27.7.2007   

EN

Official Journal of the European Union

C 175/1

1.1

The Committee thinks it would be wrong to apply an automatic adjustment for the rate of inflation in the EU-15 since 1992, given that another three countries joined the Union in 1995, a further ten on 1 May 2004 and two more on 1 January 2007.

1.2

The Committee thinks that if the desired harmonisation is to be achieved in the EU-27, the adoption of a maximum rate of duty should be considered: this is certainly one measure that holds out the prospect of effectively combating smuggling and fraud and approximating taxation rates, thus facilitating the emergence of a real single market. The way to protect the interests of consumers — who should not be seen as smugglers simply for buying alcoholic beverages where they cost less — is through progressive harmonisation.

1.3

The Committee recommends that Member States be explicitly forbidden to add to the normal duty and VAT regimes other forms of consumer taxation — for which, as the European Court of Justice has found (1), they sometimes invent the name ‘Community tax’.

1.4

In the Committee's view, the proposal does not sufficiently justify the choice of Article 93 of the Treaty as the legal basis, authorising the Council to adopt measures to harmonise national legislation on fiscal issues by unanimous vote. By leaving the Member States free to set their own rates above the minimum, the proposal does not, in fact, harmonise anything.

1.5

The Committee thinks the Commission is wrong to play down the proposal and in this way justify the absence of an impact assessment and a consultation of interested parties. In a hearing held at the Committee, all the participants not only declared their own opposition to the Commission proposal, but also called on it to carry out a thorough impact assessment in the future.

1.6

The Committee wishes the proposal to be withdrawn and calls on the Commission, in its future work, to update references to the codes in the Common Nomenclature set out in Directive 92/83 and revise the methods of classification.

2.1

The Proposal for a Council Directive amending Directive 92/84/EEC on the approximation of the rates of excise duty on alcohol and alcoholic beverages sets minimum rates for excise duty on alcohol and the different categories of alcoholic beverages. Article 8 of the Directive obliges the Commission to carry out periodical inspections and submit a report and, where appropriate, a proposal for amendment.

2.2

The debate following the report issued by the Commission on 26 May 2004 — in which it concluded that greater convergence of the minimum rates of excise duty in the different Member States was needed to ensure proper functioning of the internal market and prevent the fraud and smuggling which was facilitated by the different regimes in the Member States — led to the initiative, prompted by the Council's call for it ‘to come forward with a proposal to adjust the minimum rates of excise duty in order to avoid a fall in the real value of the Community minimum rates, providing transitional periods and derogations for those Member States who may have difficulties in increasing their rates’. The Council also added that ‘the Commission should also duly take into account the overall political sensitivity of this special issue’.

2.3

The Commission therefore proposes amending the Directive by:

2.4

The primary aim of the proposal, as requested by the Council, is to restore the real value of rates to the 1992 level — a value which the Commission thinks will ‘ensure the functioning of the Internal Market without fiscal borders’.

3.1

In the absence of an impact assessment, the Committee decided to hear for itself the views of producers' associations, consumers and trade unions. In the course of the hearing, participants spoke with one voice of their bewilderment at the proposal for a directive. Some organisations also noted that the proposal would further increase the unequal treatment of alcoholic beverages — to the manifest detriment of those liable to duty. Producers of beverages not liable to duty, on the other hand, called for the present structure — which was, moreover, set defined in the Common Agricultural Policy agreements — to remain unchanged.

3.2

Those participating in the hearing (2) also agreed that social and health aspects should be taken into consideration, but should not determine taxation. At the same time, they called for support for a ‘responsible consumption’ campaign to limit risks of abuses — a demand which the Committee endorses. It was also stressed that the European industry led the world and made a by no means negligible contribution to Europe's GDP and to both direct and indirect employment.

3.3

At first sight, the draft Directive would appear to be a routine measure simply adjusting the figures to match inflation since 1993. However, it deals with an extremely involved and sensitive issue that exposes how far national policies and interests are from giving way to a high degree of Community fiscal convergence. The Committee has on several occasions expressed its desire for a process of fiscal harmonisation, which is absolutely vital if consumers are to appreciate the benefits of the single market.

3.4

The ECOFIN meetings of 7 and 28 November 2006, at which this proposal was one of the items on the agenda, have reopened the interminable discussions between Member States, in many ways recreating the situation which back in 1992 gave rise to the Directive, which succeeded only in setting minimum rates and offered no possibility of identifying a joint approach for harmonising and converging excise duties.

3.5

Close inspection reveals truly vast differences in the rates in the various Member States. The report of 26 May 2004 included measures applied for various categories in the then 25 Member Sates and the candidate countries Romania and Bulgaria (3), members since 1 January 2007. The gap between the lowest and highest rates amounted to 1 100 %!

3.6

By way of example, for wine the range was from 0 to EUR 273; for sparkling wine from 0 to EUR 546 per hl.; for beer, from 0.748 per degree Plato (4), equivalent to EUR 1.87 to EUR 19.87 per hl./degree of alcohol; for still and sparkling intermediate products from EUR 45 to 497 per hl.; for pure alcohol from EUR 550 to 5 519 per hl., equivalent to a range of between EUR 220 and EUR 2 210 per hl. for 40o alcoholic beverages.

3.7

Revalorising the minimum rate as proposed by the Commission would reduce the gap between the rates used in different countries from 1 100 % to somewhere between 800 % and 1 000 %. The suggestion that this measure would ensure the operation of the internal market seems bold, to say the least. The Committee suggests that the effective solution is to introduce not only a minimum rate, but also a maximum rate — a measure that holds out the prospect of combating smuggling and fraud.

3.8

The insistence that adjusting the minimum rates to the rate of inflation will not increase real value is equally unconvincing. In the interests of providing fuller information, the Commission should have supplied a dynamic model of the way excise duty has operated in the Member States, starting with the year in which the proposal for harmonisation was put forward in a White Paper, namely 1985. The truth is that the result of this, with one or two exceptions, has been to increase the real value of duties in Member States once the derogation granted to some countries had expired. The Committee is critical of all national practices that add other forms of taxation to duties, in some cases calling them ‘Community tax’.

3.9

That this is indeed the case has been confirmed by a study instigated by the Commission itself (5), which makes it clear that all but three of the Member States have increased the value of their duties every year or every few years.

3.10

The same study, which took into account demand elasticity in response to prices, showed that if the minimum rates were readjusted in line with inflation:

3.11

It would be interesting to compare this study, which was limited to the EU-15, with the effect of variation of the minimum rates in the new EU of 27 Member States.

3.12

The Committee wonders whether the Commission should continue to perform a merely administrative role on what has been stated to be an extremely sensitive subject, or whether it should not instead put forward proposals, in some cases in dialogue with the Member States, to effectively mitigate the substantial distortions to competition entailed in maintaining such a fragmented taxation regime.

3.13

Another aspect that the Commission completely ignored in drafting its proposal for amending the directive is that in the 12-member European Community in 1992 the gap in per capita income was not such as to make the rates in force onerous. In the Europe of 27, where there is a very diverse range of salary and pension levels, continuing the same degree of taxation for new and old Member States is an unfair measure that hits only more modest incomes. For households containing workers and pensioners whose salaries and pensions are no higher than EUR 100 to EUR 150 a month and who have already had to suffer an increase in alcohol duties of between 50 % and 400 %, a further 31 % hike would undoubtedly adversely affect consumption. In the particular light of the accessions that have occurred in the meantime, bringing in 12 new countries, the Committee does not believe it would be right to apply an automatic adjustment for an inflation rate recorded in the EU-15 from 1992 onwards.

3.14

Save for very rare exceptions, then, the system proposed is at odds with all the anti-inflation policies put in place by the Member Sates which some time ago abolished, where they existed, mechanisms indexing wages and pensions to the inflation rate. The Commission fails to explain adequately why such a mechanism should be retained only for taxes and duties.

3.15

The Committee believes, on the contrary, that the current regime is entirely unfit for purpose and finds adjustment to the rate of inflation (of the EU of 12, 25 or 27?) to be an unnecessarily punitive measure, especially for the lowest incomes, as are all forms of indirect taxation that eat into the tax-payer's net income.

3.16

Just as the consumption of wine in moderation is part of the culture and history of some Member States, the same is true for other types of alcoholic beverages for other European peoples. The issue, in all its ramifications, needs to be seen in a broader perspective.

3.17

The Committee respects the decision of some countries to adopt a stringent fiscal policy on alcohol and tobacco, probably because of the abuse involved, especially among young people. Some Member States have made it clear that their fiscal policies must take account of public health. Nevertheless, these decisions they have chosen to make cannot influence the choice and motivations of other Member States.

3.18

In this regard, the Committee has already expressed its position in a detailed opinion (7) which stressed that: ‘Abuse is best tackled by education, information and training programmes primarily aimed at those who do abuse alcohol.’

3.19

In the Committee's view, the requirements of Article 93 of the Treaty are not met, authorising the Council to decide by unanimous vote on measures to harmonise tax regimes in order to implement or improve the operation of the internal market within the scope of Article 14. The fact is that increasing minimum duties does not contribute to harmonisation, but merely sets a minimum level that every Member State can decide to raise as much as it wishes. The fact that actual rates have further diverged since the adoption of Directive 92/84 EEC shows that harmonisation cannot be achieved through a directive of this kind.

4.1

One adverse consequence of wide-ranging differences in taxation, apart from hindering sound operation of the internal market, is the strong tendency to avoid duties — either in part, by paying them in a Member State other than that of end consumption, or completely by importing goods from third countries or rerouting goods while they are in transit and duties are suspended.

4.2

The arrival of e-commerce has provided another area of potential fiscal fraud, given the impossibility of monitoring online sales and the absence of a coordinated policy to combat alcohol duty fraud, since some Member Sates do not consider this to be a problem and it is almost the exclusive concern of areas with the highest taxation.

4.3

Enlargement has brought the Union's external borders to countries where taxation levels are far lower than the EU average and the potential for fraud has increased exponentially. Corruption is rampant in some of these countries, with customs authorities themselves involved in some cases. Measures to combat smuggling must be further strengthened and if an increase in duties is adopted in the form proposed, the profit margins for international smugglers will be even greater.

4.4

As far back as 1992, the Union was aware of the problem of combating fraud on goods liable to excise duty, and published the Council Directive 92/12/EEC of 25 February 1992 on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products. As this met with little success, it was amended in 2004 by Council Directive 2004/106/EC of 16 November 2004, which amends also Directive 77/799/EEC concerning mutual assistance by the competent authorities of the Member States in the field of direct taxation, certain excise duties and taxation of insurance.

4.5

On this issue, the Committee maintains in one of its opinions (8) that in order to effectively combat fraud ‘there is a clear need to modernise, strengthen, simplify and make more efficient the instrument for administrative cooperation and exchange of information between Member States on excise duties’.

4.6

The same opinion highlighted the fact that: ‘Once again the benefits which would flow from more effective operation of the single market, and in the case in point from procedures likely to detect and combat fraud and tax evasion, are being limited by the wish to safeguard national interests.’ And again: ‘There is no doubt that many fraudulent practices are directly related to the differences — sometimes significant — which exist between excise rates applied in the different Member States.’

‘The Committee takes this opportunity to criticise the limitations arising from the unanimity principle, which at present governs most Community decisions on tax law, and reiterates the need to replace it with the qualified majority principle when it is a matter of taxes which influence the operation of the internal market or cause distortions of competition’.

4.7

The Committee has, over the years, repeatedly emphasised the following key concepts:

4.8

In Sweden in 2004, for example, travellers or smugglers imported around 164 million litres of beer alone, which was roughly the same volume — 173 million litres — sold by the state monopoly (Systembolaget) and represented a loss of around EUR 190 million in revenues from excise tax and VAT. Such purchases have risen 40 % since 2002 and the lifting of a special regime restricting purchases from abroad. Smuggling is estimated to have doubled in the past two years. Denmark puts the amount of beer that travellers have bought in Germany and then imported at 95 million litres and this, added to 10 % of smuggled goods, means that around 30 % of beer consumed in the country is not subject to Danish taxation. In 2005, travellers imported more than 42 million litres, 10 % of total consumption, into Finland, causing revenue losses in excess of EUR 50 million. Thirty million litres were imported into Austria from Germany and the Czech Republic and more than 100 million into the UK (in addition to large-scale smuggling) (9).

5.1

In its 2004 report, the Commission set out some of the problems identified over time in the actual implementation of Directive 92/84/EEC, highlighting three in particular:

5.2

As far as the first point is concerned, the Commission justifies its proposal to remove the option of treating sparkling and still wines differently by saying that the arguments which had originally informed this decision — namely that sparkling wines were still a luxury product — were now less valid. (In point of fact, quite the opposite is true for certain still wines!).

5.3

Regarding the second point, Article 26 of Directive 92/83 (on the structure of excise) stipulates that the Common Nomenclature codes to which the directive refers are those in force on the day that the directive was adopted (19 October 1992). The Commission, however, proposes a reference instead to the most recent applicable Common Nomenclature codes and for future modifications to be adopted in line with Article 24 of Directive 92/12 EEC (involving a Committee on Excise Duties of the kind set up for energy products).

5.4

On the third point: to avoid the problem raised by many operators regarding the directive's vague wording, which fails to specify the amount of distilled alcohol that can be added to ‘other fermented beverages’, the Commission proposes to make the definition of alcoholic beverages for excise purposes less dependent on the Common Nomenclature classification.

5.5

The Committee finds the changes requested by operators to ensure simplification and protection of competition to be well founded and coherent. It endorses the proposals made earlier by the Commission and wonders why these changes have not been introduced to amend Directive 92/83 to this end.

5.6

The Committee calls for the proposal for a directive to be withdrawn, while recommending that the changes to Directive 92/83 proposed by the Commission be adopted.

27.7.2007   

EN

Official Journal of the European Union

C 175/8

1.1

The EESC welcomes the proposal for the five-year statistical programme 2008-2012 and agrees with the assertion that harmonised and comparable statistics are indispensable for the understanding of Europe among the general public, for the participation of citizens in the debate and for the participation of economic operators in the single market.

1.2

The EESC highlights the need for Eurostat as well as national statistical institutions to have the best human and financial resources that budgets will allow, because this is essential to meeting the increasingly demanding requirements for statistical information and because of the European Union's importance as a player on the world stage.

1.3

The Committee considers that greater emphasis should be placed on aspects relating to the wellbeing of Europeans and to this end suggests that the statistical programme be extended to cover the following areas:

1.4

Given its enormous importance in achieving the Lisbon objectives, the attention the Statistical Programme 2008-2012 gives to improving statistical information on education and vocational training may be considered inadequate.

1.5

Statistics should also be provided for the Social Economy, since this plays such an important role in the European Union.

1.6

There are also areas where the statistical information currently available is inadequate. Thus the five-year programme should thus focus more closely on the following areas:

1.7

The EESC wishes to point out that, in accordance with the Treaty, ‘The production of statistics … shall not entail excessive burdens on economic operators.  (1)’ This will require:

1.8

Statistics for external trade: corrections should be made to the discrepancies that have been noted between the figures for exports from one given country to another and the figures for the second country's imports from the first. In other words, the figure given for A's exports to B is different to the figure given for B's imports from A.

1.9

Given the diversity of a European Union comprising 27 Member States, the EESC wishes to highlight the importance of striving to ensure the best possible coordination of statistical terminology.

1.10

To ensure that statistical data is as neutral as possible and to guarantee the other principles set out in the Code of Good Practice (including statistical confidentiality), the EESC considers it to be crucial that the work of private agencies operating (directly or indirectly) within the European Statistical System be monitored.

2.1

Council Regulation (EC) No 322/97 (2) calls for a multi-annual Community Statistical Programme (CSP) (3) to define the approaches, the main fields and the objectives of the actions envisaged for a period not exceeding five years, and to constitute the framework for the production of all Community statistics. The CSP is implemented via annual work programmes which provide more detailed work objectives for each year and via specific legislation for major actions. The CSP is subject to mid-term progress reporting and formal evaluation after the expiry of the programme period.

2.2

Against this background, the objective of the proposal — the legal base for which is Article 285 of the Treaty establishing the European Community — is to put in place a comprehensive strategic programme for official Community statistics. It should comprise the production and delivery of products and services to users, the improvement of the quality of statistics and the further development of the European Statistical System (4).

2.3

The main purpose of official Community statistics is to underpin on a recurring basis the development, monitoring and evaluation of Community policies with reliable, objective, comparable and coherent factual information. In some areas the statistical information is also used directly for the management of key policies by the Community institutions.

2.4

The 2008-2012 CSP is guided by the following policy priorities:

2.5

When drawing up the proposal for a decision, the Commission consulted all interested parties, including the EU Member States, the EFTA and candidate countries and the technical working groups of the ESS. The European Advisory Committee on Statistical Information in the Economic and Social Spheres (CEIES) (5) and the Committee on Monetary, Financial and Balance of Payments Statistics (CMFB) both delivered opinions on this subject (6).

2.6

With regard to the programme's approach, and given the two possible options, the ‘restricted’ vs. the ‘comprehensive’, the Commission opted for the second, bearing in mind three factors: a) the capabilities and efficiency, b) the costs incurred by Member States implementing these measures and c) the burden on enterprises and households.

