific factors such as the patient's degree of isolation and the training model and culture of the professionals concerned as well as by more general, socio-cultural factors such as the degree of tolerance within the particular society and the profile of vulnerability in the area concerned, which may lead to preferences for particular approaches and impact on the availability of alternatives. It is therefore impossible to make categorical recommendations regarding the number of hospital beds required for patients in an acute phase, without taking account of local conditions.

4.7.5

Moreover, the most important factor is the nature of the treatment, in other words, what benefits it is intended to provide, for which needs, and to what level, above and beyond the setting in which it is dispensed.

4.7.6

It is generally acknowledged that hospital treatment has a number of advantages, with regard to availability of trained staff, a secure and appropriate environment for patients and therapeutic support under safe conditions. However, these advantages disappear if a lack of beds means that too many non-cooperative patients with very severe disorders are grouped together within a hospital, leading to unacceptable or dangerous disruptions to the surrounding work.

4.7.7

A number of international and French studies have shown that up to 40 % of the patients with acute disorders voluntarily seeking or prescribed hospital admission, can be treated with other forms of therapy, provided that they are willing to cooperate or can be persuaded to do so, for example, with the support of close family or social support networks (emergency or crisis support). As alternative approaches become more effective, there is a tendency for hospitalisation to be reserved for the ‘unavoidable’ cases, including patients requiring a two-pronged psychiatric and physical assessment, patients presenting with particularly severe mixed, acute disorders, relapses from known psychiatric disorders, or uncontrollably violent or suicidal behaviour. In such cases, compulsory hospitalisation is often necessary. As we shall see, this has an impact on organisation and treatment.

4.7.8

In view of the above, the same studies recommend a minimum threshold of 0.5 beds per 1 000 adult inhabitants for patients in acute phases, a figure which will have to be reviewed if the target objective of an 80 to 85 % service occupation rate is envisaged, as we recommend. Naturally, this minimum threshold is premised on the assumption that upstream and downstream alternative treatment sites are sufficiently equipped and effective and does not include secure beds for acute patients receiving psychiatric care within the criminal justice system, beds for adolescents or elderly people. If the requirements for proper ambulatory services are not met, coming too close to this threshold would lead to the creation of extremely costly additional psychiatric or medical beds.

4.8.1

Whilst the threshold for bed numbers may vary from country to country, the minimum standards for accommodation can be more assertively presented. All accommodation should be fit for its purpose and, whilst possibly provided in older settings, must aspire to contemporary values of dignity and respect for residents. It is essential for the purposes of recovery that the environment is appropriate. Environmental risks must be assessed and addressed in regard to the particular needs of the residents.

4.8.2

The residents should have access to a wide range of therapies that compliment and contribute to their care and treatment. All mental health staff should contribute to this environment by being appropriately trained, skilled and humane in their approach.

18.8.2006   

EN

Official Journal of the European Union

C 195/48

1.1

Danish-style flexicurity appears to provide an example of how to achieve economic growth, a high level of employment and sound public finances in a socially balanced way. This development is consistent with the Lisbon process, which is designed to secure a high level of employment and sustainable growth and social welfare.

1.2

Danish-style flexicurity, the hallmarks of which are a mobile labour market, achieved through elements of social security and an active labour-market and training policy, does, it would appear, help make the country more competitive. Together with other facets of Danish society, flexicurity has given the Danish labour market a strength and a flexibility that equip the country well to face the challenges of the future. A high level of employment, high unemployment benefits and a sense of optimism mean that both employers and employees accept the uncertainties and drawbacks inherent in the system, given what each group gets in return.

1.3

The key to understanding Danish-style flexicurity is that flexibility and security are not necessarily mutually exclusive. Having stable and secure labour relations and a motivated workforce can be an employer's interest, while flexible working hours, work organisation and payment schemes can be in the interest of employees.

