9.5.2006   

EN

Official Journal of the European Union

C 110/1

1.1

Tourism contributes substantially to the EU's economy, accounting for 5.5 % of GDP (with this figure varying from 3 % to 8 % according to the Member State) thanks to the activity of over two million businesses employing approximately nine million people. Tourism is also a powerful driving force for other sectors of the economy, including industry (particularly fashion-related sectors), transport, agrifood, trade and other types of services.

1.2

Over 80 % of European tourism is generated by individuals and families, while the rest is business tourism derived from companies. European families dedicate about an eighth of their personal expenditure to tourism-related consumption.

1.3

Europe is still the most popular tourist destination in the world. Indeed, flows of tourists to the European Union are constantly increasing from Russia, China and India, where economic development is rapidly giving more of the population access to this kind of consumption.

1.4

Despite these initial encouraging facts, strong competition from new emerging economies affects the European tourism sector more and more each year. The aim of this own-initiative opinion is to draw the European institutions' attention to the boost which culture can give tourism in Europe, and to call on them to promote and protect Europe's cultural heritage. Unlike other industrial sectors, this heritage cannot be relocated or reproduced, and it could thus be a trump card in the face of competition from other areas of the world.

1.5

As part of the process of drawing up this opinion, a number of meetings were held with the heads of the various Commission directorates-general concerned with the issue of tourism and culture and with European Parliament representatives. In addition, a public hearing was held on 18 November 2005 at Paestum, one of the most evocative archaeological sites in Italy, in which many representatives of public institutions, international organisations (UNESCO), cultural associations and private tourist companies took part. The hearing was held in conjunction with the ‘Eighth Mediterranean archaeological tourism fair’, making it possible for representatives from countries on the southern side of the Mediterranean to participate as well.

2.1

The March 2005 European summit called upon the Commission, the Council and the Member States to relaunch the Lisbon Strategy for growth and employment and to take an active part in the attainment of its objectives: tourism and culture can clearly make a substantial contribution to both growth and employment. Indeed, as regards growth, tourism looks set to be one of the fastest developing economic sectors in the coming years: an average annual growth rate of 3.1 % is expected between 2006 and 2015. In terms of employment, too, tourism is an industry which is well placed to make a significant contribution to combating unemployment. As the industry employs a large number of women, it can also help in the achievement of the Lisbon Strategy objective of raising the number of women in employment (1). Although European tourism is expected to double over the next 25 years, its growth rate is lower than the world average, and, in particular, lower than the growth rates of some regions of emerging countries. Appropriate initiatives are necessary from all the institutions if the EU's tourism sector is to expand still further and be restored as the fastest-growing tourism sector in the world.

3.1

One of the fastest growing areas of the tourism sector is cultural tourism — tourism connected with art and nature, art heritage cities and areas with a particularly high concentration of historical assets and local traditions. This opinion aims not to address all culture-related issues but to assess the potential contribution of culture to tourism.

3.2

In this specific segment of the tourism sector, the European Union is particularly fortunate in that it has a greater concentration of cultural assets than any other area in the world. Indeed, 300 of the 812 UNESCO World Heritage sites of cultural and natural heritage recorded in 137 countries are located in the 25 EU Member States. The figure rises to 331 (2) if the four candidate countries (Bulgaria, Croatia, Romania and Turkey) are taken into account. The second European Cultural Tourism Network annual conference revealed the very significant fact that the flow of visitors to Europe from China and India is entirely due to the interest that people from those countries have in European cultural and architectural heritage. The EU and the Member States must therefore invest in preserving their wealth of cultural heritage and promoting cultural tourism.

3.3

Economic benefits aside, cultural tourism also has a key role to play in developing social and civil values and in fostering European integration and the dialogue between peoples and cultures. The development of the European identity hinges on a deeper knowledge of the countries, cultural traditions and ‘differences’ which make up the rich European tapestry. Today, as Europe faces something of an identity crisis, promoting European cultural values could convey optimism and confidence as regards the Union's future (3).

3.4

Furthermore, particularly at this difficult time for multiculturalism, the EU must undertake to foster cultural and religious dialogue with other peoples, including by promoting cultural tourism. The EU's decision to make 2008 the European Year of Intercultural Dialogue is therefore particularly timely.

3.5

Developing cultural tourism, highlighting the historical and social context of European art heritage and enhancing environmental heritage will give tourists from all countries a genuine understanding of Europe's cultural history.

4.1

The European Union has for some time been active in the area of tourism and protecting and promoting cultural heritage, although it has never been able to finance tourist activities directly for lack of a legal basis. Now, at last, a legal basis has been provided for in the draft of the new Constitutional Treaty, although, regrettably, the Constitutional Treaty has yet to be ratified. The approach hitherto adopted by the EU with a view to maximising the potential of tourism has essentially been horizontal: sometimes the Structural Funds have been used to promote tourism and sometimes it has benefited from the knock-on effect of projects relating to other sectors, such as the environment or research. Although this may seem positive, the fact that it is difficult for DG Enterprise and Industry (tourism unit) to achieve effective coordination with the other directorates-general that are directly or indirectly concerned with tourism, is in danger of nullifying any beneficial effects of the various European initiatives for the sector.

4.2

With regard to the Structural Funds, in the period 2000-2006 the EU allocated approximately EUR 7 billion to projects directly or indirectly linked to the tourism sector and some EUR 2 billion to cultural projects (Interreg III, Leader+ and Urban programmes). A total EUR 9 billion of funding was thus earmarked for tourism and culture, but it may not be properly exploited because the level of coordination in managing these two respective sectors financed by the Structural Funds leaves something to be desired.

4.3

Particularly successful EU initiatives to promote cultural heritage include the European Capitals of Culture (ECCs) project. A recent study (4) commissioned by DG Culture states that this programme has led in the year of the event to an average increase of 12 % in tourism in cities awarded the title of European Capital of Culture and in the following year to tourist flows which were still higher than the average for the years preceding the event. According to the same study, the growth potential generated by the event is still high but is worth exploiting more. To this end, DG Culture has drawn up a new proposal advocating the future adoption of new, clearer criteria for selecting the candidate cities, encouraging competition and emulation between them, stressing the need for cultural programmes to have a European dimension and be sustainable and, lastly, promoting the dissemination of good practice in the management of cultural events. The proposal also calls for the EU's contribution to the European Capital of Culture, currently set at EUR 500 000, to be trebled.

4.4

In early December 2005, the EP Committee on Budgetary Control, in line with the objective of promoting the potential of tourism and culture as much as possible, approved for the first time the appropriation of EUR 1 billion for the development of a project promoting European destinations of excellence.

4.5

For its part, the Commission's DG Enterprise and Industry has set up a Tourism Sustainability Group (TSG), which includes experts representing the institutions and different categories of operators, with the task of drafting proposals to the Commission for achieving sustainable tourism as a step towards drawing up an Agenda 21 for European tourism by 2007. The EESC agrees with the Commission and the European Parliament that sustainable tourism is the only form of tourism that should be promoted, and that alone.

4.6

Moreover, at the fourth European Tourism Forum, held in Malta on 20 October 2005, Commissioner Günter Verheugen announced the launch in early 2006 of a European tourism portal, which will provide access to the websites of national tourist organisations in order to promote European tourist destinations to the rest of the world more effectively.

4.7

Lastly, the Commission's DG Enterprise has just launched a study on The impact of cultural and sporting events on tourism-oriented SMEs, while DG Culture has launched a study on the cultural economy in Europe.

5.1

Aware of the importance of the tourism sector for Europe, the European Economic and Social Committee has, for some time, been active in tourism-related areas such as tourism policy in the enlarged EU, tourism and socio-economic recovery of areas in decline, tourism and cooperation between the public and private sectors, tourism and sport, etc. (5)

5.2

Together with the two papers referred to in point 4.7 and the opinions referred to in point 5.1, this opinion seeks to contribute to the formulation of future tourism policy guidelines at European level.

6.1

The promotion of cultural values should primarily target the people living in an area, who must become more aware of the wealth of local historical, art and environmental heritage (6). Indeed, once familiar with local heritage, they can play a valuable role in preserving and promoting their area, supporting the work of the public authorities.

6.2

To encourage widespread cultural awareness, programmes need to be introduced in schools which inform young people about local historical, art and environmental heritage, together with initiatives which give young people a leading role in exploiting it (7).

7.1

If cultural tourism is to be promoted effectively and appeal even to the ‘culturally indifferent tourist’, the various segments need to be analysed and developed, and trends and opportunities for further development identified. The main segments of cultural tourism are: art heritage, exhibitions, shows and other events, food and wine and rural tourism, film tourism and cultural theme parks.

7.2.1

The most traditional segment of cultural tourism is ‘physical’ art heritage, consisting of historic city-centres, museums and archaeological sites. The priority for this segment is to encourage greater integration between the management of cultural assets and the management of tourist facilities so as to encourage tourists to ‘exploit’ this heritage. The approach must be one of integrated ‘cultural tourism’ facilities, to encourage the integrated management of combined arts-and-environment facilities, even where these are owned by different public authorities or private individuals, or to promote opening-hours and pricing policies which make the sites as accessible as possible and generate more revenue so that management costs can be covered. Moreover, cultural heritage needs to be ‘brought to life’, for instance by mounting temporary exhibitions in museums, palaces or castles of historic interest, with particular focus on the promotion of contemporary art.

7.2.2

There have been interesting schemes such as, for example, the ‘tourist passes’ introduced by a number of European cities which combine transport services and access to museums and archaeological sites.

7.2.3

‘Cultural districts’ are particularly suited to smaller centres of art heritage, which integrate tourist and cultural services in regions made up of a number of similar districts, combine public and private funding, and are promoted as a single entity. Moreover, the EESC believes that it would be beneficial for regional tourist organisations to work together to develop and create cultural districts, including across borders.

7.2.4

Moreover, ‘networks’ (8) or itineraries of cultural sites should be set up in different countries, such as networks of castles or palaces of historic interest, archaeological sites (such as the Magna Grecia network of cities) (9) or networks of particular types of museums, including ‘enterprise museums’, or trans-European itineraries (10) such as the Via Francigena. These networks and itineraries should be identifiable by means of a single mark and be properly signposted, and their components should be promoted together. The reception facilities provided should also be the same, where possible.

7.3.1

Another major segment of cultural tourism is events: exhibitions, concerts, festivals and other special events. Over the past 10 to 15 years, cultural events have become powerful driving-forces in promoting tourism. Increasing numbers of fans, particularly young people, travel to visit major exhibitions, to attend concerts and festivals and to take part in special events such as the ‘White Nights’ which are becoming popular in many cities such as Paris, Versailles, Brussels, Rome, Vienna and Warsaw.

7.3.2

To enhance this segment, infrastructure needs to be created or adapted to provide sites suitable for exhibitions and festivals; planning is also necessary in the field of advertising and information campaigns. The European Union could facilitate the creation of a single calendar of cultural events, promote cooperation between different countries and cultural institutions and, lastly, encourage initiatives in countries which have less experience and fewer traditions in this field, particularly the ten new Member States.

7.4.1

A third major segment of cultural tourism is linked to food and wine customs in the different countries: this is a segment of ‘material culture’ which has become increasingly significant in recent years and has generated a genuine cultural and economic movement promoting typical local products (11).

7.4.2

Here, too, the creation needs to be encouraged of ‘food and wine itineraries’ that include art and cultural attractions, promoting an integrated package of cultural visits, food- and wine-tastings and experiences of rural life, thus combining the history of art with an experience of typical food and wine traditions from a particular region or area.

7.4.3

The European Union could promote a European guide to food and wine itineraries and rural tourism, focusing in particular on cross-border itineraries which combine the traditions of two or three countries: this would help to highlight the common roots underlying many traditions and ‘differences’.

7.5.1

A fourth segment of cultural tourism which is emerging as a substantial source of tourist flows is linked to film and television-serial productions. Many regions are seeing the number of tourists increasing as more and more people visit sets and places which have played host to successful films and TV productions. Thus, for instance, Alnwick Castle in Northumberland (North of England), which was the setting for the films based on J. K. Rowling's Harry Potter novels, created a tourist flow of EUR 13 million per year almost overnight, making it one of the top tourist destinations in the UK. The same thing happened in Italy at Agliè Castle in Piedmont, where the television serial Elisa di Rivombrosa was filmed: the average number of visitors per week to the castle increased from 100 to 3 500. Moreover, the effect of fame even applies to films which are still at the production stage: the small city of Lincoln in England where the film The Da Vinci Code, based on the best-seller of the same name by Dan Brown, is being shot has already attracted large numbers of tourists, while tour agencies have sprung up in Paris running tours solely of the places described in Brown's novel.

7.5.2

According to a survey carried out in August 2005 in the UK, 27 % of adults and at least 45 % of young adults between the ages of 16 and 24 are influenced when deciding where to go on holiday by films they have seen in the cinema or on television. That is why VisitBritain, a body promoting British tourism, follows film productions very closely and publishes very detailed movie maps on its website showing all the places where new productions are being filmed, how to get there and the tourist facilities available.

7.6.1

A fifth segment of cultural tourism could be linked to the creation of historical and art theme parks which supplement visits to museums, historic city-centres and archaeological sites. The parks, which could be built near famous tourist attractions, should be an auxiliary facility to help visitors understand properly the history in which they are being ‘immersed’ (12). Similar parks could be built in major European cultural districts (13) and the EU could encourage the building of this ‘info-tainment’ (information and entertainment) infrastructure, which could be an additional attraction for tourists.

8.1

New information and communication technology has many contributions to make to the exploitation of cultural heritage for tourism purposes: creation of websites and satellite and digital television channels, use of audio and video clips for latest-generation mobile phones, reconstructions of monuments and sites of historical and artistic interest using virtual reality techniques (14).

8.2

New technologies could be applied in this particular area to encourage sustainable tourism and protect the most popular art heritage sites which are in danger of being damaged by mass tourism: information technology could provide new ways of scheduling, monitoring and sorting tourist flows, and environmental factors (such as humidity in museum rooms) which can damage works of art could be controlled automatically. In addition, the use of on-line-booking and visit-by-appointment systems could encourage people to visit sites which can only accommodate a small group of tourists at a time.

8.3

Lastly, modern technology has a valuable contribution to make in helping to create structures and systems that overcome architectural barriers, which are all too often an insurmountable obstacle for the less agile. This must not be overlooked.

8.4

The European Union, which stated in its Seventh Framework Programme for Research and Innovation that the results of research could be used to benefit the tourism sector and encourage access to cultural heritage, could facilitate the practical implementation of initiatives of this kind, maybe drawing up a list of available technologies and a map of best practices at Community level which could provide useful information for operators in the various countries.

8.5

The use of technology is essential to promote cultural tourist destinations both within and outside the EU. Here, too, the initiatives under way in the different countries should be recorded. The European Union could, moreover, supplement the European tourism portal with a satellite TV channel promoting tourism in Europe to countries outside Europe.

9.1

An effective system of exploitation of cultural heritage for tourism purposes raises the issue of governance of cultural assets. Some of these are public property (state or local authority), while others belong to religious or non-profit organisations or are privately owned. The situation is particularly sensitive in a number of new Member States, where the forced nationalisation of previous decades has created uncertainty as regards property rights and caused a considerable drop in the level of conservation of much cultural heritage.

9.2

Models of governance should therefore be adopted which, while respecting the current ownership structures of artistic and cultural heritage and providing the greatest possible protection and preservation guarantees, allow coordinated management of integrated cultural tourist facilities and encourage sharing of public and private investment, including by means of appropriate tax incentives.

9.3

The European Union could carry out a survey of systems of governance in the different European countries to assess their effectiveness and encourage dissemination thereof in other countries, or it could propose innovative tax and other systems fostering public-private cooperation in management.

9.4

Linked to governance is the issue of training: staff working in cultural heritage sites now, in addition to knowledge of art history, have to have management and marketing skills and be able to use new technologies, and those who have direct contact with tourists such as hoteliers, shopkeepers, public services staff etc., as well as having language skills, should be trained in ‘savoir faire’ and to respect cultural differences among tourists. Here, too, the European Union could record the most cutting-edge training expertise in the sector in order to facilitate exchanges of expertise, benchmarking and the dissemination of best practices, with a view to encouraging high-quality tourism.

10.1

Effective management of cultural tourism can benefit other tourism segments too, such as seaside and mountain tourism and even business tourism and tourism for the older public.

10.2

The presence of art itineraries, exhibitions, concerts, festivals or venues for food- and wine-tasting could encourage tourists to select particular European destinations and could help these resorts to cope with competition from tourist destinations in developing countries, which, while more competitive in terms of natural resources and prices, cannot match the cultural attractions offered by their European counterparts.

10.3

Similarly, where business tourism is concerned, the opportunity to combine a business trip with cultural tourism may lead to the trip being extended by a few days (perhaps to include a weekend) or even becoming a family vacation in which a spouse or children are included.

10.4

Given that life expectancy is now much higher than in the past, cultural tourism meets the needs of an ‘older’ public which is choosing to spend an increasing amount of its leisure time learning about and familiarising itself with new cultures. This also ties in with the need to promote tourism during low-season periods of the year.

10.5

There is no doubt that the European Union can also act as a driving force in this endeavour to promote the integration of cultural tourism and the other tourism segments.