3.1

The EESC has stated its views on the statistical programmes (7) and on various specific aspects of the Union's statistical policy on a number of occasions over the years. In general terms, the Committee has constantly sought to highlight the importance of the statistical system in achieving the EU's economic, social and political objectives and the need to support and strengthen Eurostat, which is a key element of this system, as are the national statistical institutions, although these are a matter for the Member States.

3.2

The EESC reaffirms these criteria and furthermore wishes to point out, with regard to this Decision, three aspects which made it necessary to have the best possible statistical system: the EU's role as a world player, meeting the Lisbon and enlargement objectives and the fact that coordinating the statistics of 27 States is a challenge unprecedented in history. In a nutshell, for the EU to succeed, it must have, amongst other things, an efficient statistical system.

3.3

As far as resources are concerned, the 2008-2012 five-year programme has a budget allocation of EUR 274.2 million (a 24.3 % increase over the operational resources allocated to the 2003-2007 programme). Account must, however, be taken of other factors not covered by this figure (8). If administrative costs and co-financing by Member States or other bodies are included, commitment appropriations total EUR 739.34 million.

3.4

Statistical Governance. According to the Code of Practice (9), national authorities and the Community Statistical Authority shall:

3.5

The 2008-2012 Statistical Programme proposes to achieve 32 cross-cutting aims (detailed in Annex I) and sets out some 90 objectives and practical actions (Annex II), covering both general policies and 18 specific areas of existing EU policy.

3.5.1

The programme provides for measures in the following main areas:

4.1

Given the ambitious aims of the 2008-2012 Programme, which now include close coordination between Eurostat and the statistical authorities of the 27 Member States, there is a need to prioritise statistical work and to use the limited resources as efficiently as possible.

4.2

Article 4 of the proposed Decision refers to establishing statistical priorities, given the need to use limited resources as efficiently as possible. Nevertheless, it does not set out any criteria or means for establishing these priorities. This is also difficult to do when, at the same time, there is an acknowledged need to further develop or create new areas of work.

4.3

The EESC agrees with the statement that ‘The rapid evolution in the capacity and availability of the Internet will make it the prime tool for the dissemination of statistical data in the future. It will significantly increase the potential user community and thus create new opportunities for dissemination’ (10). In order to achieve this objective and also bearing in mind that Eurostat's website reflects on the European Union, data should be presented as readably, simply and attractively as technology allows.

4.4

The EESC agrees with the assertion that cooperation between Eurostat and the national statistical institutes should be stepped up (11). The Committee wishes to point out, however, that the proposed Decision does not lay down any concrete measures for stepping up this cooperation.

4.5

European statistics — scope and priorities. The EESC wishes to highlight that, as is clear from the list of measures set out in point 3.5.1 of this opinion, the statistical system basically focuses on economic aspects and fails to provide sufficient information on social aspects, which have a direct impact on the life of the EU's inhabitants. The Committee also wishes to state that social policy has much closer links with education, vocational training and youth than with other areas.

27.7.2007   

EN

Official Journal of the European Union

C 175/11

1.1

Access to reliable and good quality statistics is an indispensable instrument for enabling institutional, economic and social operators to monitor and evaluate the effectiveness of specific legislative choices and take future decisions.

1.2

Indeed, having an overview that is as accurate and as close as possible to present realities is essential for adopting the best possible policies.

1.3

This is particularly true in the case of statistics on the employment situation in Europe, for the purpose of analysing progress made by Member States towards the Lisbon objectives.

1.4

In order to understand the labour market situation in the European Union, it is extremely important to know the sectors and regions where there are job vacancies. Unfilled vacancies are indicators for structural variations by economic sector and can provide a useful framework for identifying European regions with labour shortages, or — conversely — with significant economic and employment growth.

1.5

Job vacancies are included in the set of Principal European Economic Indicators (PEEIs) and are an indicator that, if made available rapidly, can also be useful to the European Central Bank and the Commission for assessing the impact of economic trends in specific sectors, and weighing up monetary policy decisions.

1.6

The re-launched Lisbon Strategy, which dates back to the European Council of March 2005, made creating more and better jobs one of its key priorities. This has inevitably reinforced the need for better statistical information on labour demand.

1.7

The Integrated Guidelines for Growth and Jobs 2005-2008 and the Broad Economic Policy Guidelines (BPEGs), in the context of the European Employment Strategy (EES), require aggregated structural data, for the entire European Union, on job vacancies according to economic sector for the purpose of analysing the level and structure of labour demand.

1.8

The availability of reliable and frequently updated statistical data also enables individual Member States to assess the labour market and then adopt labour policy decisions, sometimes on a regional basis.

2.1

National data on job vacancies and occupied posts have been collected since 2003 under a gentlemen's agreement. Although this agreement guaranteed the Member States' flexibility and independence, it did not entirely meet the data users' needs.

2.2

At present, four Member States have not sent data to Eurostat and the data provided are not always perfectly comparable. As for quarterly data collection, ECB and Commission requirements in terms of coverage, timeliness and harmonisation are not being satisfied at all.

2.3

Through the proposal for a regulation (COM(2007) 76 final), which was drawn up on the initiative of the Employment Committee, the Commission therefore hopes to introduce a regulation that will make it possible to obtain timely and comparable statistics on job vacancies.

2.4

During the preparation of the proposal, which also included consultation with experts and the Statistical Programme Committee (SPC), various options were considered. Under the option finally adopted, annual structural data will continue to be dealt with in the short term on a gentlemen's agreement basis.

2.5

Thus, the proposal focuses mainly on provisions governing the collection of quarterly statistics on vacancies. Based on the experience of this regulation, consideration will be given to the future possibility of drawing up a new regulation to cope with the demands for annual data.

2.6

The level of detail required for each economic activity is to be determined on the basis of the version of the common classification system for economic activities in the Community (NACE) that is currently in force.

2.7

While maintaining established quality standards wherever possible, Member States are free to use administrative data or to restrict the range of economic sectors to be considered, in order to reduce the burden on businesses (Article 5).

2.8

The Commission (Article 8) proposes to establish a series of feasibility studies to be undertaken by Member States that have difficulties in providing data for:

2.9

During the initial phase (the first three years), Member States may receive a financial contribution from the EU. The financing will be covered by the Community Programme for Employment and Social Solidarity — PROGRESS (1) (Article 9). Thus, innovations and improvements in data collection can be launched in addition to the completion of the gentlemen's agreement phase.

3.1

The EESC emphasises the importance of having EU employment statistics that are as coherent and reliable as possible. For this reason, it values and supports the Commission's efforts to set up a legal framework for obtaining up-to-date, comparable and relevant job-vacancy statistics at EU level.

3.2

In order to achieve the economic, and especially employment-related, objectives of the Lisbon Strategy, reliable and efficient statistical support must be available for all statistics users and economic, social and institutional operators at EU and national levels.

3.3

The EESC also endorses the choice of instrument, i.e. an EU regulation, insofar as the purpose of the proposal, as is usually the case for the majority of statistical activity, requires detailed and uniform application throughout the European Union.

3.4

The decision to include only quarterly data collection in the proposed regulation and to continue to apply the gentlemen's agreement to the annual structural data is undoubtedly dictated by a well-founded desire for a gradual transition from an informal agreement to an EU regulation on data collection. The results obtained during the transitional period will have to be closely monitored, and the EESC hopes that a more complete and reliable framework will be achieved in the near future for both annual and quarterly data on EU labour-market potential.

The EESC regrets that there is no impact assessment as yet, but expects the Commission to produce one before a secondary implementing regulation could be adopted, as there will, in principle, be an increase in costs and in burdens on European businesses without offsetting reductions for other survey activity.

3.5

Nevertheless, the EESC believes that due to the need to simplify and reduce the cost of data collection, a not entirely clear choice has been made to make data collection optional for sectors defined as ‘seasonal’, namely agriculture, fishing and forestry.

3.6

‘Seasonal adjustment’ however raises a range of questions about the reliability of such statistics, since in other industrial sectors and/or the public sector, seasonal-type contracts have been in use for years (textile industry, agri-food industry, tourism, etc. …).

3.7

Furthermore, in all EU countries, work contracts currently provide for dozens of different forms of employment relations. It would therefore be useful to know the types of job vacancy involved (open-ended contracts, fixed-term contracts, part-time contracts, projects, partnerships, etc).

3.8

A framework that was closer to the real potential of the labour market, its trends and weaknesses in certain sectors and regions, would make it possible to focus better on the strategies to be implemented in order to achieve the Lisbon goals.

3.9

This is another reason why the EESC believes that consultation with the European social partners and their direct involvement is particularly necessary in these areas.

The EESC welcomes the Parliament's powers of scrutiny over the proposal which will be subject to co-decision with the European Parliament. Implementing regulations will be subject to comitology under the regulatory procedure with scrutiny, in accordance with the procedure laid down in Council Decisions 1999/468/EC and 2006/512/EC.

27.7.2007   

EN

Official Journal of the European Union

C 175/13

1.1

Regulation (EC) No 1059/2003 of the European Parliament and of the Council established a common classification of territorial units for statistics (NUTS) for the Member States.

1.2

An initial amendment was made in 2005 following the accession of 10 new Member States. A further amendment has become necessary following the accession of Bulgaria and Romania, in order to insert tables concerning these new Member States into the annex to the regulation.

2.1

The EESC takes note of the Commission's proposal. Given that the need for the proposal has arisen following the accession of new Member States, and that it is of a purely technical nature, the Committee gives its full agreement.

27.7.2007   

EN

Official Journal of the European Union

C 175/14

1.1

The Directive on services in the internal market (1) is designed to promote competitiveness, growth and employment, in line with the Lisbon Strategy. It has, at the same time, triggered an intensive debate on the form to be taken by the freedom to provide services. A contentious issue has been and continues to be the effects which the proposal will have on national labour markets, social conditions and consumer protection requirements. The EESC gave a detailed response to the Commission proposal in its opinion of February 2005 (2). The question here, then, is not the document as such, but the effects on employment and the interests of consumers that can be expected if the internal market in services is implemented in the way proposed.

1.2

Freedom to provide in services is one of the four internal-market freedoms enshrined in the EU Treaty and has long been a political reality. The Commission's strategy, set out in the EU services Directive, aims to dismantle all barriers to the provision of services. In a sense, this is not directly about the labour market or consumer protection. However, the more that freedom to provide services is implemented, the more apparent and keenly felt the differences between the various national systems will be. At the same time there are relatively few EU-wide provisions for protecting the interests of employees and consumers. In these fields, national, legal, social and employment provisions predominate and they frequently differ from state to state to a considerable extent. Adding to this is the parallel or separate validity — enshrined in the services Directive — of certain national measures of the country of origin and country where the service is provided, the impact of which will only become clear in future practice.

1.3

Social stability and consumer confidence are an important element of European integration and a prerequisite for a successful internal market in services. Discussion of the services Directive is seriously flawed in including no meaningful analyses of the effect on national social conditions, employment and consumer interests. The absence of a statistical basis for quantifying cross-border traffic resulting from the freedom to provide services and freedom of establishment was one of the points criticised by the EESC (3). Furthermore, there are hardly any reliable data on the structural changes that can be expected in Member States' labour markets. The result is a few very general statistical impact assessments on the one hand and particular individual cases of a frequently illegal or semi-legal nature on the other. Neither suffices for an objective impact assessment.

1.4

Creating the internal market in services is an important part of the Lisbon Strategy. The growth potential in this sector is an important stimulus to job creation. Increased competition, triggered by liberalisation in the internal market in services, will have positive repercussions as it will lead to a broader range of services and a fall in prices. This must be accompanied by a permanent improvement in the social protection of employed workers and an appropriate level of consumer protection. The same applies to the Member States' present quality and safety standards, including environmental protection. The employment effect will differ in the individual sectors and Member States. And the effect on small and medium-sized enterprises is crucial here.

1.5

The aim of the own-initiative opinion is to make it clearer what the effects of the current strategy for the internal market in services will be on job markets, employment conditions and consumer protection and in so doing to be of practical use to those affected and the EU institutions. These two aspects were not central to the EESC's two earlier hearings on the single market (4).

1.5.1

The ‘freedom to provide services’, which in EU law applies to every performance of a service between two economic operators in different Member States (5), involves three sets of issues:

1.6

The opinion should be seen on the one hand as a starting point and on the other as a contribution to the European Commission's final report on the review of the single market (6) and to IMAC discussions (7). It is based on currently available data and the practical experience and expectations of experts and those affected. These were collected at a hearing held in Vienna in April 2006 and on the basis of a questionnaire circulated to almost 6 000 experts from industry, trade unions and various interest groups, as well as academia and government departments, in autumn of the same year Over 150 people completed the questionnaire. This makes no claim to being an objective study and can be no substitute for such a study. What it does seek to do, rather, is to provide reference points for current issues and future developments which should be explored in greater depth over the long term by the Single Market Observatory (SMO) and in turn serve as a spur to EU institutions and others in their policy decisions and analytical studies.

2.1

The European Commission has pointed out that its internal market strategy has been prompted by the poor level of development of cross-frontier services in the EU. A more dynamic internal market in services is expected to produce both incentives for employment and benefits for consumers and enterprises. How is this dynamism to be defined in concrete terms?

2.2

A problem which has yet to be resolved is how to provide a statistical representation of the cross-frontier service economy. Up to now, both EuroStat and national statistical bodies have relied on ‘payment flow’ statistics, i.e. a service is only exported or imported if it gives rise to a corresponding cross-border payment transaction. Whilst, on the one hand, the service economy is characterised by a high degree of cooperation, the transfer of expertise and the exchange of services, extensive clearing transactions do, on the other hand, take place between individual parts of companies, network partners and also between legally independent economic entities in the respective countries which are engaged only in long-lasting cooperation. In such network structures, the respective partners calculate transfers of expertise, time transfers and transfers of services in their respective home countries as a service which they have provided to the customer, even though no cross-border payment transaction is made.

2.3

As a result, in the view of the EESC, the service economy involves a considerably greater volume of exchange and therefore has a much larger impact on the internal market than the current official statistics lead one to believe. The EESC therefore strongly believes that the EU should commission a scientifically pursued basic survey to determine how the individual branches of the service economy in the EU Member States organise cooperation with enterprises in other states. On the basis of this survey and by means of a process of extrapolation, a reliable picture of the actual volume of the EU market in services should be established for the future. This project would be supported by corresponding efforts on the part of European statisticians to draw up price indices in respect of all services and to introduce them into all EU Member States.

2.4

By way of illustration, on the basis of the current level of information, the Commission calculates that the service sector accounts for 56 % of EU GDP and provides 70 % of overall employment but represents only 20 % of the volume of trade carried out within the EU. The increase in productivity in the service economy in the EU has been significantly lower than in the USA (8).

2.5

This weakness is not apparent on the world market since the EU is the leading player in the trade in services and this lead is tending to increase at a significant rate. In 2003 the EU share of the global market in services was 26 %, whilst that of the USA was just over 20 %. Despite their considerable dynamism, India and China, whose importance as trading partners is increasing all the time, so far account for a joint share of the global market in services of just over 5 %. Between 1997 and 2003 the EU share of this market increased by 1.8 %, which was also the highest increase recorded amongst the leading players.

2.6

Attention is drawn to the fact that the weakness in the trading position of the EU concerns, above all, trade within the Union. In this field, too, the figures do not absolutely bear out this conclusion. Between 2000 and 2003 intra-EU trade in services increased by 10.8 %, whilst trade with trading partners outside the EU increased by only 6.4 % during this period. The comparative dynamism of the internal market was therefore very clear, all the more so in view of the fact that the year 2003 as a whole witnessed an economic downturn. Furthermore, account also has to be taken of the decline in prices in the service sector.

2.7

The EESC calls upon the Commission to step up its efforts to draw up an impact assessment in respect of a further realisation of the internal market in services. Carrying out a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis could be beneficial in this respect.

3.1

The estimates of the impact on employment are linked to the growth forecasts. One of the first analyses of the impact of the EU services Directive was published in October 2004 by the Netherlands Bureau for Economic Policy Analysis (9). This analysis follows the usual OECD assumption that any removal of regulation will give rise to growth and, as a consequence, an increase in employment. An interesting feature of this analysis is that it comes to the conclusion that it is not regulations per se that serve as an impediment but rather the heterogeneous nature of regulations. The authors of this analysis expect that the services Directive could bring about an increase in trade in services of between 15 and 30 %, with the proportion of direct foreign investment in this trade sector increasing by between 20 and 35 %.

3.2

In the spring of 2005, Copenhagen Economics published a study (10), drawn up on behalf of the European Commission. This study set out a number of explicit observations on the impact on employment. It noted that an expected increase in consumption of 0.6 % of EU GDP would bring about a net increase in job numbers for all 25 EU Member States of approximately 600 000. It was also expected that there would be an increase in productivity and that wages would increase by an average of 0.4 %.

3.3

The conclusions of the Copenhagen Study gave rise to controversy, above all because they are argued solely from a supply-side standpoint and are geared solely to the scenario of increasing demand and falling prices brought about by the removal of all regulations. This study fails to take account of any factors which could work against a growth in demand, such as a decline in purchasing power or any other change in consumer behaviour. Moreover, the choice of sectors was controversial. As far as other estimates of the impact on employment are concerned, such estimates are either not available or are based on the Copenhagen Study and accordingly come to the same conclusions (11). Attention must also be paid to the impact of research and innovation, raising the level of improved qualifications and the use of communication technologies on increasing the efficiency of the internal market in services.