1.4

In the face of globalisation and the fact of jobs being relocated abroad, flexicurity also creates for the people a high degree of economic and social security by means of the following paradigm shifts: ‘security of employment rather than job security’ and ‘new personal opportunities brought about by a readiness to change whilst accepting limited risks’. It is quite true that individuals do risk losing their job but the social security network ensures that they have enough to live on in the short term, while, in the longer run, their chances of finding a new job are enhanced through active labour market measures, combined with high levels of employment.

1.5

Danish-style flexicurity means low job security for individual workers, who face the prospect of losing their job several times during the course of their working life. Despite this, the in-built safeguards of the flexicurity system — thanks, on the one hand, to high unemployment benefits funded using public money and the tax contributions of the whole population and, on the other hand, to employment security — mean that Danes do generally feel safe and content (see Appendix 2).

1.6

If we consider Danish-style flexicurity within a European context, it is obviously impossible to copy the system blanket-fashion, given the cultural, structural and economic differences involved. That said, some general features may be considered for adoption as a political strategy in other Member States, particularly in places where social capital — –understood as the full gamut of standards and networks, combined with a relationship of trust among individuals and among organisations — has developed along similar lines to Denmark, including a tradition of cooperation between the government and the social partners and a readiness by the people to embrace change. Geographical flexibility can, however, also give rise to very weighty problems for families, partnerships and children's school and educational careers. This is particularly the case in large countries and federal states.

1.7

Broadly speaking, the idea behind flexicurity is that a combination of worker flexibility and security can, together, safeguard social security and competitiveness. Danish-style flexicurity provides security through a high level of unemployment benefit (and transfer payments to cover other social contingencies), and flexibility through liberal dismissal rules, including, for instance, short periods of notice. Alongside social security and a high degree of mobility, importance is also placed on an active labour market policy that ensures that people are actually available for work and are honing their job skills. Danish labour market policy, therefore, comprises both incentives and sanctions, including, for instance, compulsory employment support (known as ‘activation’), which, however, primarily involves top-quality upskilling schemes. Active labour market policy is vital to any labour market designed to function effectively with high levels of unemployment benefit.

1.8

That said, however, Danish-style flexicurity cannot be seen in isolation from the overall context of the welfare state and a strong organisational set-up. The way in which the Danish labour market operates is contingent on a range of other social factors. This applies, for instance, to the key role of the social partners in political decision-making and to the application of labour-market and training policies, the broad-based publicly funded welfare system, the skills level of the population, and the macroeconomic policy mix that has been put in place over the last few decades.

1.9

The social partners have had a key role to play in the development of Danish-style flexicurity, both in decision-making and in implementation in areas such as training policy and labour-market structural reforms. In a number of fields, the development is based on agreements between the social partners, for instance the introduction of private, labour-market-related pensions. The social partners' role is the product of historical development, and also of their high level of organisation. Thanks to their input. it has been possible to arrive at creative solutions enjoying broad acceptance. To have strong input, however, the social partners and other civil-society players need to be adaptable, willing to work together and ready to address real-life situations in new and broad-based ways. Greater involvement and input from the social partners can thus boost society's capacity to compete and adapt. In these processes, support, cooperation and a critical input from other civil society organisations, such as social players and further education bodies based on associations, is also of importance.

1.10

A high level of unemployment benefit requires a high level of skills among the population at large. Otherwise, many people would be unable to find jobs in which they earned more than unemployment benefit.. A high level of skills and a readiness to adapt — including among those with the least formal training — is a key reason for the success of the Danish flexicurity system.

1.11

In the second half of the 1990s, when Denmark carried through an extensive programme of structural reforms, moves to tighten up the labour market were accompanied by an expansive economic policy that boosted both growth and employment. Over and above the income security provided by the high level of unemployment benefits, Denmark also seeks to give its people employment security. No-one has any guarantee that they will keep their current position, but the chances of finding a new job are very good thanks to the public support services. Moreover, it is easier to implement — and secure backing for — structural reforms undertaken in an atmosphere of optimism and employment-friendly growth. The Danish flexicurity system is thus based on a macroeconomic policy-mix that fosters growth and employment.