11.1

Given that culture can help to boost the development of tourism, especially since, as well as being a driving force for other sectors of the economy, tourism has a significant contribution to make to the achievement of the Lisbon Strategy goals of growth and employment, the main aim of this own-initiative opinion is, as stated above, to provide the European institutions with additional tools for promoting the sector, which is still dynamic but faces stiff competition from countries outside Europe.

11.2.1

If European cultural tourism is to be exploited effectively, more effective information and integrated advertising campaigns publicising Europe and European destinations are needed; at the same time, best practices need to be facilitated in the areas of protection, exploitation, governance and training. The European tourism portal will doubtless be very useful here, particularly if:

11.3.1

The European Union could use competitions and reward schemes in its programmes in order to promote best practices in the management of cultural tourism services, particularly in the European Capitals of Culture programme (15) and the future European destinations of excellence programme. The EU could also provide advice for cities and regions which decide to apply for these two programmes, and grant them more substantial funding than at present and maybe fast-track Structural Funds appropriations for them. At national level, it would be worth encouraging healthy competition between the cities and cultural tourism destinations applying to take part in the two programmes by applying criteria defined at European level: governance systems, cooperation between public and private sectors, integration of tourist and cultural services, advertising and information campaigns publicising events, etc. for European Capitals of Culture; and sustainability, extension of the tourist season, decongestion, governance systems, cooperation between public and private sectors, integration of services, etc. for European Destinations of Excellence.

11.4.1

Fostering intercultural dialogue, both within the EU (particularly with a view to the future accession of the four candidate countries) and between the EU and other areas of the world, must be a priority in cultural tourism programmes too. In this perspective, as has already been stressed, the decision to make 2008 the European Year of Intercultural Dialogue is extremely timely. Nevertheless, even before 2008 it would be useful to launch a series of projects targeting schools, for example, by extending international exchange programmes such as Erasmus to secondary school pupils and encouraging twinning between classes from different countries. Specific projects fostering intercultural dialogue could also be introduced for older people. Thus, 2008 would be a show-case year for current initiatives and could spawn further initiatives.

11.5.1

Since the EU has no direct operational tourism instruments due to the regrettable lack of a legal basis, it could usefully take action to enhance coordination in the area of management, to promote current and future projects for the sector. The EESC would advocate the creation, as soon as possible and with due regard for the subsidiarity principle, of a European tourism agency which could act as a European tourism monitoring centre and provide the Community and the Member States with reliable and comparable data on tourism. This has already been proposed in the earlier own-initiative opinion on Tourism and sport: the future challenges for Europe.

11.6.1

The EESC welcomes the proposals made by Commissioner Günter Verheugen at the Fourth European Tourism Forum in Malta and by the recent European Parliament resolution (16) to entrust DG Enterprise and Industry with the task of coordinating the various Community initiatives affecting the tourism sector.

11.7

The EESC has called this opinion the Paestum Declaration, recalling the public hearing held last November at that fascinating Italian archaeological site.

—

the European Route of Brick Gothic, a project which spans seven countries (Sweden, Denmark, Germany, Poland, Lithuania, Latvia and Estonia), 26 cities and two regions;

—

the European Route of Jewish Heritage, a programme awarded the ‘Major Cultural Route of the Council of Europe’ diploma by the Council of Europe (5 December 2005).

9.5.2006   

EN

Official Journal of the European Union

C 110/8

1.1

EU competition policy has for a long time been considered to be the flagship of European integration and an unquestionable achievement. During the debate on the Constitutional Treaty, however, the justification for a policy aimed at ensuring free and undistorted competition raised a number of questions. Following the reform of mechanisms for controlling cartels and abuses of dominant positions, the European Commission carried out a reform of state aid arrangements by means of an action plan. The presentation of the 2004 report gives the EESC the opportunity to conduct an overall assessment of the aims and methods of Community competition policy, in particular against the following background:

1.2

Following an introduction to the political background by the Director-General of DG Competition, the report gives an overview of the Commission's activities on:

2004, the year of Europe's enlargement to encompass ten new Member States, was marked by the entry into force of the reform of Community competition law, on 1 May.

2.1

The report underlines the link between competition policy and the revised Lisbon Strategy: competitiveness, growth, employment and sustainable development.. The Commission wishes in this way to focus its action on key sectors for the internal market and the Lisbon agenda, with the emphasis on removing obstacles to competition in the recently liberalised sectors as well as certain other regulated sectors such as telecommunications, postal services, energy and transport. This link with the Lisbon agenda should be better explained and clarified.

2.2

The first question that needs to be asked is whether competition policy should reflect the political priorities of a given moment or instead adopt its own independent approach. The EESC favours the latter option for the following reasons:

2.2.1

Businesses, consumers and economic and social actors need a stable and predictable legal framework. If competition policy is forced to change according to the priorities of the moment, it will be a source of legal instability and consequently will not favour investment and employment.

2.2.2

Establishing free and undistorted competition is a fundamental aim in itself, not as part of an economic strategy, but in order to ensure that the single internal European market functions properly. Unless this happens, this market will lose all meaning as well as all the advantages it might bring to the European economy, such as stimulating demand, increasing supply, and the power of a market of 450 million consumers.

2.2.3

In today's enlarged Union, the disparities between the economic and social conditions in the different Member States are considerable. Against this background, competition policy is particularly important. In other words, establishing genuinely free and undistorted competition is crucial to ensuring that the economic and social actors, from the least developed countries as well as from the richest, are guaranteed equal opportunities and treatment and that the conditions for strengthening economic and social cohesion in the Union are met.

2.2.4

The independence of competition policy must be maintained and strengthened. It must also be linked to other EU policies, such as those aimed at supporting consumers, economic development, innovation, growth, employment and economic and social cohesion. The reforms that competition policy has undergone and will undergo in future must give it this outward-looking vision. With this in mind, the Commission must endeavour to strike a constant balance, in order to give consumers, businesses and the general interest of the Union the highest possible degree of protection. Consequently, guidelines for handling disputes should be drawn up on the basis of a number of imperatives, such as:

2.2.5

Account must be taken of the specific characteristics of services of general interest, in particular in the health, social protection and education sectors, whilst respecting the values of social justice and transparency, in line with national traditions and practices. Where public services of general economic interest are entrusted fully or partially to private actors, competition authorities must ensure that equal treatment for all potential actors and the efficiency, continuity and quality of the service are guaranteed. In this regard, the Committee welcomes the Commission's work, which has, since the Altmark judgment, consisted of clarifying the rules for financing public service obligations. This will make the management of SGEI more transparent.

2.2.6

More generally, the problem with Community competition policy is that it is based on the assumption that the single market operates in the best possible way — actors are given complete and free information, companies are free to enter and leave the market as they wish, there are as many markets as the actors concerned are able or wish to create, no increasing returns to scale, and no dominant positions. The reality is quite different, however, in particular as regards the behaviour of certain Member States, who continue to think nationally.

2.2.7

DG Competition should carry out economic and social assessments to follow up the cases on which it is working. It should also carry out impact studies of its most important decisions, at the economic level, including the Union's competitiveness in the world, at the social level and, lastly, in terms of sustainable development.

3.1

The report's presentation would be clearer and the system would be easier to understand if it included, in particular in the field of state aid, a list of decisions in which no objections were made to aid being granted, explaining why, in certain cases, the aid was not covered by Article 87(1). This table would form the framework of good practice for Member States when granting aid.

3.2

Furthermore, given that the defining event of 2004 was enlargement, it is to be regretted that the report provides relatively little information about the new Member States' implementation of Community competition policy. The Committee thus hopes that the 2005 report will provide more complete and up-to-date information.

3.3.1

The report reveals that economic analysis has become an integral part of competition policy, which is something the EESC has consistently called for. In this context, changes in competition law (Articles 81 and 82) have been marked by a specific and pragmatic advance, consisting of better defining the market and of refining the approach regarding both horizontal and vertical practices.

3.3.1.1

Under Article 81(3) (exception from the prohibition on restrictive agreements), it can be seen that economic analysis has gained in particular from taking efficiency gains into account. Companies can thus demonstrate that they are making use of new technologies, more suitable manufacturing methods, synergies arising from integrating staff and economies of scale. They can also promote technical and technological progress through common research and development agreements, for example.

3.3.2.1

As shown by the cases referred to in the report, leniency policy has been a success. It will be recalled that this mechanism is based on encouraging businesses forming a cartel to inform the competition authorities about this agreement, which in turn allows them to be exempted, in part or in full, from any fines incurred. To this end, the Commission and some Member States have established leniency programmes applying these conditions. These are of particular importance to businesses because, even if they have not colluded in a genuine cartel, they often discover that they have unwittingly created a de facto cartel, largely as a result of faxes or emails exchanged between their commercial agents and those representing other companies.

3.3.2.2

The report does not give enough emphasis, however, to a number of underlying problems: existing leniency programmes in the EU vary widely, both in terms of the basic requirements for receiving leniency and in terms of their procedures; furthermore, not all national competition authorities have set up leniency programmes; only 18 authorities (plus the Commission) have done so (1).

3.3.2.3

Lastly, a request for leniency submitted to one authority does not apply to the others. This being the case, if the company concerned wishes to obtain immunity, it is obliged to apply to all the competent competition authorities. The EESC therefore considers that it is of crucial importance to upgrade the mechanism to cater for multiple requests from companies. The procedures in place must, therefore, be simplified so that a harmonised system can be implemented for ‘informing’ on a cartel, which would automatically stop all involvement in such an arrangement.

3.3.3.1

According to the report, the initial results of the ECN appear to be satisfactory. The European Commission and the national competition authorities in all EU Member States cooperate with one another by informing each other of new cases and decisions through the network. Where necessary, they coordinate investigations, providing assistance and exchanging evidence.

3.3.3.2

This cooperation creates an effective mechanism to counter companies which engage in cross-border practices restricting competition and helps to eliminate those that abuse market rules and cause considerable damage to competition and to consumers.

3.3.3.3

One fundamental issue concerns the confidentiality of information. This is guaranteed by a specific service, the ADO (Authorised Disclosure Officer), which allows one or more persons to intervene in the transmission of confidential information. These mechanisms have been implemented on several occasions since 1 May 2004, mainly with the Commission and apparently with success.

3.3.3.4

Although the economic players claim that the ECN has been a great success, the EESC nevertheless wishes to warn the Commission of the potential long-term problem — with there being many more cases to handle — of ensuring that confidential information is fully protected when it is exchanged.

3.4.1

Article 82 of the Treaty prohibits the abuse of a dominant position by a company (in the form of imposing unfair prices, dividing up markets by means of exclusive sales agreements or loyalty rebates which discourage customers from using competing suppliers). Furthermore, merger control is subject to this provision whenever a merger involves an abuse which strengthens the dominant position of the company launching the operation. This interpretation of the article, which is an essential component of antitrust legislation, has been ambiguous in some respects, as can be seen from an analysis of companies' behaviour and the implications of their commercial practices. In other words, the concept of abuse of a dominant position has yet to be properly defined and consequently companies sometimes find it extremely difficult to know what they are or are not allowed to do. With regard to price abuses, such as predatory or discount pricing, a particular form of behaviour can have different effects; a very efficient competitor might be able to prosper in a market in which the dominant company maintains prices at a certain level, whilst a ‘less efficient’ competitor might find itself excluded from the market. Should competition policy protect this second category of company? Would it not be more productive to develop rules based on the principle that only excluding efficient competitors constitutes an abuse?

3.4.2

The Commission recently published draft guidelines concerning the implementation of Article 82, which meet with the EESC's approval. In so doing, the Commission wishes to establish a method for assessing some of the most common practices, such as tied goods and rebates and discounts likely to undermine competition (2). The EESC welcomes the Commission's efforts, which aim to direct maximum resources towards those practices most likely to harm consumers, in order to provide clarity and legal certainty, with a clear definition of what might constitute abuse of a dominant position. The Committee hopes that the guidelines now under consideration will enable businesses in a dominant position to make a clear assessment of whether their behaviour is legal and points out that to complete the discussion, dialogue with the players concerned, (businesses, in particular SMEs, consumers, the social partners, etc.) must be guaranteed.

3.5.1

The EESC welcomes the pragmatic development of setting up a ‘one-stop shop’ for notifications of proposed mergers and of providing much-needed clarification for the competitiveness test, bringing this further into line with the reality of the economic situation and making it more compatible with the rules in force in the main merger investigation systems across the world. Lastly, although it is still difficult in practice to prove the efficiency gains resulting from mergers, it is to be hoped that, against this healthier background, merger control may be of lasting benefit to European consumers.

3.5.2

With regard to relations between the retail giants and local shops, an enormous number of mergers has taken place in the last few years, reducing the market share of local businesses, to the benefit of the large retail sector. As a result of commercial practices that are sometimes highly restrictive, pricing policies, and discounts tied to the size of purchases, local businesses struggle to compete on price given the large margins available to the retail giants, which makes the latter even more attractive to consumers. Similarly, producers are also subject to sometimes excessive pressure. Lastly, the increased number of mergers must lead to the aims of competition policy being brought into line with those of consumer policy in order to ensure that market supply remains constant, that what is on offer is diverse in terms of positioning and the quality of the range. At the same time, no limits should be imposed on cooperation between small businesses as long as they do not have a significant market share in the sector concerned.

3.6.1

The report expresses satisfaction at the reorganisation of DG Competition in response to public criticism of the Commission concerning a number of cases (Airtours/First Choice, Tetra Laval/Sidel and Schneider/Legrand).

3.6.2

Creating the post of Chief Competition Economist — to be assisted by a team of economists — appointing a group of experienced officials to take a fresh look at the conclusions of DG Competition's investigators into sensitive mergers and strengthening the role of the Hearing Officer in the merger control procedure are all measures that share a common goal: to make the merger investigation procedure more rigorous and transparent. The measures thus respond to the repeated calls of the EESC and are to be welcomed.

3.6.3

The EESC also approves of the appointment of a Consumer Liaison Officer to represent consumers vis-à-vis DG Competition but regrets that, almost a year after this appointment was made, the report does not provide any details on the real dialogue opened with European consumers. The EESC thus hopes that the 2005 report will provide practical information that will help to gauge the effectiveness of this dialogue. The Committee has also launched an own-initiative opinion on the matter.

3.6.4

Recent EESC opinions have highlighted the issue of the European Commission's resources, in particular for monitoring mergers, which are deemed to be too limited, given the funds likely to be mobilised by the players involved. This issue has yet to be resolved. It appears that DG Competition does not have enough qualified staff to examine cases involving certain states and, in particular, the new Member States. The Committee is concerned and puzzled at this lack of foresight in the Commission's human resource management and at its potential consequences and calls for remedial measures to be adopted as a matter of urgency.

3.6.5

Despite recent efforts to improve transparency, the Committee notes that there is no real policy for actively consulting the actors concerned; in fact, regarding the cross-sectoral cases that DG Competition has opened, the limited information on mergers provided on the Commission website cannot be considered to be an adequate means of gathering the informed opinions of civil society and of the various organisations concerned, as part of the process of good governance.

3.6.6

With regard to the publication of national judgments on the Commission's Internet site for competition, it must be noted that the stated aims of informing and educating have not been met (Article 15(2) of Regulation EC 1/2003). The system used on the Commission website only provides some of the information it is supposed to. Specifically, the new Member States do not — or rarely — post judgments handed down by their national courts. This impairs understanding of the way in which competition law is applied in those countries and obstructs the desired harmonisation of this law. Furthermore, these national judgments are available only in the language of the country of origin, which means that very few people, if any, read them even though they are of considerable practical importance due to the new problems that they highlight.

3.7.1

On 7 June 2005, the European Commission presented an action plan for state aid, on which the EESC delivered an opinion (3), to which the reader is referred. Our examination of the 2004 report does, however, give rise to the following general comments:

3.7.2

It is crucial to improve transparency concerning information given to companies receiving individual aid (such as the date of notification and the reasons given by the Member States). This transparency is all the more necessary because the risk that illegal aid will be recovered weighs heavily on businesses, in particular on small and medium-sized enterprises, even very small companies, even if the notification procedure has been engaged by their own Member State!

3.7.3

The national authorities responsible for assessing whether or not aid meets the required criteria do not always have the necessary knowledge to carry out an economic analysis as part of the notification procedure: regional or local authorities often grant aid for job-creation or the environment, for example, without undertaking a thorough market-share analysis and this imposes considerable financial uncertainty on companies, should the aid prove to be illegal.

3.7.4

In examining aid for restructuring or rescue, it is a fact that Community policy focuses mostly on the economic consequences for the competitors of a beneficiary of state aid and, in particular, on resources for ‘compensating’ them. Indeed, out of concern to prevent distortions of competition occurring, the Commission imposes certain restrictions on beneficiary companies, such as restricting the percentage of market share in a given geographical area, as happened in the Thomson Multimedia case, or obliging the beneficiary to forge partnerships with its competitors.

3.7.5

The EESC deplores the fact that this concern conceals another, equally crucial aspect: the effects of these actions on the end consumer (the customer as taxpayer), with the Commission not considering carefully enough whether state aid will or will not prevent a fall in prices, a wider choice of products and services or even higher quality. Consumers' interests lie at the heart of competition policy, however, and the right to state aid must necessarily be subject to the same requirements for rigour, in the form of long-term analyses, as cartels or mergers.