3.4

The creation of an additional 600 000 jobs is, clearly, a positive outcome but, given the high level of expectations, such an outcome can rather be described as modest (12). A much more important element, however, is the fact that such an increase in the number of jobs may very well have a considerably different impact depending upon the individual sectors, countries and the various groups of employees involved. No information whatsoever is, as yet, available in this field. With the help of the Single Market Observatory and in the light of the impetus provided by this own-initiative opinion, the EESC would like to try to draw up a clearer picture of the structural changes affecting the labour market.

3.5

The EESC questionnaire clearly demonstrates the great interest there is in findings of this kind. 90 % found information available on the employment impact in the internal market in services to be inadequate. Our questions addressed first of all those sectors that would be particularly affected by a drop or rise in jobs. 60 % anticipated benefits generally or in certain sectors. Business and legal advice services were mentioned most often. Others were: commerce, crafts/SMEs, transport, healthcare, agriculture and forestry, industrial services, education, tourism, personalised services, and building and property management. 44 % said they expected job losses. Industry was the most frequently cited loser here, followed by: public services, building and property management, agriculture and forestry, business-related services, basic and premium foodstuffs, personalised services, commerce/retail, tourism and the textile industry.

3.6

Some interesting contrasts emerged when it came to the anticipated benefits in the process. We can assume that adapting to the market is crucial and that those who fail to adapt to the new liberalised conditions and the cross-border market will lose out. Skilled work will offer greater opportunities compared with unskilled work and young, specialised and mobile workers will have greater opportunities than the older and less flexible. Jobs with high social standards would lose out compared with unprotected jobs or self-employment, which would in future play a greater role. Quality compared with price, high professional standards and countries with high social costs would suffer. The new Member States were seen as those who would gain the most, the old as those who would gain the least. Local and small providers will face pressure from large multinational companies. When it came to consumers, there was no clear conclusion.

3.7

The future of SMEs was an issue in itself: would the increase in cross-border service traffic create more jobs or would price and competitive pressures squeeze SMEs out and so lead to job losses? A two-thirds majority (66 %) were sanguine about job opportunities. However, 55 % could also foresee competition driving some firms out of business. Nevertheless, a clear majority (69 %) thought that liberalisation of the services market would have no major impact on the future of SMEs, as this was more dependent on other influences. In short: the anticipated benefits predominated, though they were likely to be quite modest. However, the crucial factors for success or survival were expected to be the workers' skills, their capacity for innovation and the quality of the service provided. There would also be greater pressure or demand for further harmonisation (educational and vocational qualifications, management requirements, prices and salaries, social welfare contributions, corporation tax, and meeting EU and international standards in general). Welfare standards and consumer and environmental protection were expected to deteriorate. There was concern, too, that local cultural specialities could also lose out if large providers cornered the markets.

3.8

84 % of respondents thought the self-employed would have more opportunities to operate across borders in the future.

4.1

In virtually all cases, cross-border services involve employee mobility. Since there has so far been little harmonisation of conditions in this respect in the EU, differing social provisions can therefore be encountered in a given national labour market or a given enterprise. The EU posted workers Directive introduced a minimum number of fundamental conditions as regards equal treatment of posted workers and local workers. Furthermore, matters relating to labour law and social law were in principle excluded from the scope of the EU services Directive. This would not, however, mean that a growing cross-border market in services would not have an impact. Despite the posted workers Directive, there is still a non-harmonised area of collective agreement rules. The exemption of labour law from the EU services Directive means that no ‘place-of-work’ principle has been established for workers; the legal formulations chosen were vigorously contested and are not necessarily unequivocal. This will become clear only with the transposition into national law. Finally, assuming the internal market in services is successfully deepened, the increasing frequency, and presumably length, of posting will constitute a new phenomenon.

4.2

This own-initiative opinion does not, however, provide the setting in which the debate on the implementation of the Directive on posted workers can and should be conducted. The key question to be answered is rather the following: what new problems will arise or how will existing problems be exacerbated as a result of the fact that, in future, in connection with the provision of services, employees from more than one Member State will more often — and perhaps for longer periods of time — be working at the same workplace whilst being subject to partially different conditions? This situation could, however, also be a source of opportunity, bearing in mind, for example, the prognosis set out in the Copenhagen Study with regard to increasing wages. The point here is definitely not to suggest that market participants and those bearing political responsibility are generally intent on social dumping, but to present a true picture of what is happening.

4.3

82 % responded in the affirmative when asked if they expected an increase in cross-border services, and hence in the activity of posted workers in another country, to bring about a change in the national employment conditions in their own country. 20 % anticipated an improvement in employment conditions, compared with 17 %, who expected a deterioration. Only 7 % thought jobs would be more secure. 56 % expected an increase in flexible and short-term work.

4.4

The question of flexibilisation came up again in answers to the open questions that followed. Many expected a drop in stable workforces in favour of part-time and contract work and an increase in pseudo self-employment. Expected benefits were also specified: language training, fresh perspectives and positive incentives to gain skills, as well as rising wages and more jobs. Even so, the fears predominated: there would be more competition, worse working conditions, and longer and more flexible working hours, while social strife and illegal practices would increase and wages would fall. The social welfare system would face new difficulties. Less mobile workers, especially women, would find it more difficult in future and families would suffer as a result of increasing mobility. On the question of how a future liberalisation of the internal market in services would impinge on wages, 50 % expected them to fall, 43 % to rise and 7 % envisaged no notable effect or said it would depend on the sector.

4.5

Responding to whether the posted workers Directive was sufficient to ensure social protection, 48 % replied ‘yes’ and 52 % ‘no’. If new measures were needed, most (65 %) would prefer an EU-wide approach, a third thought this would be better addressed at national level and 2 % thought both were needed. The following areas were mentioned in response to the open question of which problems particularly needed highlighting: the lack of harmonisation in the social sphere (including admission to vocations and trades) and the ensuing inequality of treatment was the most frequently mentioned. Some accordingly called for the posted workers Directive to be extended in terms of both sectors covered and substance. The inadequate application of posting rules, legal uncertainty and the growth in illegal practices, as well as shortcomings in monitoring and prosecution, also loomed large. Problems of safety and health protection in the workplace, the social security system and combating pseudo self-employment were also mentioned. Finally, there was criticism of undue red tape, remaining obstacles at national level and a tendency to national isolationism. Difficulties were also foreseen if not enough attention were paid to linguistic and cultural differences.

4.6

What would the effect of this be at company level, if workers from different countries were employed on service contracts, in some cases under differing national conditions? 6 % saw no particular impact and 23 % thought it was too early to tell. 24 % expected differences in working conditions within companies to increase, 34 % saw new difficulties in maintaining social and employment provisions and 13 % said national rights to participate in company decision-making did not fully cover posted workers. New aspects came to light in the space for comments on this question. New social and wage-related problems were appearing as a result of, for example, different remuneration for the same work or because voluntary company social benefits would be reduced. An expectation just as frequently voiced was that familiarity with best practice could be an opportunity to improve working conditions and boost the quality of work. On this front, greater intelligence was needed in the social dialogue at company level. Communications barriers could hamper the quality of work and team work and team solidarity could generally be eroded. In some circumstances, it could become more difficult for individual workers to find out and be aware of their rights. Excessive inequalities could also hamper business success (conflicts, red-tape, work quality) and respecting legal provisions could lead to excessive demands and more abuse. Finally, the liberalisation of services was also seen as an opportunity to free up bottlenecks in finding skilled staff.

4.7

It is difficult to summarise the responses to the question on particular practical examples, since it was precisely in their detail that they sought to contribute to a better understanding. This being the case, only a few such examples should be mentioned here which cast light on hitherto unmentioned problem areas. There are, for example, references to unclear regulations and procedures in the case of an industrial accident, particular problems regarding posting within a company, the changing of employment contracts, the application of collective agreements from other countries and the treatment of migrant workers.

5.1

The internal market in services is also designed to benefit consumers. These benefits relate to availability (price, access, supply), quality, transparency (information and confidence) and legal guarantees (liability and consumer protection). Are these aspects adequately reflected in current practice? Will they be promoted by the proposals for implementing the internal market in services or are there problematic developments, judging from the standpoint of the consumer? The third focus should be to highlight practical experiences with cross-border services, from the standpoint of the consumer.

5.2

The EU posted workers Directive prompts a mixed appraisal when judged from the standpoint of promoting consumer protection. The EESC hearing in April 2006 heard critical views to the effect that consumer protection had been criminally short changed. There were also favourable opinions, mostly concerning supply-side improvements. Overall, consumer protection questions are not given adequate prominence and will, in all probability, only become apparent when the impact of the Directive at national level in the various Member States is considered. Consumer confidence is, however, an element which is of major importance to the success of the EU's internal market in services.

5.3

The questionnaire called on respondents to prioritise the criteria for a consumer-friendly internal market in services set out in point 5.1 (availability, quality, transparency and legal certainty): firstly from their own perspective and secondly on the basis of how far these aspects were promoted by the EU services Directive. While quality and legal certainty ranked highly from the personal perspective (1st and 2nd position), when it came to the EU services Directive, it was clear that availability was sought above all and legal certainty came last. Only 23 % were satisfied with the current implementation of this dimension and 77 % saw a need for improvement.

5.4

Although the EU services Directive leaves the validity of consumer protection measures in the country where the service is provided essentially intact, fears were repeatedly voiced in the discussion that these had shortcomings. Asked whether they saw national consumer protection legislation coming under threat in future, 52 % said they did. Deteriorations in the enforcement of rights were most often mentioned, especially regarding complaints and compensation claims. This also tallied with answers to another question, where 76 % of respondents saw problems in relation to administrative implementation and liability. 51 % feared a general decline in the level of consumer protection. Particularly at risk were all those national standards that were above the EU minimum. This danger also applied to administrative rules regarding the exercise of trades — such as protection from unfair advantage and the grounds for compensation claims — which were directly relevant to consumers because they would in future be governed by the country-of-origin principle. There were concerns about the warranty terms and felt that the quality of services would be cut back. Finally, many feared the loss of the right to information, such as product information (environmental damage, liability, general transparency), price labelling, provider (integrity of the provider, skill level, the required guarantees and safeguards), warranty terms, liability, and so on.

5.5

Another question was about desirable and essential consumer information in cross-border services. Top of the list here were information about legal guarantees, compensation and rights of complaint. Then came the identity of the provider/origin, price transparency and precise information on the quality of the service and the safety of the product/guarantee. Clearly confused by the debate on the country-of-origin principle, many called for information as to which law applies and which supervisory authority or complaints body has jurisdiction.

5.6

Only 25 % of those questioned had any experience with European consumer advisory bodies or EU-wide cooperation on consumer protection. Their views were in the main favourable, though shortcomings were also raised, such as cross-border help in enforcing rights or finding the right partners at national level. Critical voices were also heard condemning procedures as overly bureaucratic and expensive and generally considering cooperation on consumer protection as too weak and not very effective, especially in complex cases. The impression generally was that information on European consumer advisory bodies or the opportunities for cooperation was not was not very well disseminated.

5.7

The EU services Directive recommends introducing voluntary standards and certification to improve quality in services. 54 % of respondents thought this was a very good idea, 46 % found it questionable. Those in favour of voluntary quality standards thought it an efficient means that would have to prove itself in the market and to customers. Critics were unanimous in thinking that there was no guarantee these standards could be maintained without state supervision. Some consequently preferred clear legal rules. While voluntary standards were respected by reputable businesses, they were of no use against the ‘black sheep’. Yet this was precisely what mattered so much in cross-border service traffic.

5.8

The EU services Directive also introduces a system of joint supervision by authorities in the country of origin and the country of destination. We wanted to know whether this inspired greater consumer confidence. 82 % answered in the affirmative, while 18 % were less convinced. Evidently, there were serious reservations about this how would actually be implemented in practice.

5.9

Finally, there was another opportunity to address unresolved questions about consumer protection in the future internal market for services. Once again, the lack of legal clarity and security came up as a key concern regarding warranties, liability (for example, in the event of insolvency), claims against warranty (inadequate harmonisation, burden of proof issues) and the enforcement of compensation claims (too slow, procedure too complex, desire for greater harmonisation). In second place came the guarantee of sufficient information on the service and the provider. The lack of common quality standards and the ability to compare skills and qualifications were also seen as a shortcoming. Consumer protection measures were often incorrectly implemented or were lacking in certain spheres (such as private pensions and healthcare services). Social questions also played a role (erosion of the minimum-wage, ‘black economy’ work, migration), as did the fear of losing environmental and safety standards. A minimum level needed to be set for generally available public services which guaranteed social involvement. Other fears included distortion of competition for local providers (e.g., different social costs) and problems arising from currency differences.

6.1

The responses to the questionnaire show there is considerable interest in tackling the new challenges for labour markets, employment and consumer protection in the internal market in services. Many potential problems were pointed out, but so, too, were future opportunities. In general, both merit more attention and should inform the implementation of the EU services Directive that is now in the offing.

6.2

One outstanding problem is the statistical break-down of the EU services economy in cross-border traffic. An accurate picture is essential for determining the employment dynamic that may emerge. The EESC therefore reiterates its call for a one-off grass-roots survey, which is the only way of solving the problem.

6.3

Information on the possible impact on employment of the new internal market strategy is inadequate, according to 90 % of respondents. 60 % expected a beneficial effect on employment, while 44 % foresaw job losses. Above all, people expected job relocations. It would be helpful to have a sector-specific and differentiated approach for future monitoring of the internal market in services by the SMO, focusing on areas such as industry-related services, education, selected liberalised public services, personalised services and crafts. The pointers to those who will gain the most are significant here. It would be useful to examine closely the question of skilled vs. unskilled work and the opportunities for skilled workers with the flexibility to relocate vs. workers with less mobility. The former is expected to be an issue both between Member States and within individual sectors. The latter is a particular challenge for labour markets and social security systems.

6.4

A bright future was overwhelmingly predicted for SMEs and job trends, with the EU services Directive having little influence on this, however. However, new challenges were expected and these would need to be met with better quality and skilling of workers and with innovativeness. Some believe that framework conditions should be further harmonised to counteract the new pressure of competition. It was feared that local and cultural specialities could lose out in future if big providers cornered the markets.

6.5

A majority (82 %) expected the future deepening of the internal market in services to result in changes in national work and employment conditions. This was not because of ignorance of the EU services Directive, but in view of the lack of harmonisation and new market influences. A majority anticipated an increase in short-term and flexible modes of working. Expected benefits included improved employment opportunities, language training and training generally.

6.6

The current provisions on posting play an important role in this context. Inadequate implementation of the rules was often presented as a problem. However, half of those surveyed thought the present regulations were insufficient to ensure social protection in the light of the new challenges. Close examination at company level makes this clear. The greater the non-harmonised sphere, the greater the scope for unequal treatment for the same work. In part, this was also seen as an opportunity, if contact with ‘better practices’ acted as an incentive to better working conditions in the country of origin. Generally speaking, unequal working conditions or legal provisions in a company or workplace also constituted a challenge for businesses. This is not the place to discuss the posted workers Directive. What matters here is to note that inequality and hence conflict will increase. This is a task for EU and national legislators, especially in the context of the forthcoming implementation of the EU services Directive, as well as being a challenge for social dialogue in the EU.

6.7

The increased worker mobility involved in providing cross-border services and the increasing difficulty of knowing one's rights will create more demand for consultation services. These services must be provided throughout the EU. The work done by the Euro Info Centres and the creation of a database of employees' questions, in which the EESC is taking a keen interest, would be an important source of information.

6.8

Consumers' views of the EU services directive are mixed. Some opinions are positive, some negative. The results of the questionnaire show that quality and legal certainty are rated highly but are not, according to the respondents, sufficiently promoted in the EU services Directive. Only 23 % were satisfied with the present state of consumer protection.

6.9

Concerns about legal certainty and enforcement of rights were central. Although the EU services Directive leaves national consumer protection essentially intact, 52 % felt that national regulations would be at risk in future. People wanted clear rules on the honouring of guarantees and on liability and the rapid settlement of compensation claims. Here, the current rules appeared inadequate, or else the future state of competition was considered likely to threaten high national standards. The availability of sufficient information on the service and the provider was seen as no less important. Another perceived shortcoming lay in the lack of common quality standards (views on voluntary certification were mixed) and the comparability of skills and qualifications. Consumer protection measures were often incorrectly applied or were lacking in some areas (such as private pensions and healthcare services).

6.10

Few respondents had experience of the European consumer advisory bodies or cross-border cooperation. There was approval in the main for current approaches, but these were not enough. They were too weak and were of little use in the enforcement of rights or in difficult cases.

6.11

Consumer protection aspirations in the internal services market must play a greater role. The palpable uncertainty regarding the legal situation in cross-border services must be countered with an information strategy at national and EU level. The desire for accurate information on the service and the provider must not be underestimated. That must also be taken into account in the implementation of the EU services Directive.

6.12

The EESC's Single Market Observatory will work closely with the Section for Employment, Social Affairs and Citizenship in continuing to look at the effect of the internal market in services on the growth in trade in services between Member States, employment and consumer protection. The findings of the present opinion suggest that it would make sense to take a closer look at individual sectors and, in the process, to make use of the main findings from the questionnaire.