1.12

Danish-style flexicurity is subject to constant discussion and change. As a system, it has both advantages and drawbacks, and, despite the fact that flexibility, security and an active labour market policy are undoubtedly interlinked, there is an ongoing debate about how to achieve the right balance between these elements.

1.12.1

High tax revenue is a sine qua non of the Danish flexicurity system and other factors of relevance to the way the labour market works. For instance, public expenditure on labour market policies was 4.4 % of GDP in 2003 — a European record (1). On the one hand, the Danish people are prepared to accept the high tax burden of around 49 % of GDP, yet, on the other, tax is a constant subject of debate and future cuts must be expected in the tax on labour. The high tax burden is explained, in part, however, by the high level of employment, which, in itself, has a positive impact on public finances. Boosting employment makes for further increases in tax revenue.

1.13

The importance of Danish-style flexicurity to the European Union lies in the readiness to engage in a proactive adjustment to new realities, promoted by the flexicurity approach; this adjustment has been brought about by a balanced socio-economic paradigm shift, carefully negotiated between the stakeholders, whilst fully respecting the basic values set out in the European social model.

2.1

Denmark has stable growth and sound public finances. From 2000 to 2005, for instance, the average growth rate was 1.7 %, with an average employment rate of 77.5 % and an average general government balance surplus of 1.4 % of GDP. Overall public debt was running at 42.7 % of GDP in 2004, with a general government balance surplus of 2.8 % of GDP. The general government surplus is due, among other things, to record employment levels, providing high levels of income tax revenue.

2.2

The Danish labour market is subject to a very high turnover, with more than 10 % of all jobs disappearing each year and a similar number being created. Some 30 % of workers change jobs every year and Danish workers have the second lowest average length of service of any country in the EU after the UK. This must be seen in the light both of the existing rules and of the structure of the Danish economy, with its high numbers of SMEs.

2.3

The impact of this policy mix of macroeconomic stimulation and the structural reforms undertaken by Denmark in areas like the labour market can also be illustrated using the Phillips curve, which shows the relationship between unemployment and rising wage costs. As the Danish curve given in Appendix 1 makes clear, it has been possible to cut unemployment substantially since 1993 without incurring high wage inflation; the Phillips curve has remained broadly horizontal over this period. Labour-market and training activities mitigate against the adjustment problems and obstacles that can otherwise lead to wage and price increases.

2.4

Denmark typically comes top in studies of which countries are attractive to invest in. It also ranked first in a March 2005 report by the Economic Intelligence Unit. Appendix 2 shows how Denmark shapes up against the other EU countries on a range of different parameters.

3.1

The term ‘flexicurity’ has become very popular over the past few years, although what is meant by it is not always clear, and varies from one country to another.

3.2

In the Danish version, labour market arrangements are seen as the ‘golden triangle’ between flexible hiring rules (leading to a high degree of numerical flexibility), a generous support system (providing social security) and strong activation and training measures (which both motivate the unemployed to look for work and give them the skills they need to re-enter the open labour market).

3.2.1

The Danish flexicurity system helps ensure that the jobs that are created are of a high calibre and involve decent work. A corollary of high unemployment benefits is that what are deemed ‘acceptable’ wage rates are also high. As a result, Danes do earn enough to live on. On the formal labour market, therefore, any signs of the emergence of a ‘working poor’ are few and far between — including among Danes of other ethnic origins.

3.3

This golden triangle is illustrated below. The Danish system of benefits and active labour market policy is briefly examined in Appendix 3.

The key features of the Danish flexicurity system:

3.4

However, flexibility on the Danish labour market is multi-facetted and cannot be achieved through liberal firing rules alone; it also requires working-time flexibility whereby, under the relevant agreements, working time may be calculated on a yearly basis and job-sharing can be introduced for relatively short periods. More provision in collective agreements for setting final wage rates at company level also ensures a certain degree of wage flexibility. Flexibility is also generated by the breadth of workers' skills: people are independent, willing to change and aware of their responsibilities; as such, they are quickly able to adapt to shifts in production or to a new job.