3.7.6

In general terms, the EESC wishes to express its unease at distortions of competition that could arise from differences in the way state aid is granted in the different Member States. Above all, the EESC is concerned at the often highly discriminatory nature of state aid. States often rally round to invest in and rescue large companies, whilst neglecting small and medium-sized enterprises (which actually account for four out of five jobs in the Union) and give certain sectors or types of business preferential treatment. This situation does nothing to encourage entrepreneurship and contributes to paralysing the economic climate, which is not sufficiently dynamic and conspires against new entrants to the market.

4.1.1

The Commission should pay particular attention in its forthcoming reports to the effects of enlargement and even devote a specific chapter to taking stock of changes in legislation and in the way the implementation of Community law is monitored.

4.1.2

To improve legal security, simplifying the leniency system would appear to be crucial. Given the sensitive nature of the information that must be provided and the constraints imposed by having to conduct the same procedure with the different authorities concerned (a cartel can affect a number of Member States), a reform undertaken by means of mutual recognition or even a ‘one-stop shop’ would be appropriate.

4.1.2.1

It would also be highly desirable for national leniency programmes to be brought closer into line with one another by means of a flexible and indirect harmonisation that could take the form of best practice.

4.1.3

As part of the current review of Commission policy on abuse of a dominant position, on the basis of the draft guidelines, a number of questions must be clarified in order to refocus assessment of such abuses on their harmful effects on the consumer. The Commission must clarify what is to be understood by ‘dominant position’, and especially what constitutes an abuse and what the different types of abuse are. It must ultimately draw a clearer dividing line between legitimate competition based on performance and abusive competition that undermines the way in which competition operates and thus attacks consumers.

4.1.4

As regards merger control, in order to assess how useful taking into account the efficiency gains has been, the Commission report could in future look at what has been happening in the operations concerned and the effects on consumers.

4.1.5

To ensure a fairer balance between production and distribution and within distribution itself (ensuring that businesses in rural areas, disadvantaged urban areas or sparsely-populated regions do not disappear altogether), a study should be carried out on the competition, commercial regulation or aid measures to small businesses, so as not to prevent potential players from accessing the market and to enable SMEs to benefit from state aid.

4.1.6

It would be useful if forthcoming reports could contain a description listing any links between the Consumer Liaison Officer and consumer organisations when examining cases: if necessary, could these organisations have delivered an opinion or forwarded information to the Commission on mergers, cartels or abuses of a dominant position? It is crucial to show that the work of the person responsible for consumer relations is effective.

4.1.7

In order to improve the system of publishing judgments handed down by national courts, it would be useful to set up a network of correspondents entrusted with the task of compiling legal rulings in order to make the current system more effective in real time. This measure would need to be given more substantial human and financial resources.

4.2.1.1

Assessing how competition policy works must help to determine whether it genuinely favours free and undistorted competition in the EU and to measure the effectiveness of the fight against de facto monopolies and abuses of a dominant position, their impact on the creation of new businesses and on entrepreneurship. The Commission should not impose limits on agreements between SMEs, so that they can combat competition from large integrated groups and should provide more resources so that the most serious distortions can be combated effectively.

4.2.1.2

Where the liberal professions are concerned, following its communication of 9 February 2004, the Commission published a report on competition in this sector (4), setting out the progress that had been made on removing unnecessary restrictions on competition such as price regulation, rules on advertising, entry barriers to the profession and reserved tasks. The EESC calls on the Commission to honour its commitment and reiterates the point of view expressed with unanimous support in its opinion on the report on competition policy 2003, which states that introducing mechanisms that are more favourable to competition will help the liberal professions to improve the quality and range of their services, which will directly benefit consumers and businesses.

4.2.2.1

The EESC considers that competition-related issues should be studied in the context of the EU's overall cohesion and that the question should be raised as to whether behaviour that is still too nationally-focused (state aid, whether direct or ‘disguised’, to national flagship companies, aid to attract investment, discriminatory behaviour, the continuing presence of de facto monopolies and abuses of a dominant position, etc.) does not partition the market or hinder closer links between the Union's economic players. Accordingly, the Commission must also carry out economic and social analyses of the overall impact of its policy decisions and call on the Council and the Member States to ensure that changes take place in behaviour and practices which result in a partitioned market, adversely affecting the interests of all economic and social players.

4.2.3.1

The EESC offers its services to the Commission to discuss ways of ensuring greater transparency — within the limits imposed by the need to respect business confidentiality — with regard to the actors affected by competition policy: businesses, economic and social partners, consumers and other civil society actors. With regard to mergers in particular, consideration should be given to ensuring that the latter are more actively involved, through a consultation procedure and hearings, which would satisfy the concern for good governance and participatory democracy. More generally, a local information network should be established, better to publicise the priorities of competition policy and to inform companies and consumers of their rights and obligations. This would be based on DG Enterprise's Euro Info Centres and on all of the networks of chambers of commerce and industry and of consumer organisations. Making this information available efficiently and on an ongoing basis is of vital importance, in particular in the new Member States and the candidate countries.

4.2.4.1

Competition policy is crucial to ensuring that the European internal market operates effectively. Its failings underline the urgent need to ensure the completion of the single market and to bring an end to practices that tend automatically to carve up the market. This policy on its own will not be enough, however; there must be coordination with all of the Union's policies, in order to ensure the success of the revised Lisbon strategy and the efficacy of consumer protection policy. In any event, a blueprint for economic and social cohesion must be drawn up for the Union, giving competition policy a specific role and providing a new legitimacy, ensuring equal opportunity of access for all to the single market, so that consumers, businesspeople and employees genuinely benefit from the advantages of the world's largest market.

9.5.2006   

EN

Official Journal of the European Union

C 110/14

1.1

The Committee welcomes the Commission's proposal to establish an explicit, clear and transparent legal framework for the financing of European standardisation, given the important role that the regulatory system plays in the proper functioning of the internal market, the competitiveness of European industry, and the role of European technical standards in supporting Community legislation and policies.

1.2

The Committee reiterates that European standardisation is, and must remain, a voluntary activity, exercised by and for the benefit of interested parties, with the specific task of developing standards and other standardisation products that can meet their needs.

1.3

The Committee urges the Council, the European Parliament and the Commission to take a more proactive approach to European standardisation policy. It must be considered as one of the European Union's key policies to help implement the recently reinvigorated Lisbon Agenda; it must also help to create a true ‘culture of standardisation’ in both European and national institutions and businesses, as this is a strategic element at national and international level.

1.4

The Committee believes it is essential to ensure the full participation of all stakeholders in an enhanced European standardisation system, and particularly the participation of NGOs, SMEs and consumer and environmental protection organisations, by ensuring that support — including financial — is provided for training qualified practitioners.

1.5

The Committee stresses that European standardisation is vital for the operation and consolidation of the internal market, particularly through the ‘new approach’ directives in the areas of health, safety and environmental and consumer protection, and to ensure interoperability in many areas, particularly in transport and telecommunications. Moreover, since European standardisation facilitates the free movement of goods and services in the internal and global markets, it ensures that business competitiveness is enhanced.

1.6

Given that the European standardisation system is a strategic and essential resource, the Committee believes that sound and sustainable management of financed activities must be ensured, as must the ability to pursue the common cooperation objectives and the administrative and financial conditions necessary to preserve the independence and neutrality of the system and to enhance its operational efficiency and standards production.

1.7

The Committee believes that, for the five-year period in question, the proposed figure is insufficient to cover the entire European standardisation system and that it should be increased beyond the current 2 % threshold in order to ensure that standards can be freely produced and disseminated, thereby enabling it to meet the needs of both the enlarged EU-25 and the EU candidate countries.

1.8

The Committee stresses the importance of:

1.9

ESOs provide the infrastructure and services that are needed to produce standards but they do not produce them themselves; this is the technical experts' task. In the Committee's view, this should be highlighted as an important point to be included in the recitals.

1.10

The European Commission's proposed total of EUR 134 million for the period 2006-2010 would appear to be barely sufficient.

2.1

The Committee has always called for a more extensive use of European standardisation in EU policies and legislation in order to extend, in line with the needs of both society and businesses, the expansion of standardisation into new areas such as services, information and telecommunications technology, transport and consumer and environmental protection.

2.2

In particular, there is greater awareness among business leaders and other stakeholders of the benefits of standardisation for business: this awareness is reflected in the strengthening of the key European standards bodies (CEN, CENELEC and ETSI) and the full participation of all stakeholders in the standardisation process, SMEs in particular.

2.2.1

Given these bodies' potential contribution to the achievement of the Lisbon objectives, the Committee calls for organised civil society to be well represented on their executive boards.

2.3

With a view to increasing the presence and participation of the various civil society players in the standardisation processes within CEN, CENELEC and ETSI (1), these are carried out with the full participation of bodies such as ANEC, ETUI-REHS, NORMAPME and, most recently, ECOS (2), which was set up in November 2002.

2.4

The Committee has, on several occasions (3), called for a review of the current legal framework on standardisation so that it can respond to the latest developments and challenges in European standardisation and simplified legislation, which would be more in line with the principle of ‘better lawmaking’ (4), the approach taken by Industrial Policy in an Enlarged Europe  (5) and the internal market strategy priorities for the period 2003-2006 (6).

2.5

The Committee has also come out in support of a stable financial framework for European standardisation, on a solid legal basis. Similarly, it must be ensured that Member States and the Commission co-finance standardisation procedures, European infrastructure and measures to improve synergies between ESOs, in order to enhance efficiency in the European standardisation process and in promoting international standards.

2.5.1

Greater involvement of Member States' representatives could lead to better, more specific production of standards geared to stakeholders.

2.6

A European technical standardisation culture is vital to ensure an efficient and balanced internal market for the EU-25. It is therefore important to ensure that structures are developed at EU level which can respond effectively to:

2.7

The total number of European standards produced in 2004 by CEN was approximately 1 200 and about 400 were produced by CENELEC: this has brought the total number of European standards adopted by the two committees to 15 000.

2.8

The Committee believes that the elements that have contributed to this success must be consolidated and, if necessary, further developed. The new legal framework, which is based on Articles 95 and 157 of the Treaty and which regulates the financing of standardisation processes must not, in the Committee's view, invalidate the fundamental nature of the standardisation process, which must remain free, voluntary and consensual.

2.9

Moreover, the Committee is aware of the importance of streamlining, consolidating and securing a long-term financial framework for the main European structures, not least in relation to the increasing use of technical standards over the last few years.

2.9.1

There is, in fact, a growing interest in avoiding new barriers to trade through a standardisation system capable of fostering the competitiveness of products, services and European industrial processes, with a view to developing the economic, social and environmental aspects of development, in line with the Lisbon strategy.

2.10

So far there is no legal reference at European level that explicitly regulates the financing of a technical standards system or enables the Commission to financially support, via additional resources, all standardisation work.

2.10.1

As is widely known, these processes cover a spectrum ranging from information and communication technology to transport; from environmental and consumer protection to the safety of food processes and products; from pre-normative and co-normative research to the services and new deliverables (7) sector.

2.11

Moreover, the central structures of CEN, CENELEC and ETSI must be better coordinated and consolidated, particularly following the accession of the new Member States and in view of future EU enlargements.

2.12

Whereas national standards organisations can be financed via direct contributions on products and services, Community institutions depend only on membership fees and additional funding from the EU and EFTA, which, for various reasons, seem to be inadequate to ensure an effective, solid European standards system.

2.13

In its Conclusions adopted in 2002, the Council called on the public authorities to acknowledge the strategic importance of standardisation and to make a clear commitment to that end, particularly through a specific contribution with a view to maintaining effective and efficient standardisation infrastructure.

2.14

In December 2004, the same Council took note of the Commission's initiative to reform the institutional framework and propose a new legal basis for the financing of European standardisation (8); it therefore called on the European Commission, the Member States and the European and national standards organisations to consider ways of optimising the European standards system, with a view to making the best use of available resources and exploring other options to ensure viable financing of standardisation in Europe (9).

2.15

The Commission has drawn up several proposals (10) on the possible scenarios as regards financing of the European standards system:

2.16

A shortcoming of the arrangement whereby full financing is provided by industry and other stakeholders would be that it would focus almost exclusively on the production of market driven technical standards, i.e. it would be geared to improving European competitiveness on the global market.

2.16.1

The advantage of this type of funding would be that it is willingly provided by businesses and reflects the needs of the market without being influenced by external factors. At the same time, however, it could have a profound impact on the protection, and particularly balanced protection, of all the interests represented, and those of SMEs in particular.

2.17

The option whereby full financing is provided by the Member States, via the ESOs which are members of CEN, CENELEC and ETSI, could weaken the level of European coordination and coherence of the European standards system.

2.17.1

On the other hand, this option could, to a large extent, satisfy the principles of subsidiarity and proportionality laid down in the Treaty.

2.18

Greater Commission involvement would give a high level of European value added to technical standardisation, thereby leading to the abolition of non-compliant national standards and improving the operation of the single market, not least in terms of economies of scale for the output of European industry.

2.18.1

The European Commission could influence the standardisation process and steer it towards a Community standpoint, with potential gains in terms of visibility, consistency and effective support for its policies.

2.19

With regard to costs, recent studies (11) have shown that the annual costs of the CEN/CENELEC/ETSI standards system amount to about EUR 700 million, distributed as follows:

2.20

As regards revenue, currently, the main sources of funding are the following:

2.21

Currently, financial support for European standardisation is based on several acts which, for the most part, do not contain explicit, specific provisions on financing conditions. These acts provide the basis for the European Commission to ask the European standards organisations (CEN, CENELEC, ETSI) to draw up European standards in support of its policies.

2.22

Financial support for European standardisation is governed by the partnership relations established between the European Commission, EFTA and the European standards organisations, which are also specified in the General Guidelines for Cooperation signed on 28 March 2003.

2.23

The financing of European standardisation mainly involves:

2.23.1

Similarly, standardisation helps in reducing the technical barriers to international trade through the WTO Agreements, such as the TABD (Trans Atlantic Business Dialogue) and the MEBF (Mercosur European Business Forum), and by transposing European standards into international standards: ISO, IEC, ITU.

3.1

In the Committee's view, in order to retain the essential characteristics of the European standardisation process and to ensure that it remains voluntary, consensus-based and market-driven, it would be useful to insert a new recital as follows:

‘the standardisation process must remain voluntary, consensus-based and market-driven. These characteristics must be retained and enhanced through the new Community legal basis for the financing of European standards in line with the Action Plan for European Standardisation adopted by the Commission in October 2005; the action plan must be updated annually with the consent of ESOs and stakeholders.’

3.2

The Committee believes that the rapid pace of technological development does not justify the industry's involvement in boosting the spread of consortiums and forums for the creation of technical specifications outside the official process of European standardisation. This would in fact weaken the key elements of European standardisation: participation open to all experts, particularly small businesses; the transparency of the entire process; and extending the basis for voluntary consensus. It therefore feels that it is important to include the following new recital:

‘The new legal basis for financing must ensure that standardisation is more effective and stronger, with a view to meeting, as part of a transparent, open and voluntary process, the requirements of the new deliverables: technical specifications, reports and guides. The ESOs should be allowed to monitor these deliverables (12) in order to ensure that the demands of all stakeholders, particularly those which are less structured and smaller in size, and the legitimate requests of consumer organisations, are met.’

3.3

In the Committee's view, it would be advisable to amend the current 4th recital in order to show that the objective to be attained is not only to provide a legal basis ‘for the Community's financing of all the European standardisation activities required to implement its policies and legislation’ but also to enhance the European standardisation process, as this is a key element underpinning the competitiveness of European industry, consumer protection and the protection of the health and welfare of European citizens:

‘This Decision must provide an explicit, complete and detailed legal basis for the Community's financing of all the European standardisation activities required to implement its policies and legislation and to enhance the European standardisation process itself, as it is a key element underpinning the competitiveness of European industry, consumer protection and the protection of the health and welfare of European citizens’.

3.4

The Committee believes that it should be more clearly emphasised that ESOs do not produce technical standards but that they provide a European infrastructure service through which standards can be developed by experts representing the participating stakeholders; a new recital should therefore be inserted after the 8th recital as follows:

‘European standards organisations essentially provide infrastructure services for the production of technical standards, which result primarily from a consensual approach to technical standards production by stakeholder representatives’.

3.5

The Committee suggests that in Article 3(1) of the Proposal for a Decision — Standardisation activities eligible for Community financing — two new points g) and h) be inserted after point f) as follows:

3.5.1

As stated in point 1.4 above, training of stakeholders on standardisation issues is particularly important. Article 3, new point g):

‘the training of stakeholder representatives, particularly for small businesses, the services and distribution sector and less structured organisations, both in terms of the general and the technical standardisation process, with a view to enhancing the capacity for 'co-producing' European and international standards’.

3.5.2

In order to ensure increasing participation of the numerous civil society stakeholders in standardisation processes, it is essential to improve networking between them. Article 3, new point h):

‘enhancing the interdisciplinary coordination of methods, procedures and policies; interactive European computer networks allowing national and regional standards organisations to communicate’.

3.6.1

The work carried out by standards organisations is on a par with activities of general economic interest, since it produces services that are vital for health, the environment and sustainable development.

3.6.2

The Committee believes that the activities of the central secretariats of European standards organisations could be financed through both ‘grants for actions’ and ‘operating grants’ (13) and by launching calls for tender (procurement) in line with public procurement procedures. Essentially, a more flexible approach is needed.