27.7.2007   

EN

Official Journal of the European Union

C 175/21

2.2.1

Logically enough, DG ‘Education and Culture’ and DG ‘Employment, Social Affairs and Equal Opportunities’ include social aspects in their IAs. Furthermore, the ‘principle of proportionate analysis’  (7) induces differences in the degree of integration of social elements in other areas. This raises the question of whether or not social aspects (including items related to the EU Social Agenda) need be considered as a bottom line and also how to deal with proposals not related to social issues or likely to have a weak social consequence. Empirically, the study of the Istituto per la ricerca sociale (see e.g. footnote 2) reveals that ‘IAs lacking consideration for social aspects tend to concentrate in the economic field. Here, one third of the IAs includes social aspects only marginally or not at all’ (8).

2.2.2

Obviously, ‘when the social relevance of the measure is self-evident (…), social aspects are widely considered and quite developed throughout the impact assessment document’ (9). There, ‘the employment issue clearly emerges as the most recurrent and stressed social consequence’ (10).

2.2.3

According to the Istituto per la ricerca sociale, ‘the degree to which social elements are considered is not necessarily “proportionate (…)” to the policy content and its likely impact. (…) In many cases these impacts are only described generically (…)’ and ‘are based on (…) shared assumptions (…). Such relations are seldom discussed when taking into account the specific content of the measure, the target population and interested territorial areas, the specific choice of policy instruments and the effect of the implementation process’ (11). The study carried out by this institute also states that ‘several IAs have not envisaged any correlation with other policy domains or EU policies’. While the work involved in conducting impact analyses is considerable, the latter must not be incomplete or superficial, or their shortcomings will undermine the value of the legislation.

2.3.1

Evaluation of the impact of a legislative draft is not a ‘tick box activity’. It also needs to be monitored — ideally by or in close cooperation with users of the law, especially those who will be most directly concerned. Since the social dimension is one of the three assessment criteria for EU policies there is a need to organise a standard procedure — both transparent and straightforward — for the collection of targeted inputs in the context of IAs. A few options can be mentioned:

3.1

A number of questions must be posed in order to determine what methodology could be recommended:

4.1

In view of the complexity and importance of evaluating the social consequences of legislative proposals, all actors concerned, i.e. social partners as well as representatives of civil society organisations, should reflect upon the following methodological issues:

4.2

A public hearing at the Committee has given social NGOs, social partners, other actors of organised civil society and experts a chance to express their views and discuss the draft opinion so as to pass clear messages to the European institutions in general and to the Commission in particular.

4.3

Ultimately and in view of the fact that social IAs are an element of paramount importance in the EU decision-making process, the Committee should make proposals on how to bring about improvements and better integrate civil society organisations in this procedure.

5.1

Several different social indicator systems already exist at national and international level, but it is necessary to ascertain how useful and how suitable they would be for the specific purposes of impact analysis.

5.2

Social indicators have been developed in a number of countries over the past thirty years as an alternative to assessing the appropriateness and impact of economic policies in terms of basic, quantitative data, with a view to ‘steering’ social development in parallel with economic development and developing the capacity to measure social well-being and its evolution.

5.3

As a result, there has been a significant growth in the amount of social statistics available, particularly in major areas of collective responsibility such as education, health, social protection, the environment, housing, transport, research and unemployment. However, unless this data is organised, summarised and interpreted, it does not automatically lead to the creation of social indicators.

5.4

An indicator is ‘merely a statistic, to which particular importance is attached for the purposes of knowledge, judgement and/or action’ (12). As far as impact analyses are concerned, it is not simply a question of compiling social statistics, from various sources, for each country, but of structuring this data in order to assess the current situation in relation to specific themes, selected on the basis of their relevance to the impact analysis.

5.5

It is quite possible that in some areas, only sparse or fragmented studies and surveys may be available, making it impossible to conduct a cost/benefit analysis. For example, we already know that certain categories of pesticides are harmful to health and that concentrations in excess of a certain threshold cause serious illness. Yet, although a decision to reduce the use of chemical pesticides would have a positive impact on the health of the general population and of workers exposed to these pesticides, it would be impossible to produce exact figures on the long term benefits of this policy within the framework of a proportional impact study.

5.6

On the other hand, the social and health aspects would clearly justify the proposed measure and would provide considerable reinforcement for the economic arguments (which would include the reduction of production costs for agriculture and the resulting increase in competitiveness). In addition, the fundamental right to a clean environment could be raised in support of the proposal.

5.7

In practice, we now have access to a considerable volume of social statistics and these have also diversified in accordance with the changing foci of public debate in the various countries (such as working conditions, employment of young people, older people and women, crime, income inequalities, discrimination at work and relocations). Further, although few social indicators were drawn from this mass of statistics until very recently, fortunately, in the new socio-economic climate which has developed over the past ten years, where emphasis is again being placed on the role of the state in social policy and regulating the market, their relevance is once again being acknowledged.

5.8

However, social indicators do not always serve any great purpose if they stand alone, and take on more meaning if they are integrated into a broader concept, such as social and economic development or sustainable development. They now come from an increasingly diverse range of sources, not just central government but also from NGOs, and the think tanks operated by major foundations. They are also being presented in increasingly diverse ways, ranging from the selection of statistics to thematic surveys, and the compilation of data to form composite thematic or general indicators.

5.9

A number of international bodies publish social indicators and statistics and conduct comparisons between their member states. In this connection, the main bodies of relevance for the EU countries are (in no particular order) the OECD, the UNDP, the European Commission, particularly Eurostat, UNESCO, the World Bank and the ILO.

5.10

This very diversity of sources poses a number of problems in itself: firstly, with regard to the quality of the statistics, in that not all countries have sophisticated Statistics Offices, secondly in terms of comparability and thirdly in terms of harmonising concepts. For, ‘the choice of indicators for measuring the social convergence of the EU countries is a highly political issue. The indicators used for comparisons are not neutral: they not only reflect priorities but also sometimes particular understandings about what kind of society is desirable, which may legitimately vary from one state to another. The example of unemployment demonstrates that some indicators may have tangible and possibly even negative impacts on policy orientation (13). Notwithstanding, as things currently stand, the construction of indicator systems is left entirely to technicians.’ (14)

5.11

The use of GDP and growth as indicators of social wellbeing has been particularly critiqued within the UNDP, which has developed its own HDI (human development index), notably under the impetus of Amartya Sen's work on poverty, famine and democracy and his critical analysis of the use of purely economic, quantitative indicators, which won him the Nobel Prize in Economics.

5.12

Data on access to drinking water, male and female literacy, the health system and the outcome of campaigns against pandemics, participation in the democratic process, gender and life expectancy, perinatal and infant mortality are all relevant for assessing a society's level of wellbeing and the environmental situation. However, this data is not directly correlated with GDP.

5.13

The UNDPs first composite HDI indicators therefore provoked broad debate and controversy, since the ‘rich’ countries were sometimes well below the top ranking in terms of ‘gross national happiness’. Nevertheless, in view of its solidity (it covers education, life expectancy and incomes adjusted to take account of poverty) this indicator has become the most widely accepted alternative to the purely economic indicators.

5.14

Social statistics are a necessary complement to economic statistics and, in that the public ascribes considerable importance to the key social issues, they also have a political import which it is imperative for governments to take into account.

5.15

Above and beyond narrow economistic thinking and financial short or medium-termism, we must, in all objectivity, recognise that other obstacles stand in the way of this happening, notably, the diversity of social issues and the difficulty of linking and quantifying them with a view to their integration into economic policy orientations.

5.16

We could, intuitively, come to the same conclusions regarding the establishment of environmental indicators aimed at re-integrating external factors into economic growth. For, ultimately, a model of growth that involved the clearing of virgin forest should be rejected, were the impact study to integrate all the social and environmental factors which, as we now know, more than outweigh the economic and monetary factors. On the other hand, it is extremely difficult to put a monetary figure on external factors, such as climate change, the loss of biodiversity, the fate of people who make a living from gathering or using medicinal plants, rapid soil exhaustion and the resulting soil erosion. Although a short term audit might appear largely positive, if these external factors were brought back into the picture, the long-term outlook might well be extremely negative, not only for the region or the country concerned, but for the planet as a whole.

5.17

The objective limits of the use of social and environmental aspects in impact analyses are clearly demonstrated in the cost-benefit approach underpinning a number of the ‘better lawmaking’ assessments and used in EU impact studies (15). Although a relevant indicator (such as number of job losses or lack of opportunities for re-employment) may be used to assess the social impact, the social impact itself is not necessarily a determining factor in the political decision-making process. It often comprises elements that are difficult to quantify, particularly when impact studies cast their evaluations in terms of short-term — or at best, medium-term — monetary considerations. The long term situation is far more difficult to grasp: how does one go about evaluating an aspect such as the expected economic benefits of falling mortality connected with fuel pollution at sea? (16)

5.18

Lastly, debates around social issues use concepts that are sometimes only loosely defined. For example, an indicator on flexicurity would be formulated differently in different countries, or depending on whether it is based on existing experience or a desire to bring the concept into discussions at European (17) or national level with reference to ‘national’ models developed in a particular context and difficult to transpose into other social settings. Which factors should be taken into account and, most importantly, what values, either positive or negative, should be attributed to them? For, ‘the inclusion or exclusion of particular indicators may reveal implicit values and ideologies.’ (18) The problem is magnified still further when it comes to the construction of composite indicators: which indicators should be included, what coefficient should be ascribed to each of them and what is the actual meaning of the composite indicator obtained?

5.19

Composite indicators can integrate both qualitative and quantitative dimensions, can be disaggregated by age, gender and other significant criteria, but must also remain easily comprehensible. To take one example, how could we go about designing an indicator for quality of life in Europe? We could include aspects such as income, life expectancy, perceptions of the efficacy of the health system, pensions, average educational attainment and perceptions of satisfaction with work. But we could also include the unemployment rate, underemployment or housing conditions. And what weight should be accorded to each factor?

5.20

As we can see, the construction of indicators is not a purely technical question. It is closely bound up with a system of shared values or living traditions in a given society. It requires consultation with social organisations and ultimately reflects a particular ideological and political standpoint. At the current time ‘few social indicator approaches actually include societal goals, which are a reflection of social values and standards against which performance may be gauged (…) A crucial element of this approach is the identification and ranking, through consultation and consensus-building, of (…) benchmarks in a number of social areas. Outcomes and inputs, as well as the links between them, are also decided in this process (…). In other words, for social indicators to be policy drivers, process must be part of the product’. (EKOS Inc. Associates 1998: p. 18).

5.21

Another issue which arises is the choice of the subject of statistical analysis: i.e. individuals, communities or the household, as the basic economic and social unit. Likewise, there is the issue of gathering data on particular ethnic groups, which poses problems with regard to the requirement for non-discrimination, but would also be a useful means of determining the nature and scale of discrimination, with a view to proposing policies for reducing and ultimately eradicating it in the longer term.

5.22

The selection of statistics and construction of indicators can be conducted with a view to evaluating an existing policy or with a view to exploring the various options available at an earlier stage. In the latter instance, a broader range of statistical data would probably be needed in order to determine a policy's objectives and the means of attaining them, and could then be narrowed down, once the most relevant statistics and indicators were identified. However, the process of selection is also closely bound up with empirical issues. It is not an exact science and the same statistical data, which include both economic and non-economic data, can be interpreted in many different ways.

5.23

For example, for each of the social indicators used in ‘Society at a Glance: OECD Social Indicators — 2005 Edition’ (see short bibliography), the OECD collected raw data on:

5.24

Eurostat uses the following social indicators:

5.25

To what extent can this (non-exhaustive) list of indicators be successfully integrated into the general objectives of the Open Method of Coordination (OMC) of March 2006:

5.26

Furthermore, the concepts and methods used for certain indicators need to be more precise. In the case of poverty, for example, the French Council for Employment, Income and Social Inclusion (Conseil de l'emploi, des revenus et de la cohésion sociale — CERC) (19) has highlighted the ‘multidimensionality’ of the concept.

5.26.1

Thus, poverty comprises several dimensions: inadequate monetary resources, poor living conditions, inadequate cognitive, social and cultural resources. For each of these dimensions, two approaches are adopted to determine the poverty situation:

5.27

In summary and in conclusion, the social indicators aim to draw the attention of public opinion and decision-makers to social issues which risk being underestimated or poorly understood. Focusing the attention of decision-makers on the key points is particularly important as they generally have to deal with too much information. Herbert Simon put it nicely when he said that too much information kills the information.

5.27.1

From a functional point of view, the purpose of a system of indicators is to achieve ‘optimum aggregation of information’.

5.28

An indicator is more than a statistic:

A system of indicators is not a mere collection of data. It has a number of consequences:

5.29

In practice, the features of an indicator are:

5.30

Features of a parameters system:

6.

The EESC calls for the evaluation of the social impact of EU legislative and policy initiatives to be incorporated in all policy areas. In other words, the Commission should carefully assess the social impact of all relative initiatives without worrying about which DG is in charge of the initiative. This is important if Europe genuinely wants to create a ‘social Europe’ and gain public support. The ‘better lawmaking’ initiative offers a suitable springboard to push ahead in this direction.

6.1

This assessment should examine individually specific groups which might be affected in different ways by the new legislation. Special attention should be paid to disadvantaged groups such as women, disabled persons and ethnic minorities. In some cases, depending on the subject matter of the initiative concerned, it might even be necessary to examine specific sub-groups individually, such as blind persons, for example.

7.1

What emerges from the above and from the public hearing organised by the European Economic and Social Committee on 28 March 2007, is that the multi-dimensionality of certain concepts makes it impossible to develop a social indicator based on a single criterion. By its very nature, the debate on social issues brings into play concepts whose edges are blurred and necessarily vary from one country or one social reality to another. Furthermore, the inclusion or exclusion of particular indicators reveals implicit or explicit ideologies or values. The selection of indicators is closely bound up with empirical issues, and this should, in principle, stand in the way of a rigid approach.

7.2

Although it is laudable and necessary, if not vital, to draw the attention of political decision- makers to the social impact of proposed legislation, there is a methodological problem here, since ‘too much information kills the information’. The European Economic and Social Committee considers that particular emphasis should be placed on the methodology, which has yet to be determined.

7.3

Therefore, the European Economic and Social Committee considers that, at this stage of the reflection process, it is vital to draw the attention of the Commission, and other players, to the quality standards that must be met by all indicators, namely:

7.4

The European Economic and Social Committee also calls on the Commission to incorporate the evaluation of the social impact of EU legislative and policy initiatives in all Community policies, without having to worry about which DG is responsible for deciding whether a social impact analysis needs to be carried out. This is vital if we genuinely want to create a ‘social Europe’ and gain public support.

7.5

The Committee should take full account of the road map and impact assessment alongside the legislative proposal referred to it for an opinion and should begin its work immediately, as soon as the communication accompanying the legislative proposal has been published.

7.6

It is vital to conduct regular assessments of all legislation for which prior impact assessments were conducted and, where necessary, to make adjustments to the way the legislation is implemented and to involve the social partners and, if necessary, stakeholder NGOs in this process. This is important in order to verify the validity of the indicators that were used, to combine them in the social impact assessment and draw lessons or, if need be, persuade the legislator to look into possible changes.

7.7

In certain specific and highly socially sensitive cases (such as labour law), consultations with the social partners should take place at a still earlier stage, so as to identify the most appropriate indicators for conducting as comprehensive and objective an impact analysis as possible.

7.8

There is no doubt that the ‘Better lawmaking’ initiative offers a suitable springboard for pushing ahead in this direction, i.e. proposing vital and effective legislation, whose consequences are both predictable and stable for its addressees and more closely incorporated in the impact analysis and evaluation process conducted by the EU's consultative bodies (the EESC and the CoR) and, depending on the nature of the legislation, by the social partners and the relevant NGOs in the area concerned.

27.7.2007   

EN

Official Journal of the European Union

C 175/28

1.1

With this Communication on the implementation of Directive 1997/7/EC, the Commission is not only informing the Council, the European Parliament and the EESC of the results of the directive's transposition and implementation, but is also opening up a public consultation of the interested parties, with the aim of gathering their opinions. The Commission does not, however, put forward any proposal for reviewing the Directive until the broader review of the consumer acquis communautaire is concluded.

1.2

Whilst noting the delay in the publication of this communication in relation to the deadlines set down in the directive, the EESC welcomes the initiative and agrees with a great number of the Commission's comments, many of which have in fact already been made in the Committee's own opinions, specifically those on the proposals for a directive on distance selling in general and on the distance selling of financial services in particular. The Committee also agrees with the need to bring the rules in this area into line with those of other legal instruments introduced in the meantime, in some cases without the necessary coordination and joint planning.

1.3

The EESC is of the view, however, that it would be valuable for a review of these rules to be carried out immediately, in conjunction with a review of those on the distance selling of financial services and certain aspects of electronic commerce, without waiting for work on the review of the Community acquis concerning consumer contracts to be concluded, out of a concern to make all the disparate provisions more accessible and easier to understand.

1.4

To this end, the EESC urges the Commission to carry out a detailed analysis of the responses to its public consultation exercise that have been received in the meantime, to which it should add reliable statistical data on the scope and scale of distance selling in the internal market, culminating in a public hearing of the interested parties.

1.5

The Committee agrees with most of the Commission's suggestions on improving the directive's wording and structure but reaffirms its position — already stated in previous opinions — that the directive's scope should not be confined to business/consumer relations and that it would be extremely useful to reconsider this aspect in order to bring it into line, in fundamental aspects, with the scope of the regulations on electronic commerce.