3.5

The security of the Danish labour market is not due solely to the relatively high level of unemployment support that is provided. A measure of employment security is also given by the high employment and turnover rate on the labour market. Employment security is further backed up by a broad raft of supplementary and further training measures which are managed and administered jointly by the authorities and the social partners. Moreover, Danish society offers families a degree of security to combine family life and work through attractive arrangements for paternity/maternity leave, childcare facilities etc.

3.6

The key to understanding what is meant by Danish-style flexicurity is that flexibility and security are not necessarily opposites. Traditionally, employers have wanted a more flexible labour market, clashing with workers' desire for job security and high levels of economic compensation during periods of unemployment and sickness.

3.7

The concept of flexicurity breaks with this antagonism. Employers may be keen to have stable and secure working relationships and motivated staff, while workers may be similarly keen for flexible working time, flexible work organisation and flexible pay arrangements. These new kinds of labour markets can thus generate a new interplay between flexibility and security.

3.8

Within the labour market, the Danish flexicurity system combines the dynamism of a liberal market economy with the social security of a Scandinavian welfare state through universal public service and income equalisation. Seen in a broader perspective, this is one result of the political objective to give people opportunities in their working lives and to redistribute resources via public-sector budgets and activities. This in turn generates social cohesion through a strong policy of income equalisation and action to head off major social tensions. It also gives workers security to adapt and to cope with the flexibility of the system.

4.1

The social partners have traditionally played a key role in decision-making and administrative arrangements in labour-market and training policy. Their input has helped generate creative and balanced solutions to market and innovation difficulties and to equip the country well to adapt and develop in the ways demanded by globalisation. The social partners are, after all, in a position to assess any needs that may be reported and make any changes that may be necessary. Over time, close dialogue among the various stakeholders also generates social capital by boosting confidence, fostering responsibility and promoting mutual understanding.

4.2

The current situation has historical roots stretching back more than a century. The typically Danish labour-market model, for instance, has its roots in the 1899 ‘September compromise’ between the Danish Confederation of Trade Unions (LO — Landsorganisationen) and the Confederation of Danish Employers (DA — Dansk Arbejdsgiverforening), both of which had only recently been set up as nationwide organisations. This was the world's first general agreement and has served as the framework for agreement and interplay between the social partners ever since.

4.2.1

Employers accepted the main trade union body as a negotiating partner, while employees accepted employers' right to hire and fire — and thus their right to manage. This basic provision has helped form the liberal mindset that prevails in Denmark in relation to firing rules. Another key element of the September compromise was a commitment to good industrial relations for the duration of the agreement. The social partners' central tenet of voluntary labour-market regulation and conflict-resolution by the partners themselves remained in place until as late as 2003. Only when the EU refused to recognise independent implementation of directives by the social partners, did additional legislation begin to be introduced in Denmark. Appendix 4 gives more information on the historical development of the social partners' role and the establishment of the Danish model.

4.3

After many years of high inflation and highly volatile real-wage increases, the social partners recognised, from 1987/88 onwards, that agreements should also reflect overall socio-economic conditions. Of course, employers, workers and governments do have differing viewpoints in Denmark, but there is also a basic culture of dialogue and consensus that must be seen as part of social capital. The low power gaps that exist at every level of society help maintain this consensus culture.

4.4

In policy terms, Denmark has, since the 1960s, developed a comprehensive public system of vocational supplementary and further training for people both in and out of work. This has made the entire workforce more adaptable. Throughout the whole of the twentieth century, the social partners also had (and indeed still have) an important role to play in public decision-making and in putting those decisions into practice. In contrast to developments in most other European countries, this role was even strengthened from 1993/94 onwards.