3.6.3

Article 5. Financing arrangements, point 5. As regards the framework partnership agreements between the ESOs and the European Commission (ex. Article 5), the Committee believes that it would be advisable to ensure that these contracts are the result of a genuinely equal partnership and are not dictated unilaterally. It would also be useful to reduce red tape and administrative supervision, avoiding burdensome certification and auditing procedures of costs incurred, by introducing flat-rate systems, which would cover 100 % of all marginal costs.

3.7.1

In addition to the primary objectives of standardisation, i.e. facilitating trade, improving the quality of life, health standards and the safety of industrial processes and services, environmental protection must also be given particular attention.

3.7.2

The Integrated Product Policy, which focused on the ‘environmental life cycle’ (14), provides a template here. The analyses of environmental aspects at enterprise and ‘site’ level have already been integrated into EN/ISO 14001, which has been adopted as a European standard. The other standards of the ISO 14000 (environmental management systems) category have also been introduced into European practice: ISO 14020, environmental labels and declarations; ISO 14030, environmental performance assessment; ISO 14040, LCA (Life cycle assessment).

3.8.1

The Committee considers that Article 6(2) should be amended in line with the amended 4th recital.

9.5.2006   

EN

Official Journal of the European Union

C 110/19

1.1

The Commission's green paper is an extremely important strategy document in the quest to achieve full integration of EU financial markets. It is well known that the economic development and growth of European countries is closely linked to the development and integration of financial markets, the latter also representing the full achievement of the third phase of European Union.

1.2

Leaving aside the academic debate as to whether financial development precedes or follows economic development, it would seem important to emphasise that with regard to the dualistic, bank- and financial market-oriented approach that characterises the ‘Anglo-Saxon’ model (and that of the US in particular) as compared to the ‘European model’, current legislative trends and the direction of the Union seem to indicate a desire to continue to work towards full integration of the two approaches in our economic system.

1.3

Financial markets and institutions perform for society the fundamental task of bringing together units that are running a deficit and those that are running a surplus, complying with ground rules based on efficient allocation of resources and rationality. Furthermore, it must be remembered that fair competition — and competition between firms — occurs in capital and credit markets before it does in the material goods market.

2.1

European regulation of managed savings, in general, and of UCITS (Undertakings for Collective Investment in Transferable Securities) in particular, revolves around the core Directive 85/611/EEC, which in recent years has supplied the regulatory framework within which the sector has developed. Although the EU has not yet completely removed the regulatory barriers to cross-border localisation and product marketing, the UCITS market operates in a harmonised regulatory context.

2.2

The UCITS market appears to be growing at an unstoppable pace. In recent years, managed net assets have seen two figure growth. According to figures from the ‘European Fund and Asset Management Association, Investment Company Institute, and other Mutual Fund Associations’, from 1996 to 2005 the market that comprises the EU, the Czech Republic, Hungary, Poland, Norway and Switzerland recorded a compound annual rate of 14.5 %, increasing from approximately EUR 1 450 billion to more than EUR 4 900 billion of net assets.

2.3

The publication (1) of the annual figures for the number of funds and total fund capital globally shows that the phenomenon is clearly on the increase both in terms of numbers and volumes managed.

2.4

Whilst it appreciates the difficulties, the EESC believes it is very important to resolve the problem of fiscal convergence in order to increase the growth potential of UCITS. The sector's internationalisation strategies can be influenced by entrance barriers and exit barriers. Exit barriers are created when non-resident fund holders are taxed according to fund host country legislation; entrance barriers are created by the legislation of the fund holder's country of residence.

2.5

In Europe UCITS fiscal discipline appears almost everywhere to be inspired by the principle of neutrality of investment in funds compared to direct investment; nearly all European countries operate — either formally or substantially — the no-veil (fiscal transparency) model, in which investor income is taxed directly. The transparency model applies the principle of capital export neutrality and, where income from funds has not been taxed at source, investors are taxed based on the residence principle.

3.1

In the European financial industry, UCITS are, on average, less than one third of the size of their US counterparts; as a result fund management does not fully benefit from economies of scale, reducing net returns to end-investors.

3.2

However, although the Commission's key objective is to define a framework for product financing, the EESC feels that if investors are to benefit, there must be full regulation of the financial system (i.e. regulation of both products and services).

3.3

The Green Paper highlights the increased operational risk that the outsourcing of certain functions may entail, which may possibly result in conflicts of interest: the EESC feels this is a valid concern, which should be followed up with appropriate legislation.

3.4

Whenever a process is segmented and delegated to different organisations, the problem is not so much to do with the technical arrangements for making the subdivision than with the balance with which the (new) market that regulates buyer-vendor relations develops. Let us take, by way of example, the financial analysis industry. Under current practice, financial analyses are not bought and sold independently; instead, they are incorporated into other services, usually of an operational nature. Thus, for example, a bonds broker tends to distribute analyses of individual bonds in exchange for operational continuity based on commission levels that also include the cost of the analysis.

3.5

Information (analysis) is thus disseminated according to a market logic that is typical of that for a ‘public good’: the amount of information needed is provided and the price is the sum of the prices paid by the various buyers; only a few of these buyers, however, actually pay anything. The effect is destabilising, to say the least: analysis is underpaid, thus providing an incentive to make economies of scale when producing analyses, with an inevitable reduction in quality and also an incentive to take advantage of cost benefits deriving from conflicts of interest (see, for example, the British FSA's intervention on ‘soft commission’ between brokers/dealers and asset managers). The EESC considers that rules must be established to avoid — as far as possible — confusing the price setting mechanisms used in the financial capital risk intermediation industry with those used in the investment risk intermediation/transformation industry.

A.

Eliminate the uncertainty surrounding the recognition of funds during the transition from UCITS I to UCITS III,

B.

Simplify the notification procedure for passporting funds,

C.

Promote implementation of Commission's Recommendations on the use of derivatives and the simplified prospectus,

D.

Clarify the definition of ‘assets’ which can be acquired by UCITS.

4.1.1

To answer the question it is necessary to distinguish between ‘product’ financing and ‘service’ financing. The aim of the former is to establish the practical instruments for bringing providers and receivers of financial capital together; the latter aims to identify the instruments that are best suited to the requirements of fund investors or providers, and indicate — where no suitable product exists — what the missing features are.

4.1.2

The conversion of financial systems from a ‘bank-centred’ to a ‘market-centred’ approach changes the role of the financial intermediary, who increasingly frequently has to intermediate risk as well as financial capital. Risk intermediation is profitable as long as the intermediary is able to handle the risk at a lower cost then the investor. It is therefore legitimate to wonder whether a legislative system that aims for total reduction of risk is more effective than one intended to provide adequate levels of efficiency for risk intermediation.

4.1.3

It should be borne in mind that even in efficient financial market contexts, the overall risk of an investment would ideally be split into two parts: ‘payoff risk’ and ‘informative risk’. The former measures the effective volatility of an investment's payoff. The latter measures the difficulty of correctly assessing the payoff risk (due mainly to a lack of information on the part of the economic operator). It must be appreciated that the risk premium calculated by the economic operator derives from both types of risk and that the links between the two types are not characterised by simple addition but by correlations of varying degree.

4.1.4

In light of the above, the EESC would answer in the affirmative, but only insofar as this applies to product financing. With regard to service financing there is a need to allow greater freedom in the provision of investment services, for example, by removing the current restrictions on financial promotion, which do not take full account of the principle of home-country-control.

4.1.5

There is a clear concern underlying this, i.e., the need to prevent evasive behaviour on the part of those aiming to set up promotional networks exploiting the more favourable conditions pertaining in certain EU countries. The EESC believes that this logic is fundamentally flawed: the fact that evasion is possible means that the conditions have not been effectively harmonised.

4.1.6

The EESC therefore feels that free movement should be increased within the service financing industry as an incentive towards the standardisation of the application by individual countries of EU directives on investment and transferable securities (including UCITS III).

4.2.1

Regulatory convergence must, however, be accompanied by measures to coordinate the fiscal rules that apply to the sector. Different national systems still coexist in the European market, as they do in all other areas of finance, and these are compounded in some sectors by rules deriving from bilateral agreements to avoid double taxation.

4.2.2

This patchwork of fiscal regulation leads to distortions of competition, double taxation, and scope for arbitrage, fraud and tax evasion. In this respect, the national regulatory framework needs to be more efficient, given the growing internationalisation of the market.

4.2.3

Individual Member States possess a formidable promotional and protectionist instrument: taxation. Given that the tax implications of UCITS originating in other EU countries are open to various interpretations, less favourable tax arrangements can be applied, thus creating a kind of entrance barrier. The Committee is aware that tax harmonisation cannot be considered an easily attainable objective in the short term, partly due to the requirement for unanimity in this area. We would therefore propose that consideration be given to framing an EU taxation system for investment products in terms of both levying and collecting.

4.3.1

The passport and simplified prospectus seem suitable measures for overcoming criticisms regarding market fragmentation and barriers to full mobility of capital and market completion and for beginning to establish sufficient legal certainty; the EESC also believes it is essential to work towards eliminating the uncertainty surrounding the recognition of funds launched during the transition from UCITS I to UCITS III.

4.4.1

The EESC realises that within the EU there are two financial models: that of the UK and that of continental Europe, and it will be difficult to converge them in the short term. However, the EESC hopes that the new rules will ensure that the convergence process can be facilitated by having a single regulator, since it believes that the introduction of legislative obstacles to prevent institutions from picking and choosing which regulatory system to avail of would only serve to perpetuate the current imbalanced situation.

4.4.2

The EESC is convinced that splitting responsibility for supervision of the fund management company and of the fund between two Member States increases supervisory concerns, and risks reducing operational efficiency. The Committee therefore recommends that responsibility towards the investor should lie with the fund that is based in the investor's home country, even when the management company is based abroad.

4.5.1

To enhance the functioning of fund markets and the level of investor protection it is not enough to regulate only the product side of financial instruments. The EESC suggests that, if investors are to make informed choices, due attention must be given to their needs in the fund distribution phase, making it more transparent.

4.5.2

Information provided to investors must take some account of the home environment and culture in which the investors are based. The enlargement of the European Union to include countries which up until 15 years ago were not participating in the market economy raises the issue of whether there should a uniform information requirement. The EESC believes that consideration should be given to this, bearing in mind on the one hand, the need for a regulatory framework which is as simple and uniform as possible, and on the other, the different economic and financial cultures that still exist between some Member States.

4.6.1

The EESC believes that clarification of ‘conduct of business’ rules for distributors can only be a good thing. We must not underestimate, however, the problems arising from the day-to-day implementation of the directive, with regard to risk management and fee transparency, which are not always easy to resolve.

4.6.2

Consider, for example, the technical issue of benchmark accounting. This can take on totally different meanings depending on whether the manager is aiming to beat the benchmark or meet the benchmark; the particular delegation process — where the same technical instruments are used — requires exposure to different levels of risk, assuming that to beat the benchmark it is necessary to allow managers to vary their allocations, thereby assuming additional degrees of risk.

4.6.3

In this context, we would propose the introduction of regulations aimed at bringing greater transparency to the process (rather than the quantity) of portfolio investment rotation: gross performance being equal, high levels of rotation bring higher transaction costs, reducing the net performance for the client. This is a particularly pressing issue, especially if part of the transaction costs are to be borne by the managers themselves.

4.7.1

The MiFID directive can provide an important regulatory basis, particularly in seeking to attain high transparency standards in the distribution of UCITS.

4.7.2

The MiFID directive does not, however, lay down transparency rules for the negotiation of bonds, which can be far from transparent. The EESC therefore feels that the MiFID Directive cannot be seen as the instrument that rounds off the legislative framework governing UCITS by remedying all of its shortcomings.

4.8.1

European funds are still relatively small-scale: in 2004 the average was USD 195 million, compared to the American average of USD 628 million in the same year. This impacts on the chances of achieving economies of scale, then on returns and, last but not least, on the profitability of the company that manages the fund.

4.8.2

It is widely known that one of the financial effects of the process of economic globalisation is a reduction of the absolute level of risk, which is associated with a readjustment of the levels of systematic (increasing) and specific (decreasing) risk. While admittedly cross-border mergers can increase economies of scale they should only be implemented on a limited basis, in the case of products where such mergers can be a driver of success, or rather to all sectors of fund management where efficiency is more important than effectiveness. In sectors where effectiveness is lacking, however, no benefit can be derived from agglomeration.

4.9.1

Pooling asset management in the case of funds that are very similar in nature clearly leads to economies of scale and is an instrument already used by management companies for improving fund management efficiency. With cross-border pooling, however, investment funds run into the various tax and legislative problems previously discussed. The EESC therefore considers that it cannot be an alternative means of circumventing the legislative and institutional difficulties impeding the consolidation of the investment fund industry.

4.10.1

The answer to this is no, as the US experience has revealed. Investment funds have existed on the American market for the past sixty years: despite the spectacular increase in the number and size of funds available, the costs borne by the funds and by investors have, on the whole, almost doubled (2). This has resulted in a distinctly unsatisfactory performance when measured against the benchmark: while over the period 1945-1965 the benchmark outperformed funds by an average of 1.7 % annually, in the period 1983-2003 this gap increased, reaching 2.7 % per annum.

4.11.1

The option of choosing a depositary in a different Member State from that in which the fund management company is based could increase competition among depositaries, reducing the costs borne by the fund.

4.11.2

This could also mean an increased supervisory risk if there is not sufficient cooperation and convergence between the regulatory authorities.

4.11.3

Though they are considerable, depositary fees are lower than other costs, such as, for example, distribution expenses. The EESC would suggest that the benefits and risks of a legislative initiative in this regard should be weighed up carefully.

4.12.1

Standardisation, automation and the computerisation of order-placing and fund liquidation are fundamental pre-requisites if distributors are to expand their range of products and increase competition.

4.12.2

This, however, would require significant changes to be made to the rules and standards governing operating and IT procedures, incurring significant costs for operators. It should be remembered that in continental Europe fund management companies and distributors are often part of the same group. In a context such as this there is presumably little incentive for operators to bear the costs involved in increasing competition at the distribution level. It is possible, therefore, that public sector involvement could accelerate this process.

4.13.1

The effectiveness of strict codes of conduct regarding risk management has always been a matter of intense debate in the world of economics, especially in light of the varying benefits deriving from past experience since the Bretton Woods exchange-rate agreements. This results from the diverse nature of economic risk in relation to time: in the short term, fluctuation in the face of restriction creates risk, while conversely, in the long term, risk is also created where something remains rigid while the system evolves. As a result, introducing rigidity by means of formal limits would be beneficial in the short term, but would create substantial risks in the long term.

4.13.2

A point should also be made in relation to recent studies on the so-called behavioural finance sector: the actions and decisions of individual economic agents tend to be strongly influenced by the level of risk involved. As the level of risk increases, behaviour becomes increasingly reactive and vice versa; consequently, the EESC takes a negative view of any legislation that introduces excessive rigidity and which could have a twofold effect in the long term: the instruments would pose a greater operational risk and economic operators would become less reactive, with an outcome that remains to be established, but it would certainly be negative. On the other hand, awareness of ‘real loss’ of capital could be the most effective impetus to its protection.

4.13.3

This development entails further distortion of the markets: the creation of expectations that if the risk has a favourable outcome, the investor benefits, whereas if it produces negative results, this will be absorbed by the market.

4.14.1

The EESC would propose intervening in the short term, possibly by means of formal and strict regulations, but only with a view to breaking cartels; if this were to happen the market would become more mature, and thus, would no longer require tight restrictions. Accounting is one area of particular interest: all too often the timeframes set by accounting obligations are completely inconsistent with those pertaining to product financing (too short), so that the accounts show little evidence of the temporal diversification pertaining to certain investments.

4.14.2

In order to enhance investor protection, the EESC suggests considering setting up a special guarantee fund, to which fines imposed by the supervisory authorities could also contribute. Clearly, this fund should not cover market risks originating from UCITS investments; it should help to compensate investors who have lost out when intermediaries have not played according to the rules.

4.15.1

Investment funds compete against financial products such as unit-linked policies, perceived as comparable by investors, despite the fact that they are governed by a very different legal framework.

4.15.2

This can distort investors' choices with negative repercussions on cost and risk levels in the investments concerned. The EESC believes that this problem cannot be addressed with reduced competition or by easing the restrictions and guarantees imposed on investment funds. We would call instead for an upward adjustment of standards so that financial products that are perceived as being a direct alternative to investment funds are subject to regulatory requirements that are comparable to those pertaining to such funds.

4.16.1

In order to clarify the terms of this question and the issue raised in the previous question it is necessary to preface our response as follows. The Commission needs to clarify its definition of transferable securities. Clarification is needed to dispel doubts as to whether or not this term implies a liquid instrument. It seems that these two concepts are being used interchangeably, in an attempt to divest the concept of transferable securities of any connotation of being an alternative investment or a UCITS-substitute. We believe that this misunderstanding could have serious consequences, as it could lead to the confusion of two quite different theories regarding financial markets: efficiency and completion.

4.16.2

A financial market is efficient when investment transaction costs can be borne by it; a financial market is complete when it comprises all possible investments.

4.16.3

Private equity and hedge funds must be judged primarily in terms of their effectiveness (capacity to select the best investments) before being considered in terms of efficiency (capacity to achieve economies of scale regarding costs). For this reason, the issue of fund size is less relevant: thus, problems regarding effectiveness (capacity to move quickly on the market without influencing its performance) and the containment of systemic risk (consider the rescue of the LTCM fund in 1998) suggest that it would be preferable not to incentivise excessive expansion in the size of funds.