1.6

The EESC disagrees with the Commission's assessment of the consequences of the use made of the ‘minimum clause’, which it does not consider to be the cause of the directive's implementation problems — which are rightly highlighted. The Committee does not, however, reject the possibility of envisaging a move towards total harmonisation, by means of regulation, provided that consumers are guaranteed a higher level of protection.

1.7

With the aim of contributing to an in-depth review of the rules on distance-selling, the EESC is putting forward a broad range of specific recommendations, which it considers should be studied, at the present stage of development of the internal market, in order to boost consumer safeguards and confidence, guaranteeing protection in this type of transaction equivalent to that enjoyed by consumers concluding contracts face-to-face.

1.8

The EESC also points to the need for a particular focus on providing contracting parties — particularly less well-informed consumers — with real information, and also that there should be an effective system for sanctioning practices that breach existing legal provisions.

2.1

With the Communication on the implementation of Directive 1997/7/EC of 20 May 1997 (COM (2006) 514 final of 21 September 2006), the Commission sets out to report to the Council, the European Parliament and the European Economic and Social Committee on the directive's transposition and implementation in the period of around 10 years since its publication, thus fulfilling the requirement set out in Article 15(4) of the directive, albeit with a delay of some six years.

2.2

As well as identifying some problems in the Directive's implementation (1), arising mainly from its ‘wording’ and from ‘translation problems’ in some language versions, the Commission comments on what it considers to be ‘significant divergences between national laws as a result of the use of the minimum clause’ and the Directive's potential inability to cover ‘new technologies and forms of marketing’.

2.3

Lastly, the Commission has drawn up a ‘questionnaire’, to be returned by 21 November 2006, aimed at ensuring that there is ‘public consultation’ of the parties concerned, in order to confirm or disprove its observations, and envisages a public hearing.

2.4

Despite acknowledging that the rules put in place reveal design faults and difficulties of interpretation, which are the cause of problems in implementation, the Commission does not consider it ‘appropriate’ to put forward any proposal for reviewing the Directive until the diagnostic phase of the review of the consumer acquis communautaire is concluded, and no firm deadline has been set for this.

2.5

While this opinion was being drafted, the Commission made available 84 responses received to the above-mentioned consultation and published a working paper summarising many of the responses received. The Commission proposes to complete its analysis of the remaining responses in the near future and to carry out a more detailed impact study.

3.1.1

The EESC welcomes the Commission initiative, but deplores the fact that it was not implemented by the date originally scheduled (June 2001) or, at the very least, within the four-year deadline for transposition (June 2004) and considers that most of the issues raised today could have been addressed and resolved at least three years ago, with obvious benefits.

3.1.2

The EESC would point out that many of the issues now raised in the Communication have already been addressed in EESC opinions, dating right back to the Directive's drafting phase.

In its opinion on the Proposal for a Council Directive on the protection of consumers in respect of contracts negotiated at a distance (distance selling) (2), the EESC had already warned of the need for some of the concepts set out in Article 2 of the directive, specifically those concerning contracts covered by the directive and the very concept of ‘the consumer’.

The EESC had also expressed the view that the Commission should be clearer as regards the right to withdraw from a contract set out in the directive which, in its opinion, should be understood in the context of the right to reflect and should not be confused with or jeopardise consumers' right to terminate the contract, provided that this has not been completed or that fraudulent practices have been detected.

The EESC also drew attention to the fact that the right to withdraw from a contract within seven days is less generous than that already existing in other directives and in current legislation in some Member States and advised the Commission to harmonise time limits for exercising this right. The EESC's call for clarification of the rules on the right to reflect was, in fact, reiterated in the opinion on the Proposal for Distance Selling of Financial Services (3).

Furthermore, similar criticism had already been made a long time ago in the most highly respected specialist academic publications (4).

3.1.3

The EESC is surprised at the purported lack of information available to the Commission on the date of entry into force of various Member States' provisions for transposition (5) and is also surprised that, given that some flagrant breaches in transposition by some Member States have supposedly been observed, there has been no news of infringement proceedings being brought against these Member States or of the outcome of any such proceedings.

3.1.4

The EESC also considers that it would have better reflected a genuinely participatory process if the Communication had been preceded rather than followed by public consultation, in order to avoid many of the Commission's comments and observations being based merely on subjective ‘impressions’ or ‘opinions’ (6).

The Committee also recalls the 10 March 2000 report on Consumer complaints in respect of distance selling (COM(2000) 127 final) and recommends that a similar exercise be carried out, but this time on the basis of an objective analysis of all the responses to the public consultation, updating and comparing data and thus creating an objective basis for reflection.

3.1.5

In the present circumstances, the EESC supports the Commission's suggestion and calls for a public hearing to be held, involving all parties concerned, whilst ensuring that the issue is not subsumed into the broader debate on the Community consumer acquis, on which a lengthy technical study of some 800 pages (7) was published only recently, together with the Commission Green Paper (8).

3.1.6

Given the progress of the CFR-net's (9) work to date, the EESC doubts that it would be beneficial or advisable to make a review of this directive dependent on completion of the work and consultations on the entire Community acquis relating to consumer law and on the decisions that might eventually be taken, even in the latest slimmed-down version presented by the Commission (10).

3.1.7

The EESC further suggests that the legal nature of the Community instrument to be used in a future review of the directive might be reconsidered, if it is felt that the conditions could be met to ensure that the fundamental changes required in this area are made by means of regulation, which would be the most appropriate approach (11), whilst preserving the basic aim, which is to re-establish balance and equality between the parties concerned, as is supposed to be the case in face-to-face transactions concluded on business premises.

3.2.1

The Commission's comments on the Directive can be divided into two types:

3.2.2

With regard to the directive's wording/structure, the EESC agrees with the Commission on the following points:

3.2.3

The EESC does not agree with the Commission, however, on:

3.2.4

The EESC also recommends that the Commission endeavour to simplify all the provisions relating to distance selling, which are currently scattered across a number of different instruments, and make them more accessible and easier to understand.

3.2.5

As regards the Directive's implementation and given the EESC's knowledge of experience in some Member States, it can agree with and support most of the Commission's comments, but considers that more detailed work should be carried out in order to give a complete rather than a piecemeal overview of situations where there is divergence or incompatibility regarding the Directive's transposition or interpretation in all Member States.

The EESC, therefore, urges the Commission, once it has studied the answers to the questionnaire, to carry out such a study, and to make its results known.

It should be added that the Commission has not yet provided the statistical data which make it possible to assess the proportion of distance selling to consumers in all cross-border transactions, or which show the volume of this type of business in relation to transactions with consumers in each Member State. Such information cannot be gleaned with the necessary objectivity from the most recent data collected by Eurobarometer (20); this information is crucial to assessing criteria for inclusion and for determining whether the exemptions set out in the directive are appropriate.

3.2.6

The EESC is concerned at the position adopted by the Commission, when, on the one hand, it identifies a number of problems in the directive's transposition and yet, on the other, expresses doubts regarding its relevance to consumer confidence, stating that it will not make any changes and failing to announce more vigorous measures to address these transposition-related problems.

3.2.7

First and foremost, concerning the scope of Directive 1997/7/CE, the Commission itself acknowledges that the exemptions set out in the directive have been transposed differently in the Member States and that some of these exemptions should be reconsidered. The EESC thus calls on the Commission to take more concrete measures in this area.

3.2.8

Regarding the effects of the use of the ‘minimum clause’ the EESC disagrees with the Commission that all of the situations it lists result from the incorrect implementation of the clause set out in Article 14.

3.2.8.1

The EESC considers, rather, that most of the very real discrepancies observed are not the consequence of the minimum clause being used improperly, but rather of identified shortcomings in the Directive's design, wording and transposition/translation.

3.2.8.2

The EESC is of the view that the minimum clause, which allows Member States to go beyond Community requirements in directives for minimum harmonisation, while complying with the Treaty, as stipulated in Article 153, is a useful tool that will ensure a high level of consumer protection, and will help ensure that account is taken of each national system's specific cultural, social and legal characteristics.

3.2.8.3

The EESC nevertheless suggests that, insofar as a higher degree of consumer protection is indeed secured, certain areas of law should be subject to total harmonisation — and preferably in the form of a regulation — as a means of guaranteeing uniformity, and this could also apply to the directive under consideration.

3.2.9

The EESC considers that there are other issues that might warrant reassessment in a review of the Directive and to which the Communication does not refer.

3.2.10

Specifically, these are:

3.2.11

The EESC is of the view that proper consideration of these issues is crucial to achieving the aims that the directive proposes to guarantee, in other words, that consumers of goods and services purchased at a distance should enjoy protection equivalent to the protection rightly provided in contracts concluded face to face.

27.7.2007   

EN

Official Journal of the European Union

C 175/33

1.1

The Commission's proposal to amend the legislation governing mergers or divisions of public limited companies is part of the plan to modernise company law and improve corporate governance in the EU (1). It provides for an action plan to complete a radical legislative reform for the short, medium and long term that does more than simply execute the proposals for Directives still pending.

1.2

Also, at a more general level, Annex III of the Action Programme for Reducing Administrative Burdens in the European Union (2) presents ten specific proposals for introducing ‘fast track actions’, with the aim of reducing minor requirements that do not change the level of legal protection. This is the purpose of the proposal under discussion, which simply abolishes the expert report on the draft terms of mergers or divisions, provided ‘all’ shareholders agree.

1.3

It should be noted that Article 8(4) of Directive 2005/56/EC on cross-border mergers of limited liability companies (3) already waives the requirement for an expert report on the draft terms of mergers if all the members of the companies agree. Similarly, the last amendment of Directive 77/91/EEC on the formation of public limited liability companies and the maintenance and alteration of their capital (4) introduced two new articles, 10a and 10b, under which the expert report is not required for non-cash contributions in circumstances where the real value of the assets contributed can be guaranteed.

2.1

The purpose of this amendment to the Directives on mergers or divisions of public limited liability companies is to align their content with that of the Directive on cross-border mergers with respect to the involvement of experts in drawing up the report on the draft terms of mergers or divisions, provided that all shareholders and holders of securities giving the right to vote have so agreed.

3.1

The EESC welcomes the process of simplification, and in particular the reduction in the administrative burden for European companies. It is in this sense that we understand the content of the proposal, which in particular protects shareholders' interests by requiring their unanimous agreement for not drawing up an expert report on the draft terms of mergers or divisions.

3.2

The EESC nevertheless still sees problems, in particular relating to mergers of large companies, owing to the diversity of shareholders, most of whom are investors. If shares are not managed directly, minority shareholders may be unprotected and obliged to accept agreements adopted by the bodies that manage their securities. Although prevailing rules provide for the right to oppose and withdraw from such agreements in cases where shareholders object to the economic outcome of the operations, especially in relation to share swaps, it will be much more difficult to exercise this right if there is no expert report on the draft terms of mergers.

3.3

By the same token we believe that companies' creditors and employees are vulnerable if they are kept in the dark for lack of an objective evaluation under the responsibility of experts. The right of creditors to oppose a merger once the merger notices have been published is recognised, provided their claims are not secured. However, it must be borne in mind that neither the Directive on mergers nor the Directive on divisions sets out any right for workers, whereas the Directive on cross-border mergers provides the option of employee participation (Article 16), which promotes a better outcome by means of appropriate information channels.

3.4

The effectiveness of legislation depends on whether it safeguards the rights of all those involved in legal processes — in this case mergers and divisions — since their complexity makes it necessary to promote ways of making them transparent without creating conflicts between all the parties concerned. Abolition of the expert report subject to the approval of all the shareholders should happen in the circumstances set out in Article 10 of Directive 2006/68/EC, i.e. when the assets are in the form of transferable securities or money-market instruments or have recently been valued by independent experts, since the value is then verifiable and has been ascertained in accordance with the relevant standards.

4.1

The EESC realises that the proposal to amend the Directives on mergers or divisions of public limited liability companies is part of the plan to reduce the administrative burden on European companies. It must nevertheless be borne in mind that this type of legal process generally involves large limited-liability companies whose shareholders comprise both portfolio managers and individual investors, who have differing interests. Individual investors want to maximise the exchange value of their shares.

4.2

The point of the amendment should be to promote the general interest of all those involved in such legal operations, where expert assessments ensure greater transparency and reliability of the offers contained in the draft terms of mergers or divisions, since the experts are independent and therefore lay down objective criteria for the content of the draft terms.

4.3

In addition, the EESC considers the basic rules for involvement of experts to be contained in Articles 10, 10(a) and 10(b) of the second Directive, where waiving the requirement for an expert report is conditional on the existence of recent, verifiable valuations.

4.4

On the other hand, the EESC believes that account should be taken of the provisions of the 10th Directive, not just because it was published recently, but because it is more in line with the new criteria relating to interests protected by company law, considering not just shareholders and creditors, but also employees, who are part of the company structure. We therefore think that the scope of the present proposal should be widened in accordance with Article 16 of the above-mentioned Directive, since this is more consistent with the objective of aligning national rules on mergers or divisions.

27.7.2007   

EN

Official Journal of the European Union

C 175/37

1.1

The proposal submitted to the EESC entails the amendment of two regulations: they are Regulation No 11 concerning the abolition of discrimination in transport rates and conditions, in implementation of Article 79(3) of the Treaty establishing the European Economic Community, and Regulation (EC) No 852/2004 of the European Parliament and the Council on the hygiene of foodstuffs.

1.2

With regard to Community policies for better regulation, the European Economic and Social Committee considers reducing the administrative burden placed on businesses by existing legislation to be a necessary and crucial factor in boosting competitiveness and achieving the goals of the Lisbon agenda. The Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions on A strategic review of Better Regulation in the European Union, and the Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions on an Action Programme for Reducing Administrative Burdens in the European Union certainly contribute to this purpose.

1.3

The first amendment regards Regulation No 11, which of course dates back a very long way, concerning the abolition of discrimination in transport rates and conditions, in implementation of Article 79(3) of the Treaty establishing the European Economic Community. The EESC agrees on abolishing the obligation to provide information on routes, distances, rates and other transport conditions, and allowing the use of consignment notes to provide information on the remaining requirements related to the current transport document, because it provides for a reduction of unnecessary administrative burdens while the same level of essential information continues to be available.

1.4

The EESC therefore agrees with the amendment to Regulation No 11, and more specifically with the deletion of Article 5 and the amendment of Article 6 deleting the fifth and sixth indents of paragraph 1. It also agrees with the amendment to Article 6 deleting the third sentence of paragraph 2, and replacing paragraph 3 with the following text: ‘Where existing documents such as consignment notes or any other transport document give all the details specified in paragraph 1 and, in conjunction with carriers' recording and accounting systems, enable a full check to be made of transport rates and conditions, so that the forms of discrimination referred to in Article 75(1) of the Treaty may be thereby abolished or avoided, carriers shall not be required to introduce new documents’.

1.5

The EESC agrees with the amendment of Regulation 852/2004, intended to provide for the exemption of the relevant businesses from the requirements of Article 5(1) of Regulation (EC) No 852/2004, since operators must comply with all the regulation's other requirements. Under Article 5(1) of the Regulation, all food businesses which are micro-enterprises predominantly selling their products directly to the final consumer, such as bakeries, butchers, grocery shops, market stalls, restaurants and bars, and which are micro-enterprises within the meaning of Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises, must put in place, implement and maintain a permanent procedure or procedures based on the Hazard Analysis Critical Control Point (HACCP) principles.

1.6

However, the EESC considers that the exemption of the above-mentioned businesses who sell their products directly to the final consumer, such as bakeries, butchers, grocery shops, restaurants or bars should also be extended to small enterprises, as defined by Recommendation 2003/361/EC concerning the definition of micro, small and medium-sized enterprises.

1.7

Extending the exemption in this way will probably mean incorporating two requirements in the amendment of Article 5 of Regulation 852. The provision would include small enterprises — defined of course as having no more than 50 employees, a number too high for exemption from HACCP — and with their inclusion a specific reference and restrictions for catering businesses would be introduced.

1.8

The first requirement could be strict compliance with the hygiene guides and specific hygiene requirements set out in Article 4 of Regulation 852/2004 which, together with staff training, would be sufficient to ensure food product hygiene, while at the same time making it easier for businesses to meet their legal obligations.

1.9

The second requirement — with the same aim of exempting small catering enterprises, which by definition have fewer than 50 employees — could be that, in the specific case of these businesses, there could be no more than 10 persons per shift working on product preparation (production unit-kitchen). The enterprise would be required to provide, in advance, a list of those workers engaged in preparation.

1.10

The introduction of these distinctions and clarifications complies with the provisions of Recommendation 2003/361/EC, while laying down production and shift restrictions specifically for catering businesses such as bakeries, butchers, grocery shops, restaurants and bars so as also to satisfy the conditions necessary to protect and safeguard public health.

2.1

The Commission has asked the EESC to draw up an opinion on the amendment of two regulations: Regulation No 11 concerning the abolition of discrimination in transport rates and conditions, in implementation of Article 79(3) of the Treaty establishing the European Economic Community, and Regulation (EC) No 852/2004 of the European Parliament and the Council on the hygiene of foodstuffs.