4.5

There has been a substantive shift in labour market policy, which used to be regulatory in approach, but is now needs-based and tailored to providing individual solutions. The social partners — and the local authorities — became the key players in the fourteen regional labour market councils which were given both the powers and the public resources to put action on unemployment and regional labour market policy at the top of their list of priorities.

4.6

Over many years, therefore, the social partners have built up a broad, collective awareness of what it means to shoulder social responsibility, while the authorities have learnt to draw on their resources and influence. The social partners have unique information and knowledge about the labour market and can thus identify needs reliably and quickly. Through their corporatist input, they provide the authorities with free resources, and find creative solutions to joint problems through discussions and decision-making forums. Also, the organisations are vital to ensuring that policies are adopted, implemented and — not least — accepted. The authorities are thus dependent on the social partners' cooperation in the flexicurity arrangements.

5.1

To fully understand the Danish flexicurity system, it is important to consider the social context of which that system is a part. Moreover, economic policy and the public sector also have an impact on the workings of the labour market and, together, shape the elements that may be called ‘the Danish model’. This interplay is illustrated in Appendix 7.

5.2

In the second half of the 1980s and the first half of the 1990s, the Danish economy was in crisis. Between 1987 and 1993, for instance, the average annual growth was running at 0.8 %, while unemployment rose from 5 % in 1987 to 9.6 % in 1993. The crisis was the result, among other things, of the economic constraints that had been introduced in the wake of the big government deficits of the previous years.

5.3

From 1993 onwards, active labour market policy was being strengthened just at the time the economy was also being boosted by low interest rates and an expansive economic policy. As a result, at the start of the growth period from the mid-1990s onwards, the Danish public deficit was so big that the stability and growth pact rules, had they existed at the time, would not have been met. Property funding rules were also changed (allowing longer loan repayment periods and the possibility of refinancing), thereby giving people more disposable income. High growth, falling unemployment and burgeoning optimism made it easier for people to accept more stringent labour market rules.

5.4

The extra public spending was used, among other things, on major schemes to expand childcare cover so that women with small children were genuinely available for work.

5.5

The increased focus on labour market policies also meant more emphasis on training and further training, with the state providing massive support for further training measures for people both in and out of work. The support was given not only to fund training but also, to some extent, to offset loss of earnings. The number of training posts for young people was also increased at every level.

5.6

In broad terms, it has to be said that the Danish system, involving high levels of unemployment benefit and thus a high ‘acceptable’ wage, does require a skilled and productive workforce. If a large pool of low-skilled people is allowed to develop who are unable to match the wage levels obviously required by the high unemployment benefits, excessively high unemployment is bound to ensue.

5.7

From the mid-1990s onwards, an investment-based economic strategy was successfully introduced, with growth being generated through proactive reforms and investment in education and public services. Confidence in the future and a high degree of income security encourage consumers to buy and ensure a high level of domestic demand.

5.8

The current economic strategy was a response to the economic crisis Denmark experienced from 1987 onwards, when the government reduced the large public and balance-of-payments deficits through savings and cuts. The savings strategy did sort out the imbalances, but, in turn, resulted in low growth and increasingly high unemployment. The current strategy appears to safeguard growth and employment while balancing public finances and securing a sound balance-of-payments position. This, incidentally, is a combination unseen in Denmark since before the oil crises of the 1970s.

6.1

Even although Danish-style flexicurity has had positive results over the past few years, there are of course still challenges that need to be addressed.

6.2

Globalisation and technological change are, broadly speaking, putting pressure on the Danish labour market. Unskilled workers in particular are coming under pressure as they face competition from lower-wage countries and automated production.

6.2.1

So far, Denmark has dealt with this pressure by reducing the number of unskilled workers on the labour market, since more older unskilled workers are leaving the labour market than young ones entering it. As things stand, however, many young people do not receive skills training — something which, in the long run, may undermine the Danish flexicurity system. Thus, unless the supply of skilled workers is kept fairly much in sync with demand, public expenditure on unemployment benefits and other transfers will simply be too high.