4.17.1

A feature of these investments, in addition to the payoff risk, is their major informative risk. It is right to regulate this risk, particularly in order to contain the risk of fraud, but it would be a mistake to try to reduce it excessively. Indeed, if these funds were to become fully transparent, there would be a risk of invalidating manager skills, which in fact underpin the production of returns that are only tenuously linked with the market.

4.17.2

The Committee does not believe that the way forward should consist in a utopian attempt to clarify a complex process, but rather to inform the ‘average’ investor that alternative investments require highly specialised knowledge, without which expert advice should be sought.

4.18.1

The establishment of a common private placement regime for qualified investors could be a major fillip to the development of private equity funds in the European Union.

4.18.2

Qualified investors must by definition be in possession of the technical skills and assets management ability required to make high risk investments such as in private equity. It must therefore be assumed that they are able to assess the ability and credibility of managers. Moreover, given that private equity funds provide a de facto diversification of risk, there should be no need for any flanking measures that might lead to over-regulation of management company activity.

4.19.1

There are several examples of the shortcomings inherent in the current approach. For example, ETF (Exchange Traded Funds), which combine the positive features of a fund (considerable diversification) with those of shares (can always be traded on the market). The directive encourages use of this instrument by allowing it — given its UCITS status — to benefit from the passport. On the other hand, it poses restrictions on another UCITS holding it, as it would then be treated as a stock certificate.

4.19.2

In the light of, inter alia, alternative investment thinking and given the importance of not focusing solely on product finance but also on services finance, the Committee considers that a move towards principles-based regulation would be welcome. At the same time, it believes that the review of the regulatory framework should be done gradually and attempt to strike the right balance between providing adequate consultation time and completing the review promptly.

5.1

As has been shown, the European UCITS system still appears to be fragmented, with relatively small businesses compared to the U.S. and apparently still sluggish cross-border collaboration and flows. This is not something that is likely to enable any significant economies of scale or — consequently — cost reductions to be made.

5.2

Furthermore, the excessive concern, also voiced in the green paper (3), regarding the definition of assets that can be acquired by UCITS, obliging funds to invest in liquid financial instruments in particular, would prevent participation in non-regulated markets.

5.3

It would therefore be advisable to consider making private equity operations a possibility. This would be consistent with the objective of opening SME capital up to risk capital operations and therefore to private equity.

5.4

The European economic system is strongly characterised by small and medium enterprise, which often appears undercapitalised because it resorts mostly to banks.

5.5

This undercapitalisation is often accompanied by excessive indebtedness — especially short-term debt –with a large amount of commercial debt and credit, linked to the fact that businesses from the same sector of industry are highly interdependent. This is also the consequence of a type of ownership that is typical of family capitalism in that the entrepreneur's assets and the firm's capital are often combined.

5.6

These business problems and the need to achieve more general ‘productive system’ objectives on a European scale make it essential to find solutions to the financial problems experienced by SMEs. These objectives are threefold, and can be summarised as follows:

5.7

The Committee hopes that, on the basis of the above considerations, the European legislator will extend his attention to the important field of private equity, while venture capital is still underdeveloped in Europe.

5.8

The Committee believes, moreover, that the current discussion of the regulatory framework for investment funds must also provide the opportunity to take a closer look at the development of socially responsible finance, which does not sacrifice social development and environmental protection issues to the profit motive. In 2003 ethical funds accounted for approximately 0.37 % of all assets managed by European UCITS. A comparison with the American market, where in the same period 11.3 % of all assets managed by UCITS belonged to ethical funds, shows that socially responsible finance still has very high growth potential in Europe.

5.9

In order to encourage faster development of socially responsible finance, the Member States might envisage tax incentives involving partial de-taxation of earnings from these investments following a practice — already provided for in some Member States — that allows voluntary contributions to socially useful organisations to be tax deductible. Furthermore, tax concessions should be available to funds profits that are reinvested in socially useful organisations.

5.10

Given the innovative nature of this proposal, the Committee hopes it will be examined in further detail and a feasibility study carried out in the light of current best practice.

5.11

The medium- and long-term challenges are essentially:

5.12

Proper information on risks and related products and manager credibility on transaction amounts and arrangements are all factors which — above and beyond the necessary rules — are able to endow the market with confidence, fairness and behavioural rules. These are crucial factors for market efficiency and for effectiveness in allocating resources.

5.13

Consequently, harmonising tax rules, encouraging mergers, enabling joint management of funds (pooling), encouraging competition in the management and distribution of products and services, abolishing the need for the fund manager and the depositor to belong to the same Member States, avoiding high ‘transaction costs’ connected with fragmented subscription and reimbursement procedures, will bestow on the market a greater degree of efficiency and effectiveness.

9.5.2006   

EN

Official Journal of the European Union

C 110/26

1.1

There is an urgent and pressing need to ensure the market in accessible ICT goods and services pursues a path of interoperability and compatibility both across the European region as well as globally.

1.2

The ICT industry are beginning to wake-up to the untapped market of disabled consumers as well as an ever growing population of older consumers who could benefit considerably from accessible features in the design and production of goods and services in this sector.

1.3

EU Member States are increasingly acting both together and independently to address the digital divide and to promote eInclusion and eAccessibility through both legislative and voluntary measures. It is imperative that there is EU level coordination on this matter to reverse existing market fragmentation, to ensure avoidance of further fragmentation in the market and to avoid past mistakes whereby there was a lack of accessibility in mainstream ICT and a mis-match between assistive technologies and mainstream goods and services which isolated many potential consumers from the market. Such mistakes have had the additional negative effect in wider economic terms in particular by perpetuating the social exclusion of many persons and inhibiting their access to the labour market.

1.4

The European Commission communication on eAccessibility presents the main priorities to consider and address in order to avoid market fragmentation but rather to promote greater convergence and economic growth in this sector.

2.1

The Commission Communication on eAccessibility is intended to contribute to the principal strategic framework on a European information society as set down in the i2010 Communication (1) published in June 2005.

2.2

The main objective of the Communication is stated as being to promote a more consistent approach to eAccessibility initiatives in the Member States and by industry.

2.3

This Communication details both the benefits provided to disabled persons by new technology as well as the problems and the new barriers being created in the development of such technologies.

2.4

The Communication expresses concern about the existing fragmented market in accessible technologies and the danger that a lack of harmonisation and interoperability in this market will further accentuate the problems.

2.5

Three approaches are identified in the Communication as a means to address the issue:

3.1

It is increasingly well understood that the advances in information communication technology (ICT) must incorporate the needs of all persons in society, in particular those most vulnerable to social exclusion, to address the problem of the digital divide and an entrenched two-tier society.

3.2

Access to information by disabled persons must be recognised first and foremost as a rights issue. Disabled people, who make up 10 % of the EU population, have the same rights as non-disabled people to access to goods and services and this includes ICT goods and services.

3.3

There are also important economic reasons for Governments and industry to seriously address this issue. By addressing and finding solutions to the challenges faced by disabled persons to accessing ICT it will be to the advantage and to the benefit of all users in particular to the benefit of a growing population of older persons, children and persons with temporary disabilities.

3.4

Disabled persons constitute a heterogeneous group of people. At the same time it is fair to say that the main impairment groups facing accessibility difficulties in ICT are: persons with cognitive and learning disabilities, persons with sensory disabilities (deaf and hard of hearing, blind and visually impaired persons, deafblind persons, persons with speech disabilities) and persons with physical disabilities.

3.5

Disabled persons have benefited in many ways from advances in ICT — both in the respect of mainstream technologies and in respect of assistive technologies; for example:

3.6

However, at the same time new barriers are being created; for example:

4.1

The Lisbon strategy emphasises the need to secure the social and economic inclusion of all persons via employability. However, if information communication technologies are not designed in an accessible way disabled persons will be continually and increasingly excluded from the mainstream labour market. Full and effective implementation of eAccessibility principles and practices are essential to the economic inclusion of disabled persons as well as the social inclusion of disabled persons. Adherence to eAccessibility principles also means adherence to environmental safety requirements (such as addressing the incompatibility of electronic and noise interference experienced by persons wearing hearing aids when using mobile telephones). On average, the participation rate of disabled people in the EU workforce is under 35 %, compared to 70 % for workers without disabilities. And the Commission has estimated that around 2 to 3.5 million people with disabilities could potentially be integrated in to the labour force if positive measures are taken to properly address the barriers to their inclusion (4). Economic inclusion of disabled persons will benefit society and the economy of Europe at large — shifting away the dependency of many disabled persons.

4.2

While a growing number in the ICT industry need to realise the economic and business advantages to be made by addressing the needs of disabled and older users in the design of products and services, awareness of these advantages should be promoted more actively and further across the industry. There is a particular need to educate the industry personnel, both at management level, technicians and front-line staff, about accessibility requirements and features in order to better address the growing needs.

4.3

Disabled persons make up 10-12 % of the European population. Furthermore, Europe is facing important demographic change. Most significant will be the impact of an ageing population in Europe. By 2050 34.5 % of Europe's population will be over the age of 60 years old.

4.4

Disabled persons, persons with temporary disabilities and older persons combined make up 30 % of the European population (5). Furthermore accessible technology would benefit the wider consumer population at large including children and those unfamiliar with new technologies and wider socially excluded groups. One example is real-time text communication, which has the potential for a market which extends much more widely beyond the disability community.

4.5

Disabled persons and older persons are an untapped market which industry needs to take better advantage of and to market its goods to such consumers in a way it does not do at present. A German study has revealed that 48 % of persons over 50 years old consider that their age group was not adequately addressed by ICT products and services (6). Furthermore, a recent study undertaken by Microsoft identified that 50 % of the population aged over 59 years would benefit considerably from accessibility features in ICT technologies. Accessible and design-for-all technologies has led to job creation within the sector itself, in particular among SMEs which have paved the way for innovations in accessible technologies and advancement in new fields and professions.

—

The EESC welcomes the European Commission communication on eAccessibility which sets out important proposals and commitments in the field of, public procurement, certification and legislation. This eAccessibility communication provides an important reinforcement to the i2010 Communication on the European Information Society for Growth and Employment.

—

The EESC calls on the EU institutions to bring the actions proposed in the eAccessibility communication to the very centre of the European strategic framework on information society. The aims and objectives to promote eAccessibility and eInclusion will be given much more prominent attention in the i2010 actions.

—

The EESC recognises that there are many individuals and families who are denied continual access to telephone services because of their limited income. In addition, ICT equipment and services (such as access to the internet) can be prohibitively expensive for these people — including disabled people and older people; the EESC calls on Member State Governments to provide economic support to facilitate access to ICT goods and services by vulnerable and socially excluded groups in society.

—

The EESC is aware of, and very much welcomes, the work in progress by the Inclusive Communications Committee (INCOM) and TCAM (7) working groups on Disability chaired by the European Commission. These respective working groups have brought together all the relevant stakeholders to set down key priorities and areas for action in respect to eAccessibility — access to both goods and services.

—

The EESC recalls that the promotion of mainstream eAccessibility and disabled people to goods and services has been referred to and supported in a number of EESC Resolutions; notably:

6.1.1

The EESC shares the concern of the European Commission regarding the lack of harmonised solutions in the field of eAccessibility. Given the global nature of the ICT industry it is essential to ensure against European fragmentation due to the existence and development of separate Member State solutions. However, in order to provide the greatest possible economies of scale and the greatest choice to consumers, it is also essential to avoid global fragmentation by the introduction of unique regional requirements.

6.1.2

The EESC considers that the ICT industry is increasingly becoming aware of the untapped market among disabled and older consumers in Europe and internationally but this awareness must be more strongly promoted and supported.

6.1.3

The EESC fully supports the development and implementation of European standards for accessibility which are open, consensual and objective. These standards must also, at the same time, recognise the global situation and complement international standards. Lack of complementarity of European and international standards will lead to confusion and frustration for both the disabled consumer and the industry.

6.1.4

There has to be active user involvement in the standardisation process and support must be made available to ensure representative disability organisations can be represented in the decision making processes on the drawing up of European accessibility standards.

6.1.5

The EESC considers that the European Standardisation Organisations should be required to consider eAccessibility issues in the development of all standards.

6.2.1

Introducing accessibility requirements into public procurement tenders has been shown to be a very effective means to promote the mainstreaming of design for all and accessible technologies as well as in promoting employment and growth. Use of public procurement to advance accessibility approaches is a means whereby industry have a real incentive to bring this approach to the centre of their mode of operation. Furthermore, the EESC calls on the new Commission initiative, eProcurement to promote on-line purchasing, to be made fully accessible to disabled persons (consistent with the aims and objectives of eAccessibility) and to avoid incidents of mishandling or corruption.

6.2.2

The revision of the EU Directives on Public Procurements promote the opportunity to include accessibility as a criteria in the public purchase of ICT equipment and services. It is important to remember that public procurement makes up 16 % EU gross domestic product i.e. EUR 1 500 billion and, of this, the ICT sector makes-up 6 % EU GDP. The European public sector ICT average spending is 0.8 % of GDP which is EUR 76 billion. With this level of investment it is essential that public purchases ensure a long-term sustainable purchasing policy whereby ALL members of society have access to the goods and services being provided. Such a policy of eInclusion is essential to the effective function of local economies and in the promotion of the well-being and independence of members of the community.

6.2.3

The EESC, therefore, fully supports the European Commission proposal to go forward with the European Standardisation bodies to develop European accessibility requirements for public procurement of products and services in the ICT domain. However, it is essential that any such requirements are balanced between user needs, industry requirements and that they are usable by public authorities and do not lead to fragmentation within the European and, as much as possible, the global market.

6.2.4

Furthermore, in the case of future revisions of the EU public procurement Directives (8), the EESC would welcome a strengthening of the provisions to the Directive to include mandatory requirements on accessibility in public purchasing.

6.3.1

There is a need for the ICT industry to more clearly communicate to the consumer the accessibility and design-for-all features of its mainstream goods and services.

6.3.2

The EESC considers interesting the European Commission proposal to explore certification and self declaration schemes and to encourage transparency and better recognition of eAccessibility, as well as through the consideration of adequate certification schemes for an eAccessibility mark for goods and services that are compliant with standards on eAccessibility.

6.3.3

EESC considers the forthcoming investigation and data gathering on the different options will assist to clarify the best way forward. In particular, we welcome the forthcoming EU conference(s) and initiatives on this issue.

6.4.1

The European Commission correctly draws attention to existing EU legislation that can be used to promote and enforce eAccessibility.

6.4.2

Voluntary commitments made by industry are to be very much welcomed and encouraged. Such voluntary commitments demonstrate the level of interest and attention on the part of industry to address accessibility in the design of goods and services. At the same time, voluntary commitments alone have not proved to be sufficient to ensure adequate implementation of accessibility requirements to address access barriers which disabled people experience to mainstream technologies. Voluntary commitments should be complemented by legislative initiatives also including the field of public procurement.

6.4.3

It is important that EU commitment to eInclusion and eAccessibility is explicitly recognised and taken up horizontally in all other relevant EU initiatives.

6.4.4

For instance, the existing legislation in public procurement and electronic communications is also strongly supported by EU non-discrimination legislation in the field of employment which provides some important opportunities to advance the access needs of disabled people.

6.4.5

The Directive on Universal Service (9) at present covers access to public pay phones and publicly available telephone services such as emergency services and directory enquiry services. The EESC regrets that the Directive does not cover, within its scope either mobile telephones or broadband. The scope of the Universal Service Directive should be extended to cover both mobile phones and broadband (10). Furthermore, equal access to networks and services must be assured through fair tariffs and, where necessary, social tariffs.

6.4.6

Many disabled persons continue to face severe useability and access problems in relation to mobile communications. There is a need for real-time interactive mobile communication for deaf and hard of hearing persons, persons with speech difficulties and deafblind persons; interactive communication through mobile communications to be received on an equal basis with non-disabled persons — meaning in respect to useability and quality of service and equipment, choice, availability and price.

6.4.7

There is the need to address the problem of interoperability of existing systems used by persons with sensory disabilities. Disabled persons must be able to make a real time call across Europe and internationally without difficulty.

6.4.8

The internet is increasingly being used as a public service and communication tool but there are still important access problems which disabled people experience when trying to use the internet. One example of accessibility problems in relation to broadband: New voice services such as Voice Over Internet Protocol (VOIP) are already offering broadband-based ‘telephony’ services, a cheap service very attractive to users, especially for international calls. However, there is no guarantee that the VOIP will provide access to emergency services or directory enquiry services. This needs to be addressed.

7.1.1

The EESC calls for the European Standardisation Organisations to be required to consider accessibility when developing all ICT standards.

7.1.2

The EESC calls for EU standards and legislative commitments to be adopted to bring about the harmonisation of disability accessibility requirements notably in respect to the following areas:

7.2.1

The EESC supports the Commission proposal to examine the idea for a certification scheme and product labelling and Self Declarations of Conformity together with the mandatory or voluntary nature of these processes and supports the involvement of all interested stakeholders, especially including representative disability organisations. These findings to be made available by the European Commission to the EESC during the year 2007.

7.3.1

The EESC urges EU Member States to fully transpose the Directives on Public Procurement into National law without delay and to ensure strong provisions on requirements for disability access are included in the framework of national law.