2.2

Regarding Regulation No 11 concerning the abolition of discrimination in transport rates and conditions, in implementation of Article 79(3) of the Treaty establishing the European Economic Community, considers the possibility of deleting outdated requirements and modifying certain requirements in order to minimise the administrative burdens on businesses. Article 5 notably requested transport undertakings (as well as Member States' governments) to provide information on transport tariffs, rates and conditions before 1 July 1961. Article 6(1) of the Regulation requires a transport document containing several information elements concerning the consignor, the nature of the goods carried, the place of origin and destination of the goods as well as the route to be taken or distance to be travelled, including frontier crossing points where appropriate. Since these latter elements are no longer indispensable to achieve the objectives of the Regulation, they can be deleted. The third sentence of Article 6(2) of the Regulation requires the carrier to retain a copy showing the full and final transport charges and any other charges and any rebates or other factors affecting the transport rates and conditions. This sentence can be deleted, as nowadays this information is available in the accounting systems. Article 6(3) is to contain an explicit reference to consignment notes, which are very well-known and often used in the inland transport sector. This reference improves legal certainty for transport undertakings as it clarifies that these consignment notes, if containing all details required by paragraph 1 of Article 6, suffice.

2.3

Another ‘fast track action’ relates to Regulation (EC) No 852/2004 of the European Parliament and the Council on the hygiene of foodstuffs. The purpose is to exempt micro food businesses able to control food hygiene simply by implementing the other requirements of Regulation (EC) 852/2004 from the requirement to put in place, implement and maintain a permanent procedure or procedures based on the hazard analysis and critical control points (‘HACCP’) principles. This exemption applies to micro-enterprises that are predominantly selling food directly to the final consumer.

3.1

The EESC welcomes the amendment to Regulation No 11 concerning the abolition of discrimination in transport rates and conditions, in implementation of Article 79(3) of the Treaty establishing the European Economic Community, envisaging the deletion of outdated requirements and the modification of certain requirements in order to minimise the administrative burdens on businesses.

3.2

With regard to the amendment of Regulation (EC) No 852/2004, the EESC considers that small enterprises should also be taken into account, in keeping with Recommendation 2003/361/EC of 6 May 2003. A degree of flexibility is needed for these businesses, as has been shown in practice.

3.3

It must be recognised that, as in the case of micro-enterprises, it is not possible for some small enterprises to establish HACCP criteria, but only critical control points. This is specifically on account of the difficulty in storing documents, which would place an excessive burden on these businesses.

3.4

Recommendation 2003/361/EC defined micro-enterprises as those employing a total of fewer than 10 persons and with a turnover of less than EUR 2 million. This definition may well be appropriate regarding the number of employees for enterprises in some Member States; however, in proportion to this number of employees and in these Member States, the EUR 2 million turnover is excessive.

3.5

Moreover, the definition given in Recommendation 2003/361/EC makes no distinction between catering or commercial enterprises, at least with regard to the number of employees, The EUR 2 million criterion was added specifically for commercial enterprises, because with only three employees they can — in some Member States, at least — generate a turnover of more than EUR 1.5 million. This unacceptable anomaly has been corrected only for a specific type of enterprise. It is therefore reasonable, at least for the present opinion, to consider that catering businesses operating in various Member States cannot be argued to be micro-enterprises only when they have fewer than ten employees and turnover of less than EUR 2 million. In some Member States, catering businesses operate two shifts and consequently employ considerably more than ten persons, while their turnover is naturally well below EUR 500 000.

4.1

The EESC considers that the reference to Recommendation 2003/361/EC made in the text under consideration in the present opinion, concerning the definition of enterprises, and specifically to applying HACCP, should take a different approach.

4.2

Extending the exemption in this way will probably mean incorporating two requirements in the amendment of Article 5 of Regulation 852. The provision would include small enterprises — defined of course as having no more than 50 employees, a number too high for exemption from HACCP — and with their inclusion a specific reference and restrictions for catering businesses would be introduced.

4.3

The first requirement could be strict compliance with the hygiene guides and specific hygiene requirements set out in Article 4 of Regulation 852/2004 which, together with staff training, would be sufficient to ensure food product hygiene, while at the same time making it easier for businesses to meet their legal obligations.

4.4

The second requirement — with the same aim of exempting small catering enterprises, which by definition have fewer than 50 employees — could be that, in the specific case of these businesses, such as bakeries, butchers, grocery shops, market stalls, restaurants and bars, there could be no more than 10 persons per shift working on product preparation. The enterprise would be required to provide, in advance, a list of those workers engaged in preparation.

4.5

The introduction of these distinctions and clarifications complies with the provisions of Recommendation 2003/361/EC, while laying down production and shift restrictions specifically for catering businesses so as also to satisfy the conditions necessary to protect and safeguard public health.

4.6

In particular, the EESC considers that the following sentence should be added to Article 5(3) of Regulation (EC) No 852/2004:

4.6.1

‘Without prejudice to the other requirements of this Regulation, paragraph 1 may be amended so that small catering enterprises, bakeries, butchers, grocery shops, market stalls, restaurants and bars, as defined and clarified in Recommendation 2003/361/EC, are also exempted from the application of HACCP, on condition of strict compliance with the hygiene guides, the specific hygiene requirements set out in Article 4 of Regulation (EC) No 852/2004, which, together with staff training, would be sufficient to ensure food product hygiene, while at the same time making it easier for businesses to meet their legal obligations. The protection of public health is the key prerequisite’.

4.6.2

‘Similarly, for small catering enterprises, bakeries, butchers, grocery shops, market stalls, restaurants and bars, which of course by definition have less than 50 employees, the additional and specific condition must be met that no more than 10 persons per shift may work on product preparation (production unit-kitchen)’.

27.7.2007   

EN

Official Journal of the European Union

C 175/40

27.7.2007   

EN

Official Journal of the European Union

C 175/40

1.1

The European Economic and Social Committee (EESC) has always supported the active role played by the European Commission in introducing and implementing the Rotterdam Convention on the prior informed consent (PIC) procedure for hazardous chemicals and pesticides in international trade, together with the Stockholm Convention on Persistent Organic Pollutants (POP).

1.2

The Committee agrees that a harmonised approach by the Commission is necessary, aimed at improving the protection of human health and the environment in importing countries, especially developing countries. It also agrees on the need to use streamlined, clear and transparent mechanisms based on smooth, uniform procedures to ensure the prompt provision of proper information, to countries that import dangerous chemical products and substances.

1.3

The Committee considers that the more stringent provisions under Regulation (EC) 304/2003, which was annulled by the Court of Justice on the grounds of its wrong legal basis, and reinstated in the present proposal for a new regulation are a key element in overall safety and the management of dangerous chemicals.

1.4

The Committee supports the Commission's aim to use the opportunity provided by the correction of the legal basis of the regulation in order to increase the effectiveness of the Community instrument and boost legal certainty, tying in closely with Regulation (EC) No 1907/2006 on chemicals legislation (REACH) which is to come into force in June 2007.

1.5

In the Committee's view, the new legislation should include provisions on, firstly, the drafting of practical guides and information documents and, secondly, the organisation of training courses based on Community standards, intended primarily for customs officials, with contributions from relevant Commission and, in particular, Joint Research Centre (JRC) staff.

1.5.1

The Committee emphasises the importance of using the language of the importing country on labelling and the safety data sheets.

1.6

The EESC warmly welcomes the fact that provision is made for exports to proceed on a temporary basis, while further efforts are made to obtain explicit consent.

1.7

The EESC is convinced that the key to the effective, smooth and transparent functioning of the proposed mechanisms lies in the customs control arrangements, and in full cooperation between the customs authorities and the national authorities designated to apply the regulation (DNAs).

1.8

The Committee emphasises that it is essential for the proposed improvements to the Combined Nomenclature, and the development of a version of the EDEXIM database specifically for customs authorities, to be backed by information and training initiatives that are systematic and harmonised at Community level.

1.8.1

The EESC views the financial and human resources available to the Commission and, in particular, the JRC for this purpose to be entirely inadequate to the task of:

2.1

The European Committee has previously (1) expressed its support for the aims and mechanisms of the Rotterdam Convention (2), which set up a prior informed consent procedure for the export and import of dangerous chemicals, at the same time improving access to information and providing technical assistance to developing countries.

2.2

The Committee agreed with the views of Member States, that it was ‘appropriate to go beyond the provisions of the convention in order to fully assist developing countries’ (3).

2.3

Regulation (EC) No 304/2003 concerning the export and import of dangerous chemicals, which was adopted on 18 January 2003 and come into force on 7 March 2003, was in fact primarily aimed at implementing the Rotterdam Convention with regard to the prior informed consent procedure for certain hazardous chemicals and pesticides in international trade.

2.3.1

However, the regulation contained some provisions which went beyond the requirements of the convention.

2.4

More specifically, the regulation stipulates that the exporter of a chemical listed therein must notify the designated national authority prior to the first intended export of the chemical. Once the notification has been checked for full compliance, it is forwarded to the Commission, which registers it in the EDEXIM database as notification of a Community export, specifying the product and the importing country.

2.5

Likewise, in the event of a Community import of a chemical from a third country, the Commission receives the relevant export notification, acknowledges receipt of the notification and registers it in the EDEXIM database.

2.6

More generally, the Commission is responsible for ensuring proper application of the regulation. In practice this means it must manage the export and import notifications.

2.7

The EU export notification procedure currently applies to some 130 chemical products and groups of products/substances, listed in Annex I, Part 1 of Regulation (EC) No 304/2003 (4).

2.8

Lastly, clear obligations are imposed concerning packaging and labelling.

2.9

Regulation (EC) No 304/2003 also provides for penalties in the event of infringement, specifying that such penalties must be ‘effective, proportional and dissuasive’, and are to be determined by the Member States.

2.9.1

In addition, Regulation (EC) No 1907/2006 of the European Parliament and of the Council concerning the registration, evaluation, authorisation and restriction of chemicals (REACH) was adopted on 18 December 2006, and will come into effect on 1 June 2007 (5).

2.10

In its judgments in Cases C-94/03 and C-178/03 (both of 10 January 2006), the Court of Justice of the European Communities established that the legal basis of Regulation (EC) No 304/2003 should have Articles 133 and 175 of the EC Treaty and not on Article 175 alone and that, consequently, the regulation itself was annulled. The Court did however specify that the effects of the regulation would be maintained pending the adoption, within a reasonable period of time, of a new regulation founded on appropriate legal bases.

2.11

The report covering the 2003-2005 period (6), presented on 30 November 2006 in accordance with Article 21 of Regulation (EC) No 304/2003, reviewed the following aspects:

2.12

All the Member States now have the necessary legislation and administrative systems for the implementation and enforcement of the Regulation: 2 273 export notifications have been made to date (more than 80 % of them originating from Germany, the United Kingdom, the Netherlands, France and Spain), while the number of importing countries rose from 70 in 2003 to 101 in 2005.

2.13

Customs control arrangements are the most sensitive part of the system. Closer cooperation between designated national authorities and the customs authorities is needed, with regular exchange of information and clearer provisions, particularly regarding the specific obligations of exporters and the application of improved control instruments to the Combined Nomenclature and the Integrated Tariff of the European Communities (TARIC).

2.14

The Committee agrees that a harmonised approach by the Commission is necessary, aimed at improving the protection of human health and the environment in importing countries, especially developing countries. It also agrees on the need to use streamlined, clear and transparent mechanisms based on smooth, uniform procedures in order to ensure the prompt provision of proper information, free of red tape, to importing countries about EU exports of dangerous chemical products and substances.

3.1

In addition to rectifying the legal bases, which had led to Regulation (EC) No 304/2003 being annulled, the Commission's proposal for a new regulation introduced other changes, in the following areas:

4.1

The Committee restates its full support for Community strategies in favour of sustainable development, including the voluntary SAICM framework (8), and highlights the need for a preventive approach to chemicals management in order to guard against any harmful effects for human health and the environment, as it previously pointed out several times (9) in its contribution to the introduction of the REACH legislation.

4.2

The EESC thus supported the introduction of the REACH system, especially the move to make manufacturers, importers or users responsible for preparing documentation on chemicals with a view to registration and an initial risk assessment; for this reason the EESC supported the establishment of an EU registration system and of a Community body to manage it (10).

4.2.1

In connection with the reporting requirements laid down by the specific rules on dangerous chemicals, the Committee urges the Commission to review the list of products posing a risk to human health and the environment, and to replace them with less dangerous products and preparations wherever practical alternatives have been prepared and tested as a result of technological research and innovation.

4.3

The EESC has always supported the active role played by the European Commission in introducing and implementing the Rotterdam Convention on the PIC procedure for hazardous chemicals and pesticides in international trade, together with the Stockholm Convention on Persistent Organic Pollutants (POP), aimed at eliminating the production and use of certain chemical products, including nine types of pesticide. The Committee has also recently drawn up an opinion on this issue (11).

4.4

The Committee considers that the more stringent provisions under Regulation (EC) 304/2003, which was annulled by the Court of Justice on the grounds of its wrong legal basis, and reinstated in the present proposal for a new regulation (12) are a key element in overall safety and the management of dangerous chemicals.

4.5

The Committee also believes that amendments should be made to the regulatory provisions, to close the operational loopholes and resolve the problems in implementation identified in the 2003-2005 report.

4.6

The Committee therefore supports the Commission's aim to use the opportunity provided by the correction of the legal basis of the regulation in accordance with the Court's judgment (on which the Committee drew up an opinion at the time (13)) in order to increase the effectiveness of the Community instrument by ensuring greater clarity, transparency and legal certainty for both exporters and importers.

4.7

The EESC considers that the legal certainty, consistency and transparency of the proposed new Community legislation should be ensured by means of better definitions of the terms ‘exporter’, ‘preparation’ and ‘chemical subject to the PIC procedure’.

4.8

In order to contribute to the process of simplification, removing red tape and speeding up procedures, the EESC fully supports the provision to allow exports to proceed on a temporary basis, while further efforts are made to obtain explicit consent, together with the provision to waive the consent requirement for chemicals to be exported to OECD countries.

4.9

The Committee also stresses the importance of the fact that requests for consent and period review of consent are to be channelled through the Commission, in order to prevent unnecessary overlaps or duplication, as well as misunderstandings and uncertainty in importing countries. It considers that the financial and human resources allocated to Commission and, in particular, JRC services for this purpose must also be adequate to the task of providing harmonised information and training packages, guides and safety data sheets for the different categories of user and, lastly, a dialogue with the importing countries, especially developing countries, with a view to identifying and clarifying problems arising from import/export notifications.

4.9.1

Given the seriousness of the work accidents sometimes caused by dangerous chemical substances, and in the light of the international conventions of the ILO on this matter (14), the Committee cannot overemphasise the importance of providing labelling information and safety data sheets in the language of the importing country. This would benefit intermediate and final consumers, especially those working in agriculture and SMEs.

4.10

The EESC is convinced that the key to the effective, smooth and transparent functioning of the mechanisms introduced under the proposed legislation lies in the customs control arrangements, and in full cooperation between the customs authorities and the national authorities designated to apply the regulation (DNAs). The proposed improvements, consisting in the inclusion of ‘warning flags’ in the Combined Nomenclature, and the development of a version of the EDEXIM database specifically for customs authorities, must be backed by information and training initiatives that are systematic and harmonised at Community level.

4.11

In the Committee's view, the preparation of practical guides and information documents, as well as training actions based on Community standards, should be stipulated in the new legislation, particularly for the newly-joined Member States.

27.7.2007   

EN

Official Journal of the European Union

C 175/44

1.1

The EESC welcomes the European Commission's proposal to introduce a new Regulation on the placing of plant protection products on the market (fungicides, insecticides, herbicides and similar products for use in agriculture and horticulture).

1.2

In addition to the goal of ensuring that the plant protection products placed on the market are effective and safe, a further top priority objective is to ensure that these products are used in a sustainable and safe way. The EESC therefore welcomes the fact that the European Commission is presenting, together with the proposal for a Regulation under review, a proposal for a Directive regulating the sustainable use of plant protection products.

1.3

The EESC notes that in the preamble to the proposal for a Regulation, strong emphasis is placed on preventing and limiting harmful consequences for humans and the environment arising from the use of plant protection products. It is, in the EESC's view, vital to prevent harmful consequences for the environment and human beings arising from the use of plant protection products. The EESC does, however, draw attention to the fact that, one aspect of an approach geared to ensuring sustainability is that, economic considerations, too, must carry equal weight. In addition to the growing level of interest in organic farming products, the vast majority of present-day consumers is interested mainly in being provided with high-quality products which are, furthermore, available throughout the year and at an acceptable price. The safety of products for consumers is an absolute prerequisite in this context. This requires considerable efforts to be made in the agricultural production value chain. The availability of adequate supplies of good, safe plant protection products is, in this connection, indispensable.

1.4

The EESC expresses its concern over the introduction of criteria for the approval of plant protection products based on the intrinsic properties of the active substances and the consequences which this measure may have with regard to innovation in respect of new and better plant protection products. Rigid application of these criteria may result in a substance which fails to meet one criterion, whilst representing an improvement vis-à-vis all the other criteria, being denied approval. The EESC calls for a risk assessment to be carried out which takes greater account of actual use and exposure.

1.5

The EESC takes the view that the proposed introduction of zonal authorisation and mutual recognition represents a first step along the road towards complete harmonisation of authorisations in Europe. The EESC proposes that mutual recognition of authorisations also be made possible on a cross-zonal basis, in the case of (neighbouring) states where similar climatic and agricultural conditions prevail.