6.2.2

Some firms in Denmark are closing and relocating all or part of their production operations to lower-wage countries. This is a challenge — especially in remote areas that are very sensitive to the closure of individual companies. The Danish labour market, which is structurally dominated by small and medium-sized enterprises, is, however, viewed as a dynamic entity, so that, instead of trying to hold onto these jobs, policymakers, working together with the social partners, are seeking to create new and more competitive ones.

6.3

The high degree of labour market turnover means that employers are less inclined to pay for further training as they do not know how long the staff will remain in employment. This applies in particular to the unskilled, since employers do more to keep and train hard-to-come-by specialist workers, and also because unskilled workers are not always motivated to engage in further training. For that reason, there is a comprehensive, publicly subsidised system of training and further training for both unskilled and skilled workers, with compulsory contributions from employers, since a well-trained workforce is vital to the workings of the Danish flexicurity system, and it is politically desirable to pursue a broad-based, proactive approach to upskilling.

6.4

Many immigrants find it difficult to gain a foothold on the Danish labour market, thereby also limiting their chances of integration. The labour market difficulties are due, among other things, to the fact that immigrant groups and their descendants do not have the skills required to attain Denmark's high levels of unemployment benefit and wages. Immigrants and their descendants are, for instance, less well-educated than ethnic Danes; they have, on average, a lower participation rate on the labour market and suffer from higher unemployment than the rest of the population. Difficulties may be linguistic, social or educational.

6.4.1

This may be explained in part by cultural differences and ingrained habits. Experience shows that unemployment fluctuates more among these than among other groups. When unemployment is falling, for instance, employers are more inclined to explore new avenues and take on people from a different ethnic background. A high-employment, low- unemployment environment can thus, in itself, provide immigrants and their descendants with better access to work, without, however solving the integration issue as a whole. Demographic developments mean that Danish jobs face having to open up more fully to immigrants over the coming years.

6.5

The Danish welfare model is underpinned by a high percentage of working women — in order both to provide the requisite public services and to maintain high tax revenues. On the one hand, this means that women are more economically independent, while, on the other, it presents challenges in terms of reconciling family life and work. Compared with many European countries, Denmark has made substantial progress in this area but there is still a long way to go to achieve, among other things, equal career opportunities for men and women.

6.6

The Danish system is expensive for the state, which pays a substantial proportion of the wage-replacement benefits to the unemployed. Spending on passive labour market policies, for instance, made up 2.7 % of GDP in 2003 — an EU record. The funding of the Danish welfare society is set to come under pressure in future from a number of sides. To maintain welfare state funding without tax hikes requires higher employment rates among people of working age.

6.6.1

At around 49 %, the Danish tax burden is among the highest in the EU, where the average is around 40 %. Consumer taxation is particularly high, although the country does not top the list for tax on labour. Income tax is high and very progressive, but employers are not, broadly speaking, subject to social security charges. The Danish tax structure is set out in greater detail in Appendix 5. Because of globalisation, some tax revenue may come under pressure in the future.

6.6.2

Demographic developments mean a rise in the number of older people and a fall in the number of those who are economically active. This is due to the fact that the youth generations are small, the post-war generations are big, and people are also living longer. In the debate about possible reforms of the welfare society, labour market policy — including unemployment benefits — also comes into play. The Danish pension system is, however, to some extent ready to meet these changes (cf. Appendix 6). There may be a labour shortage and, since women, who constitute the labour reserve, are already to a large extent part of the workforce, new ways will have to be found of boosting employment. These may include raising the retirement age or increasing the numbers of immigrant workers with the requisite skills.

6.7

Around a quarter of the population of working age is without a job and in receipt of some form of public support (for unemployment, ‘activation’, early retirement etc.) Around half of these people have withdrawn permanently from the labour market as a result of physical wear-and-tear, unemployment or of their own volition, while the other half are only temporarily out of employment. The fact that such people are given public support is a basic tenet of the welfare state, but this does represent a challenge for future welfare society funding. To safeguard the long-term funding of the welfare society, it is essential to bring down the percentage of the population leaving the labour market early.