7.3.2

The EESC calls on all public authorities to include accessibility criteria in their tendering process.

7.3.3

The EESC calls for mandatory provisions on accessibility to ICT goods and services to be included in the future revision of public procurement Directives. Thereby, it should be legally prohibited for public authorities to use software, hardware or other ICT products and services which do not conform to existing accessibility standards.

7.3.4

In respect of the standardisation mandate to CEN, CENELEC and ETSI in support of European accessibility requirements for public procurement of products and services in the ICT domain, the EESC calls on EU Member States to produce a plan of action on the implementation of how to apply the European standard to best effect at national level consistent with a common and coherent approach.

7.4.1

The EESC calls for explicit recognition of the importance of eAccessibility and design for all and ergonomic approaches to ICT to be made across all relevant EU legislative and non-legislative proposals, in particular in key EU documents on the information society and in respect to the Structural Fund Regulations, the funding instruments for the new accession countries and in the 7th Framework Programme on Research.

7.5.1

The EESC calls on all EU Member States to formally adopt, unchanged, Version 2 of the Web Accessibility Initiative Guidelines and to fully incorporate the Version 2 across all public websites.

7.5.2

The EESC calls for the application of the 2nd level of consent of Version 2 of the W3C-WAI Web Content Accessibility Guidelines, which implies the higher accessibility level, to be applied to all web resources.

7.5.3

The EESC notes and calls for the urgent need to develop and make easily available authoring tools (11) on accessibility which web designers can use to ensure W3C-WAI WCAG 2.0 compliance of their websites. These tools should conform with version 2 of the W3C WAI Authoring Tool Accessibility Guidelines ATAG.

7.6.1

The European Commission must undertake stronger action to ensure the Member States implement and meet their obligations to disabled users under the existing electronic communications Directives. It is apparent from the responses received by the Commission to the INCOM questionnaire on the Electronic Communications Package, that Member States have not adequately respected these commitments.

7.6.2

Where Member States are not implementing their obligations under EU law, the EESC calls on the European Commission to launch infringement proceedings towards the Member State(s) concerned to ensure full compliance.

7.6.3

The EESC calls for forthcoming revisions to the EU legislation on electronic communications to considerably strengthen the accessibility provisions and to make such provisions mandatory.

7.6.4

The EESC calls for the publication of a comparative report, by the European Commission, of the status of Member States' activities in respect to eAccessibility and for legal action to be taken where Member States' have not met their commitments under the respective electronic communication Directives.

7.6.5

The EESC calls for strengthening and broadening of scope of accessibility provisions in the EU Electronic Communications Directives on services and equipment. In particular:

7.7.1

The EESC notes that the European Commission strategy for the European Information Society (12) requires Member States to report annually on their achievements and how they are to implement their national reform programmes.

7.7.2

The EESC calls on the Member States to include a specific section on eAccessibility and eInclusion in their annual reporting and for the European Commission to support this call.

7.7.3

The EESC calls on the Member States to set clear and explicit targets and timetables for implementation of eAccessibility provisions in the national action plans.

7.8.1

The EESC calls on EU decision makers to ensure full and equal consultation and systematic involvement of disabled users from representative disability organisations, in the development and design of goods and services and in the development of standards. Additional resources must be provided by the EU institutions to ensure disabled users are able to participate adequately in the process.

7.9.1

The EESC calls on Governments and industry to develop and support measures to promote ICT education and training of disabled persons, and certain older persons within the framework of lifelong learning as well as among other excluded groups in order they may have better and easier, cheaper and better access to such technologies.

7.9.2

Awareness raising measures, such as the promotion of a European Design for All Curriculum have a great potential to improve understanding and the integration of accessibility into ICT.

7.9.3

The EESC calls on the European Commission, all Member States and industry to actively promote and incorporate a design-for-all curriculum into all education and training programmes in the ICT field.

7.9.4

The EESC calls on industry to ensure systematic in-house or external training of its personnel on accessible design.

7.10.1

The EESC is committed to ‘getting its own house in order’ and ensuring it will respect the principle and practice of accessibility in public purchasing in its public procurement activities.

7.10.2

The EESC will examine the extent to which improvements must be made to ensure full and equal access by disabled persons to the EESC website, computer software systems and ICT equipment.

7.10.3

The EESC will introduce internal procedures to ensure that all documents are issued in an accessible format.

9.5.2006   

EN

Official Journal of the European Union

C 110/33

1.1

The EESC welcomes the amendment to Regulation (EC) No 2037/2000 (Article 4(3) (new point (i)); the addition of the European Parliament, as co-legislator, to the title of this regulation; and the proposed change to its legal basis.

2.1

The proposed amendment of Regulation (EC) No 2037/2000 entails adding new letter point (i) to Article 4(3), stipulating that a new base date for allocating hydrochlorofluorocarbon quotas applies to the Member States which joined the EU on 1 May 2004: these will no longer be allocated on the basis of the 1999 quotas but on that of the average of the market shares in 2002 and 2003.

2.1.1

This change to the base date is in response to a purely trade-related imperative, preventing the exclusion of businesses present on the market only after 1999 and having minimal impact on the distribution of the total allocation of quotas, the quantities of which remain unchanged: there are thus no environmental consequences. The change to the base date also ensures that any future challenges on the basis of alleged breaches of the principles of ‘non-discrimination and legitimate expectations’ can be met.

2.2

The EESC notes and welcomes the addition of the European Parliament, as co-legislator with the Council, to the title of the regulation in question.

2.3

Lastly, the EESC approves the change of the legal basis of the Regulation itself from Article 57(2) of the Treaty of Accession to Article 175(1) of the EC Treaty, in line with Addendum 1, Corrigendum 1 and the agreement reached by the Working Party on the Environment on 21 October 2005.

9.5.2006   

EN

Official Journal of the European Union

C 110/34

1.1

The objective of this additional opinion is to propose various operational follow-ups and tools for the opinion on the social dimension of culture adopted by the EESC on 31 March 2004.

1.2

It endeavours to define the concept of a social dimension of culture, with reference to three key words. These key words — familiar to our Committee which studies them in depth on an ongoing basis — are ‘knowledge-based economy’, ‘economic globalisation’ and ‘civil society’.

1.3

It does not pursue the ideas put forward in the first opinion concerning the setting up of new structures such as observatories, laboratories and task forces.

1.4

However, it does call on the Commission to specify the qualitative and quantitative indicators justifying its assertion that the current range of Community tools suffice to measure:

1.5

The opinion suggests that the Commission should present a very detailed report on this phenomenon and this objective, not least since 2008 has been designated the year of intercultural dialogue. The EESC is willing to play a very active role in the drafting of such a report.

1.6

The opinion therefore proposes launching a new cultural debate on culture, particularly since the current debate still appears to be excessively fixated on issues of patrimony and on conserving heritage rather than on creativity, ongoing processes, and new departures of the imagination; nor does the debate yet reflect the cultural ferment characteristic of social, economic and environmental developments.

1.7

The opinion expresses the hope that the work of the Dublin Foundation will be brought more forcefully to bear in these areas. It proposes that, whenever the EESC deals with subjects where there is an implied need for ‘cultural revolutions’, ‘changes of mindset’ or ‘shifting away from inherited paradigms’, there should be at least one paragraph devoted to specific analysis of these ideas.

1.8

The opinion emphasises the extent to which the method of good or best practice could, if not used in a merely rhetorical way — as is often the case — be a major tool for dialogue, exchange and transfer of knowledge and culture.

2.1

This opinion put forward a number of ideas:

2.2

to affirm the EESC's cultural role, despite the lack of formal competences conferred on our institution in this field to date;

2.2.1

to work towards gradually setting up a European observatory of cultural cooperation, which, together with the European Parliament, could draw up its own annual report;

2.2.2

to achieve closer cooperation between the European Parliament and the EESC which, in addition to facilitating the establishment of the above-mentioned observatory, could also make it possible to set ‘an annual objective of promoting at least one truly shared cultural value’;

2.2.3

to launch a laboratory of cultural change in the social, economic and environmental fields;

2.2.4

to set up a European ‘task force’ to encourage cultural and artistic exchange in areas of conflict.

2.3

The present additional opinion is warranted by the fact that the earlier opinion had to be drafted quickly. Towards the end of its term of office, the European Parliament had asked us to launch a process and an EESC-EP partnership. Our Committee's enthusiasm for continuing its work has been heightened by the fact the very conception of the cultural dimension within the EU institutions seems to have given a twin boost.

2.3.1

Initial statements by Commission president José Manuel Barroso to the effect that the ‘moment of culture’ was at hand, that ‘in the hierarchy of values, the cultural ones range above the economic ones’ (1), were very encouraging and marked a vital turning point. For us, this was the first boost.

2.3.2

The second boost has come from our very own Committee, following its unanimous adoption of the programme presented by its president, Ms Anne Marie Sigmund, who has made this subject a central priority of her term of office.

2.3.3

However, these efforts remain tentative, since the programme presented by the new Commission does not actually translate this turning point into practice. It does not even explicitly refer to the new emphasis on culture! In accordance with standard procedures, the 2007-2013 programme for culture presented by the Commission has not been referred to our organisation for an opinion. It is not therefore the task of this opinion to comment on it other than to point out that the programme does not take spontaneous account of the ‘social dimension of culture’, and that the programme's funding is well below what the European Parliament would like to have seen allocated. Even in terms of the place of culture among the priorities of the EESC's programme, it would be an exaggeration to claim that specific action has already been taken.

2.3.4

Moreover, the role of culture and its social dimension in particular in the regeneration of the European Union remains ill-defined in the current context of the reflection period decided on by the Council following the rejection of the Treaty establishing a Constitution for Europe in France and the Netherlands (a treaty which included culture as one of the objectives of the European Union [(Article.I-3.3)], envisaged modifying decision-making processes in the field of culture and in many areas would have overcome the paralysis imposed by the unanimity requirement [(Articles I-17 and III-280)], and given the modest scale of the compromise which was reached on the financial perspective.

3.1

The EESC opinion on the social dimension of culture initially approached the subject from three main angles:

3.2

This additional opinion aims to help find the essential points, the ‘key words’ capable of meshing these initial reflections as simply as possible into current Community policies.

3.3.1

As was noted in our opinion on the social dimension of culture, the universal tendency to intellectualise all the aspects of work, including the ‘work’ of consumption, and the increased role played in this context by relational, stylistic and creative criteria, are and will continue to be at the heart of the differentials of competitiveness, attractiveness, mutual respect and entrepreneurship between the various geo-cultural regions of the planet. Europe must — and is in a position to — take the ‘creative economy’ as a reference point.

3.3.2

That is why the EESC opinion highlights, among other things, the issue of work and employment in the fields of culture and the arts, and of a culture-based economy, and it is in these areas that the Committee would like to see better use being made of the work of the Dublin Foundation. It would be useful to analyse how the forms assumed by cultural and artistic work are given shape by a more creative assessment of work as a whole and reflect the knowledge-based economy.

3.3.3

Our Committee does not resignedly accept the gulf between ‘high culture’ and the cultural dimension of technical, economic, social, health and environmental matters — areas which are still much too far removed from one another. Through its ongoing work, among other things, on lifelong learning and the shaping of a ‘learning’ society, our Committee is resolutely striving to help bridge that gulf.

3.3.4

The enormous need for activity and employment which is both secure and flexible in the fields of communication, mediation, knowledge, art and representation in all its various forms, and knowledge about knowledge, runs into the problem of employment models which, paradoxically, can accentuate inflexibility and insecurity.

3.3.5

The rigidity of traditional hierarchies of recognition accorded to various occupations may also impede the emergence of new occupations. More generally, it should be noted that there is a failure to genuinely translate intangibles into economic results, and insufficient mobility of artists and other cultural practitioners — and their works — across Europe. The shortcomings in terms of compiling and exchanging cultural innovations, which would save continually having to reinvent the wheel, should also be noted.

3.3.6

The success of the Erasmus and Television without Frontiers programmes, the European contribution to regenerating devastated areas, the revival of major urban centres thanks to artistic activity, and the lasting gains experienced by the European Capitals of Culture are already an initial indication of what is meant by the ‘social dimension of culture’. Although the EU's remit is limited to backing up national policies, it is nevertheless often a key player in helping facilitate numerous cultural events and activities; thus, its role is that of a catalyst. Ongoing input of information into a ‘knowledge’ database could have a considerable multiplier effect.

3.3.7

Equally, the losses in terms of earnings and networking activity sustained across the entire social and economic fabric when festivals and cultural events are discontinued, even temporarily, demonstrate the holistic contribution which artistic, cultural and mediation activity and employment — and the free movement and cross-fertilisation thereof — make to sustainable development.

3.4.1

In the EESC's view, the mediocre results of the Lisbon strategy relative to its ambitious objectives have mainly to do with neglect of the human, cultural and participatory factor. In a ‘globalised economy’, promotion of a European culture which no longer separates or prioritises economic, social and environmental factors is the only way for Europe to halt or even reverse the detrimental development lag between it and most other areas of the world.

3.4.2

In many European countries, and also in other parts of the world, there can no longer be any doubts concerning the economic weight of cultural and creative sectors, confirmed by numerous reports, studies and quantitative assessments. Many businesses and hence jobs have been created in these sectors over the last few years. One cannot overlook the trend here for the creation of small, micro- and one-person businesses, a development which has complex social implications.

For example, networks have to be put in place, given that tasks often have to be pooled due to the small size of the companies concerned. This means that the players concerned need communication, negotiation and presentation skills, as well as expertise on contract law, licensing rules, etc.

Small companies often face major challenges, due to a partial or sometimes total lack of such skills and knowledge, which are essential for all modern businesses; at the same time, they frequently lack the financial capacity to seek professional support, although other small and medium enterprises have become highly effective in these areas.

As for social policy, it must find solutions for social protection issues (for example, sickness, pensions and unemployment insurance) arising from new business structures and new forms of employment.

3.4.3

Another social dimension arises from the fact that businesses in ‘new’ economic sectors such as the creative industries are often isolated, given that they operate in fields which are still characterised by a total or partial lack of reference values, model contracts, sectoral indicators, etc. This aspect too is important for the future development of the creative industry and it should be reflected in an appropriate way, especially given that, due to increasing globalisation and the need to face up to international competition, such basic information is vital for economic progress.

3.4.4

Given that the European Union must itself redefine its goals, it is all the better placed to understand how economic globalisation is influencing and will continue to influence the emergence of new global cultural values. This also reflects the fact that the European Union is no longer, and can no longer be, a club, a restricted federation of ‘advanced’ countries with a relatively high degree of economic, cultural and spiritual homogeneity. The EU has fully opened itself up to Protestant, Orthodox, and Muslim cultures, is launching negotiations on Turkish accession — an enlargement, which if it actually happens, will be wholly unprecedented — and is placing its relations with its immediate neighbours on a systematic footing. It is now also having to re-think its place and its particular role in a globalisation process which has also seen the rules of the game change at a rapid pace (2).

3.4.5

A ‘cultural Europe’ born of nation states that were past champions at waging war, colonising and empire-building is now perhaps the most appropriate expression of Europe as a ‘great power’ with the capacity to export, disseminate and ‘professionalise’ a ‘culture of peace’, civility and excellence. This represents a return to the very idea that was the driving force behind the European venture — the desire to spread the values and practices of peace, interaction and exchange, rather than domination and hierarchy across the world.

3.5.1

The fact that the EESC, whose formal remit has not been explicitly expanded to include culture has, at its president's instigation, adopted an overall action plan that gives priority to culture  (3), is a key political statement.

3.5.2

This could even be seen as a kind of affirmation of culture, in defiance of the hegemony of a way of thinking which sees everything strictly in terms of economic benefits or output, or even of social and environmental issues. This affirmation is all the more valuable for having been initiated by European social and economic actors, representing organised civil society across the board, in the fields of production, consumption and redistribution.

3.5.3

This evolving European culture, which the current historic enlargement process is re-uniting, is the product of a remarkable history and a unique form of development (4). It is all the more important to be aware of its potential to overcome a phenomenon which cannot be concealed or under-estimated: the fact that ‘the public in the Member States shows little interest or curiosity, or is simply indifferent, to the cultures of other EU countries’ (5). Incentive policies (EU ‘cultural’ programmes) can of course have a significant impact on this state of affairs, but only a holistic vision of culture and full recognition of its social dimension will suffice to fully remedy the problem.

3.5.4

The wide range of issues involved in the task of devising a true social and cultural democracy would merit thorough discussion with social movements, cultural networks and the social partners — not just between institutions. One of the major challenges to be met is undoubtedly that of establishing a cooperation ethic and technology among all the partners concerned, in order to work constructively towards a global set of cultural values founded on non-violence.

3.5.5

Our societies can no longer afford not to recognise and involve all their actors and all their environments. It has been made clear both by the European Year of Disabled People and EESC opinions and initiatives on this subject — and also on all other subjects linked to various forms of discrimination and severe poverty — that they will be judged on the place and role they give to the most disadvantaged and marginalised members of society. The aim is not only to give everyone their due place, but also to ensure that the cultural impact of their fight against poverty infuses humanity and provides an opportunity to revamp modern humanism. Should not the traditional models of hierarchical command and ‘assisted dependence’ (cf. the various forms of welfare state) now give way to a model involving the active participation of each person, i.e. ‘empowerment’ of all the economic, social, family and cultural players? This means that, in the new democratic mindset required and facilitated by a globalised economy, ‘civil society’ can, despite not having any direct claim to power, no longer be presented as a subordinate factor or counteracting influence. To ensure a stable future and protect itself from arbitrary developments, civil society must promote its values of solidarity and preserve the capacity and guarantee for ‘thinking collectively’.