1.6

The EESC supports the principle of carrying out comparative assessments of plant protection products containing substances that are candidates for substitution. The EESC does, however, call for evaluations to be carried out at less frequent intervals and for the normal period of data protection to be applied in the case of the abovementioned substances in order to maintain a degree of readiness to invest in these substances on the part of industry and thereby prevent bottlenecks in the agricultural sector.

1.7

The EESC considers that the proposal for a Regulation contains too few incentives for the authorisation of plant protection products for minor uses. The EESC proposes two measures for improving this situation. Firstly, a system could be introduced under which the initial applicant would be granted a longer period of data protection, the greater the number of minor uses that are included. Secondly, the EESC asks the European Commission to facilitate the drawing-up of an up-to-date list for the benefit of the Member States, setting out all the authorised (minor) uses.

2.1.1

Plant protection products are used to afford protection and to promote plant health. They enable farmers to increase their yield and to make their production methods more flexible. This ensures reliable production of affordable, safe (food) products in local regions.

2.1.2

The vast majority of European consumers is becoming ever more demanding with regard to the quality of food and its availability throughout the year; food safety is regarded as an absolute prerequisite and a self-evident requirement in this respect. As a result, the agricultural production chain is facing major challenges. If it is to be in a position to satisfy the exacting demands of this large group of consumers, it must be able to have available a sufficiently broad package of good, safe plant protection products.

2.1.3

On the other hand, a number of other factors need to be taken into consideration: the use of plant protection products may have an impact on agro-ecosystems; these products may pose risks to the health of users; and they may have an impact on food quality and harmful effects on the health of consumers, particularly in cases where harmful residues of plant protection products remain in food products, as a result of inappropriate use of plant protection products (uses which are not in accordance with good practice).

2.2.1

The proposal for a Regulation under review involves replacing the currently applicable Directive 91/414/EEC on the marketing of plant protection products. This Directive seeks to take action at source in order to preclude risks by making provision for the application of a very comprehensive risk-assessment procedure in respect of each active substance and the products which contain these substances, before these products may be marketed and used.

2.2.2

The proposal under review also involves repealing the current Directive 79/117/EEC prohibiting the placing on the market and the use of plant protection products containing certain active substances.

2.2.3

The EU's regulatory framework for plant protection products also includes Regulation (EC) 396/2005 of the European Parliament and of the Council on maximum residue levels of pesticides in or on food and feed of plant and animal origin and amending Council Directive 91/414/EEC which sets maximum residue levels (MRLs) of active substances in agricultural products.

2.2.4

Together with the proposal for a Regulation under review, a proposal is also presented for a Directive of the European Parliament and of the Council establishing a framework for Community action to achieve a sustainable use of pesticides (COM(2006) 373 final). The aim of this Directive is to regulate the use and distribution of pesticides insofar as these phases are not addressed in the proposal for a Regulation.

2.3.1

In connection with the European Commission's evaluation of Directive 91/414/EEC, the European Parliament and the Council called, in 2001, for the Directive to be amended with a view to:

2.3.2

Following an extensive period of consultation (lasting five years) with all stakeholders and the establishment of an impact assessment, the Commission presented its proposal for amending Directive 91/414/EEC in July 2006. The Commission decided to replace the Directive by a Regulation with a view to achieving simplification and further harmonising legislation in the EU Member States.

2.4.1

A positive list of active substances is to be drawn up at EU level by the Standing Committee on the Food Chain and Animal Health. Approval of the active substances is to be based on a set of clear criteria which will seek to ensure a high level of protection for human beings, animals and the environment.

2.4.2

When active substances are being assessed, there must, as a minimum requirement, be at least one use which is safe for both the user of the product and the consumer and there must not be any unacceptable impact on the environment. Clear deadlines are laid down for the various stages of the assessment and in respect of decision-making on the approval of active substances.

2.4.3

Member States, themselves, will continue to be responsible for the authorisation of plant protection products at national level; these products must be based on active substances included in the list of approved active substances.

2.4.4

When assessing the dossiers submitted in connection with applications for authorisation, the Member States should apply harmonised criteria, if such criteria are available, and take account of national circumstances.

2.4.5

In the case of substances with a low or normal risk profile, the Commission is introducing a system involving mandatory mutual recognition of authorisations for plant protection products within ‘authorisation zones’. Under this system, in any of the three proposed climate zones (the Commission divides the EU into three zones), a Member State takes a decision on a national authorisation for a given product and the product is to be authorised only in those Member States where the producer has also applied for mutual recognition of the authorisation in question.

3.1.1

In the preamble to the Directive the recitals are listed which led to the drawing-up of the proposal for a Regulation. Express mention should also be made, in this preamble, of the importance, in respect of the reliable supply of safe and high-quality food to demanding European consumers, of having available adequate quantities of plant protection products.

3.2.1

The Directive makes no provision for Member States to issue provisional national authorisations. This can delay the marketing of substances which update and improve those currently available. The Commission is endeavouring to tackle this situation by applying shorter deadlines designed to lead to the more rapid inclusion of new substances on the positive list.

3.2.2

The EESC proposes that the Regulation still provides for provisional authorisations to be granted at national level in cases where the set deadlines have been exceeded because of administrative delays and where the obligation in respect of maximum residue levels (MRLs), set out under Regulation (EC) 396/2005, has been complied with.

4.1.1

Article 4 of the proposal for a Regulation deals with the approval criteria for active substances, with reference to Annex II. Strict application of these criteria would result in active substances being denied approval already on the basis of a single property since all the requirements must always be met.

4.1.2

The application of such approval criteria for plant protection products, based solely on the intrinsic properties of their active substances without taking account of actual use and levels of exposure, would undermine the principle that decisions are to be taken on the basis of risk assessments. This situation will result in the gradual disappearance from the market of a number of existing products/applications, which may well be required in order to meet the need to have a broad range of products available.

4.1.3

In this way, Article 4 will prevent the marketing of innovative products which bring about improvements in respect of all criteria but fail to fulfil the requirements in respect of just one criterion. The EESC cannot endorse these provisions since they would unnecessarily curtail innovation in respect of new and better products. It takes the view that the intrinsic approval criteria for active substances should only be used to identify candidates for substitution and not to reject products in advance without carrying out a thorough evaluation.

4.2.1

The EESC believes that the system of zonal authorisation and mutual recognition represents an important step on the road towards establishing a completely harmonised European system for the marketing of plant protection products.

4.2.2

Introduction of compulsory mutual recognition of authorisations in the Member States in respect of same authorisation zone, alongside the standard authorisation procedure at national level, will prevent the duplication of work in the Member States and make innovatory, environmentally-friendly plant protection products available more quickly.

4.2.3

The EESC proposes that provision be made for mutual recognition of authorisations also on a cross-zonal basis, in the case of neighbouring countries having comparable conditions of production.

4.2.4

In the case of the use of plant protection products in greenhouses and in the case of post-harvest treatment, the Commission proposes that provision be made for compulsory mutual recognition by all the Member States in all zones (Article 39). The EESC takes the view that seed treatment, one of the cornerstones of integrated plant protection (IPS), should also be included under this regime.

4.3.1

In the case of plant protection products based on more critical substances (candidates for substitution), Member States are to carry out a comparative assessment within a period of four years from the authorisation of the product (Article 48). This assessment is to be carried out with a view to finding an alternative substance, thereby making it possible to replace the more harmful substances, except in cases where the substance in question continues to be necessary in order to provide ongoing protection in the event of the development of resistance.

4.3.2

The EESC takes the view that (a) the stipulation that comparative assessments are to take place within four years of the granting of authorisation and (b) the seven-year period of data protection afforded to candidates for substitution do not provide the industry with adequate security and will lead to the early withdrawal of such products from the market, with possible damaging consequences as regards the availability of satisfactory products in the case of resistance and minor uses.

4.3.3

The EESC calls for comparative assessments to be carried out at less frequent intervals and for the application of the normal period of data protection in the case of candidates for substitution in order to maintain a degree of readiness to invest in such substances on the part of industry, thereby preventing bottlenecks in agricultural production and bottlenecks further on in the value chain in the direction of the consumer.

4.4.1

Article 49 entitles, amongst others, professional users and professional agricultural organisations to request that the authorisation of a plant protection product be extended to cover minor uses. Under this article, Member States are also to establish and regularly update a list of minor uses.

4.4.2

The EESC welcomes this article but notes that it does not provide holders of authorisations, themselves, with sufficient incentives to seek to bring about extensions of authorisations for minor uses.

4.4.3

The EESC proposes that holders of authorisations be given a bonus in the form of an extension of the period of data protection in cases where, following the granting of an authorisation, they are the first applicants to request several extensions of authorisations to include minor uses.

4.4.4

The EESC proposes that the European Commission facilitates the drawing-up of a centralised European list of minor uses and makes such a list available for inspection by the Member States, in place of the proposed lists to be drawn up by individual Member States under Article 49(6).

4.5.1

Under the proposal for a Regulation, it is possible to make it obligatory to inform any neighbours who have requested to be informed and who could be exposed to the spray drift; such neighbours are to be informed before the product is used (Article 30).

4.5.2

Whilst the EESC believes that transparency with regard to the use of plant protection products makes very good sense, it does, however, take the view that the proposed obligation to provide information would undermine the confidence in the law, on which the marketing of plant protection products is based. We are, after all, dealing here with the use of products which are deemed to be safe and imposing an obligation to inform neighbours could convey the opposite assumption.

4.5.3

The EESC believes that implementation of this article is not conducive to mutual understanding between users of plant protection products and their neighbours; it may, on the contrary, upset social cohesion in rural communities since making it obligatory to inform neighbours may give rise to the impression that the products being used are unsafe. This provision would, in this sense, be counterproductive.

27.7.2007   

EN

Official Journal of the European Union

C 175/47

1.1

The Committee welcomes the proposed Directive which offers a carefully considered and pragmatic approach to moderating and compensating for the rapidly growing volume of greenhouse gases emitted by the aviation industry.

1.2

By bringing aviation within the remit of the European Emissions Trading Scheme (ETS) the scheme is itself potentially strengthened and made more robust as the pre-eminent model for tackling CO2 emissions at a global level.

1.3

The proposal is realistic. It recognises the strength of political, economic and consumer pressures for the continuing development of air travel and transport whilst using the market mechanism of the ETS to compensate for one of the main, damaging external impacts of the aviation industry.

1.4

The proposal is nevertheless vulnerable. It stands or falls with the ETS — a system which has met with criticism from many stakeholders, which has yet to prove itself and which in turn depends on fair allocation of CO2 allowances, imaginative and innovative investment in CO2 reduction and enforcement of National Allocation Plans by Member States.

1.5

The EESC welcomes the inclusion in the scheme of all flights into or out of Europe from 2012 but believes the start date should be 2011 as for European operators.

1.6

It is noted that the Directive allows the entry into the scheme of ‘external’ flexible project credits from the Kyoto Joint Implementation or Clean Development Mechanisms (JI/CDM). Support for carbon reduction, certified renewable energy/energy efficiency schemes in developing countries is positive providing strict auditing is maintained.

1.7

The Committee recognises that this is a complex issue but feels the proposal is somewhat opaque and fails to present its advantages clearly. The proposal appeals in different ways and at various levels to the EU as a whole, to individual Member States, to different sectors of industry and to the public. In particular the positive potential of the Directive to support and reinforce the ETS should be emphasised. It is also noted that active and complementary support will be required from other parts of the Commission, particularly Transport and Energy and Research.

1.8

The EESC therefore recommends that:

1.8.1

The inclusion of aviation in the ETS is used as an opportunity to revise the scheme, correct existing mistakes and strengthen weak areas so that it enables a genuine and effective market in carbon trading to develop — a critical element in supporting the EU's pledge to meet a 20 % CO2 reduction by 2020.

1.8.2

The proposed emissions cap is lowered to require aviation to make an adjustment more comparable with other industries already in the ETS.

1.8.3

The proposed free allocation of allowances to operators should be eliminated or significantly reduced requiring all, or the majority, of allowances to be auctioned.

1.8.4

A common limit on the purchase of credits from JI/CDM schemes is applied to ensure that a high proportion of emissions reductions occur within the EU.

1.8.5

Advance planning is considered for how the effects of the Directive will be presented to the public. Not only will this further raise awareness of the impact of aviation on climate change but it should encourage more openness on the financial implications of the scheme for the customers and operators and minimise the risk of windfall profit-taking.

1.8.6

Member States should be asked to voluntary offset the emissions from flights by Heads of State, Heads of Government or Government Ministers, which are presently exempted for administrative reasons (flights mostly operated by military units), so as to set a positive example.

1.8.7

Complementary work on non-ETS carbon-reduction measures should also be given a very high priority. These include eliminating legal barriers to tax and regulatory steps — particularly on aviation fuel; restricting nitrogen oxide emissions; improving air traffic management and research into greater engine and airframe efficiencies.

2.1

Aviation has been and remains an integral and important part of the expanding global economy. Aviation is, in many ways, a success story. Since 1960 it has grown each year by an average of 9 %, a rate 2.4 times greater than the growth in global GDP. This growth continues and on present trends air transport will double by 2020.

2.2

This success has inevitably created problems such as the growth and local impact of airports but in the context of climate change attention is increasingly focussed on how aviations' greenhouse gas and other emissions contribute to global warming. The aviation industry, as a service sector, provides about 0.6 % of the EU's economic added value but 3.4 % of its greenhouse gas (GHG) emissions. Emissions from aviation in the EU have increased by 87 % since 1990 whilst the EU's total GHG emissions from all sources fell by 3 % in the same period.

2.3

International flights have been historically exempt from fuel tax and are not covered by Kyoto Protocol targets. Taking into account the long working life of aircraft and the possibilities for further technical and operational efficiencies the growth of aviation means the sector will continue to increase its GHG emissions, undermining efforts made in other sectors where reductions are taking place. Although aviation has, by and large, seen great improvements in regulation, coordination and enforcement in matters of safety and security it has been difficult to reach international agreement on environmental issues which may also impact on commercial interests.

2.4

The Commission has been seeking a way to encourage or enforce reduction in aviation GHG emissions for some time. In 2005 it adopted a Communication, ‘Reducing the Climate Change Impact of Aviation’  (1) In April 2006 the EESC in its Opinion on this communication (2) concluded that additional policy measures were needed to control the impact of aviation on climate change and recommended, inter alia, inclusion of aviation in the EU Emissions Trading Scheme. Similar positions were taken by the Council of Environment Ministers, The European Council and the European Parliament. The Commission have now proposed a Directive — the subject of this Opinion — which includes aviation in the Community scheme for GHG emission allowance trading.

3.1

In the introduction to the proposed Directive it is noted that growth in aviation emissions could, by 2012, offset more than a quarter of the EU's environmental contribution made under the Kyoto Protocol. Reaching international agreement on action is proving difficult but the proposed Directive is intended to provide a model for action at a global level and is the only imitative which offers this possibility.

3.2

The present proposal amends Directive 2003/87/EC on GHG allowance trading to include aviation in the Community scheme. An impact assessment accompanying the proposal concludes that whilst emissions trading is the most efficient solution to reducing the climate impact of aviation the impact of the measures would have ‘only a small effect on forecasted demand growth’ and therefore on the volume of emissions (3). It must therefore be understood that this proposal is not designed to restrict the growth of aviation per se but to ensure that some of its damaging environmental impacts are offset by actions mostly in other economic sectors.

3.3

The present EU ETS (4) covers about 12,000 energy-intensive industrial installations which are responsible for 50 % of total EU CO2. Under the proposal airlines will receive tradable allowances to emit certain levels of CO2 each year with an overall cap defined by the average annual level of emissions generated by the aviation industry in the three years 2004-2006. Operators can sell surplus allowances or buy additional allowances on the ETS market, e.g. from industrial installations which have reduced their emissions or from clean energy projects in third countries under the Kyoto Protocol mechanisms.

3.4

The proposed directive will cover emissions from flights within the EU from 2011 and all flights to and from EU airports from 2012. Both EU and foreign aircraft operators would be covered. It is estimated that by 2020 the proposal may add between EUR 1.8-EUR 9 to the cost of a return ticket within Europe and more for long-haul flights, e.g. EUR 8-EUR 40 for a return ticket to New York. The very modest impact of such a charge in the price-elastic airline industry is the reason why the scheme is seen as having little impact on growth.

3.5

It should be noted that the Commission recognises that inclusion of aviation in the ETS is just one of the possible steps that need to be taken at international level to deal with the increasing impact of aviation emissions on the climate. It suggests bringing forward proposals related to nitrogen oxide emissions following an impact assessment in 2008. The International Civil Aviation Organisation (ICAO) is also intending to make further proposals at its assembly in September 2007 though indications suggest that pressure is building to weaken and undermine the EU initiative.

4.1

The EESC welcomes the fact that the inclusion of aviation in the ETS is the first step, at international level, in getting air transport to pay some of the environmental cost it has been externalising since its inception. The inclusion of non-EU operators is also welcomed. In addition the proposed scheme will require aircraft that are less fuel-efficient to use a greater permit allocation, providing a modest stimulus for technical and operational efficiencies. As low-cost airlines have an average 10 % higher load factor than ‘legacy’ carriers the proposal will also have slightly less impact on the low fare carriers whilst encouraging the discounted sale of vacant seats by all airlines.