6.8

Bit by bit, labour market policy is increasingly being regulated by EU rules and practice. Conditions on the Danish labour market have traditionally been a matter for the social partners themselves rather than for legislation. If EU rules become too detailed, there is a risk that public acceptance will dwindle and that developments will pull in a different direction from that desired by the social partners. The EU's open method of coordination appears to offer a way to allow traditional Danish practice to continue to develop, while synchronising European employment and labour market policy.

18.8.2006   

EN

Official Journal of the European Union

C 195/54

2.1

Since the first and second EC directives of 11 April 1967, the Community has set itself the goal of dismantling fiscal barriers between Member States. A unified place of taxation is needed to make this vision come true. The country of origin principle which the Directive aims to apply would result in taxation in the country of establishment of all taxable activities conducted by economic operators in that country and within the framework of the European Community. According to this principle, goods delivered from, say, France to another Member State would be subject to taxation at French VAT rates. The same would apply to services provided from France.

2.2

However, to avoid distortions of competition, the country of origin principle would require VAT rates in individual Member States to be aligned. Above all, an internal clearing system would be needed, given that value added tax represents a significant proportion of tax revenue in Member States and of EU funding.

2.3

With this in mind, the EU has decided not to apply the country of origin principle, or at least not during a lengthy transition period.

2.4

However, the European Commission has taken various measures to boost trade between individual Member States, to remove bureaucratic obstacles and to reduce or if possible entirely avoid distortions of competition, in particular those arising from differing taxation rates. In the past, the Council in particular has contributed to the retention of divergent systems. The EESC continues to support the Commission in all its efforts to align these systems and to promote the Internal Market.

4.3.1

A strict distinction needs to be drawn between business-to-business services (services provided to taxable persons (1)) and business-to-consumer services (services provided to non-taxable persons (2)). The proposal in question clearly differentiates between treatment of these two eventualities.

4.3.2

In the case of services to taxable persons, the general rule should be that the place of supply of services depends on the place where the client is established, rather than the service provider.

4.3.3

The document under review proposes to maintain the place of establishment of the service provider as the general rule, in the case of services provided to non-taxable persons. The reason for this decision is that taxation of services provided to non-taxable persons in other EU Member States would result in an excessive administrative burden on enterprises providing the services, such as a requirement to register as a VAT payer in the countries concerned.

4.3.4

In the absence of a mechanism enabling tax to be collected in the Member States of consumption without creating undue administrative complications, it is unrealistic to tax all supplies to non-taxable persons at the place of consumption.

4.3.5

However, some exceptions to this general rule are necessary.

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It is proposed to insert a sixth paragraph, which stipulates that services rendered between establishments shall not be treated under the directive as supplies.

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Paragraph 2 has been reinserted and defines the place of supply for restaurant and catering services provided to taxable persons on board ships, aircraft or trains during a passenger transport service as the place of departure of the transport service.

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Paragraph 3 has been amended to define long-term hiring or leasing as an arrangement governed by an agreement providing for continuous possession or use of the movable tangible property throughout a continuous period of more than thirty days. This provision should rule out disputes (for example car hire by taxable persons for immediate use).

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Paragraph 1(c) has been amended to exempt the distance-learning services referred to in point (d) of Article 9g(1), which are the subject of a separate provision.

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In paragraph 1(d), restaurant and catering services have been included to ensure that they are taxed at the place where they are actually carried out.

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In paragraph 2, the place of supply of restaurant and catering services on board ships, aircraft or trains during a passenger transport service has been notionally defined as the place of departure of the transport service. This amendment was made in response to a proposal which came up during the consultation process.

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In the case of long-term hire, i.e. for longer than 30 days, the place of supply of a means of transport to non-taxable persons is defined as the place where the customer is established, has his permanent address or usually resides.