4.1

The EESC notes that, for the time being at least, its institutional partners (European Commission, Parliament) and to some extent the Committee itself view the establishment of new structures such as ‘observatories’, ‘laboratories’, and ‘task forces’ as either useless, premature, or unrealistic.

4.2

For the European Commission and, it seems, the Parliament, the networking of structures such as the various existing observatories could yield real results in terms of European cultural cooperation without requiring new instruments to be devised.

4.3

However, the EESC would ask the Commission to formulate quantitative and qualitative indicators, and to clarify existing indicators, thus enabling objectives for the advancement of intercultural dialogue, for the mobility of artists and artworks, and for the transfer of knowledge and ideas between hitherto highly compartmentalised fields, to be discussed, shaped and evaluated.

4.4

For the EESC, this is not just a matter of ex-post monitoring of quantitative progress towards such objectives. Indeed, the proliferation of intercultural contacts and events in an enlarged Europe and in a more developed single market, particularly in terms of services, can only intensify.

It is also important to know whether measurable growth in cultural consumption and tourism exchanges automatically translates into gains in terms of enhanced knowledge, more outward-looking attitudes and culture. It would be well not only to quantify and describe, but also to seek to understand the proliferation of phenomena such as exclusion, racism (even in countries such as the Netherlands or France where it seemed that long-term policies aimed at integration and/or multiculturalism had created stable models), decoupling of individual and general interests, and fragmentation rather than convergence.

4.5

Moreover, everyone is aware that many national cultural policies, even those which benefited from determined and coherent management over decades by EU Member States, have had very little impact on inherited social class systems.

4.6

That is why the EESC is so strongly in favour of the European Union becoming a forum for reflection and discussion on the cultural policies of each Member State — a forum for a new process of cultural reflection on culture. Preparations for the year of intercultural dialogue (2008) should be an opportunity for the Commission to present a very detailed document on the actual breadth of such dialogue, the persistent or new obstacles which it encounters, and new ideas which could help genuinely deepen it. The EESC is willing to play a role in the drafting of such a report, for example from the perspective of the social dimension of culture, and also from that of the cultural dimension of social issues, for example in terms of intergenerational relations.

4.7

This additional opinion also proposes the following:

4.7.1

sustained ‘cultural hygiene’ on the part of our Committee: whenever an opinion deals with subjects where the cultural aspect is of key importance, a section of the opinion could explicitly discuss this aspect. Rather than referring in abstract terms to the necessity for cultural revolutions, changes of mindset and shifts away from inherited paradigms which have since become obsolete, the conditions required for cultural transformations of this sort should be discussed in as specific terms as possible.

4.7.2

closer attention to the open method of coordination and the use of ‘best practice’. Should not concepts and procedures be ‘tightened up’ so that they can acquire a much more specific operational capacity? This would help to ensure that identification and transfer of knowledge and cultural changes lead to more efficient, cost-effective and convergent reforms which can be clearly explained, thus enabling their appropriation and replication.

4.7.3

determination on the part of the European Economic and Social Committee — which is an ideal forum for encounters between national, professional, social and societal cultures — to launch a search in specific sectors for areas of activity where there is scope for exchange of practices, for example between the healthcare and educational sectors; these are sectors where there are close parallels between cultural changes — both those which are already underway and those which are desirable. Such changes could help to establish new ways of controlling complex systems, and offer scope for more encounters, exchanges and sharing. For example, promoting multidisciplinary team work can help to create common ground between various professions, which by nature are isolated from one another. Such interaction could help to overcome compartmentalised and blinkered attitudes in individual disciplines. It could also enable progress in one field to benefit other areas of activity more rapidly and extensively

than is usually the case. Finally, it would establish a systemic culture, in which economic, social and environmental aspects are no longer divorced from one another, as a cultural unity for Europe is in its diversity and in improving the living conditions of its peoples.

9.5.2006   

EN

Official Journal of the European Union

C 110/39

1.1

The European Economic and Social Committee welcomes the Commission document presenting the JEREMIE programme (1) (Joint European Resources for Micro-to-Medium Enterprises) with keen interest.

1.1.1

The Committee is grateful to Danuta Hübner, Commissioner responsible for regional policy, as well as DG Regio and the EIF, for the efforts they are making in developing this delicate programme and for the support they have given to the Committee's work.

1.1.2

The EESC has always supported Commission initiatives to facilitate access to credit for micro-enterprises and SMEs, being convinced — as is the European Parliament — that aspect has always represented a weak point for smaller businesses.

1.1.3

Strengthening small businesses represents a fundamental element in the Lisbon strategy, since it ties in with innovation, generates stable employment and contributes to the ongoing training of the workforce.

1.1.4

In numerous opinions, and especially those drawn up since 1982 (2), the EESC has highlighted the efforts made by the Commission, DG XXIII (3) in particular, to help businesses improve their links with the credit system, particularly banks.

1.1.5

The EESC has also emphasised the need for the broad-based involvement of the social partners in all enterprise-related problems and, in particular, those concerning credit, since they have a considerable impact on social well-being and development.

1.2

Throughout the 1990s, DG XXIII (4) sought to act on credit problems, working in close contact with organisations representing the crafts sector and SMEs. The successive European Conferences of Crafts and Small Businesses (SME) (5) and the numerous preparatory meetings (an average of 10 in the run-up to each conference, attended by hundreds of small businesses) have:

1.2.1

On the basis of the experience outlined above, the EESC believes that it would be appropriate, not least in view of the new programming for 2007-2013 and the Lisbon objectives, to provide more information on the new programmes, especially those aimed at micro and small enterprises, by holding meetings in the Member States with representatives of the social partners and civil society.

1.2.2

However, in spite of the interventions and efforts organised over the last 20 years, many regions in the EU-25, especially the most disadvantaged ones, lack a project capable of coordinating and fine-tuning the many loan instruments currently in existence.

1.2.2.1

Close to four million businesses — 20 % of those in existence — judge that poor access to finance is a serious barrier to their growth (9).

1.2.2.2

Only a few tens of thousands of undertakings have been able to use Community financial instruments (10), revealing the yawning gap between the way the issue is presented and the practical results. This prompts consideration of the practical possibilities of intervening with systems which can boost the involvement of financial institutions and amplify the results.

1.2.2.3

The EESC is aware of the need to step up efforts to improve the information on credit opportunities provided by the Commission, the EIB, EIF, EBRD and national and regional authorities. Micro and small enterprises are very often excluded –in part, moreover, through their own fault — from channels of information.

1.3

JEREMIE could therefore be put forward as a ‘smart’ tool for coordinating and rationalising existing opportunities.

1.3.1

The JEREMIE initiative falls within the scope of the Cohesion Policy in Support of Growth and Jobs: Community Strategic Guidelines. The Committee's position on this may be summarised as follows:

1.3.2

The Committee emphasises the importance of Commission support for the JEREMIE initiative not only outwardly, but also through internal coordination between services managing actions to support micro, small- and medium-sized enterprises, by setting up a ‘JEREMIE focal point’ to serve as a unit informing and coordinating between the various actions in order to optimise the results.

1.3.3

The EESC believes that the Commission should provide a report every two years to the European Parliament, the Council, the Committee of the Regions and to the European Economic and Social Committee on the progress and efficacy of the programme, with a view to extending this important experience to other sectors.

1.3.4

Lastly, the Committee recommends that full compliance with the principles of economy, efficiency and transparency be ensured in tendering and selection procedures, management of the regional holding funds and accreditation of the financial intermediaries charged with project management. In particular, full compliance with the relevant Community legislation must be ensured, even in cases of exclusive rights. It must be possible to impose penalties, dismiss inefficient holding funds and revise the lists of accredited financial intermediaries.

2.1

The EESC has repeatedly underlined the role — not only economic, but also social — played by small businesses in their respective Member States, and has drawn specific attention to this in several opinions, including those issued in 1992 (13), 1997 (14), 2001 (15) and 2003 (16), together with others on the European Charter for Small Enterprises (17).

2.1.1

Micro and small businesses perform an essential role in the European economy. They number some 25 million, represent 99 % of all businesses and employ nearly 95 million people, providing 55 % of all jobs in the private sector (18).

2.1.2

These figures highlight the importance and the role of SMEs in the Lisbon strategy, as well as the need to establish a strong partnership with the representatives of the social partners, in order to be in a position to generate new forms of cooperation (19). Their purpose is to put into practice the social and economic values underpinning Europe's social market economy (20).

2.1.3

The main problems affecting the start-up and development phases of micro and small businesses are, in order of importance:

2.1.4

Access to credit is therefore a precondition for setting up a business, and is a fundamental requirement for the growth and development of micro and small businesses, who feel the restrictive effects of the credit system more clearly and more strongly than large companies.

2.1.5

Direct contact with businesses and their problems, and an understanding on their part of the opportunities provided by the credit system — especially those located in the areas where the businesses are operating — is the only way to harness the positive effects of credit. This will prevent excessive inflexibility in funding arrangements and the ensuing increase in risk, with regard inter alia to developments concerning the Basle Agreements. Businesses must therefore find their own financial balance and identify the necessary tools.

2.1.6

Self-financing plays a key role, even if small companies can rarely achieve their own investment plans with this instrument. The following are necessary in 90 % of cases:

2.1.7

Among these instruments, risk capital is often mistrusted by small enterprises. Only 5 or 6 % of the myriad micro (21) and small (22) businesses (90 % of which are individual companies or partnerships) make use of venture capital. If take-up is not to remain negligible, new forms of venture capital must be devised which can also apply to individual companies.

2.1.8

The priorities identified to bridge the gap between finance and small enterprises can be summarised as follows:

2.1.9

The analyses and evaluations of needs and potential, under the JEREMIE preparatory phase, should be carried out in individual EU regions with the real involvement of the relevant economic and social partners, as part of an effective and responsible partnership.

2.2.1

The degree of difficulty in gaining access to loans, outlined above, varies according to the level of economic and market development. The convergence regions (25), which have the greatest need of credit instruments in order to boost employment through entrepreneurship, are in fact those where access to credit is most difficult, and where interest rates are higher than those applied in more developed regions (26).

2.2.2

EIB loans, granted in rotation (27) to trustee banks to be divided among SMEs at variable, but limited, rates (28), are used primarily by banks operating in developed regions, where competition between banks is greater and granting EIB loans is a means of keeping loyal customers.

2.2.3

Since there are few banks, especially of the cooperative or popular credit type, in the less developed regions, there is less competition in the banking sector and little awareness of small operators: as a result, it is rare that the valuable instruments provided by the EIB are used in such regions.

2.2.4

In short, if efforts are not made to reverse this trend, in part by the financial mediation of those tools which JEREMIE can deploy alongside the more conventional EIB and EIF ones (29), the poorer regions will be condemned to continuing long-term poverty.

2.2.5

In order to provide loan back-up, especially in the convergence regions, a JEREMIE desk could be organised at the EIF with the task of supporting guarantees on bank loans with surety instruments, via credit consortia or other bodies which are active in the less advantaged regions in particular.

2.3.1

The problem of access to credit for micro-businesses, as well as SMEs, puts the spotlight on a number of market shortcomings:

2.3.2

The aim therefore is to make up for market shortcomings with actions which:

2.3.3

The Lisbon strategy was relaunched at the March 2005 European Council, and the governments and economic and social partners were urged to act in three priority areas:

2.3.4

The Member States' expenditure on supporting employment and job creation is sometimes considerable, but is justified by the social results (31). In the event of a universal loan of EUR 20 000 to half of the EU-25's SMEs — i.e. some 12 million businesses — the probable losses due to insolvency (32) would not exceed EUR 6.5 billion, representing 0.07 % of EU-25 GDP; at the same time, granting loans across the board would enable most enterprises to consolidate their position and to innovate with regard to their processes and products.

2.3.5

If loans were granted through the intermediary of loan consortia, capable of absorbing 50 % of insolvencies, the losses would be shared equally (50-50) between the relevant consortium and bank.

2.3.6

A culture of accepting that credit has a social function enables the necessary financial engineering tools to be developed with a contribution from public funds, European funds and solidarity funds contributed to loan consortia by businesses themselves, either when registering with a consortium or in the form of a percentage of bank interest (33).

2.4.1

Granting large numbers of small loans, as required by business start-ups and by European micro and small enterprises, is subject to:

2.4.2

Some solutions to these problems can be found in existing instruments, which should however be put to better and more extensive use:

2.5.1

Over the last few years in particular, the multiplier instrument has been analysed and used by both credit consortia and banks to boost credit possibilities (37). Rigorous analysis of the insolvencies picture, especially in the convergence regions, allows the multiplier to be adjusted to match the local situation. The percentage of insolvencies of course rises in the most disadvantaged regions, where it can reach 10 %, while in the richer regions, the failure rate for micro and small businesses is of the order of 2.5 %.

2.5.2

JEREMIE can realise its potential primarily in the convergence regions, providing credit consortia with personal guarantees and facilitating securitisation processes, in order to increase credit opportunities and offset the weakness of the multiplier.

2.6.1

The Competitiveness and Innovation Framework Programme (2007-2013) (38) brings together various Community measures and programmes, including the following:

2.6.2

There should also be an analysis of the financial instruments included in the Fourth multiannual programme (MAP) (2000-2005), extended until 31.12.2006), with a budget of EUR 531.5 million (47), which is to be incorporated into the CIP and come under the JEREMIE strategy.

2.6.2.1

The MAP is organised around three pillars:

2.6.2.2

An analysis of how the MAP financial instruments have operated reveals which have given the best results and which may consequently be incorporated into the JEREMIE strategy. These instruments are by far the largest item of expenditure under the fourth MAP: in 2003, for example, they accounted for 67 % of the programme's total budget (48). Resources are distributed within these financial instruments as follows:

2.6.2.3

These instruments were previously used, in 1998-2000, under the programme of initiatives for growth and employment, alongside others:

2.6.2.4

Neither SCA nor JEV have yet yielded much by way of results.

2.6.2.5

Approximately 178 000 SMEs had availed of the SME-Guarantee instrument by the end of 2003 (53) (136 000 under the growth and employment programme, 32 000 under the credit guarantee programme and 10 000 with the micro-credit programme).

2.6.2.6

During the same period, some 240 000 SMEs (54) had benefited from the ETF Start-up programme.

2.6.3

JEREMIE could therefore continue disseminating experience with these two financial instruments, increasing the number of beneficiary SMEs, especially in the convergence regions.

2.6.4

It should be borne in mind that only 0.81 % of European SMEs have, during these years, benefited from joint DG Enterprise, DG Economic and Financial Affairs and EIF interventions.

2.6.5

It is, however, important that JEREMIE should explore new paths, including those envisaged by the new programmes, in the following areas in particular:

2.6.6

The EESC is however convinced that these interventions suffer from a major problem of information and training: the solution should involve the financial institutions, and organisations representing employees and workers, governed by the principles of corporate social responsibility and the social purpose of credit.

2.7.1

It is in the Committee's view vital that Community legislation on public service tendering be complied with in full, in order to guarantee that the JEREMIE initiative succeeds.

2.7.2

In any case, the Commission's JEREMIE department and/or the EIF must guarantee that the tendering procedures comply with the principles of economy, efficiency, impartiality, equal treatment and transparency. The contract documents, drawn up in advance by the Commission, must in particular contain among the eligibility criteria for companies or consortia wishing to take part, the following:

2.7.2.1

In the event of holding fund/2007-2015 operational programme agreements, there must be provision for penalties, revocation and dismissal of a holding fund on the grounds of inefficiency, irregularity or serious failures to fulfil obligations. Management should be monitored at two-yearly intervals, with the support of regional economic and social partners, with transparent procedures for the publication of reports, which should be forwarded to the central national authorities, the European Parliament, the EESC and the Committee of the Regions.

2.7.3

Financial entities or consortia established in another Member State or in one of the countries which has signed the agreement on public contracts, as set out in the Annex to the WTO Agreement must be allowed to qualify under the same conditions as those applied to national participants, on the basis of documents complying with the legislation of the countries in question, which demonstrate that all the requirements for qualification are met.

2.7.4

These provisions should also apply to the accreditation procedures for intermediary credit institutions: these must be subject to systematic performance monitoring arrangements, defined in conjunction with representatives of the relevant economic and social partners, and also to a periodic accreditation review. In all cases, replacement of part of the accredited elements must be ensured every three years.

9.5.2006   

EN

Official Journal of the European Union

C 110/46

1.1

The EESC congratulates the Commission on its complex, meticulous work on simplifying administrative procedures; however, it notes a certain discrepancy between the statement made at the beginning of the Explanatory Memorandum (‘the following draft … deals with technical amendments which can be introduced under the current Financial Regulation’) and the actual scope of many of the amendments.

1.1.1

Many of the ‘technical’ amendments concerning relations with businesses and the public are ‘political’ in nature and scope: greater transparency, streamlining procedures, faster responses and greater confidence in the social partners are signs of welcome progress in public governance.

1.2

At the same time the EESC stresses the need for caution: the desire to benefit the social partners must take into account the fact that there must be a limit to flexibility for treasury administrators — i.e. potential losses must be set against actual savings in that difficult but necessary exercise known as risk assessment. This exercise may be very unpopular with administrators but it is the only sensible path to take.