4.2

The Committee recognises that action on flight pattern efficiencies, alternative fuels, improved design and higher load factors will all make some contribution to reducing the growth of GHG emissions. Nevertheless, most of these measures have been actively applied in aviation since 1990 and yet this period has still seen an increase in emissions of over 85 % — a figure which continues to rise due to the significant increases in passenger numbers and freight carried.

4.3

This Directive proposes to tackle the growing contribution to climate change by the aviation sector by including it in the ETS. The ETS itself provides the only international, market-related large-scale CO2 regulatory and compensatory mechanism but has experienced significant initial problems in its trial phase which ends in 2007. This was largely due to over-allocation of allowances by Member States. For the EU-ETS to meet its objective to be a market instrument of reducing CO2 emissions it is essential that the Commission, supported by all Member States is resolute in determining and applying CO2 quotas and ensuring compliance.

4.4

In practice the inclusion of aviation might be of great benefit to the ETS. Aviation is less price sensitive than most of the industrial process and energy-generation industries currently responsible for the majority of CO2 emissions. As (inevitably) the CO2 share from aviation increases then significant new funds will enter the ETS system providing investment for further carbon savings in other sectors. Whilst aviation itself may have limited capacity to make such savings it can provide a conduit for funds enabling other industries to do so.

4.5

For example, the Commission estimates that the Directive will result in net GHG reductions of 183 million metric tonnes of CO2 by 2020 compared with a business as usual scenario. Projecting the price of carbon during that period is imprecise and depends on a firm allocation regime but if the aviation industry purchased 100 million tonnes during that period at an average price of EUR 30 it would, in principle, inject EUR 3 billion into CO2 reduction.

4.6

The EESC in 2007 has commenced an extensive programme of encouraging action and best practice in civil society on climate change, an integral part of which is to minimise further contributions to GHG emissions. Whilst the Committee recognises that this proposal is, pragmatically, the best approach to the inclusion of aviation in a carbon-reduction strategy it must however point out that the proposed Directive will do virtually nothing to limit the ever-increasing output of GHGs by the air transport sector. This creates a major ‘presentation’ problem. The aviation industry is already the fastest-growing source of GHG emissions in Europe and this Directive indulges the industry in its insistence on growth without requiring a limit to emissions. The public will need to understand that the Directive can stimulate significant resources, which will be applied to compensatory CO2 reduction.

5.1

In terms of achieving the stated objective of significantly cutting emissions from the industry the proposed Directive is terminologically inexact. As airlines can buy allowances at ‘market’ rate to cover emissions above the capped allocation the effect on reducing GHGs from the aviation sector will be minimal, estimated at a possible 3 % net reduction by 2020, or less than just one year's growth in GHG emissions from aviation. From the Commission's own figures it can be seen that the marginal cost increase in ticket prices will have little effect on the demand for air travel.

5.2

By issuing the great majority of initial allowances free of charge to airlines and allowing top-up purchasing within the general ETS (an open as opposed to a closed system for air transport — or possibly for transport as a whole) the Commission accepts the status quo and does little to affect the continued and rapid growth of a GHG-emitting aviation sector. However the heart of the problem is that such a restriction is currently politically and economically unacceptable. To make any progress the Commission has calculated that not only will the inclusion of aviation in the ETS drive some internal carbon reduction efficiencies but it will also, by balancing-off increased CO2 emissions from aviation by reductions in other sectors, provide genuine market stimulus and finance for new research and applications for CO2 reductions elsewhere.

5.3

The Commission notes that a ‘closed’ system of trading allowances — i.e. within the aviation sector only — the allowance price would be EUR 114-EUR 325 as opposed to the assumed EUR 30 per tonne. Such a closed system is likely to increase ticket prices by EUR 8-EUR 30 for a short haul flight. Whilst this may be thought a more realistic way of affecting both demand and supporting fuel efficiency and research into emission minimisation it is unlikely to be supported at EU level where there is evidence of differing transport priorities. A closed or ‘transport only’ system would make a global agreement even more unlikely.

5.4

In the proposed Directive the Commission has recognised but decided not to take account of the well-researched analysis that aircraft emissions are between two and four times more damaging to the climate than those from other industries (5). (This is largely because most emissions take place in the upper atmosphere and due to the effects of non-CO2 emissions such as condensation trails and nitrogen oxides) Complementary action must be taken on reducing or compensating for nitrogen oxides.

5.5

Airlines already benefit from the exemption of aviation fuel from taxation and the free distribution of initial allocations of carbon allowances will further increase their state-supported advantages over other transport sectors. There is a risk that operators use the introduction of the ETS scheme to raise prices across the board. A clear presentation by the Commission to the public of the real financial impact of the scheme on industry costs may mitigate unjustified profit-taking.

5.6

Further thought should be given to the ‘exclusions’ proposed in the Directive. For example the exemption of flights by Heads of State, Heads of Government or Government Ministers is particularly inappropriate as this group should be setting a good example. Although there are administrative reasons for offering this exclusion (flights operated by the military units mostly) Member States should be asked to voluntarily offset these emissions, as some have already decided to do.

5.7

As the Commission has opted for an open top-up system there seems little justification for not bringing the baseline date of the scheme into closer alignment with the current EU commitment for the first phase of the Kyoto Protocol (an 8 % reduction between 2008-2012 from 1990 levels) and future commitments (e.g. 30 % by 2020 from 1990 levels). The choice of 2005 as the base reference year already allows the sector a ‘starting point’ already some 100 % higher than Kyoto. Of course, taking into account that the aviation is the first transport sector introduced in the EU-ETS, it is only fair to make initial allocation on the same principles as introduced in the EU-ETS rules.

5.8

This Directive is unlikely to achieve any significant impact on slowing the increase of total aviation emissions. Nevertheless the fact that it may stabilise net CO2 emission through the ETS and in doing also provide resources for further reductions goes a long way towards justifying the cost and administrative complexity of implementation. The proposed Directive does more than offer an environmental fig-leaf to the aviation sector — it may positively increase public awareness, offer significant new carbon-reduction resources and provide a measure for internalising those external environmental costs which hitherto the aviation industry has been able to ignore.

27.7.2007   

EN

Official Journal of the European Union

C 175/53

1.1

The EESC believes that the aims of the reform, if they are pursued as a whole, can form the basis for a coherent policy for developing this important sector of the European Union's agricultural, industrial and food economy.

1.2

The EESC welcomes the confirmation of the pivotal role of producer organisations in the Common Market Organisation of the fruit and vegetable sector.

1.3

The EESC considers financing to be an essential part of a coherent policy capable of ensuring the competitiveness of the European fruit and vegetable sector; it therefore calls on the Commission to think more carefully about the financial impact of the innovations it is introducing, positive and laudable though these are.

1.4

The EESC believes that the introduction of new and significant measures into the operational programmes will lead to an objective reduction in resources available for investment and employment.

1.5

The EESC supports the Commission's strategy aimed at turning the entire first pillar into a consistent and balanced whole by 2013; to this end, it calls on the Commission to put in place an appropriate transition programme for the fruit and vegetable sector so as to bring all the operators in the sector up to speed with the new system and, at the same time, to ensure that European consumers enjoy security of adequate supply in terms of quality and quantity.

1.6

The EESC welcomes the Commission's policy aimed at actively protecting the environment; with this in mind, it recommends flexible measures that reward the practices and approaches of the various operators. As regards promoting the consumption of fruit and vegetables by certain categories of consumer, it recommends a more definite strategy as part of the horizontal support policy.

1.7

The EESC recommends that the marketing standards aimed at protecting consumers be maintained, in particular those on food hygiene and the origin of produce.

2.1

The Commission sets out the following objectives:

2.2

The architecture of the reform is based on three key pillars:

2.2.1

The Commission states that the above-mentioned objectives have been identified taking into account the need for WTO (World Trade Organisation) compatibility; consistency with the reformed CAP, and conformity with the financial perspectives.

2.2.2

The Commission points out that EU-27 fruit and vegetable production accounts for 3.1 % of the Community budget and 17 % of total EU agricultural production.

2.2.3

The resources the proposed reform allocates to fresh fruit and vegetables remain at 4.1 % of the value of the marketed production of the PO, whilst the national maxima for processed produce are transferred to the Single Farm Payment (SFP) in accordance with the historical values for each country and, for the new Member States, in accordance with those set by the accession treaties.

2.2.4

In regions where the degree of organisation of producers is particularly low, additional national financial assistance may be authorised.

2.2.5

The co-financing rate of operational programmes is maintained at 50 %, except for some particular cases, where it may rise to 60 % (transnational actions, schemes operated on an interbranch basis, organic production, producers in new Member States, mergers of POs, outermost regions, regions where less than 20 % of production is organised).

2.2.6

Withdrawals of up to 5 % of production, for distribution to charitable organisations and foundations, penal institutions, schools, children's holiday camps, hospitals and old people's homes, may be 100 % financed by the Commission.

2.2.7

Provision is made for abrogating Article 51 of Regulation 1782/2003 and thus for the eligibility of fruit and vegetables for the SFP.

2.2.8

Member States are to establish reference amounts and eligible hectares under the single payment scheme (SPS) on the basis of a representative period appropriate to the market of each fruit and vegetable product and of appropriate objective and non-discriminatory criteria.

2.2.9

The Commission provides that at least 20 % of the total expenditure of each operational programme must be dedicated to agro-environmental measures.

2.2.10

The proposal does not affect the existing rules on external trade; however, it does propose the abolition of export refunds.

2.2.11

Part of the regulation of the fruit and vegetable sector provided for in the proposal was previously included in the proposed regulation on a single CMO (currently being considered by the Council).

2.2.12

In its proposed reform, the Commission also provides for a subsequent review of marketing standards, relating in particular to quality, grading, weight, sizing, packaging, wrapping, storage, transport, presentation, marketing and labelling. The Commission proposal confirms the key role of producer organisations in the fresh fruit and vegetable sector by:

2.2.13

The proposal recognises interbranch organisations and provides for the rules for members of POs to be extended to producers who are not members of POs if the latter cover at least 60 % of the production of the area in question.

2.2.14

The Commission proposes that Member States establish a national strategy to enable POs to assess the effectiveness of the operational programmes.

2.2.15

Obligatory promotion actions targeted towards young people under 18 are proposed within each operational programme.

3.1

The EESC believes that the aims of the reform, if they are pursued as a whole, can form the basis for a coherent policy for developing this important sector of the European Union's agricultural, industrial and food economy. Indeed, the Commission itself, in its ‘reasons for reform’, states that ‘of the 9.7 million agricultural holdings in the European Union (EU) of 25, 1.4 million produce fruit and vegetables. The sector farms 3 % of the cultivated area and produces 17 % of the value of EU's [sic] agricultural production. The sector is faced with pressure from the highly concentrated retail chains and with increased competition from third country products. […] The sector receives about 3.1 % of the Common Agriculture's [sic] budget.’ (1) For its part, the EESC points out that the fruit and vegetable sector provides the highest level of employment in proportion to surface area used. Moreover, the fruit and vegetable sector faces an internationally competitive environment (WTO negotiations, Euromed free trade area in 2010), which will have an increasing impact on the development of European fruit and vegetable production.

3.2

In addition, the European Court of Auditors, in its special report 8/2006 entitled Growing success? The effectiveness of the European Union support for fruit and vegetable producers' operational programmes, whilst taking a critical look at the operation of producer organisations and also finding a ‘significant advance on the initial situation’, called for better monitoring of the effectiveness of aid, and asked for ‘better target[ing of] the policy’ so as to strengthen POs.

3.3

The EESC points out the discrepancy between the stated objectives and the financial resources — a key component of a coherent policy — made available for the realisation of those objectives; this confirms an imbalance in the CAP as regards production in the Mediterranean.

The EESC notes that the Commission has made its proposals within the constraints of a budget that has not been increased. It also notes that by abolishing market withdrawals and export refunds, the Commission is bringing about an increase in the resources potentially available for future operational programmes, but that these resources risk being left unused and will not be available for investment by more efficient POs.

3.4

The EESC further notes that the proposal a) introduces new, politically and economically highly significant measures (management of market crises, environment policy, promoting consumption) into operational programmes and b) raises (to 60 %) the co-financing of certain measures that are considered strategic.

This innovative policy, combined with the maintenance of the upper limit to Community aid for operational programmes of 4.1 % of the value of the production marketed by each PO, results, de facto, in a reduction in the resources available for investment.

3.5

The Committee also notes that the introduction of total decoupling of support for processed products could very likely lead to a reduction in the value of marketed production and, consequently, a reduction of aggregate financial resources compared to the current situation.

3.6

For all these reasons, the EESC believes it necessary to introduce at least three corrections, whilst keeping to the principle of genuine budget neutrality:

3.7

However, the EESC notes the Commission proposal to entrust crisis management to POs and calls on the Commission to put in place transparent criteria for crisis management to support non-member producers and ensure that the instruments made available for this purpose can be used by all producers, so that any intervention in the event of a crisis will be effective and enable the markets in question to recover.

3.8

The EESC is aware that the Commission has repeatedly stated its long-term strategy aimed at bringing all the CMOs into the SFP scheme by 2013. The Committee believes that it would be possible, inter alia in keeping with the reforms approved to date, to have an adequate transition period, taking into account the specifics of each Member State and of the various products. The EESC is well aware of the consequences of a hasty approach, which would be disruptive to employment and to the processing industry, which needs to embark upon a complex restructuring strategy — possibly including plant closures — for which the proposed reform does not provide for any specific support measures.

3.9

The Committee also notes that the Commission, in order to comply with the WTO, considers it necessary to replace Article 51 of Regulation 1782/2003. This will bring about additional competition within the sector between established fruit and vegetable producers and potential new producers. In order to avoid artificial distortions of the profitability of the sector, the EESC considers it essential to allow — for a transitional period — Member States to keep Article 51 in force selectively for certain sensitive products, or to provide for new rights for those fruit and vegetable producers whose past production did not generate any.

3.10

The EESC notes that the Commission, in the context of trade with third countries, proposes the abolition of export refunds for the sector, and points out that this is another aspect of EU policy that takes a generally piecemeal, not entirely consistent approach to the various sectors of agriculture. It also calls on the Commission to avoid making any commercial concessions that would weaken the principle of Community preference, and to ensure that tariff quotas are administered rigorously and maintain the special safeguard clause, not least because the EU is the world's biggest importer of fruit and vegetables, over 70 % of its imports come from countries that benefit from preferential trade agreements, and the sector includes so-called sensitive products.

3.11

The EESC, whilst it supports the aim of moving towards simplification, believes that maintaining marketing standards is vital, both for the protection they afford to consumers in terms of the safety and origin of the product, and because of the important role that they play in regulating the market. To this end, the EESC stresses the importance of the EU successfully introducing traceability, as a basic measure for managing risks to public health and plant protection, into the standards governing international trade.

3.12

The EESC also highlights the need for the European Union to promote, at international level, the introduction and recognition of environmental and social standards with respect to workers employed in the production process.

3.13

The EESC welcomes the Commission's policy aimed at actively protecting the environment. In this regard, the EESC believes that, rather than setting limits and fixed percentages, it would be more effective to use an incremental co-financing method, starting from a mandatory minimum, aimed at rewarding operational programmes oriented towards those objectives.

3.14

As regards promoting the consumption of fruit and vegetables by certain categories of consumer, the EESC supports the emphasis placed on this objective by the Commission. It therefore calls on the Commission to draw up a specific promotion strategy within the scope of horizontal support policy, but is doubtful as to the effectiveness of making promotional measures, which will inevitably be limited in scope, mandatory within operational programmes.

4.1

The Committee points out that the Commission's proposal does not resolve the problem facing producers of red fruit for processing. The EESC believes it would be useful to create a system of direct support for producers of red fruit for processing, as is the case for other fruit and vegetables grown for processing (e.g. dried fruit).

4.2

The EESC welcomes the inclusion of culinary herbs among the products for which a PO may be set up and calls upon the Commission to ascertain whether the list set forth in its proposal meets the needs of all EU regions.

4.3

Based on comparable past experience in distribution for charity, the Committee would call the Commission's attention to the need to provide for fast and effective implementing measures.

4.4

The EESC calls on the Commission also to consider including non-food uses in measures relating to free distribution.

4.5

The EESC calls on the Commission to consider the particular difficulties faced by producers in the new Member States in co-financing crisis management.

4.6

The EESC believes that setting a minimum limit of direct sales by producers is contrary to the aims of the reform, and suggests that the wording of the previous regulation be kept.

4.7

The EESC is not opposed to the idea of the Member States framing a national strategy for operational programmes, inter alia to make best use of existing public bodies; however, it believes that these national strategies should be voluntary for the Member State concerned and should not lead to the drawing-up of new lists of positive actions at national level.

4.8

In addition, the EESC notes that, in some cases, Community policy facilitating group supply, including by merging POs, may prove to be in conflict with Community or national authorities' measures to safeguard competition. It therefore calls for the European dimension of the fruit and vegetable market to be taken into account when implementing competition rules.

4.9

The EESC proposes that the Commission set up a Community observatory on pricing and marketing practices, with the aim of improving market transparency for the benefit of all stakeholders.

4.10

Given that the proposed reform establishes an independent Common Market Organisation for the sector, the EESC calls on the Commission not to include additional standards relating to the fruit and vegetable sector in the regulation on the Single CMO.

27.7.2007   

EN

Official Journal of the European Union

C 175/57