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In the case of short-term hire (e.g. hire of a car for a few days), the place of supply is the place where the means of transport is put at the disposal of the non-taxable person. This provision was also welcomed by the majority of respondents to the consultation process.

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This article has been completely overhauled. The services listed in Article 9g(1) are supplied in the place where the client is established, has his permanent address or usually resides.

During consultation there was an overwhelmingly negative response to this provision due to the introduction of excessive red tape arising from compliance with VAT obligations. For this reason, introduction of one-stop shop arrangements were seen as a precondition for this provision.

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The EESC calls for a clearer definition of the services to be subsumed under this article.

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The amendment makes it clear that the place of supply of services is determined by the place in which the principal transaction is carried out according to the provisions of Articles 9a to 9g and 9i.

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The changes here follow on from the deletions in Article 9g, as mentioned earlier.

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The rules for determining the place of supply of e-commerce, telecommunication and broadcasting services provided by a supplier established outside the EU will remain unchanged in future. The place of supply will therefore remain the Member State in which a non-taxable client is established or the Member State in which the service is actually used.

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The proposed amendment to the text of this article envisages extending the recapitulative statement submitted by each taxable person identified for value added tax purposes to certain transactions arising from the provision of services. This applies to other services provided to consignees identified for value added tax purposes in the transactions referred to in the fifth subparagraph and to the taxable customers supplied with services under the conditions provided for in Article 9(1).

6.1.1

The Committee welcomes the planned extension of the reverse-charge procedure to company level and thus to the exchange of services between taxable persons.

6.1.2

However, this is dependent on the persons concerned being able to carry out all aspects of the reverse-charge procedure without any problems. Difficulties could arise if the service provider delegates the evaluation of turnover or of VAT details, the place of supply, taxation obligations and tax rates, or the possibility of tax exemption to the recipient of services, without giving the latter the option of assessing this information reliably.

6.1.3

Companies should not be burdened with extra recording and reporting requirements. There is no doubt that businesses within the EU should be enabled to reliably determine whether a taxable person or company established in another EU country is obliged to apply the reverse-charge mechanism to the relevant transaction. Excessive liability of the company providing services in the event of a subsequent failure to reverse VAT charges would undermine the system as a whole and lead to resistance from those affected by it.

6.2.1

If services are provided by a company/taxable person to non-taxable persons, the reverse-charge procedure is excluded a priori. This mean that in the event of taxation being applied at the place where services are used, a company from another EU country would have to register as a VAT payer in the country where services are provided and to comply with VAT obligations there. To avoid red tape in this situation and thus minimise obstacles to intra-Community trade, unbureaucratic rules are needed.

6.2.2

Any obligation to register as a VAT payer would result in significant extra red tape, additional costs and, in doubtful cases, to reluctance on the part of the taxable company to provide the service. Far from opening up the single market and creating a level playing field for companies in all Member States of the EU, this would significantly disadvantage EU companies established in other countries in comparison to domestic service providers. This can hardly be in the interests of dismantling barriers to trade. Therefore, extending taxation at the place where services are used to non-taxable persons is only a viable option if the proposed one-stop shop system operates smoothly and rapidly. Only then could companies be expected to provide taxable services, possibly in all 25 Member States, in the absence of the reverse-charge option. Otherwise there is a danger of the opposite effect, with small and medium enterprises being excluded from the single market.

7.1

The same applies to simplification of VAT obligations arising from the input VAT refund procedure. As is well known, problems connected with input VAT refunds mean that, particularly when the sums in question are relatively small, companies need to decide whether it is ‘worth’ submitting a claim to a foreign tax office or whether giving up any entitlement to a refund is a much more advantageous option. However, this is in de facto contradiction with the principle of the deductibility of input VAT which underlies the sixth VAT directive.

In this connection, the Committee feels that efforts in some Member States to apply VAT at uniform rates across the board are severely in need of improvement.

7.2

For this reason, it must be ensured that the Commission's proposals concerning the introduction of a one-stop shop system are implemented and monitored for effectiveness.