2.1

The proposal lays down implementing rules for Financial Regulation No 1605/2002, which is currently in force. In order to shorten implementation times, it also takes into account a number of technical amendments made by the new Proposal for a Council Regulation on the Financial Regulation (1) which is in the process of being adopted. The EESC has already issued an opinion on the latter document (2).

2.2

As in its earlier opinion, the EESC refrains from commenting on strictly technical accounting aspects, which can be addressed more effectively by technically qualified EU bodies with direct experience in the matter. Instead, as in its earlier opinion, it focuses on rules which could affect third parties (civil society organisations) which enjoy relations with the European institutions.

2.3

Three of the technical accounting principles — unity, annuality, unit of account — remain essentially unchanged and are just slightly amended or clarified. As regards the fourth principle — sound financial management — the proposal is based on existing criteria but clarifies the content of an ex ante evaluation and provides clearer guidelines on the scope of ex ante, interim and ex post evaluations, taking into account the proportionality principle. The EESC is very pleased to note the Commission's intention to ‘redirect’ the priorities of the evaluation, ‘in order to focus on proposals with a real impact on business and citizens’.

2.4

Again mindful of the expectations of business and the public, and concerned to ensure that public funds are used sensibly, the Commission stresses that pilot projects and preparatory actions should be subject to an evaluation if they are to be continued as a programme. However, in order to simplify procedures, where projects or actions have already been evaluated, as in the case of joint actions undertaken by the Commission and the Member States, such evaluation should not be duplicated.

3.1

Of course, the comments made by the EESC in its above-mentioned opinion on the Proposal for a Regulation apply to the implementing rules as well. Although the simplified procedures and more flexible criteria for applying the rules are to be welcomed, it would not be acceptable if it were to become the norm to consider every sum below a pre-established threshold as negligible. In other words, the EESC agrees that the thresholds below which simplified procedures are to be used should be raised, but that does not mean that a more relaxed attitude can be adopted or that the level of control of expenditure can drop under the pretext that any material damage would not, in practice, affect the budget as a whole.

3.2

Without wishing to refer to the abused and over-invoked principles of public morality, the EESC points out the danger of adopting a less vigilant attitude towards the legality of expenditure transactions concerning amounts considered to be ‘low’, particularly in the case of calls for tender and grants. The public must not receive the impression that, because procedures are being streamlined, it will be possible to find unlawful ways of obtaining funds from public authorities: a perception of this kind would be a blow to Europe's image.

3.3

The EESC believes that careful scrutiny of OLAF reports by the Commission's accounting authorities would reveal whether existing and forthcoming simplifications are sound and where any weak points are: the information on exposed fraud cases could provide useful pointers.

4.1

The new Article 85(a) concerns appeals by third parties against a Commission decision imposing a fine, constraint or penalty: to protect the Community's interests the accounting officer has to require the petitioner to provisionally lodge the amounts concerned or else provide a financial guarantee (in technical terms, surety). The guarantee must stipulate that — should the appeal be turned down — the guarantor will pay the amount requested by the authority immediately, unconditionally and without the need for prior prosecution of the debtor. Technically, this is surety which must be redeemed at the first request, along the lines of the estoppel principle used by many tax authorities and customary in calls for tender.

4.1.1

The EESC has no particular objections to this kind of guarantee. It merely notes that surety which is to be redeemed at the first request is more burdensome than normal surety and that commissions are proportionate to the length of validity of the guarantee. In view of the burden incumbent on the petitioner, the procedures for examining appeals should be made moderately more expeditious than they are at present. Although it does not directly concern the Financial Regulation or its implementing rules, this aspect, which is regretted by certain social partners, warrants close analysis in the context of administrative authorities' relations with third parties.

4.2

The new Article 90 lays down, inter alia, that where procurement and grants linked to sectoral programmes are concerned, adoption of the annual work programme is considered as the financing decision necessary for the expenditure to be included in the Community budget. Although this is an internal accounting measure, it may well speed up the procedures for allocating funds and the EESC therefore believes it could benefit creditors or beneficiaries.

4.3

Article 129 is designed to simplify the management of contracts with a value below specified thresholds. Hence, where the amounts concerned are relatively small, the authority is authorised to use a ‘negotiated procedure’ (or, to be more accurate, private treaty), after consulting a number of candidates, specifically:

In practice, the new provision does not introduce any new elements but merely raises the thresholds laid down by the previous rules.

4.3.1

Articles 130 and 134 also introduce a number of simplifications. Article 130 states that, for contracts with a value below EUR 60 000, the contracting authority may limit the documents relating to the invitation to tender ‘to what is strictly necessary’ (on the basis of its own criteria and under its own responsibility, of course). Article 134 provides that the documentary evidence of eligibility to take part in the call for tenders may be replaced by a declaration on the candidate's or tenderer's honour, without prejudice to the authority's right to request the evidence supporting that initial declaration at a later date.

4.3.2

Another simplification introduced by Article 134 is the waiver of the obligation to submit documentary evidence if such evidence has already been submitted to that or another contracting authority for another purpose no earlier than six months previously. In this case, too, the documentary evidence is replaced by a declaration on the candidate's or tenderer's honour.

4.3.3

Article 135 also makes concessions concerning the documentary proof of candidates' or tenderers' financial, economic, technical and professional capacity. The article stipulates that the authority may, on the basis of their assessment of the risks, decide not to require this proof. The facility is, however, limited to contracts with a value equal to or less than EUR 60 000 where the beneficiary of the contract is the authority itself or to contracts with various different values (depending on the case) where the beneficiary is a third party. Another restriction is the stipulation that, where it is decided not to require proof, no pre-financing or interim payment may be made: this is a guarantee for the authority but an important consideration for the other party, who may decide to submit the documentary proof anyway to avoid what could be a considerable expense.

4.3.4

The EESC endorses all these provisions making the procurement process — which is costly for both candidates and the authority — less burdensome where relatively modest amounts are concerned. However, it points out the need for great care to be taken to prevent any abuse: the more flexible the procedures, the greater the temptation to abuse them.

4.4

The implementing rules regarding grants appear to be sympathetic to the concerns of the social partners, taking into account — as far as can be inferred from the provisions as a whole — the specific nature of beneficiaries. As an initial measure, Article 164 provides that, for grants with a value of less than or equal to EUR 25 000, the authorising officer may require greatly simplified documentary evidence: the EESC endorses this procedure although it notes both the heavy responsibilities incumbent upon the authorising officer and the danger that, in certain cases, the benefit of simpler rules will be cancelled out by an — understandable — reluctance to take these responsibilities on.

4.5

Various other provisions facilitate or provide access to Community funds for various types of institutions. To this end, where bodies with a de jure or de facto monopoly are concerned, Article 168 merely requires an informal investigation, to be recorded in the form of a reasoned declaration by the authorising officer. Article 162, which provided for operating grants — which do not decrease with renewal — for bodies pursuing an aim of general European interest, extends the list of possible beneficiaries to bodies involved in research, innovation or the promotion of citizenship. Article 172 enables authorising officers to accept co-financing in kind (such as voluntary work) as contributions from the institutions receiving funding.

4.5.1

The EESC welcomes all of these provisions but points out once again that more flexible rules will bring greater risks for the Community budget and more responsibilities for authorising officers, and require tighter controls.

4.6

There are number of other provisions simplifying procedures. All educational establishments will now be exempt from the verification of financial capacity (Article 176), whereas in the past only secondary schools and higher education establishments benefited from this provision. For grants with a value of less than or equal to EUR 25 000, the authorising officer may draw up a less detailed grant agreement (Article 164). Moreover, under Article 173, the obligation to submit proof of an external audit will not apply to grant agreements with a value of less than EUR 750 000, agreements for an action with value of less than EUR 100 000 and agreements with a number of beneficiaries who have signed a document accepting joint and several liability.

4.6.1

The EESC understands why the Commission wants to simplify procedures as much as possible and, in principle, agrees with it. However, it fears that it may be going too far. It is one thing to exempt parties from submitting costly and sometimes unnecessary documentation, but it is quite another to waive the obligation for grant recipients to declare the state of their finances, when the thresholds set — particularly for the cases covered by Article 173 — are far too high. The aim should always be to strike the right balance between the expected benefits (savings in time and money for both the Commission and the public) and the potential costs (loss of public money, calculated in terms of the probability and size of the risk).

4.7

The criterion of caution and risk assessment mentioned in point 4.6.1 above has, moreover, already been adopted with regard to pre-financing: a guarantee (surety or other form of guarantee) is required as a general rule for all pre-financing with a value equal to the grant, and for any pre-financing exceeding 80 % of the amount of the grant and above EUR 60 000.

4.7.1

The EESC believes that the above provision is based on the sound principle of caution as referred to in point 4.6.1, but wonders whether these criteria might not also have been applied to genuine grants (e.g. the cases cited in point 4.6), given that, in terms of actual risk , the difference between pre-financing and grant is very often — with a few, sometimes significant exceptions — more administrative than real.

4.8

Article 165 introduces a criterion which is entirely acceptable but has not always been applied in the past: where the recipients of grants are bodies which pursue an aim of general European interest, the Commission is entitled to recover the percentage of the annual profit corresponding to the Community contribution to the budget of the bodies concerned. This provision only applies in cases where the rest of the body's budget is financed by Member States' authorities which are themselves required to recover their share of the profits.

4.8.1

The EESC fully endorses this provision but finds it difficult to believe that the text as it stands can be intended to imply that the Commission should not also be entitled to recover profits in cases in which the rest of the budget is financed not by public authorities but by private entities.

9.5.2006   

EN

Official Journal of the European Union

C 110/49

1.1

The relaunch of the Lisbon strategy has established sustainability as a primary objective of EU policy. The EESC believes that this own-initiative opinion on regrowing raw materials could act as a spur to progress in key areas:

1.1.1

Even against the background of an increasing use of regrowing raw materials, economical and efficient use of raw materials will continue to represent the key challenge for the future development of all sectors.

1.1.2

The Committee recognises the high level of effectiveness in terms of employment of establishing a regrowing raw materials industry in the regions; it also recognises the need to develop an appropriate policy to provide employees and users in all areas connected with the production and use of regrowing raw materials with the requisite skills and further training.

1.2

The Committee realises that many different units in the Commission are addressing this issue from their own perspectives, but it regrets the lack of a clear coordinating point or task force for this EU policy area. It therefore calls on the Commission to carry out a reorganisation to give the policy for regrowing raw materials a clear sense of direction.

1.3

The decoupling of direct payments under the Luxembourg agricultural reform agreement of 2003 and the EAFRD Regulation, as well as the future approval of sugar beet as a regrowing raw material, provide an important basis for wider cultivation in Europe.

1.3.1

When it comes up for review in 2006, modifications should be made to the energy plant premium in respect of the following points:

1.4

The Committee expects high allocations to be set when earmarking aid from the Structural Funds for this sector's economic development.

1.5

The 6th Framework Programme largely neglected research and development in the sphere of technologies for regrowing raw materials. The EESC therefore calls for specific actions in the 7th Research Framework Programme for the development of regrowing raw materials and their material applications, as well as funds for developing energy from biomass. This will require a considerable increase in funding.

1.6

The Committee points out that, at the present time, it is not the volume of supply of regrowing raw materials which are or could already be produced which is the limiting factor in the development of this sector. It is rather the level of processing technologies in respect of the products which could be marketed which is lagging behind.

1.7

The Committee welcomes the EU Biomass Action Plan, but regrets that it does not cover the production of materials but only of energy from biomass, and awaits assessment of the Action Plan and moves to establish national and regional action plans.

1.7.1

In the case of renewable sources of energy, particularly biomass, most EU Member States are failing to adequately exploit potential resources, because the general legal conditions are inadequate. The Committee therefore calls upon the Commission and the Council to produce a more effective policy in this regard.

1.8

The Committee explicitly supports EU target-setting for the share of renewable raw materials sources. It recommends 4 x 25 for 2020, or 25 % of electricity, heating, fuels and new materials, such as compound materials, natural fibre reinforced plastics, or other petrochemical products.

1.9

The Committee stresses the crucial importance of developing and implementing effective market launch measures for all applications (electricity, heating, fuels, and materials production). The energy-saving laws of certain Member States could serve as models of success here. It is important for measures to have the necessary flexibility to provide security for investors and incentives to employ new technologies, whilst taking account of differing background situations with regard to, for example, technology and economies of scale.

1.10

As regards identifying policy approaches and political obstacles, the opinion addresses several other points: emissions and waste legislation, the packaging and end-of-life vehicles directives, tax law, standards and the organisation of the market in fibre plants. The REACH Regulation on chemicals provides new perspectives for biomass-based procedures. Complex political and administrative obstacles exist in the 25 Member States owing to differences in policy implementation and systems. The Committee calls on the Commission to identify political obstacles and propose solutions.

1.11

The Committee sets out cultivation requirements with respect to competition for land use with food plants, energy and the ecobalance, as well as nature, environmental and landscape protection. It proposes the introduction of an accreditation scheme under which the origin of products and the processing they have undergone are indicated.

1.12

On the international front, the opinion points to opportunities for the EU to export technology. At the same time it calls for the WTO rules governing the international trade in biomass fuels to take into account, in particular, food sovereignty, and environmental and social standards.

1.13

The Committee will address the European Commission's Biomass Action Plan in a separate opinion.

2.1

Aims of EU policy: In the context of relaunching the Lisbon strategy and applying sustainability criteria, forward-looking stimuli to progress are lacking in the following key areas:

The aim of this own-initiative opinion is to set out important aspects from the perspective of civil society.

2.2

Definition: Regrowing raw materials are defined as materials produced by agriculture, forestry and fishing that are also put to use in the non-food or non-feed sectors. This area thus embraces all substances created by photosynthesis and subsequent biological processes, i.e. stored solar energy. Biomass can be used as a material or as energy.

2.3

History: Production of regrowing raw materials is one of the main agricultural activities in addition to production of food and feedstuffs. These agricultural products began to be displaced with the Industrial Revolution. It was not until the middle of the twentieth century that petrochemical products replaced biomass-based products to a substantial degree. With traditional knowledge supported by new technologies and creative science, a wide range of new applications are available today in the spheres of energy, pharmaceuticals, chemicals, the construction industry and transport.

2.4

Global resource policy framework: The economies of the EU Member States are acutely dependent on fuel and raw materials imports from all over the world. Increasing consumption of and dependence on fossil raw materials, including crude oil and natural gas, though also coal, is becoming unsustainable and has many negative effects

2.4.1

The lack of innovative developments and investment with a view to achieving a sea change in the use of raw materials in the industrialised countries can be put down to the pursuit of one-sided policies. The dramatic side-effects of dependence upon fossil fuels do not comprise only ecological damage and global climate change; external and security policy risks also arise.

2.4.2

The consequences of global climate change, energy price hikes and a lack of efficient alternatives are further aspects of the misguided developments which have brought about, inter alia, poverty in the developing states.

2.4.3

EESC documents have dealt in considerable detail with the drama of climate change, the worldwide difficulties in implementing the Kyoto Protocol and the high expectations and limited results of the Montreal climate change conference. Everywhere and every day, calls are being made for European and international solutions to be found.

2.5

Regrowing raw materials are a continually renewable source of raw materials and energy. By contributing towards a positive eco-balance, they can reduce pressure on the environment, in particular damage caused by CO2 enrichment. They provide potential for regional economic and value-added chains. They help to create and keep jobs in rural areas in the EU; in these areas and in the upstream and downstream sectors of both agriculture and forestry they can stimulate new economic dynamism. They can make crop rotation more flexible, thereby helping to safeguard biodiversity. By virtue of their innovation potential, they have a wide range of applications and offer a broad substance base for chemical products.

2.6

National policies in the EU respond to the changing raw materials situation

Many European countries have renewable energy laws to promote feed-in of electricity produced on a renewable basis. The feed-in price will be set higher on the basis of various technological and economic criteria. This leads to wide production and marketing of new technologies, and cost reduction as a result of extensive business experience and perfected technologies. However, as is clear inter alia from Commission Communications COM(2005) 627 and 628, there is considerable work to be done in many European countries to provide effective incentives for development and market launch.

2.7

Worldwide policies: Renewable raw materials are becoming increasingly important in various cultures and countries, especially in rural regions. Political and economic initiatives include the ethanol programme in Brazil, and trials with jatropha (an oil plant) in the arid regions of India and Africa. But there are also some alarming trends in South East Asia and South America, for example, where forested areas are being destroyed to satisfy the increased worldwide demand for fuel oils. This has a very adverse effect on more than just the climate. The United States is planning a long overdue shift in its energy policy. It wants to produce 20 % of fuel and 25 % of chemicals from biomass by the year 2030. The president and Congress are now establishing the biomass sector as a cornerstone of the US economy by means of the energy security law.

2.8

Renewable raw materials in the work of the EU: the subject is being addressed from different perspectives by over ten different DGs in the European Commission. The most important work is being done in the Agriculture DG and Transport and Energy DG. But Enterprise, Industry, Development, Research, Regional Policy, Trade, Competition and Taxation are also involved in this area. And the European Environment Agency in Copenhagen is making a substantial contribution.

2.8.1

EU initiatives for developing regrowing raw materials include:

Most recently, the Commission issued the following on 7 December 2005:

The European institutions are currently making decisions on the following: