11.2.2011

Official Journal of the European Union

C 44/1

Opinion of the European Economic and Social Committee on ‘How to foster efficient partnership in the management of cohesion policy programmes, based on good practices from the 2007-2013 cycle’ (exploratory opinion)

2011/C 44/01

Rapporteur: Mr OLSSON

On 23 February 2009, Ms Wallström, Vice-President of the European Commission asked the European Economic and Social Committee, to draw up an exploratory opinion on

How to foster efficient partnership in the management of cohesion policy programmes, based on good practices from 2007-2013 cycle.

The Section for Economic and Monetary Union and Economic and Social Cohesion, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 23 June 2010.

At its 464th plenary session, held on 14 and 15 July 2010 (meeting of 14 July), the European Economic and Social Committee adopted the following opinion by 141 votes to one with three abstentions.

1. Conclusions and recommendations

1.1 The EESC strongly believes that genuine and profound partnership greatly improves the effectiveness and overall success of the EU's cohesion policy. Partnership is a tool for sustainable, economic and social development: it makes EU funds responsive to the needs of actors on the ground; it increases the visibility of the EU; and it strengthens democracy. Successful partnership must be based on a long-term perspective of real participation, providing equal opportunities for private partners to play an active role alongside the public authorities. IT TAKES TWO TO TANGO.

1.2 The current regulations still leave too much room for national interpretation of the concept of partnership. A strengthening of these rules is needed, particularly of Article 11 of the general Regulation 1083/2006. The EESC proposes, for the future, a number of changes to the wording of that article, thus establishing minimum requirements for partnership.

1.3 The EESC regrets that the European Commission's role has, in recent times, focussed more on procedure and thereby less on results. The EESC firmly believes in a stronger and much more pro-active role for the Commission as guardian of the partnership principle. The Commission should, jointly with the Member States (hereafter MS), regions and together with organised civil society, strengthen propagation of the principle based on the Open Method of Coordination.

1.4 Continuous capacity-building of the partners is crucial: technical assistance resources should be made available to social partners and civil society in all operational programmes.

1.5 The EESC underlines that global grants are a very efficient instrument to achieve real participation of partners - particularly small enterprises and the social economy - and should therefore be extensively used by all Member States in both ESF and ERDF programmes.

1.6 The EESC also advocates a return to simplified Community initiative programmes targeted at social innovation and local development.

1.7 For post-2013 EU cohesion policy, programme structures and regulations should facilitate the implementation of the partnership principle. This is in line with the Barca Report, which focuses strongly on the link between a ‘place-based approach’ and partnership, and which is particularly relevant for the ERDF and should be part of the Europe 2020 strategy.

1.8 In order to ensure a stronger involvement of civil society in all phases of cohesion policy, a Code of Good Practice should be established at European level, agreed upon with the appropriate European partners.

1.9 Simplification is imperative in order to enhance – the positive impact of programmes, notably for projects involving smaller players. Controls on projects must be rationalised. Financial payments to such players must be better facilitated and speeded up through pre-financing and payments made in due time.

1.10 The EESC is acutely aware that no one size fits all. Nevertheless, good practice can and should be disseminated widely. Such good practice has been identified and is described in the annex to the current opinion. The EU Commission should support its dissemination.

1.11 In most MS, regions play a crucial role in implementing the partnership principle. The EESC therefore proposes that regions wanting to share their experience and disseminate good practice set up a network of ‘regions of excellence in partnership’ and believes the Committee of the Regions would be the appropriate mentor for such a network.

2. Introduction

2.1 In February 2009, the European Commission asked the EESC for an exploratory opinion on how to ‘foster efficient partnership in the management of the cohesion policy’s programme based on good practices from the 2007-13 cycle’; the opinion should also ‘help to prepare the future cohesion policy’. The EESC was asked to look in particular at the aspects of partnership and participation of civil society in the development of cohesion policy. This opinion does not cover, however, ‘vertical’ partnership within the public sphere, i.e. between the EU Commission, MS, regional, local and other public authorities.

2.2 The opinion has benefited from close collaboration with the Commission services. Considerable field work was carried out by the Rapporteur, involving members of the EESC, national economic and social committees, social partners and other civil society organisations to identify and document good practice. Hearings were held in Katowice, Porto and Schwerin; which were supplemented by field visits to various other MS. Valuable assistance was also given by the European Parliament and the Committee of the Regions.

3. The partnership principle and its evolution

3.1 The partnership principle is one of the cornerstones of EU cohesion policy. Its earliest roots can be found in the Treaty of Rome of 1957, when the European Social Fund was set up. A new step was taken in 1988 when the principle was established as a common instrument for the structural funds. In the beginning, partnership focussed on traditional economic and social actors only; now it includes ‘any other appropriate body representing civil society, environmental partners, non-governmental organisations, and bodies responsible for promoting equality between men and women’ (1). This evolution reflects the EU's strategic objective of good governance, most recently reaffirmed in the Europe 2020 vision.

3.1.1 Article 11 of the general regulation is key in defining the scope and application of the partnership principle. MS shall involve the relevant partners in the different stages of programming. Further, they shall designate the most representative partners at national, regional and local level in the economic, social, environmental or other spheres ‘in accordance with national rules and practices’. Each year, the Commission shall consult the organisations representing the economic and social partners at European level.

3.2 The regulation provides for ‘global grants’; management of such funds can be entrusted to intermediate bodies, including regional development bodies or non-governmental organisations (Art. 42).

3.2.1 Measures of technical assistance can be aimed at all partners, beneficiaries of the funds and the general public. Information, networking, raising awareness, promoting cooperation and exchanging experiences are such measures (Art. 45-46).

3.3 Articles 163 of the TFEU and 104 of the afore-mentioned Council Regulation confer a particular role to the social partners for the European Social Fund (ESF). In administering the ESF the Commission is assisted by a committee composed of representatives from governments, trade unions and employer organisations.

3.4 For the ESF, partnership is developed in Regulation (EC) 1081/2006.

3.4.1 Good governance, partnership, capacity-building and lessons learnt from the EQUAL programme are highlighted and should be promoted by involving the social partners and other stakeholders (Preamble and Art. 5).

3.4.2 The ESF should promote partnerships, pacts and initiatives through networking of relevant stakeholders, such as the social partners and non-governmental organisations, at transnational, national, regional and local levels (Art. 3.1e). This should be supported by capacity building (Art. 3.2b).

3.4.3 The ESF has a particular task to strengthen social partners and social dialogue in the convergence regions. NGOs in particular should play an active role in programmes for social inclusion, gender equality, equal opportunities (Art. 5).

3.4.4 Particular attention shall be paid to innovative activities in the context of partnership (Art. 7).

3.5 Contrary to the ESF or EAFRD Regulations, Regulation (EC) 1080/2006 on the European Regional Development Fund (ERDF) has no specific provisions on to partnership. The EESC feels that the ERDF should reorient its focus more on small enterprise, innovation and local development using instruments that favour partnership (e.g. targeted measures, global grants) for this.

4. Partnership in practice

4.1 The factors for success and effectiveness of cohesion policy attributed to the partnership principle can be summarised as follows:

—	Diverse view-points and knowledge are brought in highlighting the realities on the ground.

—	There is a better response to the needs and perspectives of the partners.

—	By going local, interventions can be even more adapted to the realities of business, workers and the citizens in general.

—	Environment, gender equality and measures to combat social exclusion will have a higher profile in the programmes.

—	Value added from integrated policies become more visible.

—	Partnership is a key instrument of collective commitment and contributes to better efficiency of public expenditure and public policies.

—	Partners will bring EU cohesion policy closer to the citizens.

4.2 However, successful partnership relies largely on whether a tradition of consultation and participation is part of the national and political culture. Where this is the case, partners are more involved and able to formulate, and even implement, programmes and projects.

4.3 Experience shows that overall the implementation of the partnership principle seems to have improved over the years even if the appraisal thereof varies between partners. Major obstacles, which vary from country to country, and sometimes also within countries, still remain. Nevertheless, in some MS the perception of civil society is that there were some set-backs compared the programming period 2000-2006.

4.4 In recent years, the Commission has become more than ever focussed on formalities and audit requirements. There is less scope for small enterprise and organisations to run projects. Adequate resources to support small projects have to a large extent disappeared. Community initiative programmes have been abolished and mainstreaming them has failed in most MS.

4.5 Partnership is still viewed in a formalistic manner: often there is distrust between the authorities and the partners as they have no common or clear view on the purpose of their partnership. There is no clear understanding of what constitutes organised civil society and its role; this is reinforced by the unclear rules of the Regulation and by authorities perceiving partnership as an additional burden. The legitimacy and representativeness of partners is questioned and fears arise that excessive and time-consuming consultations might slow down the implementation of programmes.

4.6 Consequently, consultation procedures are often inadequate, being too bureaucratic, too technical and with insufficient time-lines granted to partners. There is a large information gap between the competent authorities and the partners. Often, the latter are only partially involved in policy-shaping and implementation. Disregarding partners means that they are not being listened to. There is also a resistance towards new thinking and innovative ideas. The current rules and their implementation are not adapted to promote partnership. As a result, partners are discouraged from taking part and becoming committed.

4.7 In order to fulfil their role as partner, many socio-economic players and NGOs require appropriate knowledge, organisation, professional capacity and financial resources. It is particularly difficult for small organisations to take part fully.

4.8 A BusinessEurope survey shows significant improvement for the 2007-2013 programming period compared to the previous one, due to more experience from authorities and social partners, more transparency in discussions and better organised consultation and implementation procedures. Involvement is generally seen as more satisfactory at national level than at regional level. Improvements are certainly needed in those MS that joined the EU recently but this is also true for countries with long membership in the EU. BusinessEurope highlights the gap of a short consultation process and a long delay in programme implementation and asks for better feedback from the consultation process.

4.9 UEAPME favours a bottom-up and ‘think small first’ approach, adapted to the needs of local enterprises and communities. Partnership should be developed within a framework of multi-level and multi-actor governance. UEAPME underlines the notion of horizontal subsidiarity as a factor for success i.e. engaging socio-economic partners simultaneously at European, national and local levels. Administrative and financial rules must be simplified, and there is a need for larger advance payments, as well as global grants, which are very effective. According to UEAPME, there are regions in which small enterprises receive just 1-2 per cent of available EU funding. To access funds, SMEs must work in partnership and through intermediary organisations. Technical assistance here is indispensable. UEAPME demands that the Commission publish a vademecum on how funds can be used.

4.10 ETUC believes there has not been so much improvement in the last programming period. It demands clear rules in the Regulation to define partnership and asks for minimum requirements. The quality of partnership depends much on the will of authorities to implement the principle. ETUC agrees that national and regional partnership is working better than local partnership. It is important to share experience. Interregional cooperation programmes have to be strengthened particularly through the involvement of Interregional Trade Union Councils. ETUC has published a handbook based on practical experience from its members on how trade unions can work with the ESF.

4.11 In February 2010, the European social partners (ETUC, BE, CEEP) published a joint report on the ESF. The major conclusion is that capacity-building is crucial to improve the Fund's effectiveness. Other obstacles highlighted are administrative rigidities and low understanding of partnership in some MS. The social partners call for a stronger partnership between themselves and the regional/local authorities.

4.12 The European Anti-Poverty Network (EAPN) suggests that consultation should be broad and deep covering different types of organisations and using a multiplicity of methods. Participation costs should be met and meetings sufficiently frequent. For EAPN it is important to integrate the lessons of EQUAL in the ESF, focussing on the principles for innovation, partnership, gender mainstreaming and transnationality. More room should be made for small projects, as in the previous programming period.

4.13 ECAS proposes that MS and regions should draw up an information, consultation and participation plan covering all stages of programmes and their projects. Those plans should be published and evaluated within a framework of multilevel governance and partnership bringing together local leaders. ECAS suggests that a community of practice be established by regions wanting to take leadership on sharing experience.

4.14 In a 2008 report published by CpKP of the Czech Republic, NGOs from Central and Eastern Europe analysed through their SF platform team partnership in six countries (BG, HU, LT, PO, RO, SK) and concluded that limited capacity of NGOs in the biggest issue. CpKP also found there is low political support for partnership. NGOs need to educate their experts and managers through technical assistance of programmes; this assistance is more usually used directly by the public administration. The selection process to participate in the Monitoring Committees and other bodies should be made with greater care.

4.15 An EP report (2) based on case studies says that moving governance to lower territorial levels is important, as is the creation of intermediary platforms or bodies for coordination and informal networks. It also recommends reducing the complexity of programmes. Policy learning and capacity building should be organised through specific measures, such as strategic discussions, transnational actions, support structures, dissemination of good practices.

5. General remarks

5.1 The EESC is convinced and indeed has repeatedly argued in past opinions that partnership which is genuine and profound in character will lead to more targeted and effective use of the structural funds and thereby to more successful projects. Partnership must be based on a long-term perspective of real participation providing equal opportunities for private partners to take part alongside with the public authorities. Real partnership creates a win-win situation for all stakeholders.

5.2 The citizen must be at heart of all Community policies. Therefore, partnership in the context of the structural funds should reflect a bottom-up approach and provide opportunities for all citizens and their organisations to become involved in cohesion policy and the projects it funds. Where the partnership principle permeates programming and implementation, it leads to active participation of citizens and organised civil society in cohesion policy thereby strengthening democracy.

5.3 Achieving a culture of real partnership is a process of learning. It is about empowering partners and creating equal opportunities for all of them to take part in all phases of cohesion policy implementation. Evidence shows that resources for capacity-building have played a crucial role to make partnership more efficient. Therefore such resources should be used for all partners, both private and public and in all operational programmes – not only in the convergence regions Further ‘joint training’ between public and private partners is greatly needed.

5.4 An imbalance between partners exists with regard to influence and power, access to information, financial means, professional capacity, etc. For the post-2013 period there is a strong need to establish a framework that will create a new balance between the public authorities and the private sector through a governance model based on the partnership principle in which regional and local dimensions as well as private social and economic actors are cornerstones.

5.5 All private and public partners must trust each other and rise beyond their own particular interests; this requires a change of mindset. A new culture of dialogue, based on ‘think small first’ which meets the needs of local enterprises and organisations is required. Public authorities must be open to the inputs provided; private partners need to be committed, which can be stimulated by allowing more private co-financing in the projects. Partners' involvement must be sought from an early stage, empowering them to play a decisive and constructive role.

5.6 Social partners as key socio-economic actors must be involved, as well as social economy organisations and NGOs. It is important to encourage pluralism by including small innovative enterprises, organisations and other actors who can be protagonists for the future. However partnership should also be made flexible and targeted according to the specific needs of the various programmes.

5.7 As was stated above, political culture, tradition and experience determine how the partnership principle is put into practice in MS. As these vary widely within a Union of 27 Member States, there is no single homogenous model to fit all contexts. Therefore practices must be shared in a mutual learning process; all stakeholders share a common responsibility for the dissemination of good practice thus rendering the funds more efficient.

5.8 Responsibilities, rights and obligations within the partnership are different according to the respective role and the status of the partners. This is particularly the case when the right of participation is confronted with the decision making powers regarding budgets. Even so, this dichotomy can be overcome if all partners pursue a consensual approach on strategy and funding.

5.9 In the current Regulation, it is the MS that manages the application of the partnership principle in accordance with national rules and practices. For the EESC there is a strong and urgent need to establish European minimum requirements on how to organise a high standard of partnership. Therefore the EESC feels that the ERDF should reorient its focus more on small enterprise, innovation and local development, to use instruments that favour and benefit partnership like targeted programmes, global grants and so on.

5.10 Programming in general can and must be reformed to reinforce partnership. This will happen by making programmes more targeted and problem-oriented in objective and scope (e.g. geographical area, sector, task).

5.11 That programme structures directly determine the prospects for successful partnership was clear in Community initiatives, such as EQUAL and URBAN II, where partnership was explicitly required. That these initiatives were abolished can be seen as a regression of the partnership principle in comparison to the 2000-06 programming period. Many MS have failed to mainstream the EQUAL experience in the present programming period despite such a provision existing in the ESF Regulation.

5.12 Targeted at rural areas, LEADER was, from the start, a forerunner of implementing the partnership principle. Even if no longer a Community initiative, it must be noted that the LEADER method is fully mainstreamed as a mandatory axis of the rural development programmes in the current period, both thanks to the success of the initiative and to the more stringent provisions of the EAFRD regulation (EC) 1698/2005, article 6. Its aim is to involve and mobilise local actors by creating territorial alliances for endogenous local development. Setting up a local partnership known as a ‘local action group’ (LAG) is an original feature. At local decision-making level, socio-economic partners and civil society are in majority. LEADER is supported by national rural networks, composed of a broad partnership that links the local projects with the national and EU level.

5.13 The EESC regrets that the European Commission's role has become, in recent times, rather procedural and formal thereby focussing more on auditing and less on real results. The EESC underlines that the Commission should be stronger and more proactive in implementing the partnership principle. In a return to the philosophy of the cohesion policy of the past, the Commission should transform itself from just being an observer to becoming a real and involved ‘partner’.

5.14 The EESC has found that complex administrative and financial procedures related to programmes and projects of the structural funds have a stifling, discouraging and even dissuasive effect, for notably SMEs, micro enterprises and social economy organisations, to benefit from the structural funds. For the EESC, simplification of such procedures both at EU and national level is, therefore, a logical corollary to the need to arrive at successful partnership as is the speeding up of payments. This is a matter of absolute urgency.

5.15 Global grants have proved to be extremely efficient in bringing the management of the funds closer to the beneficiaries and their needs. Such grants have been instrumental in funding small projects. The EESC regrets that this system has been severely curtailed in the current round as compared to the period 2000-2006. It argues that all MS make an extended use of global grants in both funds with real ownership by the beneficiaries in order to release the enormous potential of SMEs and the social economy.

5.16 A stronger and more extensive activity of the EIB would be a welcome addition in this respect. The EESC also pleads for reinforcing the JEREMIE programme, with a view to stimulating support for small enterprises and their organisations.

5.17 The EESC reiterates its demand to integrate and coordinate all the funds associated with the Union's cohesion policy, including also the EAFRD and the European Fishery Fund into Single Operational Programmes. Such an integration will further efficient partnership, as partners generally have a holistic view of development. The EESC believes there is also a case for actively pursuing integration with national policies, thus benefiting doubly from an integrated approach at European and national level.

5.18 This demand is fully in line with the April 2009 Barca Report (3) which highlights the role of partnership with organised civil society in order to give the territorial dimension of cohesion policy a key role in European integration. Partnership is crucial for effective and good use of the funds. The report underlines the need to mobilise local actors in the territories and to engage citizens through public debate. Barca suggests that in 2010-2012 a genuine strategic debate involving civil society should precede the future cohesion policy after 2013.

6. European initiatives for improvements

6.1 The EESC argues that a series of compulsory and voluntary actions at European and national level are needed to improve and strengthen partnership in the structural funds and to extend what is perceived as good practice in partnership to all MS. The EESC calls for the various EU regulations to be amended. Furthermore, a code of good practice is needed, linked to stronger guidance given by the European Commission.

6.2 The EESC proposes that article 11 laying down the measures of partnership in the current general Regulation 1083/2006 to be revised as follows (a consolidated text with all proposed changes is attached in Appendix 1) for use in a future new Regulation.

6.2.1

After the wording ‘in accordance with national rules and practices’ paragraph 1 should be completed with the wording ‘after agreement with the relevant partners’. Only by seeking agreement with the partners on the nature of that partnership, can the process be truly legitimised and lead to more successful projects. The EESC subscribes to the provisions already taken in the framework of the ESF Committee to determine who the relevant partners are; this particular provision should be extended to all structural funds.

6.2.2

The EESC believes it is indispensible to incorporate in Article 11 the idea that the implementation of the partnership principle should be monitored jointly by the Commission, the MS and organised civil society. The Open Method of Coordination (OMC) provides an excellent model for this. The Commission, in cooperation with the MS, sets objectives, establishes indicators and guidelines, benchmark performance and exchanges good practices as well as evaluations made through peer reviews.

6.2.3

The Lisbon Treaty recognises the OMC, which is found in articles TFEU 149, 153, 156, 168, 173 and 181. Consequently the EESC suggests introducing a similar formulation which should be added in article 11: ‘The Commission may in close contact with the MS take initiatives aiming at the establishment of guidelines and indicators, the organisation of exchange of best practice and preparation of the necessary elements for periodic monitoring and evaluation’. The major European organisations representing social partners and civil society should also take part.

6.2.4

The consultation of economic and social partners at European level ‘should take place at least twice a year’ and also include concerned and representative organisations quoted in article 11.1.c) as well as rural development organisations in order to create a link to the EAFRD. Such consultations should already be organised now as part of a genuine strategic debate at European level to precede the future cohesion policy after 2013 (see Barca).

6.2.5

Likewise, the EESC suggests that the specific consultation processes of each fund at EU level should be improved. Without reducing the privileged role of the social partners, the ESF Committee should, after appropriate consultations, co-opt a limited number of observers from other representative stakeholders' organisations.

6.2.6

The EESC strongly advocates that the ERDF and EAFRD regulations be amended to take on board the concept developed in article 5 on ‘good governance and partnership’ from the ESF regulation. The Committee also suggests that a Partnership Committee appears in the new ERDF regulation.

6.2.7

The EESC particularly underlines that ‘an appropriate amount of resources shall be allocated to capacity-building open to all private partners’ and suggests therefore that as a guideline 10 per cent of the TA budget should be put aside for capacity-building and learning in all operational programmes. European training benefiting the national level, thereby also facilitating exchange of experience and good practice should also be supported.

6.3 In order to achieve necessary simplification, the EESC thinks that audits and controls on projects should be rationalised. Payments, financial guarantees and pre-financing should be adapted and speeded up to the needs of the beneficiaries, especially where these concern small players. Current possibilities for pre-financing, despite a number of improvements proposed by the Commission in 2009, remain largely inadequate.

6.4 With a view to fulfilling minimum requirements leading to a high standard of partnership, the EESC proposes that the Commission together with representatives of the partner categories mentioned in article 11 should develop a Code of Good Practice regarding the exercise of the partnership principle based on the following guidelines:

—	from the outset, the appropriate public and private partners should agree upon an information/consultation/participation plan for programming, implementation and evaluation with clear objectives and a roadmap to follow;

—	the competent authorities should report on how they have taken into account the partnership principle in their proposals and reports. The views of the partners should be clearly and openly documented;

—

the partnership should be given the responsibility for procedures to select their own members to Management Committees (hereafter MC) and other consultative bodies established within the framework of the structural funds. Selection should be based on interest, representativity and openness towards new, dedicated and innovative actors;

—	technical assistance in all operational programmes should be available for all partners for capacity building, coordination and representation; the partners themselves formulating and managing such projects;

—	partnership should be involved in setting up criteria for project selection from the beginning;

—	partnership should be a criteria for projects financed by the funds;

—	transnational partnership should be furthered;

—	indicators for an efficient management from the view point of beneficiaries should be established;

—	simplification of procedures and controls should be implemented;

—	payments to beneficiaries should be speeded up;

—	long term strategies should be discussed in the MCs or in other appropriate bodies linked to the NSRF.

6.5 When Operational Programmes are significantly revised during the programming period, the partnership principle should be rigidly observed and highlighted.

6.6 The EESC proposes that regions wanting to share their experience and disseminate good practice set up a network of ‘regions of excellence in partnership’. Embryos for such a network already exist (4). To promote such an initiative the EESC suggest a joint action between itself and the Committee of Regions and the EU Commission. The Committee of the Regions would indeed be an appropriate mentor for such a network.

6.7 Finally, the EESC proposes that the Commission head up the formation of a working group consisting of all relevant partners at European level to promote the partnership principle from different perspectives also that state aid and procurement rules should not have negative effects on partnership.

7. Good practice

7.1 During the drafting of this opinion good practice has been identified from the perspective of the involvement and role of the private partners, not the public authorities. The cases briefly presented in a separate Appendix are just a sample. There are certainly others.

7.2 Good practice has been judged from four perspectives: access to partnership, empowerment of the partners, decision-making partnerships and targeted partnerships.

7.3 Good practice in one of the fields does not necessarily mean an overall good practice. On the other hand the same case may be good practice in two or more fields. There are some cases that should be particularly highlighted like the systematic partnership approach all over England; the successful Peace Programme for Reconciliation in Northern Ireland in which local partnerships and grass-root involvement are a key factors; the partnership management of all funds (including EAFRD) for an integrated development in Mecklenburg-Vorpommern (D), the unique civil society management (Fundación ONCE and others) of an ESF operational programme (E), the support structure for the third sector in Wales (3-SET).

7.4 All four perspectives of good practice can be seen in some interesting cases where structural funds are explicitly targeted to respond the needs of the local actors: the innovative partnership (trade unions/cooperatives/banks) which manages the global grant Esprit in Tuscany (I); the strategic and increased use of global grants in Poitou-Charentes (F); the Austrian Territorial Employment Pacts and the decentralised management of the ESF in Baden-Württemberg (D). The local action groups within LEADER should also be mentioned in this context.

7.5 A dynamic process of improving and developing the partnership principle is also good practice. Poland is a case in point where decentralised management of the funds to working groups in which partners have a decisive role should be highlighted. The national framework agreement (Protocollo d'Intesa) on partnership rules in Italy as well as its follow-up in some regions e.g. in Puglia are good intentions to follow up on.

7.6 The EESC notes that generally there is only partial involvement of national and/or regional economic and social committees with the exception for Italian CNEL has a substantial role in regional policy-making and evaluation for Mezzogiorno (South Italy). The Committees in e.g. Portugal, France (regional level), and Malta take part in the programming phase.

7.7 Access raises questions about how and what partners are selected. Procedure of transparency and legitimacy are needed to define partners. Selection is normally not a problem with the social partners but rather with the NGO sector and particularly how to include vulnerable and marginalised groups, e.g. disabled, ex-prisoners, Roma and other ethnic minorities.

7.7.1 To leave responsibility for selection with organised civil society is good practice. One interesting example is found in the Czech Republic (election system).

7.8 Several interesting examples of building capacity and empowering the partnerships have been found like for instance:

—	social dialogue learning (e.g. Czech Republic);

—	building up professional capacity in the partner organisations (Mezzogiorno, Germany, Spain, Poitou-Charentes, Slovenia);

—	creating specific knowledge centers or ‘observatories’ (‘Kompetenzstellen’ in Germany, 3-SET in Wales);

—	developing manuals and guidance for the partnership organisations at national (e.g. DGB Brandenburg Germany) and European level (ETUC, EAPN, Bankwatch).

7.9 In some cases real decision-making over which project to finance has been delegated to organisations within the partnership. Global grants is just one case in point (Italy, UK, France).The Sweden model (Västra Götaland and other Structural Fund Partnerships) and the abovementioned ONCE Fundación operational programme are others.

7.10 A few programmes are well targeted; geographically, groups, sectors, communities, specific tasks etc. and thereby also normally closely linked to a specific group of partners which have the real decision-making power. The Peace Programme in Northern Ireland as well as the Growth forums (Denmark) but also the local initiatives mentioned above in point 7.4. belong to this category of good practice.

8. Proposed changes to current article 11 of Council Regulation No 1083/2006:

Article 11

Partnership

1. The objectives of the Funds shall be pursued in the framework of close cooperation, (hereinafter referred to as partnership), between the Commission and each Member State. Each Member State shall organise, a partnership with authorities and bodies such as:

(a)	the competent regional, local, urban and other public authorities;

(b)	the economic and social partners;

(c)	any other appropriate body representing civil society, environmental partners, non-governmental organisations, and bodies responsible for promoting equality between men and women.

Each Member State shall designate the most representative partners at national, regional and local level and in the economic, social, environmental or other spheres (hereinafter referred to as partners), in accordance with national rules and practices, taking account of the need to promote equality between men and women and sustainable development through the integration of environmental protection and improvement requirements.

2. The partnership shall be conducted in full compliance with the respective institutional, legal and financial powers of each partner category as defined in paragraph 1. The partnership shall cover the preparation, implementation, monitoring and evaluation of operational programmes. Member States shall involve , each of the relevant partners, and particularly the regions, in the different stages of programming within the time limit set for each stage.

3. he Commission shall consult the organisations representing the partners at European level on assistance from the Funds.

Brussels, 14 July 2010.

The President of the European Economic and Social Committee

Mario SEPI

(1) Cfr. Art. 11 of Council Regulation (EC) 1083/2006 on the structural funds.

(2) ‘Governance and partnership at national and regional levels, and basis for projects in the field of regional policy’, Rapporteur Jean-Marie Beaupuy, European Parliament voted on 21.10.2008.

(3) An Agenda for a Reformed Cohesion Policy. A Place Based Approach to meeting European Union Challenges and expectations – May 2009.

(4) For instance Reves (partnership regional/local authorities and social economy), Bankwatch Network, IQ net (regional management authorities and research), the ECAS initiative, and Community of Practice involving managing authorities of the ESF.

11.2.2011

Official Journal of the European Union

C 44/10

Opinion of the European Economic and Social Committee on ‘The impact of population ageing on health and welfare systems’ (exploratory opinion)

2011/C 44/02

Rapporteur: Ms HEINISCH

In a letter dated 18 September 2009, Ms Margot Wallström, Vice-President of the European Commission, asked the European Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, to draw up an exploratory opinion on

The impact of population ageing on health and welfare systems.

The Section for Employment, Social Affairs and Citizenship, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 16 June 2010.

At its 464th plenary session, held on 14 and 15 July 2010 (meeting of 15 July), the European Economic and Social Committee adopted the following opinion by 89 votes with 5 abstentions.

1. Recommendations

1.1 The Committee believes that the following measures are needed to deal with the impact of population ageing on health and welfare systems.

1.1.1

At national level:

—	Mainstreaming of ‘healthy ageing’ as a horizontal issue.

—	Strengthening of preventive healthcare, health promotion and education across all age groups.

—	Improving the quality of health and social care for older people.

—	Inclusion of palliative care in care services.

—	Developing and adapting age-appropriate types of therapy, by including older people in clinical studies and comorbidity studies.

—	Developing health and care institutions suitable for older people, and alternative housing.

—	Evaluation through Health Technology Assessment (HTA) of telecare and technology-based solutions including Ambient Assisted Living (AAL) and other health technologies (care environment), which aim to support independent living and improve the efficiency and quality of care for older people.

—	Creating a comprehensive, decentralised infrastructure near to where people live that facilitates direct contact between older people and members of the medical and caring professions (deinstitutionalisation).

—	Support for regional and local stakeholder networks to implement the Ageing and health aims.

—	National legislation introducing mandatory schemes to ensure care in old age (e.g. care insurance).

—	Opening of national health and social care systems to model tests with subsequent evaluation in order to enable systems to evolve.

—	Making systems for additional payments and complementary insurance more flexible.

—	Drafting and implementation of national strategies and policies for lifelong learning (LLL) at national, regional and local level.

—	Ensuring that work, family and care can be reconciled.

—	Encouraging volunteering.

—	Recognising the importance of carers and their needs.

1.1.2

At European level:

—	With reference to the conclusions of the EPSCO council on 30 November 2009, drawing up an action plan for healthy and dignified ageing.

—	Prioritising the issue of active, healthy and dignified ageing in the EU 2020 strategy.

—	The need to harmonise terminology, definitions, assessment tools, guidelines, criteria, procedures, etc. It is now 20 years since this problem first arose and yet there has been no significant progress to date.

—

Emphasising active, healthy and dignified ageing as a key theme in the European Years 2010 (European Year for Combating Poverty and Social Exclusion), 2011 (European Year of Volunteering) and 2012 (European Year of Active and Healthy Ageing and Intergenerational Solidarity) and during the corresponding Council presidencies.

—	Inclusion of demographic change in the European Commission's joint research programming.

—	Developing a European Charter on the Rights of Persons in Need of Assistance and Care.

—	Establishment of a specific inter-service working party in the Commission on Ageing and health (including healthcare, personal care, pensions and financial sustainability).

—	Creation of a Round Table, a Category or a Permanent Study Group on Active, healthy and dignified ageing – intergenerational dialogue in the EESC to draw up an interdisciplinary strategy in these areas.

—	Inclusion of gerontology and demographic research as a priority in the Eighth Research Framework Programme.

—	Establishment of a project entitled Older people and knowledge transfer as part of the Science and society sub-programme.

—	Listing and comparing the health aims of Member States and how binding these are.

—	Supporting the Member States in the implementation of the above-mentioned measures through funding from the Structural and Cohesion Funds and the Open Method of Coordination.

—	Support for the exchange of good practice regarding tailored information and communication technology (ICT) solutions, for example in the context of the INTERREG programme, with support from the Structural Funds.

—	Support for multinational Health Technology Assessments (HTAs) for evaluating new ICT solutions to the care needs of older people.

—	Continuous awareness-raising of lifelong learning (LLL) and the exchange and coordination of European education and training programmes with Ageing and health as key themes: from lifelong learning to ‘learning for a long life’.

—	Creating a new image of old age – including in the media.

—	Drawing up European guidelines on reconciling family, work and care.

2. General remarks

2.1 Introduction

2.1.1 Society in the European Union is ageing because of increasing life expectancy. Eurostat forecasts suggest that the proportion of people aged 65 or over in the population will rise from 17.1 % in 2008 to 30 % in 2060. The average ratio between people of working age (15-64) and people aged 65 and over will change from 4:1 now to 2:1 in 2050.

2.1.2 A large proportion of the economically active population will exit the labour market between 2026 and 2030. This means that, at a time of lower birth rates, the proportion of people not working will increase in relation to the working population.

2.1.3 A recent Commission Communication (1) states that governments have only a short window of opportunity to implement measures to address the issues relating to the ageing population before the baby-boom cohorts enter retirement. In this context, the Commission asked the EESC on 18 September 2009 for an exploratory opinion to look at how the efforts of the Member States to tackle this problem could be supported by Community initiatives in the area of health. This opinion is based on a number of EESC opinions (2).

2.1.4 The Council presidencies held by the Czech Republic (first half of 2009), Sweden (second half of 2009) and Spain (first half of 2010) have included healthy, dignified and active ageing as a priority in their work programmes.

2.1.5 Society and leaders in healthcare need to develop a new image of ageing that is appropriate to demographic change and is conducive to the dignity of older people.

2.1.6 It is not the ageing of the population per se that causes greater expense, but unhealthy ageing. For this reason, the main recommendations in this opinion relate to measures to promote healthy ageing.

2.2 Further development and innovation of healthcare systems, welfare systems and health services

2.2.1 Demographic change requires healthcare and welfare systems, healthcare services and other related services be developed as regards their organisation and capacity, i) to meet the needs of older people, ii) to ensure that all those in need of care receive those services that are necessary to uphold their autonomy and dignity, and iii) to ensure that all sections of the population, regardless of age, gender, financial situation or place of residence, have equal access to high-quality health services (including health promotion, preventive healthcare, treatment, rehabilitation and palliative care).

2.2.2 In this context, not only older people's expectations of health and welfare systems should be taken into consideration, but also people's timely, preventive responsibility for their own ageing – in other words, society's expectations of people who are growing older.

2.2.3 To support healthcare provision and long-term care for all older people with the help of EU policy, the EU should list and compare the healthcare aims (3) of the Member States and the extent to which they are binding. Similarly, a scoreboard should be drawn up of the extent to which prevention and health promotion are already integrated within healthcare systems.

3. Specific comments

3.1 Areas of specific concern

3.1.1 Prevention

3.1.1.1 People start ageing the moment they are born. It is therefore important for them to have – as far as possible – good conditions in which to live their whole lives. What is at stake is a good start in life and a dignified end to life. Healthy ageing starts long before retirement and is influenced by, amongst other things, living and working conditions and the availability of resources. If people realise this, the need for people to grow old responsibly follows logically (4). Responsible ageing calls for lifelong learning. To this end, new strategies and policies for lifelong learning (LLL) need to be drawn up at national, regional and local level in the health education sector. They must include all types of learning (formal, non-formal and informal). This includes every stage of learning, from pre-school to adult learning. Taking responsibility for keeping themselves healthy through active participation in preventive measures (nutrition, sport, healthy lifestyles, avoidance of risk factors, etc.), health promotion and health education helps older people to remain at home and in their habitual social environment for as long as possible. In addition, the role of technology in this context should be kept under continuous review and evaluation.

3.1.1.2 Health systems need to place more emphasis on prevention. This could not only allow people to remain active in the labour market for longer, but could also enhance their ability to adapt to the labour market. High quality occupational health and safety systems and more ergonomic workplaces could play a significant role in making it possible to extend healthy working lives, thus also engaging with the demographic challenge.

3.1.1.3 By adapting what people do to their abilities and needs as they get older (e.g. moving away from implementing activities towards preparatory but also advisory, support, training and planning activities), such an extension of working lives can be made possible. This also means that older people will be integrated in social and socio-economic contexts for longer and will thus continue to receive helpful performance stimuli. In this way, longer healthy lifetimes can be reflected in longer fulfilled, productive lifetimes. This does of course meant that appropriate training and support measures must be available in order to initiate and continue the processes outlined above (lifelong learning, vocational training including certification of skills learned on the job, etc.). Businesses should offer health promotion, and illness and accident prevention, so as to develop healthy working conditions.

3.1.1.4 Once people have left professional life, social integration into society and into the socio-cultural environment is of the utmost importance. To prevent social isolation is to prevent cases of depression. Older people are particularly well-placed to put their social skills and experience to use, for example through voluntary work. However, people should be encouraged from an early age to get involved in voluntary work.

3.1.2 Health services

3.1.2.1 Emphasis is increasingly being placed on the provision of patient-centred healthcare services and on ensuring that patients are involved in developing and planning healthcare services.

3.1.2.2 Chronic illnesses (diabetes, rheumatism, heart disorders), degenerative illnesses of the nervous system (dementia and Alzheimer's), the musculoskeletal system and the eyes, and also cancer, increase with age. This poses particular challenges to the healthcare professions, diagnostics, treatments and healthcare provision itself.

3.1.2.3 Health services for integrated, personalised care that put the patient at the centre must be developed.

3.1.2.4 Better and more specific training of healthcare professionals should be encouraged: the members of these professions (doctors, pharmacists, nurses and carers) and researchers must be made more aware of the specifics of geriatric medicine and receive more training in this area. Healthcare professionals should also be given specific training in the importance of health promotion and preventive measures for the elderly (e.g. avoiding falls, healthy eating).

3.1.2.5 Development and adaptation of age-appropriate types of treatment: comorbidity, changed metabolism in old age and, in many cases, multiple treatments, require precise knowledge of interactions between organs and systems in the bodies of older people. This requires specific medication management and the selection and adaptation of medication and dosage to the metabolism of older people. The availability in public pharmacies of personalised advice involving interaction tests, along with good ICT providing information on drugs and their interactions, may help to minimise the undesired side-effects of medicines and to optimise the success of treatments.

3.1.2.6 Promoting direct, continuous contact between older people and medical and care professionals: The more dependent on care older people become, the more important such contact is to ensure successful treatment outcomes and to prevent isolation and depression.

3.1.3 Care services

3.1.3.1 Standards should be set so that the quality of care services can be guaranteed, made verifiable and evaluated. A European Charter on the Rights of Persons in Need of Assistance and Care should be developed, which should include protection from violence in care. New technologies (e.g. AAL) that enable independent living could help here. However, potential new technologies must be assessed properly and must certainly not lead to new inequalities in healthcare and care provision at national level.

3.1.3.2 ‘Rehabilitation before care’ should be the motto where older people are concerned. Institutionalised care must not become a one-way street: there must be way out of care and back home. The healthcare and care institutions that currently exist do not yet sufficiently fulfil this requirement.

3.1.3.3 Development of age-appropriate medical and care institutions, and alternative housing: what is needed is a smooth and reversible transition between health and sickness, care and social life, backed up where needed by good medical and personal care, enabling older people to remain in a ‘normal’, i.e. multigenerational, environment for as long as possible. This requires good coordination between healthcare and personal care. At the same time, provision needs to be made, alongside long-term care institutions, for more in-patient and out-patient hospices and palliative care institutions. A ‘hospice culture’ should be fostered.

3.1.3.4 For this purpose, a comprehensive, decentralised, local infrastructure for care at home needs to be set up (deinstitutionalisation). Non-institutional care infrastructure including all the necessary services (outpatient care, home care, help with odd jobs) should be promoted. This must be reflected in organisation at regional level and improved structural financing in order to ensure that there are adequate institutions and structures not only in cities, but also across the board in rural areas.

3.1.3.5 How a society treats its older people says much about that society. Voluntary work has taken on a particular significance when it comes to looking after and caring for older people. In future, every citizen must do all they can to take responsibility for the sick, disabled people and elderly people – but also be rewarded for what they do.

3.1.4 Research into the above-mentioned areas

Demographic change should be included in the European Commission's joint research programming. Following on from the WhyWeAge and Futurage projects under the seventh framework programme, gerontology (research into old age and ageing) and demographic research should be priorities in the eighth framework programme. It would also make sense to include a thematic area of Older people and knowledge transfer in DG Research's Knowledge and Society programme. This also needs to include the following areas of research:

3.1.4.1 Research into prevention

—	What is the outlook for preventive healthcare in the workplace?

—	What are the long-term effects of particular lifestyles on general health and particular illnesses?

—	How do various gender, culture and migration-related lifestyles impact on health ageing?

—	What can be done to prevent falls and bone fractures?

—	What preventive measures are useful in maintaining physical, sensory and cognitive functions, and social skills?

—	How can people be motivated to age responsibly and take responsibility for their own health? (Promoting healthy behaviour, incentives for older people to use the measures and facilities available to them to maintain their health).

—	How can people be motivated to change their behaviour in order better to fit in with the social environment?

3.1.4.2 Research into illnesses and treatments

—	relating to the epidemiology and aetiology of age-related illnesses, to enhance the scope for prevention;

—	relating to the biological ageing process from the cradle to the grave;

—

relating to comorbidity, chronic illnesses, cancer, heart conditions, rheumatism and illnesses of the musculoskeletal system, visual impairment (e.g. cataracts), neurodegenerative illnesses such as Alzheimer's disease, etc. This should also include improving diagnostics so that problems can be diagnosed, and treatment started, at an early stage;

—

relating to treatments for older people as regards age-specific illnesses: the biochemical processes that affect absorption, metabolism, the efficacy of medicines, medication and dosage, must be better understood and be taken into account during treatment. In many cases the therapeutic basis for this is lacking, as clinical trials and the testing of medicines often only involve young adults.

3.1.4.3 Care research

—	How can we develop new technologies that meet the needs of older people?

—	What are the optimum environments and formats for providing care?

—	How can improvements in the skills and working conditions of care workers be achieved, also in connection with new technologies?

—	What contribution can technical solutions (e.g. robotics) make to relieving the burden of caring relatives and improving the working conditions of professional carers without impairing the integrity and dignity of the person being cared for?

—	How can care provision be adapted to the needs and expectations of older people who are in need of care?

—

What new ideas could contribute to the development and support of care at home? This also includes economic support and societal recognition of caring relatives (e.g. the possibility of temporarily reducing working hours by agreement between employer and employee, for care-related reasons, work done as carers being recognised by pension schemes, care allowances, etc.).

—	What new ways are there of arranging care, pain relief and end-of-life care for dignity in dying?

3.1.4.4 Research into healthcare systems

—

Research in public healthcare should look at healthcare systems and long-term care, and at the integration of services, and develop a roadmap for research into ageing. An evaluation is needed as to whether the healthcare and welfare systems in the Member States are prepared for the challenges of demographic change. For example, how much emphasis is placed on prevention? What proportion of healthcare spending goes on prevention? How many people are being cared for at home or in institutions?

—	How much does voluntary work and care save in terms of resources, and how much unpaid work is carried out at home, particularly by women?

—

Research into health outcomes and Health Technology Assessments are needed particularly as regards the use of new technology and eHealth in the treatment and care of older people before such technologies are introduced. Do these technologies live up to their promises when tested in practice? Do the most vulnerable groups benefit from these technologies?

—	In cooperation with the Member States, a clinical and socioeconomic research project into the effectiveness and efficiency of investments in improving health and care provision for older people should be carried out.

—	How can the interfaces between healthcare and social care be improved?

3.1.5 Developing new technologies

3.1.5.1 However, as well as causing problems, demographic change also provides considerable potential, particularly in terms of new goods and services for an ageing society. Age as an economic factor can act as a driving force for the economy, increasing growth and employment in the area of health services, new technologies, pharmaceuticals, medicinal products, medical technology, and tourism and wellness. According to Commission estimates, the impact of demographic change on healthcare spending will be considerable: the projections suggest that public healthcare spending in the EU will increase by 1.5 percentage points of GDP by 2060. New products and services should be developed and put on the market. The amount of value they create will be influenced by market volume, the price and their added value.

3.1.5.2 Whilst possible cost savings are a priority for the ‘first health market’ and will thus determine whether Ambient Assisted Living (AAL) will be provided by statutory sickness and/or care insurance funds, the ‘second health market’ is in a position to act much more freely and flexibly in this regard. There is a need here to develop sustainable, affordable business models paid for through sale, rental or leasing. At the same time, it is important to ensure that the ‘second health market’ avoids creating inequalities.

3.1.5.3 The collation and exchange of social and economic knowledge about the consequences of introducing care-related technologies should be encouraged, for example by building on the pilot projects that have been started as part of the Competitiveness and Innovation Programme and are currently ongoing. At the same time, the exchange of tried and tested ICT procedures relating to solutions for enhancing older people's quality of life should be supported, for example as part of the INTERREG programme, with funding of the Structural Funds. This research should evaluate the opinions of technology users, particularly with regard to the user-friendliness and benefits of the technologies.

3.1.5.4 Technological progress and newly-developed early diagnosis and treatment methods are on one level a key factor in the increase in spending, but, on the other, technical advances can, when applied sensibly, certainly achieve cost savings in the long term. A greater role should be given to Health Technology Assessment (HTA) to establish the scope of health and care services and the extent to which they are funded. The effective introduction and management of technology is therefore a major determinant of future spending. However, new technologies cannot and must not replace direct contact between older people and healthcare and care professionals. They must also be affordable.

3.1.6 Financial sustainability

3.1.6.1 In almost all Member States, care services for older people are funded by welfare systems, which means that each of these systems need to have sustainable, secure funding.

3.1.6.2 The need for care is still a poverty risk, particularly for pensioners with small pensions or low incomes. Many people in Europe cannot afford decent care in their old age. Therefore, systems to cover care costs must be set up in all EU countries, in line with the way their social security systems are run (social insurance system or tax-funded system), and existing provisions need to be adapted to the challenges of demographic change over the coming decades in order to ensure that all citizens can access care services in accordance with Community law, national legislation and practices and individual needs. This coverage of care costs should apply not only to in-patient, but also out-patient services.

3.1.6.3 The transfer of some long-term care services to private health insurance must be thought out properly, in consultation with the parties concerned, so as to ensure that this trend does not complicate access to these services. Member States should continue to ensure that older people have universal access to primary care and prevention. This ambitious objective will require the deployment of all available financial instruments: statutory social security schemes and complementary mechanisms.

3.1.6.4 New structures for reimbursement of costs should also make it possible for more distant relatives to receive a care allowance for looking after people who need care. However, the quality of care must also be ensured in these cases. In addition, by analogy with maternity leave, care leave should be introduced. At political level, ways of reconciling family, work and care need to be worked out as a matter of priority, in consultation with the social partners as part of social dialogue (as in the case of parental leave, for example).

3.1.6.5 The financial pressure on social security schemes could be reduced by means of a number of measures at national level, e.g. greater use of generics, reductions in VAT on medicines and price negotiations with the pharmaceutical industry.

3.2 Local networks – The smallest unit is the most efficient and the closest to the individual

3.2.1 Older people can, depending on their constitution, offer much to society. Personal or professional circumstances mean that multi-generational households are becoming increasingly rare in modern families. Private or municipal providers with local networks can close a gap here, as bodies providing services of general interest need to be adapted at regional and local level if a decent level of support and assistance is to be provided.

3.2.2 Examples of such local networks are platforms of municipal providers, social partners, NGOs and healthcare leaders that work to coordinate service provision. Such initiatives offer good opportunities for support from the structural and cohesion funds. Europe should recognise models of good practice such as initiatives on ways to foster civic involvement and self-help in the area of care at home.

3.2.3 Multi-generational centres are also a new form of intergenerational relations outside the family: the work of nursery schools, youth clubs and day centres for the elderly is brought under one roof (5).

3.2.4 Further services such as day and night care (particularly for dementia patients) need to be added.

3.3 European health policy

3.3.1 The Member States' healthcare systems must meet the challenges of demographic change and be strengthened with this in mind. That said, it is important to remember that the organisation and management of healthcare systems remains, even under the Lisbon Treaty, the task and responsibility of the Member States, and that the EU institutions merely support the Member States in this task. Because of the way they are organised (private insurance operates alongside state-backed systems under the Beveridge or Bismarck models, or a hybrid model), their development, the differing strength of the respective economy, and the needs and expectations they face, national healthcare systems vary enormously from one Member State to another. However, as the European Charter of Fundamental Rights states, the right to access healthcare must be ensured.

3.3.2 The Open Method of Coordination (OMC) could be used to organise and manage health policy more efficiently. Such cooperation should focus on sharing experience and describing practical examples in the three key areas of access, quality and long-term affordability.

3.3.3 The organisation of social policy also remains primarily the competence of the Member States, in accordance with the subsidiarity principle. However, the EU can help them through supporting measures such as complementing or promoting cooperation between Member States. The OMC has proven to be a useful means of improving social policy in accordance with the principles of access, adaptation and sustainability.

3.3.4 The issue of active, healthy and dignified ageing must become a priority in the EU 2020 strategy. An action plan should be drawn up to this effect. This requires still more intensive and continuous cooperation between the Commission's Directorates General. A specific inter-service working group on ageing and health should therefore be set up to look at the issues of healthcare provision, care, pensions and financial sustainability. The principles of more prevention, health promotion and education should be mainstreamed across all policy areas and serve as an example to the Member States.

3.3.5 The EESC should continue, by means of a Round Table, a Category or a Permanent Study Group, to examine the issue of Active, healthy and dignified ageing as part of intergenerational dialogue with a view to drawing up an interdisciplinary strategy on demography.

3.3.6 EU policy should support the Member States in the implementation of national measures through grants from the structural and cohesion funds.

3.3.7 Beyond this, the EESC again calls for continuing support for lifelong learning in the area of ageing and health at European level and the development of a specific strategy for implementing this principle at national, regional and local level.

Brussels, 15 July 2010.

The President of the European Economic and Social Committee

Mario SEPI

(1) COM(2009) 180 final.

(2) See list of EESC opinions at http://www.eesc.europa.eu/sections/soc/index_en.asp.

(3) See European Observatory on Health Systems and Policies http://www.euro.who.int/en/home/projects/observatory/activities/research-studies-and-projects.

(5) http://www.mehrgenerationenhaeuser.de.

11.2.2011

Official Journal of the European Union

C 44/17

Opinion of the European Economic and Social Committee on ‘The added value of a common European asylum system both for asylum seekers and for the EU Member States’ (exploratory opinion)

2011/C 44/03

Rapporteur: Mr PÎRVULESCU

In a letter dated 16 February 2010, and in accordance with Article 304 of the Treaty on the Functioning of the European Union, Ms Joëlle Milquet, Belgian Deputy Prime Minister and Minister for Employment and Equal Opportunities, with responsibility for migration and asylum policy, asked the European Economic and Social Committee, on behalf of the future Belgian presidency, to draw up an exploratory opinion on

The added value of a common European asylum system both for asylum seekers and for the EU Member States.

The Section for Employment, Social Affairs and Citizenship, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 16 June 2010.

At its 464th plenary session, held on 14 and 15 July 2010 (meeting of 14 July 2010), the European Economic and Social Committee adopted the following opinion by 133 votes to one, with eight abstentions.

1. Conclusions

1.1	The European Economic and Social Committee welcomes the EU institutions' proactive approach to the issue of asylum and the interest shown by certain Member States in moving forward in this policy area.

1.2

Although EU immigration and asylum policy is under pressure from a range of risks and uncertain factors at global level (1), the Committee believes that the various budgetary constraints ensuing from the economic crisis should not lead to a reduction in the level and quality of protection received by beneficiaries. The EU's political identity is closely bound up with safeguarding human rights. Failure to do so would greatly damage the EU's internal and external credibility as a political and democratic body.

1.3

Following the entry into force of the Treaty on the Functioning of the European Union, the expansion of the EU's remit in this area and the new decision-making mechanisms established provide real opportunities to create a common European asylum area. There are also risks here, however. The expectations created may be too great for the existing political and administrative capacities.

1.4	The Committee believes that a truly functional common European asylum policy is the most effective and sustainable response to both the need to protect persons at risk and its impact on the Member States.

1.5

The Committee does not see international protection beneficiaries as an economic and administrative burden, but rather as valuable partners of their host countries and communities. In their countries of origin, beneficiaries of protection can become agents of change in terms of strengthening democracy and the rule of law and safeguarding human rights. The skills acquired could make them key players in the socio-economic development of both their host country and country of origin.

1.6

The success or failure of the Common European Asylum System (CEAS) hinges on a number of key variables: effective safeguarding of human rights, solidarity between Member States, harmonising legislation and policies in this field, enhancing the content of protection granted and proper funding for the competent EU institutions. A key priority, in the Committee's view, is to build the trust of the general public, civil society and Member State governments in a common European asylum policy. This can be achieved by swiftly making the policy operational and producing tangible results, especially in test cases.

1.7

The fact that systems for granting asylum vary from country to country entails significant costs. Developing the CEAS will clarify and limit these costs, firstly through legislative simplification (reducing the number of appeals or repeated requests, limiting the scope for abuse of procedures) and then through the action of the competent EU institutions (e.g. the European Asylum Support Office) which can take the place of the national authorities. It will then become easier to exchange good practice, train staff and importantly, redirect flows of asylum seekers.

2. Introduction

2.1

The EU's area of freedom, security and justice (AFSJ) is in a critical phase. Since 1999, the Council has adopted two five-year programmes: the Tampere programme (1999-2004) and the Hague programme (2004-2009). Ten years on from Tampere, the original objectives have been only partly achieved. The EU is still not a common area of freedom, security and justice. Considerable but uneven progress has been made on common policy in the realm of immigration, asylum and border security.

2.2

The Stockholm programme is to be implemented following the entry into force of the Lisbon Treaty. Many of the policies included in the Treaty are to be adopted by the Council under the ordinary legislative procedure or under the Parliament's co-decision procedure, enabling the EU to set more ambitious goals and re-launch a process that is currently being held back by the reluctance of certain Member States.

2.3

The ratification of the Lisbon Treaty, which includes the Charter of Fundamental Rights, has greatly increased the EU's responsibilities and remit in the area of asylum. This increased remit provides a major opportunity to progress towards the goals on immigration and asylum. It also entails a risk, however, if the decisions taken do not secure stakeholder support. Should there be failure to resolve the tensions and inconsistencies that inevitably arise in such a sensitive policy area (and already evident in the framing stage), this could compromise both progress to date and future prospects.

2.4

The Stockholm programme resulted from a consultation process that saw the integration and implementation of proposals contained in the European Pact on Immigration and Asylum (2), the reports of the advisory group on the future of European policy in the realm of home affairs and justice (3), and contributions received by the European Commission as part of the public consultation on Freedom, Security and Justice: What will be the future? Consultation on priorities for the next five years, in September and November 2008. In June 2009, the Commission published a communication entitled An area of freedom, security and justice serving the citizen: Wider freedom in a safer environment (4), and this was the subject of a Committee opinion (5).

2.5

The idea of creating the CEAS as part of the Area of Freedom, Security and Justice derives from the commitment to fully implement the Geneva Convention on the status of refugees (1951) and from the common humanitarian values shared by all Member States. Significant progress was made over 1999-2006, including the adoption of the four instruments which constitute the current acquis. Council Directive 2004/83/EC (‘the Qualification Directive’) enabled common criteria to be defined for the identification of persons who may apply for international protection and ensured that at least a minimum level of benefits is available for these persons in all Member States. Under the Hague and Stockholm programmes, the Commission undertook to evaluate the progress made in the first phase and to propose a series of measures to the Council and the European Parliament by the end of 2010.

2.6	Since 2002, the Committee has been involved in shaping and implementing the CEAS by issuing a series of opinions, including an opinion on the Green Paper on the Future Common European Asylum System (6), and an opinion on the Policy plan on asylum (7).

2.7

With the Policy plan on asylum (8) adopted on 17 June 2008, the Commission proposed completing the second phase of the CEAS by raising protection standards and ensuring their consistent application across the EU. The European Pact on Immigration and Asylum, adopted by the European Council on 17 October 2008, provided further political endorsement for this policy and the objectives set. The Policy plan proposed amending the Qualification Directive as part of a wider package including amendments to the Dublin and Eurodac Regulations and to the Reception Conditions Directive (9), and the adoption on 19 February 2009 of a proposal to establish a European Asylum Support Office (EASO) (10). Further measures proposed included strengthening the external dimension of asylum, inter alia through an EU programme on resettlement and developing regional protection programmes.

2.8

In advance of assuming the presidency of the European Council, the Belgian government has asked the Committee to draw up an exploratory opinion on the issue of asylum. The official referral states that granting international protection to persons at risk is one of the major challenges facing the EU and its Member States. The primary objective of developing a common European asylum policy has been continuously pursued in recent years. Standards have been established in respect of obtaining international protection, responsibilities have been determined and new institutions set up. Nevertheless, many Member States are reluctant to truly harmonise legislation and policies. Without the support of the Member States, European legislative and institutional integration risks becoming ineffective and costly. The advantages of a common European asylum policy are not yet apparent to the Member States and their responsibilities in this field have not been clearly assumed.

2.9

The Committee has made constructive proposals on this issue, welcoming the progress made in the practices of the EU and the Member States. Through the positions it has taken the Committee has openly backed the principles and values that favour basic human rights and has proposed measures conducive to the personal and occupational fulfilment of international protection beneficiaries. However, the Committee has repeatedly highlighted the limitations and inconsistencies in both the design and implementation of the EU's policies. Adjusting policies and instruments in this field requires a consensual process in which there is real dialogue involving the Member States, the EU institutions, organised civil society, the business world and local communities.

3. General comments

The added value of the Common European Asylum System for asylum seekers and Member States.

3.1	The Committee is of the opinion that an approach highlighting the advantages of the CEAS would be auspicious and potentially able to renew the confidence of stakeholders and particularly Member States regarding its establishment.

3.2	The Committee endorses the objectives set by the EU with a view to completing the CEAS; it would highlight, however, the disparity between the objectives set at EU level and practices at national level, which could be exacerbated by the economic crisis and its ensuing social and political effects.

3.3	The CEAS cannot be built unless it is firmly anchored within a set of common values and principles which place human dignity and security at the heart of the actions of the EU and its Member States.

3.4	Owing to asymmetric pressures on Member States, as reflected in the differing rates of acceptance of applications and the level of contested decisions and secondary movements, the implicit principle of solidarity between Member States is not being applied.

3.5

The CEAS is being undermined by the tendency of Member States to limit the harmonisation of legislation and national practices. Harmonisation is not a problem of asylum policy but it is the main instrument through which the benefits of the CEAS will be made tangible. Harmonisation will decrease the administrative and financial pressure on some Member States and guarantee a higher level of protection for asylum seekers, at least in the initial phase. If harmonisation is to yield the expected results, it must not be based on the lowest common denominator of protection.

3.6

The content of international protection is a sensitive area of asylum policy. Differences between Member States are even more marked than in the actual procedure for granting international protection. Augmenting the content of protection, reflected in the recognition of qualifications and access to education and jobs, would enable beneficiaries of international protection to raise levels of individual and collective wellbeing.

3.7

In order to provide satisfactory support for asylum policy, specialist institutions (particularly Frontex and the European Asylum Support Office) must have a clear mandate, a budget consistent with their responsibilities and transparent working methods so as to ensure compliance with procedures and the fundamental rights of asylum seekers and beneficiaries of international protection. Financial support for efficient institutions can best portray the advantages of a real common asylum policy.

4. Specific comments

4.1

The Committee would argue that the various aspects of asylum policy are interrelated. Its success or failure hinges on a number of key variables: effective safeguarding of human rights, solidarity between Member States, harmonising legislation and policies, enhancing the content of protection and proper funding for the European bodies responsible for asylum policy. A key priority in the Committee's view, is to build the trust of the general public, civil society and Member State governments in a common European asylum policy. This can be achieved by swiftly making the policy operational and producing tangible results, especially in test cases.

Respect for human rights in every phase of access to international protection.

4.2

The Committee has constantly emphasised the need for ‘common’ rather than ‘minimum’ standards of international protection (11). These standards aim to ensure greater respect for the fundamental rights of applicants for international protection by:

—	ensuring guaranteed access to the country,

—	ensuring freedom of choice as to where to lodge the application for asylum and protection;

—	considering refugee convention status first and then subsidiary protection, if and only if the conditions for the first status are not met;

—	ensuring the principle of no forcible repatriation if the applicant's life would be in danger in his country of origin or last transit country;

—	suspending an expulsion decision until the competent court has issued its decision, in order to make the right of appeal fully effective, in accordance with the case law of the European Court of Human Rights;

—	ensuring the special protection required by minors or presumed minors;

—	ensuring respect for individual rights and particularly the right of women to lodge an application for protection.

4.3	It is essential that applicants be able to express themselves in their mother tongue during asylum application procedures and that they be guaranteed free legal aid at all stages.

4.4	Rejections of applications for international protection must be explained with clear reasons and must include information on the possibilities for appeal, including procedures and timeframes. Expulsion measures meanwhile must in any case be suspended pending the outcome of any appeals (12).

4.5

Holding and detention should always be a last resort after all alternatives have been exhausted, and should never be applied without a court order, taking account of the right to legal defence, and in accordance with the Convention for the Protection of Human Rights and Fundamental Freedoms (13). There must be a procedure for appealing against court orders.

4.6

The Committee would highlight the special situation of women, who have many more difficulties than men when it comes to seeking asylum and obtaining refugee status. It would also raise the issue of minors in asylum policy and stress the importance of protecting their interests and ensuring their safety.

4.7

The Committee is concerned that insufficient attention is being given to phenomena relating to immigration and asylum, such as human trafficking and abuse in respect of Member States and third countries, particularly transit countries. Countries which have not ratified the 1951 Geneva Convention cannot be EU partners in the field of asylum policy. The success of asylum policy cannot be assured in the absence of a solid institutional arrangement with transit countries which often allow the rights and safety of persons at risk to be compromised.

Greater solidarity between Member States based on common interest and shared responsibility.

4.8

Owing to varying exposure to flows of refugees, some Member States apply restrictive rules to the granting of international protection. Asylum policy would help these States to manage applications and primarily to improve the content of protection. With a view to making this support operational, the Committee approves of the fact that a new procedure is planned in order to suspend Dublin transfers when the responsible Member State concerned would be subject to additional pressure (14).

4.9

Enhanced cooperation with Member States subject to additional pressure has many advantages: it would limit secondary movements between Member States, and distributing asylum applications more evenly among Member States would allow the process to be managed more efficiently and ensure that beneficiaries of international protection could be more deeply integrated in Member States.

Effective harmonisation aimed at improving the protection of persons at risk.

4.10

The national authorities are responsible for processing asylum applications. Insufficiently harmonised national legislation has allowed conflicting traditions to persist; the situation in the country of origin is evaluated differently; there is a dearth of common European practices; administrative capacities vary; applicants for international protection are not distributed evenly across the EU. In consequence, the level of protection granted by Member States varies significantly, which explains why there continue to be secondary flows of refugees within the EU (15).

4.11

One necessary step is to analyse asylum applications using a common information base. The Committee has repeatedly called for the list of ‘safe’ countries to be abandoned and replaced by a system providing real-time risk assessment at individual and Community level in third countries. The EASO would be responsible for this system. The common assessment system must use a set of common definitions including actors of protection and internal protection.

4.12

The Committee considers that non-State actors of protection may provide useful or even vital services in the short term, especially in resolving humanitarian issues. However, responsibility for the protection of persons in a given country cannot be entrusted to them even partially; it must be entrusted solely to State-run bodies. Internal protection is valid only where the bulk of the territory is under the control of a central authority willing and able to ensure internal order, a minimum level of public services and adequate protection of the rights and safety of individuals.

4.13

The Committee welcomes the move to render the content of the two protection statuses (refugee and subsidiary protection) identical, which it has repeatedly called for. This could enable, in future, more complete protection for persons at risk and help improve their integration in EU Member States. At the same time, rendering the two protection statuses identical should not lead directly or indirectly to a reduction in the level and quality of protection (16) but rather to an improvement.

4.14

National governments' responsibility for managing asylum policy must not imply the establishment of completely different practices. Some Member States (such as the Netherlands and Sweden) have evolved a set of best practices which could inspire similar measures in other States. The role of best practices is underestimated: they can illustrate how asylum policy can be put into practice and limit the cost of experimenting at national level.

Augmenting the content of international protection.

4.15

There is a wide range of national policies and programmes in this field, although, as no comprehensive analysis of Member States has been carried out, this statement is intuitive. In the absence of proactive measures, the granting of international protection will be devoid of substance and will result in implicit discrimination against beneficiaries of this status. The Committee would recommend involving trade unions and employers' bodies in framing and implementing asylum policy at national level.

4.16

The Committee welcomes the inclusion of provisions on the recognition/equivalence of diplomas and other qualifications as well as on fostering access to vocational training courses for international protection beneficiaries (17), as these are important steps towards their economic and societal integration and a better quality of life. Access to the labour market should be promoted through active measures to combat discrimination and encourage businesses.

Reinforcing and providing proper funding for institutions responsible for asylum policy.

4.17

The Committee is of the view that the European Asylum Support Office must become operational as quickly as possible. Its budget must enable it to carry out its logistically complex and intensive activities. For example, it must give priority to developing the common European system for evaluating risk in third countries, a major component of asylum policy. Proper funding for the Office could highlight the advantages of common institutions and procedures at European level. The EASO must coordinate with the other EU bodies and especially with Member State governments.

4.18

Funding for the various components of asylum policy must be reviewed. The funding must be stepped up and channelled towards instruments which yield the best results and offer real support for Member States. Solidarity has a financial component which must not be overlooked. For example, the European Refugee Fund has a budget of approximately EUR 5 million, far too little to provide meaningful support for implementing asylum policy at Community and national level.

4.19

The Committee is concerned to note a series of practices by Member State governments and the Frontex agency relating to the expulsion of persons who may need international protection (18). These operations, which have increased in frequency and scale, should be carried out under conditions of full transparency and accountability (19). The Committee would recommend that Frontex and the European Asylum Support Office work together to prevent human rights violations. Expelling people to countries or areas where their safety is at risk is a clear infringement of the principle of non-refoulement.

4.20

The Committee would argue (20) that specialist Frontex staff must be trained in order to improve:

—	the coordination of operational cooperation between Member States;

—	the drafting of common training standards;

—	the provision of the necessary support for Member States when organising reception and repatriation operations, with help from cultural mediators;

—	training for officials on the humanitarian right to asylum as subscribed to by the EU.

4.21

The Committee would recommend that institutional development in the field of asylum policy be flanked by a stronger role for civil society organisations in the decision-making process and practical running of asylum policy. This will boost the common policy's credibility and help permanently improve the instruments used.

Brussels, 14 July 2010.

The President of the European Economic and Social Committee

Mario SEPI

(1) For example, the risk associated with environmental degradation and ensuing conflicts.

(2) European Pact on Immigration and Asylum, European Council, Brussels, 13440/08, 24 September 2008.

(3) Report of the Informal high-level advisory group on the future of European home affairs policy (‘The Future Group’) Liberty, Security, Privacy: European Home Affairs in an Open World, June 2008.

(4) COM(2009) 262.

(5) OJ C 128, 18.5.2010, p. 80.

(6) OJ C 204, 9.8.2008, p. 77.

(7) OJ C 218, 11.9.2009, p. 78.

(8) COM(2008) 360 final.

(9) COM(2008) 815 final; COM(2008) 820 final; COM(2008) 825 final.

(10) COM(2009) 66 final.

(11) OJ C 204, 9.8.2008, p. 77, OJ C 218, 11.9.2009, p. 78.

(12) EESC opinion of 28.4.2010 on the Proposal for a Directive of the European Parliament and of the Council on minimum standards on procedures in Member States for granting and withdrawing international protection (recast) COM(2009) 554 final – 2009/0165 (COD), rapporteur: Mr Pezzini.

(13) OJ C 317, 23.12.2009, p. 110.

(14) OJ C 317, 23.12.2009, p. 115.

(15) OJ C 218, 11.9.2009.

(16) EESC opinion of 28.4.2010 on the Proposal for a Directive of the European Parliament and of the Council on minimum standards for the qualification and status of third country nationals or stateless persons as beneficiaries of international protection and the content of the protection granted (recast) COM(2009) 551 final/2 – 2009/0164 (COD), rapporteur: Mr Pîrvulescu.

(17) IDEM.

(18) See the report by the Human Rights Watch (HRW): Pushed Back, Pushed Around, Italy's Forced Return of Boat Migrants and Asylum Seekers, Libya's Mistreatment of Migrants and Asylum Seekers, HRW 2009.

(19) The Committee welcomes the Commission's intention to bring transparency to these procedures.

(20) EESC opinion of 28.4.2010 on the Proposal for a Directive of the European Parliament and of the Council on minimum standards on procedures in Member States for granting and withdrawing international protection (recast) COM(2009) 554 final – 2009/0165 (COD), rapporteur: Mr Pezzini.

11.2.2011

Official Journal of the European Union

C 44/23

Opinion of the European Economic and Social Committee on ‘The open method of coordination and the social clause in the context of Europe 2020’ (exploratory opinion)

2011/C 44/04

Rapporteur-General: Mr OLSSON

In a letter dated 28 April 2010, and under Article 304 of the Treaty on the Functioning of the European Union, Ms Laurette Onkelinx, Belgian Deputy Prime Minister and Minister for Social Affairs and Public Health, asked the European Economic and Social Committee, on behalf of the future Belgian presidency, to draw up an exploratory opinion on

The open method of coordination and the social clause in the context of Europe 2020.

On 25 May 2010 the Committee Bureau instructed the Section for Employment, Social Affairs and Citizenship to prepare the Committee's work on the subject.

Given the urgent nature of the work, the European Economic and Social Committee appointed Mr Jan Olsson as rapporteur-general at its 464th plenary session, held on 14 and 15 July 2010 (meeting of 15 July 2010), and adopted the following opinion by 61 votes in favour, no votes against and 2 abstentions.

1. Conclusions and recommendations

1.1

The EESC welcomes the Belgian Presidency's initiative to make use of the horizontal social clause and a reinforced Open Method of Coordination (OMC), as this highlights the fact that social cohesion must keep pace with reinforced economic policy coordination in order to achieve all of the targets contained in the Europe 2020 strategy.

1.2

Real participation by organised civil society at all stages and levels is essential to ensuring the effective use of the horizontal clause and the OMC. The EESC proposes that the Commission draw up an annual ‘governance report’ on such participation. The EESC can assist in this task and also suggests that pilot projects for participation be funded under the PROGRESS programme. The Committee furthermore proposes a Code of good practice for participatory governance of the OMC.

1.3

The EESC underlines the strong need for a coordination process that incorporates the interplay between all targets and all policies. This should be the overarching guideline for implementing the social clause and the OMC. The Commission should spearhead this coordination, assisted by the Social Protection Committee and the Employment Committee. The two committees should open themselves up to representation from outside stakeholders.

1.4

Implementation of the horizontal social clause must be efficient. Social impact assessments should cover all ten integrated guidelines for employment and economic policies, be published and feed into the OMC process. The focus should be on the effects on employment, the number of people living in poverty and social risks.

1.5

The EESC supports a reinforced OMC, so that employment, social protection and social inclusion are not sidelined in the current crisis. The OMC should go more local, thereby also linking it to targeted actions carried out under the auspices of the European Social Fund. Peer reviews based on mutual learning should lead to national roadmaps for social cohesion. Indicators should also focus on qualitative welfare criteria. The EESC supports the European Platform against Poverty, but thinks that the OMC and the horizontal clause can also contribute to the development of other flagship initiatives.

2. Background

2.1

The Belgian EU Presidency has asked the EESC to draw up an exploratory opinion on the following theme: How can European social cohesion be delivered through the Europe 2020 strategy and through reinforcing the open method of coordination, what practical role can the horizontal social clause play in the social dimension of European policies, and how would this be implemented?

2.2	The opinion will feed into a Belgian Presidency conference to be held on 14-15 September 2010 on ‘EU coordination in the social field in the context of Europe 2020’.

2.3	In its Europe 2020 communication, the European Commission stresses the need to involve the social partners and representatives of civil society at all levels. It suggests that ‘… the Economic and Social Committee as well as the Committee of Regions should also be more closely associated.’

2.4

In order to achieve the Europe 2020 strategy, the European Council of 17 June agreed on five headline targets (the employment rate, R&D, greenhouse gases, education and social inclusion) and concluded that these are interrelated and mutually supportive. Foundations for a ‘much stronger economic governance’ were laid by giving priority to ‘reinforcing economic policy coordination’. Efficient monitoring mechanisms are key factors for the successful implementation of the targets. The Council agreed on an aim to lift 20 million people out of the risk of poverty, whilst leaving the Member States free to set their national targets on at least one of three indicators: at-risk-of poverty, material deprivation and jobless households.

2.5

Europe 2020 refers to a mix of EU-level and national measures to achieve ‘smart, sustainable and inclusive growth’. Ten integrated guidelines for economic and employment policies support the five headline targets, Seven flagship initiatives are to be launched. Member States will set national targets and implementing arrangements that take account of national circumstances and will also draw up National Reform Programmes (NRP).

2.6

The horizontal ‘social clause’ (Article 9 of the Treaty on the Functioning of the European Union) was inserted into the Lisbon Treaty, and states that ‘in defining and implementing its policies and activities, the Union shall take into account requirements linked to the promotion of a high level of employment, the guarantee of adequate social protection, the fight against social exclusion, and a high level of education, training and protection of human health’.

2.7	This ties in with the other horizontal clauses in the Treaty (Articles 8, 10, 11 and 12 of the TFEU): gender equality, the environment and consumer protection, which were introduced with the Amsterdam Treaty, and anti-discrimination, which formed part of the Lisbon Treaty.

2.8

The open method of coordination (OMC) was defined as an instrument of the Lisbon Strategy in 2000. In short, the Council set objectives, which are followed up in national action plans and reform programmes, while progress is measured by benchmarking, indicators, peer reviews and the exchange of best practice. The OMC model has also a legal basis for certain policy areas in the Lisbon Treaty (TFEU Articles 149, 153, 156, 168, 173 and 181).

3. General comments

3.1

In order to recover from the present deep economic and social crisis, Europe is moving towards a reinforced coordination of economic policies. The EESC underlines that social progress must keep pace with economic reforms if all goals of the Europe 2020 strategy are to be achieved. There is, therefore, an imperative need to interlink the economic, social and environmental dimensions of the strategy. Integrated mutually-reinforcing policies will require all instruments to be harnessed, coordinated and strengthened.

3.2

Against this background, the EESC welcomes the fact that the Belgian Presidency is focusing on governance and social cohesion by highlighting the horizontal social clause and a stronger OMC. This focus should be maintained in a long-term approach. The Committee strongly urges the Hungarian government to make this issue a priority during its coming Presidency.

3.3	The Committee also wants to underline, however, that the provisions of the Charter of Fundamental Rights should be considered when strengthening the instruments designed to achieve social progress.

3.4

The EESC has consistently emphasised that real participation by citizens and organised civil society at all stages and levels of the process is an indispensable part of governance. Consensus on economic and social reforms must be reached with the social partners and other relevant stakeholders, thereby increasing the chances of achieving the headline targets.

3.5

The EESC underlines that it is crucial to closely involve the social partners and representatives of civil society in setting the national targets and designing the NRPs as well as in strengthening the OMC and implementing the horizontal social clause. The views of organised civil society should also be taken into consideration when the Commission and the Council validate targets and assess progress.

3.6

The Europe 2020 strategy must be implemented at all territorial levels. A ‘bottom-up’ approach should interact with ‘top-down’ EU initiatives when shaping and implementing EU social policies. Therefore, organised civil society must build up real and efficient partnerships with regional and local parliaments/authorities to set regional targets and define appropriate policy measures. This ties in with the efficient implementation of the partnership principle that should guide the use and allocation of the EU structural funds in future, thereby exploiting synergies between the Europe 2020 strategy and the European Social Fund (ESF) (1).

3.7	The EESC also favours the active involvement of national economic and social councils and similar organisations.

3.8

The EESC proposes that, in tandem with the annual progress report on NRP in the Member States, the European Commission should draw up a ‘governance report’ based on the participatory governance of the OMC and the horizontal social clause, on which the European Parliament, the EESC and the CoR should be consulted. The EESC could use its network of national ESCs and similar organisations to monitor the involvement of organised civil society. The EESC could even publish its own reports.

3.9

There is a strong need for a coordination process that incorporates the mutual interactions between the headline targets, the integrated guidelines and the flagship initiatives. The Commission has a strategically important role of spearheading this ‘coordination of coordination’. The integrated guidelines should be ‘integrated’ in the real sense of the word, meaning that all policies should be coherent and focused on all targets. Such integration should be the overarching guideline when introducing mechanisms for implementing the horizontal social clause and strengthening the OMC. In order to enhance the link between the two instruments the results of implementing the horizontal social clause should feed into the OMC process.

3.10

The EESC therefore strongly supports the proposals put forward on 21 May 2010 in the contribution of the Social Protection Committee (SPC) to the new European strategy (2). The SPC wants the horizontal social clause to be inserted into the preamble of the economic policy guidelines. It goes on to say that a thematic assessment and reporting of progress relating to its social dimension is a necessary feature of the integrated vision of Europe 2020.

3.11

The EESC values the work carried out by the SPC and the Employment Committee (EMCO) and considers that their role should be enhanced when the instruments designed to achieve the social dimension are strengthened. The EESC suggests that it is not only governments that should be represented on the Committees but also the social partners and other relevant civil society organisations. The EESC proposes that the Committees hold meetings on a more regular basis, with representatives of these stakeholders from both the European and Member State levels. The government representatives on the SPC and EMCO also have a responsibility to both organise and take part in consultations with the social partners and other relevant civil society stakeholders in their home countries.

3.12

The EESC supports the Commission's proposal to develop communication tools for involving citizens, workers, businesses and their representative organisations. The Commission's initiative to take stock of social realities can serve as one model and could be organised on a more permanent basis, also reaching the local level. However, social partners and civil society organisations must themselves be proactive in terms of how the horizontal social clause and the OMC can be used. Therefore, the EESC suggests pilot projects to this effect funded under the PROGRESS programme.

4. Specific comments on the horizontal social clause

4.1	The effects of the horizontal clauses concerning the environment, gender equality and consumer protection, established more than 10 years ago in the Treaty, are primarily informal.

4.2

The EESC underlines that social impact assessments are an essential part of monitoring the Europe 2020 strategy. They should provide effective mechanisms for evaluating social risks and should be published and open to public discussion. The EESC wishes to emphasise that the effects on employment and the number of people living at risk of poverty in particular should be assessed.

4.3

The Commission should take responsibility, assisted by the SPC and the EMCO. European social partners and other major stakeholders should be actively involved. Their views should be published in tandem (appended to) with the assessments. In this context, it should be noted that the Commission has already established mechanisms for social impact assessments through the Integrated Impact Assessment, but their visibility and use are not very well developed.

4.4

In the EESC's view, it must be ensured that economic policy and budgetary consolidation lead to higher employment, fewer people living in poverty and improved social rights. Therefore, social assessments should in particular cover all ten integrated guidelines for employment and economic policies. But also other measures undertaken to achieve the five headline targets should be evaluated if need be.

4.5	Social impact assessments should also be made at national and regional level.

4.6	An initial report should be ready by December 2010 in order to feed into the first annual review of Europe 2020.

5. Specific comments on the OMC

5.1	The EESC has often been critical of the OMC for not having delivered the expected results. It is ineffective and invisible at the national level. It does not sufficiently involve the social partners and other civil society organisations.

5.2	On the other hand, improvements have been noted, particularly in the field of social inclusion, and the EESC has, in several opinions, been a staunch supporter of introducing the OMC into new policy fields (for instance health, youth policy, demographic challenges and immigration and asylum).

5.3	The EESC is strongly of the view that in the current crisis the OMC should be strengthened, to ensure that social protection and social inclusion policies are not sidelined.

5.4

The EESC gives its full support to setting up the ‘European Platform against Poverty’, making it an instrument that will boost the commitment of businesses, workers and the general public to reduce social exclusion through practical measures. The Platform and the OMC will mutually benefit each other. However, the EESC considers that the OMC can also help develop other flagship initiatives, particularly if supported by the social impact assessments of the horizontal clause.

5.5

The EESC has suggested that the OMC should be strengthened by establishing binding targets at the Member State level in order to achieve the Europe 2020 strategy. This view is highlighted in several EESC opinions, such as most recent opinion on the employment guidelines (3), which calls for much more ambitious and measurable targets on employment, education and social inclusion, supported by better policy coordination. The EESC also strongly supports the demand made at its Biennial Conference in Florence, for the Europe 2020 strategy to include specific indicators to measure the impact of early education on reducing social exclusion in later life.

5.6

The EESC does, however, underline that when there is freedom for Member States to choose the most appropriate indicators (see above point 2.4), the OMC should follow up by benchmarking all the relevant indicators. A Member State should not be able to avoid core EU objectives. In the EESC's view, the number of people at risk of poverty, measured by the relative income indicator (4), is relevant to each Member State. Moreover, it is important that national targets be set on the basis of genuine participatory dialogue with the stakeholders.

5.7

The EESC believes that there should be better incentives for Member States to pursue their commitments, for instance through a clear link to allocations under the ESF. This approach will be strengthened if the ESF's operational programmes focus even more on social inclusion, supported by an efficient partnership with the social partners and civil society organisations.

5.8

The OMC should ‘go more local’, establishing local and regional action plans in conjunction with local authorities and organisations, thereby reflecting the participatory bottom-up approach and the coordination of partners and policies, also with support from the structural funds. Decentralising the method in this way will raise the profile of policy integration, which is so badly needed.

5.9

The EESC is strongly of the view that there should be benchmarking of participatory governance of the OMC - particularly the participation of organised civil society - based on indicators, peer reviews, mutual learning and the exchange of good practice. The EESC proposes that such benchmarking be drawn up as a Code of good practice by the Commission and the SPC, in collaboration with the major European stakeholders. It could be based on the following criteria (5).

—

structure of dialogue

—	all relevant stakeholders should take part

—	kind of dialogue – genuine participation should be encouraged - not only information and consultation

—	involvement of regional/local level through participatory action plans etc.

—	participation of national ESCs

—	timely involvement of stakeholders at all stages of the policy cycle

—	the documented result of the dialogue

—	establishment of national/regional targets

—	establishment and follow-up of indicators

—	participation of stakeholders in peer reviews, mutual learning and identification of best practice

—	participation by the stakeholders in practical measures to promote employment and social inclusion.

5.10	A clear link should be established between proposals based on ‘common principles’ and the OMC. Common principles are recommendations given to Member States and have for instance been used in EU policies for thematic strategies on flexicurity, active inclusion and active ageing.

5.11	The outcome of the OMC should eventually lead to proposals for the use of other instruments, such as ‘enhanced cooperation’ between Member States, use of the Community Method and others.

5.12

The EESC underlines that indicators should go beyond economic performance, by also identifying societal well-being indicators as proposed by the Stiglitz Commission (6). The EESC has previously identified quantitative and qualitative social policy indicators, for instance, on gender equality, youth employment, the ‘working poor’, people with disabilities, quality jobs, poverty among children and young people, income distribution, minimum wage/minimum income systems, and access to health and social services. A practicable ‘quality-of life’ indicator covering six different spheres has also been suggested (7). Qualitative indicators that measure accessibility and quality in relation to people's expectations, user involvement and user-friendliness have also been proposed.

5.13	While indicators must be established at the European, national and regional levels, the EESC underlines that stakeholders should be invited to take part in formulating and evaluating them.

5.14

The EESC believes that it is important for the Member States to report on progress towards each target using comparable but revisable European indicators, both for creating a league table as suggested in the Kok report (8) and for being used as a diagnostic tool for improvement and self-correction by national and local players.

5.15

Efficient systems for mutual learning and transferring best practice and exploiting non-legislative measures must involve decision-makers at all levels. Since the social partners and other relevant civil society stakeholders possess unique knowledge and extensive experience of social and employment policies, they must be involved in identifying and evaluating the possibilities for transferring best practice, especially innovative measures.

5.16	Peer reviews of Member States should be strengthened by involving the social partners and other relevant stakeholders. The reviews based on mutual learning and best practice should lead to public recommendations to Member States, proposing a roadmap for social cohesion.

Brussels, 15 July 2010.

The President of the European Economic and Social Committee

Mario SEPI

(1) ECO/258, Efficient partnership in cohesion policy, rapporteur: Mr Olsson.

(2) Council 9964/10.

(3) See EESC opinion of 27.5.2010 on Employment policy guidelines, rapporteur-general: Mr Greif, CESE 763/2010.

(4) Where the poverty line is defined as an income below 60 per cent of the median income.

(5) See also for instance ‘EU Policy Coordination Beyond 2010: Towards a New Governance Structure’ by Jonathan Zeitlin.

(6) Commission on the Measurement of Economic Performance and Social Progress.

(7) See EESC opinion of 22.10.2008 on Beyond GDP - measurements for sustainable development, rapporteur: Mr Siecker, (OJ C 100 of 30.4.2009, pp. 53-59.

(8) ‘Facing the Challenge – The Lisbon Strategy for Growth and Employment’, report from the High-Level group chaired by Wim Kok, November 2004.

11.2.2011

Official Journal of the European Union

C 44/28

Opinion of the European Economic and Social Committee on ‘The Development of social welfare benefits’

2011/C 44/05

Rapporteur-general: Mr VERBOVEN

In a letter dated 29 April 2010, and in accordance with Article 304 of the Treaty on the Functioning of the European Union, Ms Laurette ONKELINX, Deputy Prime Minister of Belgium and Minister of Social Affairs and Public Health, asked the European Economic and Social Committee, on behalf of the future Belgian presidency, to draw up an exploratory opinion on

The development of social welfare benefits.

On 25 May 2010 the EESC Bureau instructed the Section for Employment, Social Affairs and Citizenship to prepare the Committee's work on the subject.

In view of the urgency of the matter, the European Economic and Social Committee decided at its 464th plenary session, held on 14 and 15 July 2010 (meeting of 14 July), to appoint Mr Xavier VERBOVEN as rapporteur-general and adopted the following opinion by 66 votes to 3, with 10 abstentions.

1. Conclusions and recommendations

1.1 The EESC is delighted that the development of social welfare benefits is to be the subject of a special conference under the Belgian presidency of the Council of the European Union. The Committee recognises that social welfare is an important tool for redistribution, social cohesion and solidarity which has to be at the heart of the construction of the European project. Among other things, fundamental social rights guarantee access to adequate welfare incomes when certain social risks arise or to welfare assistance and housing for all those who lack sufficient resources. The EESC recalls that on 30 November 2009 it adopted a declaration asking the Commission to implement a new social action programme (1) to guarantee that fundamental social rights are accorded the same importance as competition rules and economic freedoms.

1.2 The EESC would like to stress the role of social policy as a productive factor. It would point out once again that if they are conceived in an appropriate manner, social and labour market policies help to promote both social justice and economic efficiency and productivity. The essence of the European social model rests on there being a proper balance between economic efficiency and social progress (2). Getting people to support the European project will depend on the effectiveness of the policies implemented in these different areas. In addition, the importance of the role played by social welfare as an economic stabiliser, both when the economic situation is good and when it is bad, must not be overlooked (3).

1.3 Because of the current economic and social crisis there is a need more than ever for an ambitious European strategy for the years leading up to 2020. This new strategy - which was defined by the Commission (4), has just been approved at the European Council of 17 June 2010 and should be formally adopted in September this year by the Parliament - covers four fields: knowledge and innovation, a more sustainable economy, the improvement of employment levels and social inclusion. The EESC supports this multidimensional vision which aims to support ‘intelligent, sustainable and inclusive’ growth but regrets that the recommendations included in its previous opinion on ‘the Lisbon strategy after 2010’ were not properly followed on certain points where gaps are noted. This would involve, among other things, formulating ‘guidelines with measurable goals on gender equality, dealing with jobs that do not provide adequate social protection, the transition to a low-CO2 economy, fighting poverty (including poverty suffered by people in employment) and moves to prevent social exclusion (for example, appropriate support in the case of unemployment or incapacity to work and in access to public services)’ (5).

1.4 The EESC welcomes the fact that the Europe 2020 Strategy includes a guideline specifically dedicated to social inclusion and fighting poverty, with a commitment that 20 million people at least will be lifted out of the risk of poverty and exclusion (6). As 2010 has been designated the European Year for Combating Poverty, it is essential to take the measures necessary to help all the persons concerned to get out of poverty.

1.5 The Council considers that the best way to escape from exclusion is to get a sustainable, quality and properly paid job. Structural improvement measures should be adopted in order to create an inclusive labour market (7). The EESC points out that a framework agreement for an inclusive labour market was concluded on 9 December 2009 as part of the social dialogue. This framework agreement notes the social partners' wish to promote inclusive labour markets, maximise labour force potential in Europe, increase the employment rate and improve the quality of jobs, including training and skills development.

1.6 The EESC shares the point of view of the European Parliament included in its Resolution of 6 May 2009 on the active inclusion of persons excluded from the labour market (8), in particular the first recital: ‘active inclusion must not replace social inclusion, as vulnerable groups unable to participate in the labour market have a right to a dignified life and full participation in society, and therefore a minimum income and accessible and affordable high quality social services must be available, regardless of a person's ability to participate in the labour market.’

1.7 The EESC points out that in its opinion of 12 July 1989 on poverty (9), it recommended the introduction ‘of a minimum social income, both to act as a safety net for the poor and to boost their reintegration into society’. It regrets that this opinion and the Council Recommendation of 24 June 1992 on common criteria concerning sufficient resources and social assistance in social protection systems (10) have, at the present time, still not led to appropriate follow-up action. The EESC therefore feels that the phasing-in of a guaranteed minimum level of income and services as part of the social welfare system should be envisaged using a new instrument which, while taking into account specific national circumstances, would provide more effective support for the policies to combat poverty pursued within the various Member States. The objective of reducing poverty, which is included in the Europe 2020 Strategy, is, from this point of view, a major incentive.

1.8 As regards replacement social benefits, the EESC stresses that not all of these are the subject at present of particular attention under the Open Method of Coordination (OMC) relating to social protection. By defining objectives, and via common indicators and the exchange of good practices, the OMC aims to reform social protection systems in the areas of combating poverty and social exclusion, retirement, health care and long-term care. As a result, unemployment payments, incapacity benefits, maternity benefits and benefits received by people with disabilities and victims of an industrial accident or work-related illness are not taken into account by this important process. The EESC recommends that the social welfare activities of the OMC be extended to all allowances to replace loss of income. It recommends in particular the introduction of monitoring to study what is an appropriate level for the allowances paid out.

1.9 The EESC points out that the modernisation of our social protection systems involves striking an efficient balance between, on the one hand, incentives designed to increase the labour supply and, on the other hand, measures intended to ensure adequate social protection by guaranteeing the effectiveness of expenditure in this area. As regards the first aspect, it would like to stress that income should not be the only element to be taken into account. Other factors such as the availability, effectiveness and quality of childcare, arrangements to improve accessibility for people with disabilities, infrastructures for placing job applicants, training, education and public health have an important role to play (11). The EESC therefore once again stresses its willingness to see the OMC strengthened by the implementation of measurable objectives as regards social welfare, especially as regards replacement or cover rates, but also as regards access to public services (12). In addition, the Committee notes that the general use of activation schemes is not the subject of special attention under the OMC for social protection. It recommends that a report be drawn up by the Committee for Social Protection in order to study if these arrangements for activation are indeed the result of a balance between the values of solidarity, responsibility and cohesion.

1.10 The EESC wishes to stress the essential role that the representatives of civil society and the social partners can play in all matters related to the modernisation of social protection systems and the strengthening of the OMC as a democratic process.

2. Introduction and placing in context

2.1 Social protection represents an important instrument for redistribution and solidarity, and its organisation and financing fall under the responsibility of the Member States. Systems vary enormously as each is constructed in a specific manner within each of the Member States. Social protection is at the very heart of the European project, as attested by Article 9 of the Treaty on the Functioning of the European Union (13), and Article 34 of the Charter of Fundamental Rights (14), which recognises and respects:

—	on the one hand, the entitlement to social security benefits and social services providing protection in such cases as maternity, illness, industrial accidents, dependency or old age, and in the case of loss of employment;

—	and on the other, the right to social and housing assistance so as to ensure a decent existence for all those who lack sufficient resources.

2.2 In addition to providing adequate revenue for people not in active employment or covering social risks, social protection should also play an active role in supporting the employment transition process, especially in terms of helping people to successfully integrate into the labour market.

2.3 Considering the impact of the 2008 financial crisis, social protection systems have not only helped to shield Europeans from the most severe effects of the financial crisis but have also played a counter-cyclical role in stabilising the economy (15). In the absence of ambitious convergence policies, these systems could be jeopardised by, in particular, competition practices developed by certain Member States which use a fall in social expenditure as a lever to attract foreign investment. This process, which is already a reality in the areas of taxation and pay levels, is tending to expand into the field of social matters (16).

2.4 On the eve of the implementation of the new Europe 2020 Strategy, it is important to remember that economic growth and increased employment is not in itself sufficient to ensure better social cohesion. Inequalities have often widened over the last ten years, while poverty and social exclusion remain a major problem in most EU countries (17). The EESC would emphasise the need to combat these phenomena by policies which are not basically reactive and concerned with compensation but which are also preventive and proactive, in order to tackle situations of poverty upstream. One phenomenon in particular that springs to mind is that of childhood poverty, which can determine the whole development and later life of the person concerned.

2.5 Social protection in general and social welfare benefits in particular face four major challenges today:

—

the impact of the crisis, which has led to an increase in unemployment spending due to numerous job losses, and the resulting strain on public finances. In order to avoid getting bogged down in long-term unemployment, it is necessary to continue improving and modernising social protection systems in order to establish an active and secure framework to ensure that people have access to and are able to return to good quality jobs, while at the same time ensuring that these systems will last;

—

the ageing population, which will have significant repercussions for the pension and healthcare sector. Solidarity between the generations means that it is necessary to ensure that pensions are sufficient and to invest in all requirements relating to this phenomenon, particularly dependency support;

—	the unacceptable growth in poverty and inequality. The poverty reduction objectives defined in the new Europe 2020 Strategy are ambitious. They require a coordinated effort by the Member States in a whole host of areas for political action in partnership with the social partners and civil society;

—	the need to enhance the well-being and social cohesion of the people of Europe. In recent years, people have shown that they expect great things from new social policies that are socially effective and progressive and economically sustainable.

3. Adequate allowances to replace income

3.1 Social welfare benefits are designed to provide a guaranteed income during a period of unemployment, after retirement, during a period of illness or due to a disability, and thus play a leading role in social protection systems. Irrespective of how they are financed, their founding principles (insurance-based or universal) or their payment procedures, they all aim to guarantee a stable and adequate income when such social risks occur. In this connection, they play an important role as a safety net both for individuals and society in general. They must be regarded not as a burden but as a productive investment that benefits everyone.

3.2 The major upheavals suffered by European economies and societies due to globalisation, technological changes, the emerging phenomenon of population ageing and, more recently, the economic recession which occurred in 2008 have led to far-reaching changes for social protection systems in general and allowances to replace income in particular. The so-called modernisation policies that have been pursued over the last twenty years aim primarily to improve the public finances of the various Member States and ensure economic growth, in particular through high employment rates. This has led to welfare allowances being given a leading role as an incentive to boost participation in the labour market.

3.3 The Committee is quite aware that the level of protection provided by these allowances is heavily dependent on public financing, which is currently under severe pressure because of the recession and issues surrounding population ageing. However, it wishes to point out that it rejects ‘steps that would jeopardise solidarity, which underpins social protection and serves Europe so well’ (18). The granting of allowances which partially maintain standards of living is essential to guaranteeing a better distribution of goods and incomes and social cohesion. Similarly, the Committee would like to stress the importance of arrangements which aim to adapt allowances to the development of living standards. It is also the reason why the Committee feels it is necessary to set up a monitoring unit as part of the OMC to see that the level of the allowances granted is adequate.

3.4 The EESC calls for the implementation of a Social Action Programme that should be based on positive collaboration between Member States to combat any temptations to indulge in a ‘competitive “race to the bottom” in terms of social rights, social protection and working conditions’ (19).

3.5 Unemployment: strengthening social protection as an investment for the benefit of both economic competitiveness and social integration

3.5.1 Unemployment insurance is an essential social advantage, since it aims to protect any worker from the effects of dismissal or restructuring. Its objective is to ensure an appropriate and stable level of resources, which is the first condition for protecting job mobility and, by the same token, ensuring that a person finds a new job (20).

3.5.2 Unemployment insurance cannot consist simply of granting allowances, but must be coupled with appropriate and dynamic support measures to help people get a quality job. Such active policies have to guarantee that people have accompaniment tailored to their requirements and access to training that provides qualifications (21). In addition, other factors such as the availability, effectiveness and quality of childcare services, access arrangements for people with disabilities, and teaching and public health infrastructures have an important role to play (22). The public authorities should ensure that these factors, which are essential for smoothing the transfer from one job to another, are in place.

3.5.3 Moreover, the EESC considers that it is necessary to take structural improvement measures in order to create a really inclusive labour market (23). It should be pointed out here that a framework agreement for an inclusive labour market was concluded on 9 December 2009 as part of the social dialogue. This agreement mentions the social partners' wish to promote inclusive labour markets, maximise the labour force potential in Europe, boost the employment rate, and improve the quality of jobs, including training and the development of skills.

3.5.4 The Committee thinks that some degree of convergence is necessary in order to make work worthwhile by ensuring that employment really is a more interesting choice financially. Coordinated policies need to be implemented on welfare, wages and taxes so that lowly-paid and low-skilled persons can obtain a worthwhile job and escape from poverty and unemployment (24).

3.5.5 Unemployment benefits associated with dynamic labour market policies can stabilise the economy and promote active adaptation to change thanks to the improvement of skills and effective initiatives on job-seeking and retraining (25). However, steps should be taken to ensure that the activation policies currently being followed within all the Member States are indeed the fruit of a balance between the values of solidarity, responsibility and cohesion and do not contain any risks in terms of inequalities, disparities between categories or isolation in atypical, low-skilled and/or poorly paid jobs. In addition, it is advisable to remain cautious about measures which aim to tighten eligibility criteria, particularly in times of recession when the demand for labour is low. The risk is that persons who are excluded will be further marginalised, which represents a major obstacle to finding a/another job. Such weeding-out policies may also have a perverse effect of displacing people to other welfare sectors, such as social assistance or work incapacity, which is undesirable.

3.6 Pensions: adequate pensions to meet the challenge of an ageing population

3.6.1 As the number of pensioners in Europe is increasing and the proportion of people of working age is falling, the European Union has encouraged the Member States to start reforming their pension schemes so as to make sure that pensions remain adequate and sustainable. Basically, the reforms seek to: (i) provide incentives for people to work longer, (ii) encourage people to have supplementary pensions, (iii) match the allowances paid more closely to social security contributions, (iv) take account of the average lifespan when setting allowances, (v) provide adequate funding for minimum pensions, and (vi) grant pension rights credits for periods spent in care and automatic or semi-automatic review machinery.

3.6.2 The rate of risk of poverty remains particularly high among people aged 65 or more (20 % on average in the 27 EU countries against 17 % for the population as a whole), particularly for women (where the rate reaches 22 %). This leads to a problem over whether the level of retirement pensions is adequate compared with the incomes received by the rest of the population. The aim of a retirement pension is to provide pensioners with a secure income to replace that received when a person was working, bearing in mind the persons previous standard of living. In future, measures need to be taken to reduce the income gaps between the pensions paid to men and those paid to women and also to guarantee correct cover for the age risk for people working in non-typical jobs or who have followed non-typical career paths. The segregation which still exists on the labour market between men and women has a major impact on the acquisition of pension rights and, consequently, on women's prospects of having a pension (26). The EESC would also like to stress that the generalised use of schemes providing a minimum pension has a major role to play in combating poverty among the elderly. The EESC urges the Committee for Social Protection and the OMC to pay particular attention to this point.

3.6.3 Public pension schemes are the main source of retirement pensions. So, it is vital that everything is done to ensure that they are long-lasting and financially viable. The EESC feels that the best way to guarantee appropriate funding for such schemes is to have a high employment rate and supplementary funding measures, which certain Member States have implemented. These schemes are based on the principle of solidarity and form links between and within generations which help to ensure social cohesion. They also make it possible for people to acquire pension rights during periods of unemployment or career breaks due to illness or family circumstances. Their financial stability proved its worth during the financial crisis of 2008.

3.6.4 In addition to these public pension schemes, supplementary pension schemes have developed. These can provide pensioners with extra income and for this reason they should be made available to all employees. However, they should not seen either as an alternative solution to the problem of the viability of public pension schemes or, above all, as a reason to call them into question. In the interests of both contributors and pensioners, the development and setting-up of such supplementary schemes must meet certain conditions, and in particular be governed by a European regulatory framework developed in collaboration with the social partners. They should not just be investment funds to provide a guaranteed personal pension but should also take care to cover the life contingency risk and ensure an income during periods of illness, or even of unemployment or absences due to family circumstances. Access to these supplementary schemes should be guaranteed to all workers in a sector or firm. The principle of equal treatment for men and women should be applied. The social partners should be involved in the negotiations to set up such schemes and in monitoring the management of them. Finally, care should be taken to promote investments that have a positive impact on jobs and discourage those that are purely speculative.

3.7 Occupational incapacity: an important safety net for workers suffering an illness or disability

3.7.1 In addition to unemployment and pensions, the third category of allowances to replace income concerns those received by victims of occupational incapacity, disability, industrial accidents or an occupational disease. This raises not only the question of how to provide an adequate replacement income but also that of how people are to return to their old job or get a new one. The EESC would like to recall its position as expressed in its previous opinion on social integration (27). While receiving an income is an essential condition for being able to live independently, it is not necessarily a sufficient one. In many cases, finding jobs for the persons concerned is still not being proper attention despite the legal provisions adopted for this purpose. In practice, the arrangements for providing guidance for people or helping them to return to their old job or find a new one are often cumbersome and unsuitable.

3.7.2 People who are unable to work must be guaranteed sufficient income assistance to be able to live with dignity. Allowances granted in such cases must not only take account of the need to maintain an appropriate standard of living but also specific expenditure that people have to pay out in connection with their illness or disability. Policies seeking to guarantee accessible and quality health care also have a vital role to play here as do those which encourage the development of infrastructures and social services set up in situations of dependency in order to guarantee a life with dignity (see home care and assistance services, aid by outside parties, etc.)

4. Minimum income and social inclusion

4.1 In its opinion of 12 July 1989 on poverty (28), the EESC recommended the introduction ‘of a minimum social income, both to act as a safety net for the poor and to boost their reintegration into society’. This opinion is quoted in the Council Recommendation of 24 June 1992 on common criteria concerning sufficient resources and social assistance in social protection systems, (29) which recommends the phasing-in of a resource guarantee as part of the social protection arrangements of the various Member States within a period of five years. Almost twenty years later, and at a time when the EU has made 2010 the year for combating poverty, it has to be said that these requests and recommendations have remained a dead letter. In 2008, the Commission specified in its Recommendation of 3 October 2008 on active inclusion (30) that the Recommendation of 1992 ‘remains a reference instrument for Community policy in relation to poverty and social exclusion and has lost none of its relevance, although more needs to be done to implement it fully’. More recently, in its Resolution of 6 May 2009 on the active inclusion of persons excluded from the labour market (31), the European Parliament ‘calls on the Member States to implement adequate income support so as to fight poverty and social exclusion’ and ‘points to the need for an adequate income support level based on Recommendations 92/441/EEC and 2008/867/EC which must be adequate, transparent, accessible to all, and sustainable over time’.

4.2 In accordance with the Council Recommendation of 24 June 1992, the EESC considers that this support guarantee must be fixed taking into account the existing standard of living in each Member State. This involves referring to indicators that are appropriate, for example the average disposable income available in the Member State, statistics on households' consumption, the legal minimum wage, if that exists, or the level of prices. This minimum income may also be adapted or supplemented to meet specific needs. This means mainly housing assistance, policies guaranteeing access to quality health care or covering the medical costs of heavily dependent persons that have already implemented been by various Member States. The EESC supports the EP's initiative (32) in that it seeks to improve the Council Recommendation of 1992 and states that ‘social assistance should provide a adequate minimum income for a dignified life, at least at a level which is above the “at risk of poverty” level’. However, attention will have to be paid to any interactions that might take place between this income guarantee, which may or may not be coupled with related payments such as housing assistance, and other social security benefits. Steps must be taken to prevent recipients of social security allowances finding themselves in less favourable situations, which would obvious give rise to some perverse effects.

4.3 The EESC points out that the introduction of a minimum income has to be envisaged as a part of policies on active social inclusion and access to quality social services. From this point of view it supports the position of the European Parliament (33), which ‘suggests that the Member States actively consider a minimum wage policy in order to tackle the growing number of “working poor” and make work a viable prospect for those distant from the labour market’. The EESC would also like to say that persons who are unable to take part in the labour market due to their age, state of health or disability must not be forgotten. It shares the view of the European Parliament (34) when it states that ‘active inclusion must replace social inclusion’ and ‘therefore a minimum income and accessible and affordable high-quality social services must be available regardless of a persons ability to participate in the labour market’.

4.3.1 The EESC considers that the phasing-in of a guaranteed minimum level of income is necessary in order to achieve the objective of reducing poverty included in the Europe 2020 Strategy and should be envisaged using a new instrument that would provide more effective support for the policies to combat poverty pursued within the various Member States.

Brussels, 14 July 2010.

The President of the European Economic and Social Committee

Mario SEPI

(1) EESC opinion, OJ C 27 of 3 February 2009.

(2) EESC opinion, OJ C 309 of 16 December 2006.

(3) European Commission, Committee for Social Protection, Joint Report on Social Inclusion and Protection 2010, Manuscript, February 2010.

(4) Commission Communication COM(2010)2020.

(5) EESC opinion, OJ C 128/3 of 18 May 2010, point 4.4.

(6) European Council 17 June 2010, Conclusions, EUCO 13/10.

(7) Idem 5.

(8) European Parliament Resolution of 6 May 2009, 2008/2335(INI).

(9) EESC opinion, OJ C 221 of 28 August 1989 and OJ C 128/15 of 18 May 2010.

(10) Council Recommendation of 24 June 1992, 92/441/EEC, OJ L 245 of 26 August 1992.

(11) EESC opinion, OJ C 302/86 of 7 December 2004.

(12) EESC opinion, OJ C 128/10 of 18 May 2010 and OJ C 302/86 of 7 December 2004.

(13) Article 9 of the TFE, OJ C 115 of 9 May 2008.

(14) Charter of Fundamental Rights, OJ C 364 of 18 December 2000.

(15) European Commission, Committee for Social Protection, Growth, employment and social progress in the EU – Key messages, Manuscript, September 2009.

(16) Klaus Busch, ‘World Economic Crisis and the Welfare State – Possible solutions to reduce the economic and social imbalances in the world economy, Europe and Germany.’ International Policy analysis, Friedrich Ebert Stiftung, February 2010.

(17) Idem 15.

(18) Idem 5.

(19) Idem 1.

(20) Florence LEFRESNE, ‘Regard comparatif sur l'indemnisation du chômage: la difficile sécurisation des parcours professionnelles’, Chronique internationale de l'IRES – no115, November 2008 p. 23.

(21) Idem 18.

(22) Idem 11.

(23) Idem 5.

(24) Idem 11.

(25) Idem 2.

(26) Idem 11.

(27) Idem 5.

(28) EESC opinion, OJ C 221 of 28 August 1989 and OJ C 128/10 of 18 May 2010.

(29) Idem 10.

(30) Commission Recommendation of 3 October 2008, 2008/867/EC, OJ L 307 of 18 November 2008.

(31) Idem 8.

(32) Idem 8.

(33) Idem 8.

(34) Idem 8.

11.2.2011

Official Journal of the European Union

C 44/34

Opinion of the European Economic and Social Committee on ‘Child poverty and children's well-being’ (exploratory opinion)

2011/C 44/06

Rapporteur-General: Ms KING

Child poverty and children's well-being.

On 25 May 2010 the Committee Bureau instructed the Section for Employment, Social Affairs and Citizenship to prepare the Committee's work on the subject.

Given the urgent nature of the work, the European Economic and Social Committee appointed Ms Brenda King as rapporteur-general at its 464th plenary session, held on 14 and 15 July 2010 (meeting of 14 July 2010), and adopted the following opinion by 113 votes to 6 with 14 abstentions.

1. Conclusions and Recommendations

1.1 In the EU today, 20 million children are at risk of poverty. The proportion of children in poverty is even greater than the proportion of adults in poverty (20 % vs. 16 %), with more expected to fall below the poverty line due to the economic crisis. The very existence of poverty among children living in the EU is evidence that they are being denied their most fundamental rights.

1.2 The consequences of doing nothing about childhood poverty will have a detrimental impact on the future well-being of the European Union. The achievement of EU 2020 Strategy depends on an educated, healthy and hopeful young generation. Both the existence of so many children at risk of poverty and the extent to which poverty is inherited from one generation to the next is a damning indictment of the failure of existing EU policies to protect the most vulnerable in society.

1.3 Child poverty and well-being is a multi-dimensional problem; findings from a number of reports show that a range of factors, including material deprivation, lack of access to basic healthcare services, decent housing and education contribute to the problem. It is generally understood that these factors are interlinked and interdependent, thus solutions to the problem should reflect this.

1.4 Child poverty and deprivation prevent millions of children from getting the best start in life, and plays a role in stunting their personal development. Very often, intervention at the early stages of a child’s life can have a positive impact on the rest of their life. It is vital that appropriate policies are developed to ensure that all children, particularly those from the most marginalised parts of society, are given a chance to achieve their full potential and therefore make a positive contribution to the future.

1.5 In this European Year on Combating Poverty and Social Exclusion, the EESC welcomes the political commitment shown by the Council with its decision to make poverty reduction one of the five headline EU targets to be achieved by 2020. The target is to ‘reduce the number of Europeans living below national poverty lines by 25 %, lifting 20 million people out of poverty’ (1).

1.6 The Committee is however disappointed that there is not a specific target to reduce child poverty and promote child well-being, given the political attention and wide range of initiatives on this issue at EU and Member State level since 2000.

1.7 The Committee welcomes that one of the seven flagship initiatives will be a European Platform Against Poverty whose purpose is ‘to ensure social and territorial cohesion such that the benefits of growth and jobs are widely shared and people experiencing poverty and social exclusion are enabled to live in dignity and take an active part in society’.

1.8 The EESC strongly recommends that this Platform becomes the framework for eradicating child poverty and promoting child well-being by developing child-specific, multi-dimensional approaches, underpinned by child rights and supported by specific targets that focus on children and families with children.

1.9 The EU Network of Independent Experts on Social Inclusion has highlighted particular groups of children who are at high risk of extreme poverty including:

i.	children living in or leaving institutions, street children, children experiencing abuse, maltreatment or neglect, children whose parents have mental health problems, children in care, homeless children and children who are the victims of domestic violence or the victims of trafficking.

ii.	children with disabilities, children from ethnic minorities, Roma children, young asylum seekers and immigrants.

iii.	children living in very poor and isolated rural areas lacking many basic facilities and children living in large estates on the periphery of major urban areas.

1.10 The EU Charter of Fundamental Rights include provisions on children’s rights, which gives the EU a strong mandate to guarantee the survival, protection and development of children. These vulnerable children should have their own indicators and targets within the EU Platform against Poverty.

1.11 The EESC supports the call for a comprehensive Commission Recommendation on Child Poverty and Well-being to set key policy objectives and targets and create a framework for ongoing monitoring, exchange, research and peer reviews that will contribute to the achievement of this EU 2020 poverty target.

2. Background

2.1 Since 2000 the issue of child poverty and social exclusion has become an increasingly important part of the Social Open Method of Coordination. It has been highlighted as a key issue in each of the Joint Reports on Social Protection and Social Inclusion (2002-2004). EU Heads of State stated the need ‘to take necessary measures to rapidly and significantly reduce child poverty, giving all children equal opportunities, regardless of their social background’ (2).

2.2 The 2005 Luxembourg EU Presidency initiative on ‘Taking forward the EU Social Inclusion Process’ called explicitly for children mainstreaming and for the adoption of at least one child well-being indicator at EU level. In 2006, the European Commission Communication on the Rights of the Child gave particular attention to the issue of children’s social inclusion and to the role of the EU Social Inclusion Process. An EU Task-Force on Child Poverty and Well-being analytical report and recommendations were formally adopted in January 2008. At the end of 2009, the Commission Working Document on the Europe 2020 Strategy recognised that child poverty and social exclusion is one of the EU’s long-term social challenges which have been further exacerbated by the financial and economic crisis. In March 2010, a detailed report on Child Poverty and Child Well-Being in the European Union was produced by a consortium led by the TARKI Social Research Institute for the European Commission.

2.3 The 2009 Lisbon Treaty includes the promotion of Children’s Rights as an explicit objective of the EU. At the opening conference of the 2010 European Year for Combating Poverty and Social Exclusion, Commission President Barroso declared ‘Let us reduce the risk of poverty rate by 2020 for the whole population, particularly children and the elderly, because the current figures are intolerable.’ Belgium, who has the EU Presidency in the second half of 2010, has singled out the fight against Child poverty and promotion of Child well-being as key priorities.

3. Child poverty and well-being in the EU

3.1 Child poverty

3.1.1 Child poverty and well-being are major challenges across the European Union. However, the extent and severity varies widely from country to country and indeed in many countries from region to region. So, evidence from the 2007 wave of EU-SILC shows the following (3):

—

20 % of children in the EU are at risk of poverty (4) as compared to 16 % for the total population. The risk is greater for children in all countries except Cyprus, Denmark, Estonia, Finland, Germany and Slovenia (in Latvia, the risk is identical. Child poverty risk is as high as 30-33 % in two countries (Bulgaria and Romania), and between 23-25 % in five countries (Greece, Italy, Poland, Spain and the UK), whereas it is 10-12 % in five countries (Cyprus, Denmark, Finland, Slovenia and Sweden).

—

It is essential to complement this information with the national poverty risk gap (5), which indicates ‘how poor the poor children are’ - that is, the depth of child poverty risk. The poverty risk gap for children varies from 13 % in Finland and 15 % in France to 40 % in Romania and 44 % in Bulgaria. The risk of poverty tends to increase with the age of children in most countries.

—

Another key factor to look at when considering income poverty is duration, i.e. how long children spend living under the poverty risk threshold. As emphasised in the aforementioned TARKI report, ‘although the risk of poverty among children in a given year gives some indication of the threat of deprivation and social exclusion they face, the threat concerned is much more serious if they have an income below this level for several years’. For the 20 EU countries for which the required EU-SILC data are available, the TARKI report shows that the proportion of children living in households that have been at-risk-of-poverty for each of the years 2005-2007 ranges from 4-6 % (in Austria, Cyprus, Finland, Slovenia and Sweden) up to 13-16 % (in Italy, Lithuania, Luxembourg, Poland and Portugal).

3.2 Material deprivation

3.2.1 The EU definition of children at risk-of-poverty is based on the number of children living in low income families. While important, this measure is insufficient as it doesn’t include all that is needed for a child to have a good start in life. Children can live in substandard housing or even be homeless, live in a derelict neighbourhoods, experience high levels of crime, poorer health, poor diets, higher risks of accidents and injuries, more physical abuse, more bullying, less access to childcare, limited access to social and family services, educational disadvantage and low quality educational opportunities, have limited or no access to playgrounds, sporting and recreational facilities or to cultural activities. Some children face more than one disadvantage and as these accumulate they can interact and reinforce each other to deepen a child’s experience of poverty and social exclusion and to increase the cross-generational inheritance of poverty and exclusion.

3.2.2 The material deprivation rate for all children in the EU is identical to that affected by poverty risk (20 %). However, material deprivation varies by a significantly larger extent across Member States: from 4-10 % (in Luxembourg, the three Nordic countries, the Netherlands and Spain) up to 39-43 % (in Hungary, Latvia and Poland), 57 % (Romania) and 72 % (Bulgaria). This compares to a poverty risk range of 10 % to 33 %. This large variation in material deprivation reflects the differences in average living standards across Member States as well as the distribution within them.

3.2.3 The material deprivation rate is 46 %, a proportion which varies significantly - from 18-28 % (Denmark, Luxembourg, Netherlands, Spain, Sweden) to 72-96 % (Bulgaria, Hungary, Latvia, Romania). And among children which are above the poverty risk threshold, the EU average material deprivation rate is 13 %. Here again, the range is very high: 1-6 % (Denmark, Luxembourg, Netherlands, Spain, Sweden) and 35-62 % (Bulgaria, Hungary, Latvia, Romania).

3.2.4 The EESC recommends that the national poverty risk rates, poverty risk thresholds and the national material deprivation rates are included as indicators.

3.3 Children most at risk

3.3.1 Lone parents and large families

3.3.1.1 Children living with lone parents and children living in large families are at highest risk in virtually all countries. Evidence from the 2007 wave of EU-SILC indicates that at EU level, 34 % of children living in single parent families are at risk of poverty, with proportions varying from 17-24 % (Denmark, Finland, Sweden) to 40-45 % (Estonia, Ireland, Lithuania, Luxembourg, Romania, UK) and 54 % (Malta). As to children living in large families (i.e. households consisting of 2 adults and 3 or more children), their poverty risk for the EU is 25 %. The share ranges from 12-15 % (Germany, Finland, Sweden, Denmark, Slovenia) to 41-55 % (Italy, Latvia, Portugal, Romania) and 71 % (Bulgaria).

3.3.2 Jobless households

3.3.2.1 The 2007 EU Labour Force Survey (LFS) shows that 9.4 % of children live in jobless households, a proportion ranging from 2.2-3.9 % (in Cyprus, Greece, Luxembourg and Slovenia) to 12 % in Belgium, 12.8 % in Bulgaria, 13.9 % in Hungary and 16.7 % in the UK (6). These children have a very high - 70 % - average poverty risk, with the lowest risk registered in Denmark and Finland (47-49 %) and the highest risk in Bulgaria, Czech Republic, Estonia, Lithuania, Portugal, Romania and Slovakia (81-90 %).

3.3.2.2 Regarding material deprivation, living in a household where no-one is in paid employment is likely to have a significant effect on both the current living conditions of children and on their future living conditions. Joblessness not only raises the question of potential financial problems; the absence of a working adult in the child’s household can also limit current or future opportunities to participate fully in society.

3.3.3 Children at risk of ‘extreme’ poverty

3.3.3.1 The EU Network of Independent Experts on Social Inclusion has highlighted particular groups of children who are at high risk of more severe or extreme poverty. This is particularly evident from the various Member States' National Action Plans for Inclusion and several transnational exchange projects. These groups include: children with disabilities, children from ethnic minorities (especially the Roma), young asylum seekers and immigrants, children experiencing abuse, maltreatment or neglect, children whose parents have mental health problems, children in care, homeless children and children who are the victims of domestic violence or the victims of trafficking, children living in very poor and isolated rural areas lacking many basic facilities and children living in large estates on the periphery of major urban areas (7). From the 2007 analysis of the EU, it appears that the position of children of migrant families and some ethnic minorities is a growing issue of concern in the older Member States.

3.4 Long-term effect and intergenerational poverty

3.4.1 Long-term effect

3.4.1.1 An important theme from the Joint Reports on Social Protection and Social Inclusion is that growing up in poverty limits personal development and has long term consequences for the development and well-being of children and for their future health and well-being as adults. It increases their risk of being poor and experiencing unemployment and social exclusion as adults. This long-term impact was highlighted in the 2007 report which concluded that ‘Children growing up in poverty are less likely than their better-off peers to do well in school, enjoy good health, stay out of dealings with the criminal justice system, and - as young adults - to find a foothold in the labour market and in society more broadly’.

3.4.2 Intergenerational poverty

3.4.2.1 The extent to which poverty is passed from one generation to the next is also a related and recurring theme. In a number of countries the intergenerational transmission is particularly evident in relation to education and this appears to be true in countries with both high and low levels of child poverty and social exclusion. The 2005 EU-SILC module on the intergenerational transmission of disadvantages revealed that childhood educational opportunities impact on the likelihood of adult poverty. So, an individual whose parents have educational qualifications at primary level has 23 times the risk of having no formal qualification compared to someone whose parents have third level education.

4. Benchmarking, monitoring and evaluation

4.1 A major challenge that needs to be given particular attention is that rigorous benchmarking, monitoring and evaluation should be made a central and visible feature at both national and EU levels.

4.2 For this, we would recommend:

—	instituting a process whereby the Commission and Member States would explore ways of making the EU social objectives more visible, measurable and tangible at EU level.

—	ensuring that progress made towards the EU and national targets and towards the improved performances in the agreed set of EU indicators are rigorously and regularly monitored and reported on.

—	ensuring that peer reviews are organised to discuss the results of this monitoring exercise with a view to boosting policy learning among Member States and the Commission.

—

introducing a much more rigorous approach to monitoring and evaluation with an increased focus on results and ensure that independent critical analysis of progress made in achieving objectives is regularly carried out. Key elements could usefully include:

—	incorporating the common indicators more systematically into the Member States' national monitoring and analytical frameworks in order to improve mutual learning;

—	boosting statistical capacity at EU, national and sub-national levels and in particular ensuring the production of more timely social statistics (including data on child poverty and well-being that allows for a better monitoring of the impact of the financial and economic crisis across the EU);

—	requiring all Member States to have formal arrangements for involving civil society organisations and independent experts in monitoring and assessing social inclusion policies on an ongoing basis.

5. Establishing the European Platform Against Poverty

5.1 The strengthening of the social dimension of the EU, and in particular the delivery of the EU 2020 targets will depend significantly on the proposed EU 2020 flagship initiative, the European Platform Against Poverty (EPAP).

5.2 The EPAP must become the visible symbol of this renewed Social Europe. It has to play a central role in ensuring that all other strands of EU policy making (e.g. economic, competition, education, migration, health, innovation and environmental policies) contribute to achieving the EU's social goals, including the EU target on poverty reduction.

5.3 A key priority will be to mainstream issues of adequate social protection, including the fight against child poverty, promoting child well-being, and children’s rights across all relevant EU policy areas and programmes, including the Structural Funds. The EPAP should play a central role in monitoring and reporting on the implementation of the social impact assessment process and on the extent to which the other strands of Europe 2020 are contributing to the goal of reducing poverty.

5.4 Improving links between EU social inclusion objectives and EU Structural Funds objectives

5.4.1 There should be much closer alignment between the EU's and Member States' social inclusion objectives and the use of EU Structural Funds. In this context, the use of Structural Funds should become a key part of the National Action Plans for Inclusion. An example was the Commission’s proposal, in 2009, aimed at permitting the European Regional Development Fund (ERDF) to be used for supporting housing interventions in favour of marginalised communities living in the newer Member States. This could play an important role in increasing resources for initiatives in this field.

6. EESC Recommendations

6.1 EU commitment to addressing child poverty and well-being

6.1.1 Given the overall objectives of the Europe 2020 Strategy, a coherent framework for addressing child poverty and child well-being, should be developed, taking a rights-based approach. A specific EU target should be introduced to eradicate child poverty and promote child well-being.

6.2 Adequate Resources

6.2.1 For families with children, there should be an establishment of a minimum family income using cash transfers that depend on the labour market status of parents. Also cash support could be guaranteed to all children by tax credits and/or universal cash benefits.

6.2.2 Universal child benefits should be further explored as a key means of fighting child poverty, given the overall efficiency in administration, absence of social stigma and high take-up as based on the analysis of the Social Protection Committee (2008).

6.2.3 As children living in jobless households run a very high poverty risk, there needs to a target to reduce the poverty gap for jobless households and those experiencing in-work poverty in order to reduce the depth of poverty experienced by children. Active labour market policies should support parental employment and there should be the provision of quality services, such as childcare, that are local, accessible and affordable.

6.2.4 Inclusive labour markets need to provide quality jobs for parents. To ensure that parents have time to spend with their children there needs to be policies that promote the reconciliation of work and family life.

6.2.5 For children experiencing extreme poverty, ensuring equal opportunities for all through well-designed social policies, and strengthening efforts aimed at successful educational outcomes for each child, is required in order to break the transmission of poverty and exclusion to the next generation. Inclusion and anti-discrimination policies need to be reinforced, especially in relation to immigrants and their descendants and to ethnic minorities.

6.3 Early Childhood

6.3.1 The EESC supports Eurochild's recommendation that childcare services need to be broadened to adopt an inclusive concept of services from pre-natal to preschool that is open to all children and families. Eurochild argues that the Barcelona targets ignore many of the good practice around early childhood policy. The EESC recommends that with regard to the Barcelona targets, there is a need for the development of common EU ‘quality standards’ for early years’ services, including early years’ care and education, as identified by the European Commission’s Childcare Network, which should influence the development of national policies and practices, including the use of the Structural Funds.

6.4 Health

6.4.1 The EESC recommends that the EU Working Party on Health Indicators should develop indicators in relation to children to monitor and evaluate public health policies and their impact.

6.4.2 Mental health indicators for positive mental health and mental disorders in children should also be developed.

6.4.3 The Commission Communication on Health Inequalities, due in 2012, should address child health.

6.5 Housing

6.5.1 EU Member States should implement the commitments and actions agreed at the Fifth Ministerial Conference on Environment and Health in March 2010 in relation to Children’s Environment and Health Action Plan for Europe.

6.5.2 The European Commission should agree with Member States a common framework and common guidelines for measuring, monitoring and reporting on homelessness and housing exclusion, paying particular attention to the circumstances of children.

6.5.3 The European Commission should continue to support and fund initiatives to assist Member States and candidate countries to close poor quality residential institutions for children and develop appropriate alternative provision.

6.6 Protection from violence, abuse and exploitation

6.6.1 The European Commission should explore with all relevant stakeholders the feasibility of establishing an indicator set on violence against children, child abuse and exploitation, covering issues of identification, protection, prosecutions and prevention, in line with the recommendations of the study of the 2009 study for the Fundamental Rights Agency on indicators.

6.6.2 Member States should develop national strategies to prevent and protect children from all forms of violence, including clear targets and budget allocations, as well as mechanisms at local level where children or others can report cases of violence.

6.7 Child centred measures

6.7.1 The Commission should strengthen links with the Council of European's ‘Building a Europe for and with Children’ which puts an emphasis on children's participation.

6.7.2 The existing commonly agreed indicators in relation to income and material deprivation need to be expanded to include more child-centred indicators. It is important that the indicators reflect the various stages of childhood development reflecting the most relevant dimensions and covering all relevant child ages. The Tarki/Applica study recommends age ranges 0-5, 6-11, 12-17 and including dimensions such as income, material deprivation, education, housing, health, exposure to risk, social participation.

Brussels, 14 July 2010.

The President of the European Economic and Social Committee

Mario SEPI

(1) According to the EU definition, people ‘at risk of poverty’ are people living in a household whose total equivalised income is below 60% of the median national equivalised household income (the equivalence scale used is the OECD modified scale).

(2) Brussels European Council, 23/24 March 2006 Presidency conclusions, 7775/1/06 rev 1, pt 72.

(3) See the web site of Eurostat, the statistical office of the European Communities: http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/themes.

(4) A child ‘at-risk-of-poverty’ is a child who lives in a household ‘at-risk-of-poverty’, i.e. a household whose total equivalised income is below 60% of the median national equivalised household income.

(5) The ‘relative median at-risk-of-poverty gap’ (here: poverty risk gap) measures the distance between the median equivalised income of people living below the poverty risk threshold and the value of that poverty risk threshold; it is expressed as a percentage of the threshold.

(6) See Eurostat web site: http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/themes.

(7) This pattern is reinforced in the 2007 report from the EU Network of Independent Experts on Social Inclusion which led to the conclusion that ‘Two groups of children stand out in a significant number of countries as being at very high risk and of experiencing severe poverty and social exclusion: children living in or leaving institutions and Roma children. However, there are also a number of other situations that are highlighted quite often: children drawn into child labour; children who are victims of violence, sexual abuse, trafficking, and addiction and are involved in crime; children with a disability; unaccompanied minors; children in homeless families and street children.’ (Frazer and Marlier, 2007).

11.2.2011

Official Journal of the European Union

C 44/40

Opinion of the European Economic and Social Committee on ‘The employment impact of industrial change caused by ecological, energy and climate-related challenges’ (exploratory opinion)

2011/C 44/07

Rapporteur: Mr Valerio SALVATORE

Co-rapporteur: Mr Enrique CALVET CHAMBÓN

In a letter dated 9 February 2010, Mr Paul MAGNETTE, Minister for Climate and Energy, acting on behalf of the Belgian Presidency, asked the European Economic and Social Committee, under Article 304 of the Treaty on the Functioning of the European Union, to draft an exploratory opinion on:

The employment impact of industrial change caused by ecological, energy and climate-related challenges.

The Consultative Commission on Industrial Change, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 1 July 2010.

At its 464th plenary session, held on 14 and 15 July 2010 (meeting of 15 July 2010), the European Economic and Social Committee adopted the following opinion by 89 votes to 2 with 5 abstentions.

1. Conclusions and recommendations

1.1

The Belgian presidency's request for an examination of industrial change in the area of employment engendered by the fight against global warming comes against a backdrop characterised by a three-fold failure, or to use less harsh terms, by three negative scenarios within an economic crisis of colossal proportions.

A.	Within the European Union, little progress has been made towards achieving the sound objectives of the Lisbon strategy.

B.	An enormous crisis has hit the financial sector, resulting from dysfunctional regulation and insufficient monitoring.

C.	The results of the UN Copenhagen summit, intended to secure an international agreement on climate change to replace the Kyoto protocol, were inadequate.

1.2	The EU must both contribute effectively to a global reduction in greenhouse gases and also develop its economy and labour market with a view to meeting the Lisbon objectives in the decade ahead, i.e. securing a competitive position at world level and doing away with mass unemployment in Europe.

1.3

The Committee, and within it the CCMI, have made a number of contributions regarding the challenges of energy and climate, sustainability, industrial change and employment. These include the following opinions: CCMI/002, 024, 027, 029, 045, 052 and 053; ECO/267; NAT/392, 440 and 453; and TEN/401. The present opinion takes a cross-cutting approach to the issue, but it is clear that regional and sector-based studies are also essential if the ideas it discusses are to be put into practice, particularly in the area of employment.

1.4

The European Union's 2020 strategy will have to address the failure of the Lisbon strategy. It therefore represents a new opportunity, providing it strengthens the key role played by SMEs. The EESC recommends reinforcing economic cooperation at European level and promoting a new, common concept of competitiveness.

1.5	The EU needs stronger economic governance within its institutions (i.e. a debate on the transfer of sovereignty to the existing European institutions in certain economic policy matters) in order to nurture industrial change so as to make the European economy greener and generate sustainable jobs.

1.6

Population growth, environmental difficulties in Africa, Asia and Latin America, drinking water shortages in many countries and the fight against climate change are developments that boost world demand for ‘green’ products and technologies and thus generate sustainable jobs. Consideration must also be given to the fact that known reserves of energy-generating raw materials are not unlimited.

1.7

An employment strategy aimed at establishing a sustainable economy could be built on knowledge and know-how that is already well-developed in the Member States. The EU needs skilled jobs and must use these strong points to its advantage. Member States should therefore invest more in their education and continuing training systems, not least in promoting science, technology and engineering. The EESC believes that the current level of public investment in education is totally inadequate, and that it should be part of a coherent life-long learning strategy.

1.8	The EU and its Member States should take the measures necessary to ensure that changes in industry do not run counter to their objectives when it comes to maintaining and creating jobs.

1.9

A green economy involving a high level of research and the application of new knowledge, aimed at increasing competitiveness should have an impact on the labour market by creating more skilled and stable jobs, reducing the risk of precarious employment. Member States should therefore invest more in their education systems and in ongoing training.

1.10

The public sector plays an important part in supporting research and fostering the use of new green technologies, as well as improving existing green technologies which have proven to be effective, above all by means of its fiscal instruments. That is why economic, social and environmental progress requires a healthy and adequately qualified public sector; weakening it by privatising all economic activities would not always serve the general interest. The EESC believes that in order to safeguard the general interest it is going to be necessary to review the regulatory framework for the liberalised energy markets.

1.11

The new jobs will be generated by the private sector and, in particular, by SMEs. The role of the public sector will therefore be to establish a stable and constructive framework at European level that allows companies to optimise the transition towards a greener economy that performs better and is rich in sustainable employment.

1.12

The EESC proposes establishing a dedicated European fund to support industrial change and, more specifically, research, development and the application of green technology, whether renewable energy technologies or new technologies that enable an effective reduction in emissions from energy-hungry industries.

1.13

The Committee notes that a solid industrial base will be indispensable for the EU if sustainable employment objectives are to be reached. Many jobs, even in the services sector, depend on the success of European industry. Industrial change varies from sector to sector and region to region and must be enacted in a gradual way, so as to avoid negative repercussions on the labour markets and without compromising the existence of an indispensable industrial network. This is not about obstructing environmental policy but managing it in a socially sustainable manner.

1.14	The EESC recommends that common agricultural policy reform post 2013 take into account the importance of agriculture and contribute to the development of the necessary synergistic links with other Community policies in the areas of research, new technologies and industrial modernisation.

1.15	The Member States should agree on a tax on financial transactions. The receipts from this tax should be used to reduce Member States' public deficits, giving them more leeway, for instance, to finance their education systems more effectively.

1.16

Green economy-oriented industrial change will require a completely new understanding of growth and competitiveness. The EESC has already declared its support for a new approach to measuring economic and social progress. It reaffirms its conviction that industrial change and employment will only be compatible with sustainability targets if the EU and the world as a whole agree on a different vision of growth. The proposal made by the Commission on its 2020 strategy is insufficient.

1.17	The EESC is of the view that it is up to the European institutions to work towards a level playing field at global level, to prevent relocations, or even the dismantling of entire sectors, from having a detrimental impact on employment and the environment.

1.18

As the institutional voice of European civil society and an important forum for structured dialogue, the EESC is in favour of the democratic participation of the European public in the broad debate that must take place on the industrial change, its impact on the employment markets, its pace and the overall social repercussions.

2. The scope of the opinion

2.1

The Belgian presidency has asked that this document be of a political nature and that it explore new areas for consideration. The presidency's representatives wish the approach to the text to be horizontal and general as opposed to sector-based. It is not a study, but a political strategy. The Belgian presidency plans to examine this opinion during an informal Council meeting of energy ministers.

2.2

The ecological and climate-related challenges underpin the statements made by the European Council in relation to the Copenhagen summit. The energy challenge is multi-faceted. European access to energy resources must be secured within the framework of the international policy of the EU and its Member States. This aspect is not addressed in the current opinion, which deals with energy challenges in the context of the industrial change caused by the fight against climate change, and in particular its effects on employment in Europe.

2.3

This opinion uses the term ‘green’ to imply goods or production methods that tie in with a logic of sustainability and thus contribute to reaching the EU's objectives in the fight against global warming. The EESC argues in favour of greening the economy and, with regard to the labour market, creating a maximum number of green jobs, i.e. the jobs (including training and qualifications) necessary to achieve this, that are of a high quality in terms both of the level of qualifications required and also of their capacity to secure social inclusion (see opinion TEN/401 on Promoting sustainable green jobs for the EU energy and climate change package, which quotes the definition of ‘green jobs’ proposed by the Director of the ILO's Economic and Labour Market Analysis Department in response to a recent European Commission initiative. The EESC would refer in this context to its October 2009 opinion on ‘flexicurity’ (1).

3. Challenges, achievements and a new opportunity

3.1	It is necessary to outline briefly the global context underlying the Belgian presidency's request. This backdrop corresponds to challenges that can be summed up by three closely-linked setbacks.

Challenges – the failure of the Lisbon strategy

3.2

The Lisbon strategy, as officially defined in the Lisbon European Council Conclusions of 23 and 24 March 2000, aimed to establish ‘the most competitive and dynamic knowledge-based economy in the world’ by 2010, ‘capable of sustainable economic growth with more and better jobs and greater social cohesion’.

3.3

At the beginning of 2010, the Committee is forced to observe that there has unfortunately been little success in attaining these necessary and well chosen objectives. The results are especially poor on jobs. One aspect of the Lisbon strategy was that it foresaw the positive effects that a more competitive economy would have on employment.

Challenges – the failure of financial market regulations

3.4

The economic upturn witnessed between 2005 and 2008 was the result of a number of factors. First, European countries focusing on the export of industrial goods benefited from high demand from Asian countries and principally China. Some European countries, meanwhile, experienced growth, which is now known to have been unhealthy, in the financial and property speculation sectors. So the progress made was based in part on external demand and in part on a high level of speculation in the property sector. The growth within the EU was therefore unsustainable. Sustainable growth and healthy labour markets need exports as well as internal demand.

3.5

The world financial crisis put an end to any hopes tied to the Lisbon strategy. The strategy proved wholly unsuccessful. Unemployment in Europe is on the increase and there is no end to the crisis in sight. The knowledge-based society is still not a reality, given the difficulties experienced by many Member States in their education systems and the proportion of GDP given over to research in the EU, far from the Lisbon target in too many countries. Public and in some cases private debt is reaching such a level in the EU that some Member States are even in danger of bankruptcy. The need to balance the books and resolve these issues must not however obstruct important investments.

Challenges – the failure of the Copenhagen summit

3.6

On 15 and 16 June 2001, the Gothenburg European Council added a new dimension to the Lisbon strategy: the sustainable development strategy. The overarching idea was to look at the economic, social and environmental consequences of European policies, including, above all, the global dimension of climate change.

3.7

It was a global-scale agreement that the UN sought to conclude in Copenhagen on 7 to 18 December 2009, in order to step up the fight against the global warming caused, according to the analyses of the majority of scientists, by greenhouse gas emissions. The 192 countries that had ratified the 1997 UN framework convention on climate change (UNFCCC) tried in vain to renegotiate an international agreement on the climate to replace the Kyoto protocol that had been in force since 2005.

3.8

It is clear that climate change and environmental pollution, particularly in very big cities, are serious issues. Furthermore, population growth at global level demands an urgent response. Nine billion people cannot survive unless resources are used more sustainably and more fairly. The issue of insufficient energy resources and their accessibility will arise more and more frequently unless our societies find intelligent answers before it is too late. Under these circumstances, use must be made of existing technologies and solutions, such as, for instance, those designed to improve the energy performance of existing buildings. Furthermore, new technologies are indispensable, especially for energy-hungry industries, but there is also a need for a new awareness of public assets such as water, which must be managed and, above all, conserved more effectively; access to water should be considered a human right.

3.9

This global dimension is significant as it offers opportunities to an innovative industry in Europe that is already highly competitive on the ‘green’ products and services market. By defending this favourable position in its negotiations at international level in a realistic manner, the EU can both contribute effectively to a global reduction in greenhouse gases and also develop its economy and labour market, with a view to achieving the Lisbon objectives.

Achievements: Committee reference points

3.10

In recent years, the Committee and its CCMI have expressed their views a number of times on the challenges of energy, climate, sustainability, industrial change and employment. That important work is taken into account in this opinion. Any new elements are the result of a new awareness raised by the three setbacks (failures of the Lisbon Strategy, financial market regulations and the Copenhagen conference) described above.

3.11	The EESC has already underlined the need to combine competitiveness with sustainable development and social and territorial cohesion (2).

3.12	The EESC considers that the employment strategy ‘cannot be addressed without reference to the macroeconomic context’ (3).

3.13	The EESC has drawn attention to the fact that ‘the man-made global warming hypothesis that climate change is a result of the increased content of greenhouse gases in the atmosphere was the basis for the policy decision of the states involved and the European Community’ (4).

3.14

The CCMI has also referred to the issue of sustainable development and industrial change with a view to considering ‘how sustainable development as Brundtland defined it […] can act as a catalyst for gradual and proactive industrial change’ (5). The definition of sustainable development presented in 1987 by the World Commission on Environment and Development in the Brundtland Report also underpins this opinion.

3.15	The Committee has adopted an opinion in which it observes ‘a new industrial revolution that places quality of life and of the environment at the heart of development’ (6).

3.16

The EESC has stressed that a solid industrial base is crucial for the European social model. It warns that a ‘possible relocation of energy-intensive industry outside the EU would significantly reduce the attractiveness of the industrial location in Europe and lead to a loss in economic growth and employment’ (7). In this context, the EESC will follow with interest the coming to fruition of the EU 2020 Strategy flagship initiatives ‘Resource efficient Europe’ and ‘An industrial policy for the globalisation era’.

3.17

The EESC works on the premise that gross domestic product (GDP) ‘as an instrument for guiding policy […] is inadequate to meet the challenges of the 21st century’ (8). The Committee has adopted an opinion in which it recommends that the Commission aim to include new measures in the 2020 strategy in order to ‘have a framework in place by 2011 on the basis of which it could develop clear proposals for comparable action on a global scale in time for the World Summit on Sustainable Development that the UN has convened for 2012’ (9).

3.18	As for the ‘Europe 2020’ strategy (10), the Committee has called for priority to be given to generating new jobs.

3.19

The EESC has criticised the Commission for not having done more to develop its analysis around major topics of the future, namely ‘the low carbon economy, protecting biodiversity, water and other natural resources, promoting social inclusion and strengthening the international dimension of sustainable development’ (11). In order to reach these goals, the EU's sustainable development strategy will need ‘an entirely new structure of governance’ (12). The EESC felt it was necessary to find a new way of measuring progress in human well-being.

3.20	Lastly, the EESC has stressed that the world's leading industrial countries need to reduce their greenhouse gas emissions by at least 80 % by 2050.

A new opportunity: the Europe 2020 strategy

3.21

The EU 2020 strategy will have to address the failure of the Lisbon strategy. On 3 March 2010, the European Commission published a communication outlining this new guiding approach to the EU's socio-economic changes (COM(2010) 2020). The Commission states its intention to turn the EU into ‘a smart, sustainable and inclusive economy delivering high levels of employment, productivity and social cohesion’. The EESC notes that the superlatives attached to the previous strategy in 2000 have been dropped. According to the Commission, the EU should promote a greener economy by targeting, among other things, investment in R&D equivalent to 3 % of GDP, a 75 % employment rate among the population aged 20-64 and, importantly in this context of this opinion, a reduction in greenhouse gas emissions of at least 20 % compared to the 1990 benchmark year. The Commission wants the quality of education to be enhanced, and for smart growth to be achieved, based on improved competitiveness ‘vis-à-vis our main trading partners through higher productivity’. The EU should maintain its leadership of the green technologies market, but its advantage in these green technologies is said to be ‘challenged by key competitors, notably China and North America’.

3.22

Initial reactions display some disappointment compared to what European citizens expect of their governments and, in terms of the competences and responsibilities of the European institutions, of European governance. Representatives of the groups at the European Parliament have described the Commission's strategy as unambitious and not enough to meet current and future challenges.

3.23

Overall, the EESC's view is that a special effort must be made to strengthen the key role of SMEs in the EU 2020 strategy, as it is SMEs that generate the greatest number of jobs in Europe and they are undeniably the driving force behind industrial change. The EESC therefore calls on the European Commission to step up its efforts to implement an intellectual property protection system primarily to benefit SMEs, as they often do not have the means to protect their inventions.

3.24

The EESC proposes strengthening economic cooperation at European level and promoting a new, shared understanding of the concept of competitiveness. Thus, the industrial changes already underway, and which are necessary in order to:

—	reduce greenhouse gas emissions,

—	make better use of natural resources, and

—	maximise energy efficiency,

may create more high-quality jobs in the EU Member States, provided that education systems are improved and research investment is stepped up.

4. How to facilitate industrial change that supports climate and employment targets at EU level

4.1

The EU needs stronger economic governance (i.e. a debate on the transfer of sovereignty to the existing European institutions in certain economic policy matters)at both European Council and Eurogroup levels. The impact of the financial crisis demonstrates that greater coordination is necessary in order to prevent distortion within the internal market and support industrial change, with a view to making the economy greener, and creating sustainable jobs.

4.2

Sustainable jobs have a future, as they will be fostered by the changes around the world that are set to become challenges that will have to be faced at EU level and not only by individual Member States. These changes include:

—	population growth and the challenge of feeding 9 billion people by 2050,

—	the growth of mega-cities, generating enormous environmental problems, especially in Asia and Latin America,

—	the scarcity of drinking water in many developing countries,

—	the struggle against climate change, entailing lower emissions and, above all, the smart and sustainable use of energy, both the shrinking fossil fuel reserves and alternative forms of energy production.

4.3

These indisputable changes stoke demand for environmental products and technologies and hence promote the creation of a modern industry generating sustainable jobs. These will be both fair and productive, and ensure a fair transition and strong competitiveness. This will not depend on an approach dictated purely by quantitative economic growth, built on energy-hungry industries, but on a logic of sustainability. Once again, it is clear that a strategic sector-based approach is required. It is above all the basic industrial and technological sectors, for instance construction and bio- and nanotechnology, and also the new green technologies, that can amplify the effect of industrial change in the direction of a more human, greener economy.

4.4

These industrial changes also contribute to social stability and international security, since the negative impact of pollution, climate change, shortages and a growing world population pose major threats to peace in the 21st century. The challenges on this level are such that solutions cannot be found at national level, but only through close international cooperation and, within the EU. The integrated EU area should be equipped with the political and legal means needed to fulfil this mission.

4.5

An employment strategy of this kind offers medium- and long-term gains in productivity and profitability. Nowadays, it can be based on the wealth of knowledge and know-how already built up in the EU Member States, and on its edge over the world market in the area of green technologies. These assets must be promoted by the EU with guidelines, European funds and – with the agreement of the social partners (in particular, agreements pursuant to article 155 TFEU) – by European legislation paving the way for a shift to a sustainable economy with a labour market characterised by low unemployment and high-quality jobs. A green economy with a high level of research and application of new knowledge should have a positive impact on the labour market by creating more skilled and stable jobs, reducing the risk of precarious employment.

4.6

This impact would also contribute to creating high-quality jobs rather than atypical, even precarious, forms of employment, such as those that have grown up in certain sectors of the services market. Precarious jobs of this kind are not likely to strengthen the knowledge economy which is unquestionably a major pre-condition for a competitive, sustainable economy. On the contrary, the EU needs skilled jobs. This is why the Member States should invest more in their education and continuing training systems. The EESC believes that the current level of public investment in education is completely inadequate, and that it should be part of a coherent life-long learning strategy.

4.7

The concept of competitiveness must be reviewed at European level. The Commission does not go far enough in its communication of 3 March 2010. Investment in new environmental technologies, combined with greater use of existing technologies, requires an effort in the present that will not necessarily boost competitiveness instantly, but may do so in the long term.

4.8

The EU should look again at its understanding of the role that can be played by the public sector in the Member States in promoting new technologies, industrial change and the creation of sustainable jobs. The public sector may possess the capacity for long-term investment in the promotion of promising new technologies that are not yet profitable, while also duly promoting existing effective technologies. It plays an important part in supporting research and, when it comes to making effective use of new green technologies and enhancing existing effective green technologies, its fiscal measures are particularly key. Public authorities should begin by securing the investments that will be most effective in reducing energy consumption and greenhouse gas emissions. The European fund proposed below could contribute here.

4.9

This is why economic, social and environmental progress needs sound and properly qualified public sectors: weakening them by privatising all economic activities would not always be in the general interest. The public sector should be able to make the necessary investment in public infrastructure to serve the European public and industry, wherever possible in partnership with the private sector. Subsidies benefiting select companies should, on the other hand, be avoided so as not to upset the market. The Member States should give preference to tax instruments to facilitate green industrial change.

4.10

Furthermore, the EESC believes that the liberalisation of the energy markets has yet to contribute either to improving the quality of services or reducing prices. There is a very real risk of underinvestment in the energy networks. The regulatory framework for the liberalised markets should be revised in order to achieve effective competition serving European public interests while maintaining security of supply and meeting climate targets.

4.11	The EESC proposes establishing a dedicated European fund to support industrial change and, more specifically, research, development and the application of green technology, be that renewable energy technologies or new technologies enabling an effective reduction in emissions.

4.12

The Committee recalls that the EU will need a solid industrial base and would stress that the socio-economic importance of energy-hungry industrial sectors differs from one European region to the next. This is why industrial change must be a gradual process, enabling transition in a way that avoids negative repercussions for the labour markets of the regions concerned. Energy supply is therefore a strategic question for the future. There must be greater investment in new technologies that enable productivity to be effectively boosted for the same amount of energy used and, at the same time, greenhouse gas emissions to be cut. Jobs in energy-hungry industries may indeed be made more secure by improving their energy performance.

4.13

The EESC recommends that the reform of the common agricultural policy after 2013, which has already been the subject of a well-received own initiative opinion, should secure development commensurate with the importance of agriculture for rural areas of the EU (which represent more than 80 % of its area) and with international commitments taken to support developing countries. The revision process must help to optimise the necessary synergies while boosting other European policies in the area of research, new technologies and industrial modernisation. This applies in particular to those sectors and regions that have been most affected by the current changes, namely those characterised by the presence of energy-hungry industries that must invest in new ecological technologies in order to reduce their emissions, with a view to protecting their jobs.

4.14

The Member States must reach agreement on a financial transactions tax in order to offset the destructive effects of speculation and thereby stabilise the banking sector and, in the euro area, strengthen the common currency. The yield from this tax should be used to reduce the deficits in the Member States' public budgets, giving them the breathing space, for example, to improve their funding of their education systems. Sound public finances and well-qualified labour markets should underpin the transition towards a green European industry.

4.15

An industrial revolution of this kind has societal consequences that will lend themselves to a rationale of sustainability. Industrial changes in the direction of a green economy will require an entirely new understanding of growth. Citizens are at present defined by their capacity to consume. Will we be capable of defining well-being in terms of physical and mental health, democratic and participatory rights, social inclusion (meaning primarily inclusion within the labour market, providing the jobs are of a high quality), energy supply and access to public goods and to services of general interest? It has to be understood that such an approach would reflect a different conception of growth, another way of operating the economy. Amounts measured in GDP are not enough to achieve it. The EESC has already stated its support for a new approach to measuring economic and social progress. It reaffirms its conviction that industrial change and employment will only be compatible with sustainability targets if the EU and the world as a whole agree to see growth differently. The proposal made by the Commission on its 2020 strategy is insufficient.

4.16

The EESC takes the view that it is up to the European institutions to work towards a level playing field at global level so as to avoid relocations, or the dismantling of entire sectors, from having a detrimental impact on jobs and the environment. Europe must take the lead on good practice and also ensure it is applied worldwide, as soon as is reasonably possible, taking care to avoid the adverse effects (amongst others, for the environment) of Europe applying it unilaterally.

4.17

As the institutional voice of European civil society and an important forum for structured dialogue, the EESC is in favour of the democratic participation of the European public in the broader debate. The EU needs a more coherent and binding strategy than the one we currently know as EU 2020; a strategy that will enable a fair, equitable and sustainable transition towards a green economy based on a completely new understanding of growth. The new growth we need in Europe, and also worldwide, will be rooted in sustainability and will be based on quality of life, active participation and health.

Brussels, 15 July 2010.

The President of the European Economic and Social Committee

Mario SEPI

(1) How flexicurity could be used for restructuring against the backdrop of global development (OJ C 318, 23.12.2009, p. 1).

(2) OJ C 10, 14.1.2004, p. 105, and OJ C 318, 23.12.2006, p. 1.

(3) OJ C 65, 17.3.2006, p. 58.

(4) OJ C 185, 8.8.2006, p. 62.

(5) OJ C 318, 23.12.2006, p. 1.

(6) OJ C 120, 16.5.2008, p. 57.

(7) OJ C 77, 31.3.2009, p. 88.

(8) OJ C 100, 30.4.2009, p. 53.

(9) CESE 647/2010 - NAT/453 (not yet published in the OJ).

(10) OJ C 128, 18.5.2010, p. 3 (ECO/267), and OJ C 100 30.4.2009, p.65 (CCMI/053).

(11) OJ C 128, 18.5.2010 p. 18.

(12) ibidem.

11.2.2011

Official Journal of the European Union

C 44/47

Opinion of the European Economic and Social Committee on the subject ‘Toward the wider uptake of electric vehicles’

(exploratory opinion on request of the Belgian presidency)

2011/C 44/08

Rapporteur: Mr OSBORN

On 9 February 2010, the Belgian EU Presidency decided to consult the European Economic and Social Committee, under Article 304 of the Treaty on the Functioning of the European Union, on the subject

Toward the wider uptake of electric vehicles (exploratory opinion).

The Section for Transport, Energy, Infrastructure and the Information Society, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 1 June 2010.

At its 464th plenary session, held on 14 and 15 July 2010 (meeting of 14 July), the European Economic and Social Committee adopted the following opinion by 155 votes to 2 with 4 abstentions.

1. Summary and recommendations

1.1

The EESC strongly supports moves in Europe towards the wider uptake of electric vehicles (EVs), and particularly of electric cars. This is urgent both as a contribution towards reducing greenhouse gas emissions from the transport sector and as reducing Europe’s dependence on increasingly less secure imports of oil.

1.2	The EESC supports all the actions proposed by the Commission in its recent communication on clean and energy efficient vehicles. It also recommends several further actions by the European Union and its member states.

1.3	On the technological side the EESC recommends a number of priorities for R & D, for acceleration of key standardisation programmes, for expanding relevant skills and training programmes, and for managing and smoothing changes in the pattern of employment in the car sector and associated sectors.

1.4

The EESC emphasises that the transition to EVs can only achieve greenhouse gas emissions reduction if the electricity for the vehicle itself comes from low or zero carbon sources. Therefore the transition to EVs must be matched by a parallel additional switch of electricity generation in the low carbon direction.

1.5

The widespread use of EVs and the substantial electric storage capacity which their batteries collectively represent might play a significant role in helping to optimise the balance of supply and demand in the electricity supply system if smart technology is introduced into the management of the grid and into the recharging infrastructure for EVs. The EESC notes that this would be complex to organise; but it recommends urgent studies and projects in order to try to turn this possibility into a major linked win-win opportunity for both the transport sector and the electricity supply sector.

1.6

Rapid transition to EVs in the car sector will require major concerted efforts by the car industry, by new providers of recharging infrastructure, by the public sector as regulators, standard setters, incentivisers and educators – and by the public as intelligent, concerned but demanding consumers of the new technology. The EESC urges the European Union and its Member States to launch a major collective effort to promote and support this crucial transition by all the means in their power, and to ensure that Europe does not fall behind the rapidly developing foreign competition in this key sector.

2. General Comments

2.1

The transport sector as a whole is still showing continuing increases in CO2 emissions from year to year in spite of gradually improving efficiency standards in all types of transport. If transport is to make an adequate contribution to the carbon reductions that Europe has committed to by 2050 it will not be sufficient to rely on incremental efficiency savings in each transport mode.

2.2

For road transport there are fundamental physical limits to the extent to which the carbon performance of the internal combustion engine can be improved. At a certain point further improvements will require a fundamental transformational shift to new low carbon or zero carbon emission power sources.

2.3	Amongst the various possibilities for achieving this, an early transition in the private car sector looks the most promising, proceeding via hybrids to all electric vehicles (EVs) as soon as possible.

2.4

There are several reasons for moving as fast as possible:

—	Reducing carbon emissions earlier rather than later will show better returns in mitigating climate change, and avoiding expensive adaptation measures in the future.

—

There will be substantial up-front costs both for the private sector (motor manufacturers, battery makers, infrastructure providers etc.) and for the public sector (R and D, infrastructure, incentive payments etc.) in the early stages of the transition, and the faster the change can take place the more quickly the investments will show an economic return.

—

There is growing interest amongst consumers in low or zero carbon vehicles which could present a golden opportunity for Europe and its member states to come forward as the champion of what could be a popular transition if it is handled right, and provided that the new vehicles can match the standards of safety, convenience, performance, reliability, design and price of its traditional rivals.

—	Major competitors (the USA, Japan, China and others) are already making major investments in the field of EVs, and could gain an enormous head start and competitive advantage if Europe does not move equally fast.

—

If Europe move quickly enough to promote the development of EV in Europe together with linked changes in power supply and the grid system the expansion of these sectors could be major engines of economic growth, job creation and export expansion for Europe. Conversely lagging behind in this transition could seriously weaken the European economy.

2.5

Against this background the EESC welcomes the intensive activity currently under way in the Commission, the Council and the member states to support and accelerate the transition to EVs. It recommends further European action under three main heads:

—	Further support for the technological transition through R&D, deployment programmes, education and training.

—	Support for the necessary parallel development of the electricity sector including expansion of renewables, grid and infrastructure development, and standardisation of the interface between EVs and electricity supply.

—	Support for transformation of the market with appropriate incentives so as to ensure that demand keeps pace with the transformation of the supply of vehicles.

3. Support for the technological transition

3.1 Research and development

3.1.1

A major effort is needed to increase R&D towards the 3 % target and to devote more of the programmes to supporting the transition to the low carbon economy. The EESC welcomes the importance attached to expanding R&D efforts generally in the new 2020 strategy, and the especial importance given to supporting the transition to a greener economy, including the transition to low carbon and electric vehicles. Particular attention needs to be given to:

—	Further improvement of battery technology so as to extend the range of EVs, and improve the robustness and resilience of the systems chosen for all weather and driving conditions.

—	Alternative methods of managing recharging so as to optimise the methods eventually selected for standardisation.

—	Ways of associating the expansion of electric vehicles with expansion of renewable or low carbon sources of electricity supply.

—	Ways of using smart metering and a re-engineered grid system to enable batteries to be recharged at optimal times from the point of view of electricity load balancing.

—	The global supply of materials that will be needed for a massive expansion of batteries, particularly lithium and rare earths, and any steps that could be taken either to augment or make more secure the sources of supply, or to substitute other more widely available materials.

—	Steps that should be taken at the outset to promote maximum reuse of materials from end of life vehicles and end-of life batteries.

3.1.2

Particular attention needs to be given to demonstration projects and other deployment programmes. Experience with the Energy Technology Platforms needs to be expanded and developed into proactive deployment programmes for the roll-out of plug-in hybrids and all-electric cars and the infrastructure support they will need. Demonstration projects in individual cities and regions that are willing to put themselves forward as pilots (which have already started in some European cities and regions) should be actively encouraged with appropriate incentives. The CIVITAS programme needs to be expanded.

3.1.3

The EESC is concerned that current battery technology is heavily dependent on materials (lithium and rare earths) that are currently produced mainly or solely in China. It urges urgent research and geological surveys to identify alternative sources of supply of such materials and to encourage recycling of them wherever possible.

3.2 Standard setting

3.2.1

Regulatory standards for minimum energy efficiency requirements for products and services have a crucial part to play. The EU has already established standards for CO2 emissions from cars, with timetables laid down for further improvements to be mandated in the future. But these programmes still need to be made more comprehensive and to set more ambitious short and longer term targets.

3.2.2

The present emission limits established for (2015) allow a super credit for low carbon or electric vehicles. This operates as a significant incentive to European manufacturers to accelerate their development and roll-out of the first generation of all-electric cars. But at the same time it reduces the incentive on them to seek further improvements from the remaining fossil-fuel powered cars. Perhaps at the next revision a separate specific target for the expansion of the electrically powered fleet might be set; while at the same time manufacturers should also be required to continue to improve the CO2 performance of their petrol and diesel vehicles, which will inevitably remain a major part of the fleet for the next 20 years.

3.2.3

It is essential that pressure is maintained on European industry to be amongst the world leaders on EVs so that they can maintain a strong competitive position as the whole world market moves in this direction. There is keen competition between the industry players in the motor industry, battery industry and energy supply industry to develop the best technologies at the keenest prices. This competition is itself a powerful driver for innovation and should not be inhibited.

3.2.4

On the other hand the EU will clearly need to promote some early elements of standardisation, so as to ensure safety, reliability, and compatibility, particularly in the supporting infrastructure for recharging EVs and the plug-in arrangements, and also in the power requirements and configuration of battery sets. Since cars (new and second hand) are also traded extensively between Europe and the rest of the world the EU should also participate actively in work to establish global standards on these matters in order to ensure compatibility of EV technology on a world scale.

3.3 Education, professional and technical training

3.3.1

Moving to a car industry dominated by EVs will bring a change in employment patterns within the industry. If production and jobs are to be retained in the European car industry and a strong export performance maintained it is essential that early investments be made in the European production capacity for EVs, and that corresponding training and retraining in the new skills that will be needed in all sectors of the industry (design, production, distribution, sales, maintenance, disposal etc.) be put in place.

3.3.2

The EESC strongly supports the Commission’s proposal to relaunch the CARS 21 High Level Group with extended stakeholder involvement to address the barriers to market uptake of the new technologies. The EESC recommends that this should include a specific social issues working group, and that steps should immediately be taken to develop and reorientate sectoral training and education structures to meet emerging skills needs resulting from EV technology.

4. Parallel transformation of electricity supply and linkages with the decarbonisation of electricity supply

4.1

Changing over to EVs will represent a significant extra demand on electricity supply – not very large at first, but ultimately substantial. If this additional electricity demand were met by constructing additional old-fashioned coal fired power stations there would be no gain in terms of CO2 production. CO2 emissions would simply have been shifted from cars to power stations. It is therefore essential that the expansion of electric cars marches side by side with further expansion of low carbon or zero carbon power supply.

4.2	Programmes for expansion of renewable energy need to be accelerated in parallel with the increased electricity demand for electric cars. This requirement should be built into the next review of targets for expansion of renewable energy.

4.3	A more sophisticated complementarity between the expansion of the total battery capacity needed for electric vehicles and the growth of the share of electricity supply from renewable sources is beginning to emerge.

4.4

A major problem for the expansion of renewables is the intermittency of supply of wind, solar energy, tides etc. In order to match the differently fluctuating pattern of demand for electricity there will probably have to be an expansion of the means of storing energy. Batteries for cars will only be needed in cars for the limited amount of time that people are actually driving. In between those times they will need to be recharged but could also potentially be available as reserve sources of energy for giving extra reserves to the grid when renewable supplies fall short. The technical and logistical problems of making this match are formidable. But as a smart interconnected grid develops this possibility will become more feasible. The EESC urges the Commission to put the necessary studies urgently in hand, and to ensure that the recharging infrastructure that is developed for EVs is made sufficiently smart from the outset to enable this complementarity with renewable energy supply to be achieved.

4.5

The development of infrastructure for recharging and/or battery replacement will require major investment. Facilities for recharging will need to be made widely available, e.g. at car parking spaces, at people’s homes, at workplaces, at retail outlets, at commercial garages, at other public gathering places, and in the streets. The public sector will need to establish a regulatory framework that will ensure that those undertaking the infrastructure investments can secure a reasonable return, at the same time as preventing excessive prices. The EESC recommends that the Commission should undertake urgent studies of appropriate regulatory frameworks that will encourage the necessary infrastructure investment. In this context it notes and supports the conclusions of the Competitiveness Council on 26 May which called for rapid development of a European standard for electric vehicles to speed up their uptake.

5. Consumers and the market

5.1

The European public is increasingly aware that the age of relying on the general availability of cheap oil is coming to an end. They are becoming aware that oil is becoming harder to find and to recover in many parts of the world, and that there is growing competition for what is available from the emerging economies. In spite of some scepticism there is also a growing awareness that emissions of CO2 need to be reduced to avoid damaging climate change, and that the transport sector will have to play its part in achieving this. To varying extents in the different member states, governments have further reinforced these messages by taxing petroleum products, by differentiating the taxation of vehicles so as to favour smaller lower carbon emitting vehicles over gas guzzlers, and in some cases by purchasing hybrids and prototype electric cars for their own fleets.

5.2

Following from this general awareness there has been some shift in the market in recent years. Consumers have shifted their preferences significantly towards smaller, lower carbon emitting vehicles and away from larger high emitting models. There has been some demand for the hybrids that have so far been introduced, particularly where member states have encouraged this by fiscal incentives. In general however consumers tend to be cautious about new innovations in this sector, and they will probably need reassurance and incentives to move decisively towards the next generation of plug in hybrids and all-electric vehicles as they become available.

5.3

Manufacturers and the oil industry have similarly been cautious about the potential for shifting towards EVs. They need to be convinced of the inevitability of moving in this direction, and of the political determination of the European Union to drive and accelerate this transition in order to put the full weight of their resources and expertise behind making the change, and selling it to the consumer. The EU and its member states need to make the necessity and urgency of this transition crystal clear to their industries, and not to allow special pleading by some of the slower businesses to slow down general progress, which could only result in the industry as a while being overtaken by faster moving businesses in other parts of the world, and a permanent loss of market share and influence in the evolution of standards worldwide.

5.4

In order to move successfully to the next stage and to build consumer confidence and demand there are several requirements from the consumer side, which may be summed up under the following main heads – safety, reliability, performance and design, range and flexibility, convenience of recharging, price at purchase and in use. (There is also some concern that electric vehicles may be dangerously quiet on the roads – if so some minimum added noise levels may need to be prescribed in order to give pedestrians and other road users some audible warning of an approaching vehicle.)

5.5

It will be crucial that EVs are at least as safe as conventional vehicles (both in normal driving and in the event of an accident), both in objective statistical measurements and in perception. Recharging arrangements, particularly any publicly accessible recharging facilities, will also need to be made safe against tampering and fraud. These criteria should be incorporated in all the regulatory requirements for safety that will need to be imposed on electric vehicles.

5.6

EVs will need to be reliable at all times and in all weather conditions. If batteries go flat easily or if certain weather conditions reduce performance or range markedly the public will easily be disillusioned. It would be desirable to build standards for durability and reliability into the regulatory framework.

5.7

Performance of EVs should at least match those of a mid-range family car as these are the cars that most of the population are familiar with. Similarly it will be important that the design and configuration of EVs are no less attractive to the public than the best ICVs. This of course is a challenge for industry to meet, and will not need regulatory action, provided that industry itself is properly motivated (and if necessary incentivised) to want to accelerate the change.

5.8

Range is intimately connected with recharging arrangements. If recharging requires a period of several hours in a garage or at a street charging point then consumers are likely to want a substantial range to be available from each charge-up. It may well be that most people only travel modest distance in the course of a normal working day – but they will want longer to be available for the occasions when they have further to travel – and will not want to be held up for hours for recharging in the course of such journeys. Batteries will sometimes go flat when a car is not at a recharging point. Arrangements for emergency recharging at the roadside or battery replacement will need to be developed.

5.9

Swifter recharging seems to be becoming a technical possibility. But unless the time could be reduced to something like the time that it takes to fill up a tank of petrol busy people will be impatient. In our view manufacturers ought to be aiming to increase available range as soon as possible to 300km if they want to ensure a sizeable market. R & D efforts should be particularly focused on this objective.

5.10

If such a range is not likely to be attainable for some years the EESC recommends that close attention be given to supplementing plug-in recharging arrangements with facilities for swiftly replacing the whole battery unit at a commercial garage (or in emergencies at the roadside) in two or three minutes. The EESC understands that some early trial projects are being developed on this basis. In order to facilitate the development of infrastructure for battery switching in this way the EESC recommends that the Commission give early attention to the possibility of achieving early standardisation of the configuration and characteristics for battery packs and how they can be removed and replaced conveniently. Battery switching would also be facilitated if the battery pack were leased from a service company handling the switching arrangements rather than being purchased outright. Such an arrangement would lower the initial cost of EVs; but it might be necessary to establish a regulatory framework in order to ensure that fair prices and good operating standards are maintained by the service companies.

5.11

Where plug-in recharging is to be used it will be essential that it swiftly becomes available at a widespread network of charging points. In addition to facilities at people’s homes there will need to be recharging points at car parks (public and private, workplaces, retail outlets etc.), and at street parking bays. In order to make this a manageable programme it may be that early introduction efforts should focus on specific geographical areas. It might be useful to conduct pilot schemes in various settings including island, large cities and their regional hinterlands, smaller urban settings, rural areas etc. so as to establish what the crucial modalities for operating and infrastructure support are. Wherever EVs are pioneered it is essential that an adequate network of recharging facilities be established at the outset. Consumers will swiftly turn against the new technology unless they feel that it is well supported by widely available recharging and battery switching facilities from Day 1.

5.12

Municipal, local and regional authorities will have a crucial part to play in promoting take-up of EVs in their areas. They can help to identify appropriate sites for recharging and battery switching facilities. They could give preferential status to EVs for parking or in reserved lanes. They could play a significant role in publicising and encouraging the transition to EVs. They could also encourage by using electric vehicles for transporting those with mobility challenges, street cleaning, etc. as many such trips only involve short distances within the authority's area.

5.13

Price at purchase and in use will of course be crucial. The transition from leaded to unleaded petrol in many countries provides a powerful example. There was consumer resistance to making this change for some time. But as soon as governments used fiscal differentials to favour lead-free petrol the resistance dropped away and the change over took place swiftly and rapidly.

5.14

For encouraging take-up of electric vehicles it will similarly be necessary at least to eliminate any cost advantage of petroleum vehicles by suitable differential tax regimes, and probably to give a preference to EVs in the early years to get the market moving. In principle EVs should be cheaper to operate because of the much greater efficiency of the electric engine. But of course much will depend on the structure of electricity tariffs, and whether recharging batteries can be integrated into a smart system for balancing loads at a preferential tariff. The EESC urges that early econometric studies be made of the various possibilities here. Since the shift to an EV is a big step for a consumer to take it may need to be strongly incentivised, particularly in the early years of the transition (e.g. by a big purchase tax differential favouring EVs against ICVs).

5.15

In addition to price incentives Governments and local authorities need to explore other forms of incentive that could assist the transition, including dedicated routes or zones and preferential parking facilities for EVs. EVs will clearly be less polluting than internal combustion engines, and some versions might also have a part to play in reducing congestion (e.g. smaller EVs for particular purposes).

5.16

In addition to action to ensure that EVs can be marketed at competitive prices it will be important to take further measures to improve consumer understanding of the carbon footprint of their transport decisions, and the extent to which they will be improving their carbon footprint by switching to EVs.

5.17

Such information should be based on a full life cycle analysis of the impact of their cars and other modes of transport. But even when the whole life cycle is taken into account it seems probable that the switch to an electric car will be one of the single biggest decisions that an individual will be able to make to reduce his or her carbon footprint. They need the right information in order to be able to assess this accurately.

5.18

Some sectors of the market will probably be easier to enter initially than others. Given the current range limitations, and recharging times, EVs will initially at least be more suitable for short urban or local journeys and less suitable for longer distance runs. Similarly plug in facilities will be easier to provide in homes that have garages or at least private parking spaces for their cars. Early marketing efforts might therefore be expected to focus on households that have such facilities, who may consider purchasing an electric vehicle as a second (smaller) runabout for local use, while maintaining a larger ICV or hybrid for longer journeys with greater loads. Even for these uses research appears to imply that restricted driving ranges and length of recharging time may limit initial take-up; so in order to avoid EVs being confined to a few small niche markets it will be important to establish from the outset a longer term vision of a more complete transition that will make electric vehicles an attractive option to all users for all journeys.

5.19

Public procurement programmes can be an enormously powerful tool in driving improvement of standards in key industry sectors. The public sector is an important purchaser of cars and other vehicles; and the example set by the public sector can have an additional influence on the purchasing decisions of others. It is therefore important that governments and other public sector bodies including regional and local authorities throughout Europe should make early commitments to purchase electric cars and other vehicles, so as to provide an early boost to the market for these vehicles, and get production volumes quickly towards the critical mass for economic production. The European Union institutions could lead the way in their own purchasing decisions, and could initiate Europe-wide discussions and initiatives to promote early uptake of electric vehicles. Political leaders and other prominent public figures could spread the message by making early use of electric vehicles themselves.

5.20

It is estimated that almost (50 %) of cars purchased in Europe are purchased under schemes managed or supported by companies for their employees. It would be desirable to incentivise companies to give preference to low carbon or all electric cars in their schemes through appropriate fiscal differentiation.

6. Other vehicles and forms of transport

6.1	In this opinion we have focused primarily on the private passenger car, and the steps that Europe needs to take now to accelerate the transition towards using electric cars in the future. This is the lowest hanging fruit on the transport decarbonisation tree.

6.2

But of course the scope for electrification does not end there. Policy makers and industry need to be alive to the potential for further electrification in the whole range of surface and marine transport, including very small one person vehicles, larger public service vehicles, railways, trams and trolley buses, and the whole field of freight. Moreover as electrification of the transport system spreads further new patterns of mobility may emerge that are facilitated by the different characteristics of electric power, battery technology and smart systems of grid and traffic management. Here too the EESC encourages the Commission and policy makers to be attentive and watchful for the best ideas that need encouragement.

Brussels, 14 July 2010.

The President of the European Economic and Social Committee

Mario SEPI

11.2.2011

Official Journal of the European Union

C 44/53

Opinion of the European Economic and Social Committee on ‘Energy poverty in the context of liberalisation and the economic crisis’ (exploratory opinion)

2011/C 44/09

Rapporteur-general: Mr Sergio SANTILLÁN CABEZA

On 9 February 2010, with a view to its forthcoming presidency of the Council of the European Union, the Belgian government decided to consult the European Economic and Social Committee, under Article 304 of the Treaty on the Functioning of the European Union, on

Energy poverty in the context of liberalisation and the economic crisis

(exploratory opinion).

On 16 February 2010, the Committee Bureau instructed the Section for Transport, Energy, Infrastructure and the Information Society to prepare the Committee's work on the subject.

Given the urgent nature of the work, the European Economic and Social Committee appointed Mr Sergio SANTILLÁN CABEZA as rapporteur-general at its 464th plenary session, held on 14 and 15 July 2010 (meeting of 14 July), and adopted the following opinion by 124 votes in favour, with six abstentions.

1. Conclusions and suggestions

1.1

The prices of electricity, gas and other fuels such as coal are still rising, and this trend looks set to continue in the coming years, which means that, unless swift and effective action is taken, the number of vulnerable energy consumers could also increase markedly. The purpose of this opinion is not to consider the causes of energy price increases but to highlight the need to protect vulnerable consumers, in order to prevent situations of energy poverty.

1.2

Combating energy poverty is a new social priority that needs to be tackled at all tiers of government and the EU should provide common guidelines to ensure that all Member States adopt the same approach to eradicating this phenomenon. The work done by the EU in recent years on protecting vulnerable customers deserves to be highlighted. Many Member States, however, are still not fulfilling their obligations, and as a result, the EU should take action in line with the principle of subsidiarity, as defined in Article 5 TEC, when Member States do not comply with the measures that have been put in place.

1.3	While energy poverty affects the energy sector, it also impacts on other sectors such as health, consumer affairs and housing.

1.4

The EESC suggests that the EU adopt a common general definition of energy poverty that can then be adapted by each Member State. One option would be to define energy poverty as the difficulty or inability to ensure adequate heating in the dwelling and to have access to other essential energy services at a reasonable price. Although this is a general definition, other criteria could be added in order to bring the concept into line with developments in society. This would help to quantify and tackle energy poverty more effectively.

1.5

The Committee considers that existing statistics should be harmonised so that the most rigorous assessment possible can be made of the energy poverty situation in Europe. With this in mind, it is suggested that Eurostat and Member States' statistical offices adopt homogenous statistical methods that enable them to quantify the extent of energy poverty.

1.6

In the EESC's view and whilst acknowledging the existence of the Citizen’s Energy Forum (London), it would make sense to set up a European Energy Poverty Monitoring Centre, which could fit within an existing body such as the Agency for the Cooperation of Energy Regulators, or any other body that could help involve all economic and social stakeholders who deal directly or indirectly with energy poverty such as energy suppliers, consumers, health and environmental associations, unions, and energy supply and construction company associations, for example. This group would be extremely useful to identify current good practices in the Member States, in order to make use of new mechanisms for tackling energy poverty and to promote an objective, accurate assessment of the effects of energy-market liberalisation on vulnerable consumers.

1.7	The Committee proposes that account be taken of energy poverty when any proposal on energy policy is drawn up.

1.8	The EESC wishes to stress the need to make technological innovations that optimise energy use available to vulnerable consumers, who are in greatest need of them.

1.9	It is important to implement approved measures relating to the energy performance of buildings and, in this case, of private homes. Given the difficulties that low-income households may face, the Member States should consider setting up assistance measures as and when possible.

1.10	Decentralised energy production may, in some cases, help to achieve the aims set out in this opinion (see point 6.8).

2. Energy poverty in the EU

2.1	Use of energy and access to it are linked to the wellbeing of individuals and communities. Amongst its many applications, energy is crucial to mobility, heating and lighting in areas such as industry, health and farming, and also in home life and leisure activities.

2.2

The concept of energy poverty can therefore be viewed in macro- or micro-economic terms. Access to sufficient and high-quality energy for industry, farming and other sectors is essential to a country's prosperity and competitiveness and its absence can lead to economic crisis, unemployment and widespread poverty. This opinion, however, focuses primarily on the energy policy affecting domestic use.

2.3

Energy poverty occurs where a household finds it difficult or impossible to ensure adequate heating in the dwelling at an affordable price (by way of reference, it might be worth adopting the definition used by the World Health Organization, which considers an adequate standard of warmth to be 21 °C in the living room and 18 °C in the other occupied rooms, or any other definition deemed technically appropriate) and having access to other energy-related services, such as lighting, transport or electricity for use of the Internet or other devices at a reasonable price. Although this is a general definition, other criteria could be added in order to update the concept when necessary.

2.4

Energy poverty is not an easily quantifiable phenomenon, although it can be measured on the basis of variables such as: a household's inability to keep the home adequately heated (21 % in the EU-27, Eurostat), the percentage of the population in arrears with their bills (7 % in the EU-27 in 2007) or the number of homes with leaks, cracks or other problems affecting the building (18 % of the EU-25 in 2007, EU-SILC Survey 2007). Although the lack of relevant statistics and studies mean there are no reliable data on the number of people affected, by comparing the known variables and taking account of a number of studies that have been published, it is estimated that, in Europe, at least 50 million people are afflicted by energy poverty (Tackling Fuel Poverty in Europe. Recommendations Guide for Policy Makers. www.fuel-poverty.org). Some estimates, however, claim the figures are much higher.

2.5

Not only is it difficult to quantify the extent of the problem, but there are also contradictions between European and national statistics. To give one example, EU-SILC data states that no one in the UK is in arrears on fuel bills, whilst the national energy regulator (Ofgem) puts the figure at 5 % (www.fuel-poverty.org).

2.6

The number of families affected by energy poverty in Europe could increase, given that:

—	approximately 16 % of Europeans are at risk of poverty (Joint Report on Social Protection and Social Inclusion. European Commission 2009)

—	from 2005 to 2007, the price of gas for households rose on average by 18 % (Eurostat 2007)

—	from 2005 to 2007 the price of electricity for households rose on average by 14 % (EU-SILC Survey 2007)

—	over 60 % of the EU's housing stock was built with no regard for thermal regulation standards.

2.7	Energy poverty is caused by a combination of three factors: low income, inadequate building quality and high energy prices.

2.8	The knock-on effects of energy poverty can include health problems, disconnection from the network by the energy supplier, energy being under-used to a level below what is comfortable, and the accumulation of debt.

2.9

The most vulnerable social groups are also those with the lowest income, such as the over-65s, single-parent families, the unemployed and those in receipt of social security benefits. Most people with low incomes also live in buildings with inadequate thermal insulation (Housing Quality Deficiencies and the Link to Income in the EU, Orsolya Lelkes. European Centre, March 2010), which exacerbates their energy poverty.

2.10

Some Member States have already adopted measures (Good practices experienced in Belgium, Spain, France, Italy and United Kingdom to tackle fuel poverty published by the EPEE working group) that are helping to prevent situations of energy poverty. Most of these good practices focus on the causes, such as:

—	energy prices (for example, ‘social’ or subsidised tariffs);

—	building quality (for example, promoting greater energy efficiency in both public and private housing);

—	low income (for example, financial assistance).

Similarly, some Member States have taken corrective measures to mitigate the consequences of energy poverty, such as prohibiting the disconnection of vulnerable families at critical times, for example.

2.11	Improving energy efficiency in buildings is a key aspect of addressing energy poverty. The proposal to recast the Directive on the energy performance of buildings COM(2008) 780 final could represent an opportunity in this field.

3. The economic and financial crisis is reflected in 23 million unemployed

3.1

The European economy is experiencing its deepest recession since 1930. In 2009, EU-27 GDP was 4.2 % down on 2008, a year in which growth was already low (+0.8 %). There has been a steep increase in unemployment, which in January 2010 accounted for 9.5 % of the active population (1.5 percentage points more than in the same month in the previous year). As a result, in the first month of 2010, 22 979 000 men and women were out of work. In percentage terms, the lowest unemployment figures were recorded in the Netherlands (4.2 %) and in Austria (5.3 %); the highest levels were seen in Lithuania (22.9 %) and in Spain (18.8 %) (Eurostat).

3.2

Europe's Economic Recovery plan of late 2008 has not produced the hoped-for results. Just as worrying as the data on the current situation is the fact that the prognoses that have been made to date (including those made by the Commission) predict ‘weak’ recovery in the near future. Although fiscal stimuli equivalent to 5 % of GDP (for the EU-27) have been launched, these are insufficient and no properly coordinated ‘“exit strategy”’ exists for dealing with the crisis.

3.3

The economic and financial crisis that started in 2007 occurred against a backdrop in which European workers' pay was stagnating or falling. Furthermore, the economic measures proposed in some Member States to reduce the high level of debt and the public deficit are having an effect on social security benefits (such as pensions and unemployment benefits, for example) and on public services.

3.4	All of this creates a worrying outlook for the households that are most vulnerable in the face of rising energy prices.

4. The EU's energy policy

4.1

The desire to liberalise the energy markets has been one of the EU's key policies in the last two decades. Following the Energy Council of June 1987, which kick-started the process, the first directives on opening up the gas and electricity markets were published in the late 1990s and since then, numerous steps have been taken in this direction.

4.2	Broadly speaking, the stated aims of the liberalisation process were to achieve a more efficient energy sector and a more competitive European economy. Not all Member States agreed on the measures adopted, however, and indeed some are strongly resisting implementing these policies.

4.3	There is currently considerable concentration of supply in the wholesale market both for gas (in 10 Member States, the three largest suppliers control 90 % or more of the market) and for electricity (above 80 % in 14 Member States) (COM(2009) 115 final).

4.4	Liberalisation benefits consumers if it genuinely promotes competition, but in a number of Member States, public monopolies have been replaced by private oligopolies and as a result, there is a need to step up measures to promote transparency and competition in the energy sector.

4.5

It is therefore worth highlighting the need for the measures contained in the Third Energy Package to be implemented. These are aimed at establishing a real energy market based on cooperation between States, and include the better interlinking of networks, better coordination between operators and greater powers for national regulators.

5. Liberalisation should benefit consumers

5.1

Liberalisation favours energy decentralisation and diversification and should be a means of achieving some key gains, such as lower energy prices and guaranteed supply, improved service quality, greater choice, and a choice that is adapted to meet the needs of consumers in general and of vulnerable consumers in particular. Member States' initial experiences have, however, revealed problems due to the lack of transparency in tariffs and the high prices, amongst other things.

5.2

In the majority of Member States, prices in the first half of 2009 were higher than in 2008, although the trend in oil prices would indicate a more significant fall in end user prices. In part, this may be due to the time lag with which price changes on the oil market are factored into the end-user prices. However, it appears that the fall seen in wholesale energy costs has not been fully reflected in end-user prices (see COM(2009) 115 final).

5.3

As a consequence, electricity and gas supply services are having a less than satisfactory impact on household budgets. 60 % of consumers have stated that their energy provider has increased prices, as opposed to only 3-4 % that have seen reductions. Electricity and gas supply services have also posted particularly poor results in terms of comparing services and ease of changing supplier. The energy sector is where consumers change provider the least: only 7 % have changed their gas provider, with 8 % of customers having changed their electricity provider (European Commission. 2nd EU Annual Consumer Markets Scoreboard Report, 2 February 2009).

6. European action on energy poverty

6.1

Energy poverty is a new social priority, which needs support at all levels. Although the legal documents presented by the EU (1) are good ones, the reaction of the Member States has to date been inadequate. By way of example, despite the fact that they were made mandatory in the common market directives on gas and electricity (first Directive 2003/54/EC and then Directive 2009/72/EC), only 10 of the 27 Member States provide social tariffs for vulnerable customers and in only 8 Member States is the term ‘vulnerable customer’ in common use (Status Review of the definitions of vulnerable customer, default supplier and supplier of last resort. ERGEG, 2009).

6.2

Not all Member States are addressing this problem and those that are, act on their own, without seeking synergies with others, which makes it harder to identify, assess and deal with energy poverty at the European level. To give one example, the United Kingdom's definition differs from the one used by the other Member States, taking the view that energy poverty occurs when a household needs to spend more than 10 % of its income in order to heat its home to an adequate standard of warmth. Even within EU documents, the definition varies.

6.3

Every Member State acting within the established rules of competition (national, regional or local), is responsible for tackling energy poverty, but in the absence of effective national legislation on gas and electricity, the EU must take action, in line with the principle of subsidiarity, as defined in Article 5 TEC. Where other fuels, such as coal, are concerned, responsibility lies solely with the Member States.

6.4	The European Union legislates on energy policy, has powers in this field and consequently has an impact, whether direct or indirect, on energy poverty in the Member States. The EU must, therefore, act and deliver policies within its sphere of competence.

6.5

The European Commission proposed the European Charter on the Rights of Energy Consumers (COM(2007) 386 final) ‘Towards a European Charter on the Rights of Energy Consumers’ and the European Parliament Resolution of 19 June 2008 (P6 – TA(2008) 0306), on which the EESC has stated (2) that a binding legal form would be needed to guarantee the public's rights, as has been done on other occasions (3). The Commission withdrew this charter and included some of the points in its Third Package, on the grounds that this would have a greater impact (for example, Articles 7 and 8 of Directive 2009/72/EC).

6.6

As regards the subject of this opinion, it is worth recalling, the text of the EU Charter of Fundamental Rights, which states that ‘In order to combat social exclusion and poverty, the Union recognises and respects the right to social and housing assistance so as to ensure a decent existence for all those who lack sufficient resources, in accordance with the rules laid down by Community law and national laws and practices.’ (Art. 34), and the duty to ensure a high level of consumer protection (Art. 38).

6.7

The EESC would reiterate the importance of ensuring the universal service guarantee is in place, respect for public service obligations, the protection of social groups that are economically disadvantaged and which face energy poverty, for example by prohibiting disconnection at critical times, economic, social and territorial cohesion and prices that are reasonable, easily and clearly comparable, and transparent (4).

6.8

The EESC wishes to highlight the potential benefits in some cases for consumers - including the most vulnerable ones – of decentralised energy production, because this would:

—	bring production closer to consumption centres, by installing smaller units, thus reducing energy loss through transport (for electricity, estimated at between 7 % and 10 %);

—	promote the generation of renewable energies;

—	boost technological development;

—	have the potential to create jobs and complement centralised energy production.

Brussels, 14 July 2010.

The President of the European Economic and Social Committee

Mario SEPI

(1) OJ L 211, 14.8.2009, p. 55, Art. 7.

(2) OJ C 151, 17.6.2008, p. 27.

(3) OJ L 46, 17.2.2004, p. 1.

(4) OJ C 151, 17.6.2008, p. 27.

11.2.2011

Official Journal of the European Union

C 44/57

Opinion of the European Economic and Social Committee on ‘Building a sustainable economy by transforming our model of consumption’ (own-initiative opinion)

2011/C 44/10

Rapporteur: Ms DARMANIN

On 16 July 2009, the European Economic and Social Committee decided to draw up an own-initiative opinion, under Rule 29(2) of its Rules of Procedure, on

Building a sustainable economy by transforming our model of consumption.

The Section for the Single Market, Production and Consumption, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 15 June 2010.

At its 464th plenary session, held on 14 and 15 July 2010 (meeting of 15 July 2010), the European Economic and Social Committee adopted the following opinion by 98 votes to 7, with 8 abstentions.

0. Preamble

With the backdrop of the crisis that Europe is still living, the reality of a number of Europeans is that they are struggling to keep employment or to guarantee an income; whereas SMEs make greater effort for survival, sustainable patterns may seem a luxury. However policies for sustainability should also include parameters to address these realities Europe is living. This opinion shall focus on a small part of sustainability, that of consumption. As an underlying principle, the EESC believes that one of the long term ways of addressing sustainable consumption is that of enhancing citizenship amongst Europeans, not only by devolving the rights of consumers as set out in the Lisbon Treaty but also by enhancing the value of citizenship, so that citizens not only have rights but also the moral responsibility to behave sustainably.

1. Conclusions and recommendations

1.1 In a sustainable economy, the modes of both production and consumption would support the continued flourishing of individuals, communities and the natural world. Most agents in society would need to be guided by a set of shared values. EESC emphasises, as in previous opinions, that environmental and social indicators should be used alongside GDP to judge the success of government policy.

1.2 The current European system of production and consumption is seen as environmentally unsustainable, especially in its dependence on energy, materials, land and water, and its impacts on the global climate and biodiversity. If everyone in the world lived a European lifestyle, we would need over 2.5 planets.

1.3 The EU Council has agreed that industrialised countries should reduce their greenhouse gas emissions by 80-95 % by 2050. Hence the EESC recommends that the EU2020 strategy would take into consideration both measures for sustainably producing and also measures for sustainable consumption. As the two are closely linked and need to be addressed if we are to minimise the impact on the planet.

1.4 Achieving 80-95 % emission cuts over 40 years while sustaining annual economic growth of 2-3 % means reducing the carbon intensity of the economy by 6-10 %/year. Such a rate of technological change is unprecedented on a sustained, economy-wide basis. It would therefore be prudent to begin a serious dialogue about the potential for changing consumption patterns and the overall economic and social model that relies on expanding production and consumption, as well as seeking the most rapid possible improvements in production and supply chains.

1.5 Efforts for change from the top down alone are unlikely to work. Social change often starts with small groups in society and spreads through a variety of communication channels. The role of the EU, national and regional government may be to identify, encourage and support existing groups working for sustainable living.

1.6 A dialogue is needed involving EU institutions, national and local government, and all the social partners. One way forward would be for the Commission to work with EESC to create a forum on sustainable consumption exploring:

—	the values that could shape a sustainable economy, and the tensions between growth and ecological sustainability, social inclusion and personal freedom, the quality of life of the current population and that of future generations etc.,

—	whether we need to consume less in certain areas,

—	what prevents citizens from choosing more sustainable consumption patterns and how can local, national and EU government help,

—	the experiences of individuals and groups that have adopted low-impact ways of living, and the potential for replicating them,

—	the measures needed to support more sustainable consumption among particular groups, e.g. the elderly, young people, the unemployed, recent immigrants, families with small children.

1.7 Dialogue must be connected to action, including support for experimentation by groups working for sustainable living and for communication of their experiences, adjustment and strengthening of policies where relevant, and practical action within EU institutions to provide leadership and demonstrate the potential for more sustainable practices. Furthermore best practices ought to be publicised so as to demonstrate the possibility of changes in consumption models.

1.8 Sustainable consumption cannot be seen as an environment policy brief only. It will require initiatives in many policy areas including health, education, employment, trade, consumer affairs, transport, agriculture and energy.

2. Need for a different economic and social model

2.1 The nature of a sustainable economy has been discussed for half a century (1). In such an economy, the modes of both production and consumption would support the continued flourishing of individuals, communities and the natural world.

2.2 For an economic model to be self-sustaining, most agents in society need to be guided by a set of shared values, as is currently the case in EU Member States. Governments currently promulgate a set of economic values through emphasis on GDP and other indicators to guide policy. The shortcomings of GDP as a measure of human, social and ecological flourishing have been widely recognised. To measure progress towards a sustainable economy, the EESC has proposed that (2), in addition to GDP, the ecological footprint (EF) should be used, along with an indicator for quality of life. The EF calculates the productive land area required to sustain a way of life for a person, group of people, institution or region. A quality of life indicator should take account of health, material wealth, access to public services, social participation and incomer integration, leisure time, and the quality of the environment.

2.3 Using a broader set of indicators to judge the success of government policy might be expected to lead to less emphasis in policy design on promoting GDP growth, and more on the other dimensions of human, social and ecological well-being.

3. The ecological challenge

3.1 The European Environment Agency emphasises two major groups of issues in its upcoming State of the Environment and Outlook 2010 report: climate and energy, and biodiversity and ecosystems (3). The central challenge to the sustainability of European society is the degradation of the ecosystems that sustain it and of its resource base including energy, soil and water. In 2003 the average EU EF was estimated at nearly 5 hectares per person and rising, whereas global land availability was only 1.8 hectares per person and falling (4). Hence if everyone in the world lived a European lifestyle, we would need over 2.5 planets.

3.2 Climate change is particularly important because, in addition to its direct impacts on human life, it is likely to exacerbate the impacts of society on biodiversity, fresh water and other systems. The largest contributor to Europe’s EF is its use of fossil fuels and generation of greenhouse gases. Other major elements include land use for agriculture, transport and buildings. The EF does not account well for other major impacts of the European economy, including the use of water (mostly for agriculture) and scarce minerals.

3.3 The EU Council has agreed that industrialised countries should reduce their greenhouse gas emissions by 80-95 % by 2050 – a 4-7 % annual cut. It has committed to reducing EU emissions by 20 % in 2020 relative to 1990 levels, or by 30 % if other countries make similar commitments. EESC has in fact proposed (5) that the 30 % target should be unconditional.

3.4 The EU seeks to achieve greenhouse gas mitigation primarily through technological means while sustaining economic growth. While technology exists that could meet these goals for 2020, progress in implementation has been slow. The EU15 committed in 1997 to an 8 % emission reduction by 2008-2012 relative to 1990 levels, but emissions in 2006 were only 2.2 % down. In the EU27 emissions fell 7.7 % in this period, but rose 1.5 % since 2000 (6). Since the 1990s EU energy efficiency has improved by only 0.5 % per year (7).

3.5 Achieving 80-95 % emission cuts over 40 years while sustaining annual economic growth of 2-3 % means reducing the carbon intensity of the economy by 6-10 %/year. Such a rate of technological change is unprecedented on a sustained, economy-wide basis. It would therefore be prudent to begin a serious dialogue about the potential for changing consumption patterns and the overall economic and social model that relies on expanding production and consumption, as well as seeking the most rapid possible improvements in production and supply chains.

4. Sustainable consumption: enabling choice

4.1 European governments committed at the 1992 Rio Earth Summit to the elimination of unsustainable consumption and production patterns. They have further committed in the Marrakech Process to develop action plans for sustainable consumption and production by 2010, to be considered by the UN Commission for Sustainable Development in 2011.

4.2 There is a growing body of research on sustainable consumption and the means of achieving it (8). Consumers mostly feel locked in to current lifestyles – for example, even if they wish to reduce their car use they cannot imagine how to do so. Consumption is shaped and constrained by a host of influences, including physiological needs, personality, the social setting, cultural factors, and the availability and prices of alternative goods and services. In the consumer society, consumption choices play a central role in meeting social and psychological needs – e.g. for belonging to a group, self esteem, and defining personal identity. All of this makes it hard for individuals to consider any change, and hard for governments to introduce policies for consumption change. When such policies have been implemented, the results have mostly been disappointingly slight or slow, making them hard to sustain against the resistance of vested interests.

4.3 Meanwhile motivations, patterns of consumption, and likely responses to specific policies, vary considerably from person to person. For any individual they can vary from situation to situation. Hence there is no simple policy solution for sustainable consumption. Rather, a broad sweep of policies, in areas from agriculture and employment to education and health, has an influence. Particular strategies may be needed to support more sustainable choices by specific groups such as the elderly and young people.

4.4 People have adopted voluntary restraint en masse in times of national emergency and war but the ecological crisis is not generally seen as an emergency on such a scale. Nevertheless, recently growing numbers of people have chosen simpler lifestyles to reduce their ecological impacts. Some of the most successful efforts to change consumption have been based on community groups – e.g. the Ecoteam approach used in several countries by Global Action Plan, bringing together small groups of people in a neighbourhood, workplace or school to monitor their waste, energy and water use and identify action they can take to live more sustainably.

4.5 Efforts for change from the top down alone are unlikely to work – especially where politicians with high-consuming lifestyles are trying to influence the general public. Sustainable consumption is not a high priority for most people. However social change often starts with small groups in society and spreads through a variety of communication channels, including the mainstream media, the arts, informal friendship networks and faith organisations. The policy makers' role ought to be more that of identifying and encouraging existing groups working for sustainable living than to impose its own view of what is needed on the community at large.

4.6 Choice for a sustainable lifestyle should not be perceived and designed as a luxury for the people who have the financial means for such a lifestyle. The EESC has emphasised that sustainable production should not come at a higher price (9) but should be accessible to all. It is essential to avoid making low-impact consumption more costly to individuals as this would enable choices for only part of society, marginalising poorer and low wage earners.

4.7 The EESC emphasises that in order to enable choice for low-impact consumption other critical areas of well-being need to be addressed, some of which are perceived as more essential, these being employment opportunity, appropriate wages for work done, decent jobs, and access to credit for SMEs.

5. Policy issues to be addressed

5.1 EU institutions have a history of setting out a vision and providing leadership for radical change, in the building of a united Europe. They have mostly worked with a pluralistic model, facilitating agreement among governments rather than leading change in particular directions. There have been instances where the EU has led, for example in health and environmental standards. These experiences may be valuable in building a sustainable economy. Leadership and inspiration may be as important as technical expertise and bureaucratic skill.

5.2 The Committee has welcomed the Commission’s Sustainable Consumption and Production Action Plan (10). Many other existing EU policies are relevant to sustainable consumption, including the Emission Trading Scheme (ETS), the Car Fuel Efficiency Labelling Directive, the Light-duty Vehicle CO2 Regulation, the Biofuels Directive, the Energy Performance of Buildings Directive, the Directive on Energy End-Use Efficiency and Energy Services, and environmental provisions in the Common Agricultural Policy. However, EU policy focuses on market instruments and technology/product standards. Only ETS deals with absolute levels of greenhouse gas emissions. There are tensions with other policy goals such as increasing mobility. There is very little to directly address consumption and lifestyle and the policies are clearly inadequate to achieve greenhouse gas reduction goals and independence from unsustainable mineral resources.

5.3 A dialogue is needed involving EU institutions, national and local government, and all the social partners. One way forward would be for the Commission to work with EESC and others to create a forum on sustainable consumption exploring:

—	the values that would shape a sustainable economy and the tensions that must be addressed, e.g. between growth and ecological sustainability, social inclusion and personal freedom, the quality of life of the current population and that of future generations etc.;

—	whether we need to consume less in certain areas. The majority of greenhouse gas emissions can be traced to consumption of food, energy and transport. There are tensions between sustainability and other goals but also potential synergies (e.g. cycling can be good for health and the environment);

—

what prevents citizens from choosing more sustainable consumption patterns and how local, national and EU government can help. This might include for instance ensuring that existing policies (e.g. the Energy Performance of Buildings Directive) are fully implemented, and strengthening measures within the Sustainable Consumption and Production Action Plan to enable consumers to choose more sustainably produced food;

—

the experiences of individuals and groups that have adopted low-impact ways of living, and the potential to replicate them. This might include organisations such as Global Action Plan, whose EcoTeams typically achieve 40-50 % reductions in non-recycled waste, networks such as Transition Towns, which work to build local communities resilient in the face of climate change and resource decline, and faith groups such as the Quakers that have long held values supporting low-impact living. Individuals in some of these groups and networks have developed fulfilling lifestyles using 60-80 % less material and energy resources than the EU average;

—	the measures needed in a period of change towards more sustainable consumption to support the adjustment of particular groups, e.g. the elderly, young people, the unemployed, recent immigrants, families with small children;

—	how to marry a shift towards low-impact consumption and sustainable production with competitiveness of the internal market.

5.4 Policy should address both immediate and long-term action to change consumption. Much can be learned from experience, for example with smoking, where a combination of pricing, regulation, labelling and education has brought about a substantial change in attitudes and behaviour.

5.4.1 Price incentives are an important part of a policy package but there is a tension between the Commission’s aim of reducing energy prices (11) and the need to reduce consumption. Carbon taxes or trading must be complemented by other measures. For example, without strong support for home insulation and alternative energy sources, high fuel or carbon prices may increase fuel poverty.

5.4.2 The EESC has on a number of occasions emphasised the importance of educational programmes to bring about effective sustainable behaviour. The EESC reiterates that such learning programmes should not only be targeted at schools and young people, which is important, but people at all stage of life. Vocational education, life long learning and programmes should be offered for the elderly. It is imperative that sustainable practices should not increase the marginalisation of groups such as the unemployed.

5.5 Dialogue must be connected to action, including providing support for experimentation by groups working for sustainable living and for communication of their experiences. To be of any use it must be taken seriously by the EU institutions, leading to adjustment and strengthening of policies where relevant, and to practical action within those institutions to provide leadership and demonstrate the potential for more sustainable practices.

5.6 Sustainable consumption cannot be seen as an environment policy brief only. It will require initiatives in many policy areas including health, education, employment, trade, competition, consumer affairs, transport, agriculture and energy.

5.7 The EESC strongly encourages the commission to seriously consider action for sustainable consumption under Commission work programme 2010 – Time to act (12) and henceforth within the EU2020.

Brussels, 15 July 2010.

The President of the European Economic and Social Committee

Mario SEPI

(1) Boulding, K. ‘The economics of the coming spaceship earth’, in Environmental Quality in a Growing Society, (Baltimore: Johns Hopkins University Press, 1966) pp. 253 ff.

(2) Opinion in OJ C 100, 30.4.2009, p. 53.

(3) European Environment Agency, Signals 2010.

(4) Global Footprint Network and WWF, Europe 2007: Gross Domestic Product and Ecological Footprint.

(5) OJ C 77, 31.3.2009, p. 73.

(6) EEA, Annual European Community greenhouse gas inventory 1990–2006 and inventory report 2008: Submission to the UNFCCC Secretariat, (Copenhagen: EEA, 2008).

(7) Tipping, P. et al., Impact Assessment on the Future Action Plan for Energy Efficiency, carried out by ECN (NL) and WS Atkins (UK) for DGTREN. Contractor: ECORYS, NL (2006).

(8) Jackson, T. Motivating Sustainable Consumption: A Review of Evidence on Consumer Behaviour and Behavioural Change, a report to the Sustainable Development Research Network, 2005, available at http://www.sd-research.org.uk/.

(9) OJ C 224, 30.8.2008, p. 1.

(10) OJ C 218, 11.9.2009, p. 46.

(11) Monti, M., A New Strategy for the Single Market, Report to the President of the European Commission, May 2010.

(12) COM(2010) 135 final, vol. I.

11.2.2011

Official Journal of the European Union

C 44/62

Opinion of the European Economic and Social Committee on ‘Consumer information’ (own-initiative opinion)

2011/C 44/11

Rapporteur: Mr PEGADO LIZ

On 16 July 2009, the European Economic and Social Committee, acting under Rule 29(2) of its Rules of Procedure, decided to draw up an own-initiative opinion on:

Consumer information.

The Section for the Single Market, Production and Consumption, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 15 June 2010.

At its 464th plenary session, held on 14 and 15 July 2010 (meeting of 14 July), the European Economic and Social Committee adopted the following opinion by 81 votes to one with seven abstentions.

1. Conclusions and recommendations

1.1 People's right to information, in its various facets - information freedom, the right to inform, the right to be informed and, in particular, the right to consumer information - is nowadays recognised with general binding force as a fundamental right in the Community's legal system in primary legislation. (paragraph 5 of the Preamble and Articles 11, 27, 38, 42 and 53 of the EU Charter of Fundamental Rights, Article 2 TEU and Article 169 TFEU).

1.2 Nevertheless, much remains to be done in relation to secondary legislation, where the new configuration of this basic rule has not yet been transposed or outlined. In fact, the content of consumers' rights to information, access thereto and the importance, profile and manner thereof are not dealt with consistently in Community law and reveal omissions and duplications which have an impact on and are amplified in Member States' national legislation; this is detrimental to both consumers and economic players and, as a consequence, also to efforts to complete the single market.

1.3 The EESC feels that consumers' right to information, be it pre-contractual, contractual or -post-contractual, as well assistance and advice, should - without prejudice to the subsidiarity principle - be covered by specific EU rules.

1.4 The purpose of this own-initiative opinion, necessarily limited to the fundamental aspects of consumers' right to information, is therefore to highlight some of the principles flowing from this new approach and its practical consequences, particularly in the framework of steps to develop a single market for the 21st century as part of the 2020 Strategy.

1.5 It is necessary to recognise that the Commission's most recent guidelines on consumer rights in general and consumers' rights to information in particular, making indiscriminate use of the full harmonisation technique, manifestly runs counter to this concept in that, violating the subsidiarity principle, it restricts Member States' capacity to raise levels of consumer rights and even limits this capacity by imposing a retroactive effect on rights conferred under Community directives and in Member States' constitutions and laws.

1.6 The EESC continues to believe that, when defining consumer laws falling within the EU's purview, the concept of the weaker or more vulnerable party should predominate, not that of the enlightened, observant and circumspect consumer who makes decisions on a purely economic basis. In keeping with this approach, the EESC continues to maintain that minimal harmonisation and a high level of protection is more in line with treaty requirements and more consistent with the real nature of consumer relations.

1.7 It is against this background that the concept of ‘suitable information’ stands out, where greater importance should be attached to the quality of information and not the quantity thereof, in order to meet consumers' real needs and expectations, gauged in line with the purpose, content, presentation and context of such information.

1.8 As regards the right to information in general, it is essential to establish the universal character of a subjective right at Community level, as well as pinpointing the obligations of the public authorities and professional bodies who should make such information available.

1.9 As for the role of commercial communications in informing consumers, including advertising, the EESC feels that generally the rule stipulated in the directive on package travel should apply, according to which messages with precise, concrete information about any good, service or right which is the object of a consumer relationship should be deemed to be an integral part of the contract.

1.10 Still on the same subject, the whole structure of the directive on unfair commercial practices should be reviewed and reformulated so as to obviate the disastrous effects of full harmonisation, now being recognised in a whole series of rulings by the Court of Justice.

1.11 Areas where there is, however, still time to take action along the lines recommended in this opinion include: the Commission's proposal on consumer rights, where a genuine ‘charter of consumers rights to information’ is to be compiled; pre-contractual, contractual and post-contractual aspects; the right to advice and assistance; and a definition of both the nature of deficiencies and the consequences of omissions in information and incorrect information.

1.12 To this end, the EESC recommends that there be a wholesale review of the detailed list of pre-contractual and contractual information requirements imposed on professionals, which are all too often contradictory, inconsistent and duplicated in various sectoral directives.

1.13 The EESC further recommends that general requirements regarding these obligations be defined in keeping with the following guidelines:

a)	There should be a general obligation to provide pre-contractual information covering, inter alia, the goods and services concerned, the professional involved, the price for executing the contract and the associated conditions, the right to withdrawal and the conflict settlement method employed.

b)	The content and extent of the pre-contractual information provided should be broadly adjusted in keeping with the goods and/or services concerned, especially if the subject is complex or has an impact on consumers' health and safety.

c)	The manner in which information is provided should comply with the general principle of fairness: it should not be misleading nor should it omit any key aspects and it should be clear and understandable, not only as regards the object of the contract but also the way it is marketed.

d)	Pre-contractual information should incorporate the contract concluded by the consumer.

e)	The principle of cost-free information on fundamental aspects of the contract should be established, along with the principle of aligning prices on costs in other cases.

f)	When making decisions about entering into a contract, consumers should easily be able to access the pre-contractual information made available and have a right to obtain clarification on this information as well as on the content and consequences of the contract.

Provision should be made for an obligation to be placed on the professional to provide assistance and advice; this should be particularly firm when products and/or services are at stake, which are either complex or which entail health or safety risks for consumers, under the terms referred to in point 8.

h)	The burden of proof establishing that pre-contractual information has been provided and that the obligation to provide assistance has been met should fall on the professional.

i)	Non-compliance with pre-contractual information and assistance obligations, since this is important, should give rise to a right of withdrawal, together with compensation for any damages.

1.14 The Committee would therefore urge the Commission to carry out an in-depth review of the above-mentioned proposal for a directive, particularly the part dealing with consumers' rights to information, with a view to incorporating the principles and particular cases where these rights are applicable, as recommended in this opinion.

1.15 The Committee also calls upon the European Parliament and Member States, prior to approving the above-mentioned proposal, to deal with all the key points contained therein relating to consumers' rights to information, along the lines set out in this opinion.

1.16 A coherent legal framework must also be established at Community level, to regulate on-line commercial communication and ensure that the right to privacy is respected under all circumstances as a fundamental personal right.

2. Introduction: the right to information - a fundamental right of citizenship - and consumers' right to information

2.1 This is the first time that an independent, systematic approach has been adopted by any EU institution to consumers' right to information, in the broader framework of the right to information as one of the rights of European citizenship. The EESC is adopting just such an approach as a contribution to a broader discussion on this question within civil society in general, without forgetting the distinct impact it has on any new approach to completing the single market.

2.2 The immensity of this subject requires a judicious definition thereof - a necessary consequence of the natural limits of an opinion of this type and the fruit of contributions received from various bodies and concerns expressed at the well-attended hearing organised at the EESC on 1 March 2010 (details of which can be found on the Single Market Observatory page on the EESC's website: http://www.eesc.europa.eu/?i=portal.en.consumer-information).

2.3 It is important to highlight that people's right to information, contained in most universal declarations and charters of fundamental rights, only fully became an integral part of the Community's legal system when the European Charter of Fundamental Rights was incorporated into the Lisbon Treaty (which recently came into force). This covers freedom of information, the right to inform/right to obtain information, and the duty to inform/right to be informed (see in particular, paragraph 5 of the Preamble and Articles 11, 27, 38, 42 and 53 of the EU Charter of Fundamental Rights, Article 2 TEU and Article 169 TFEU). In addition, there is also the fundamental right to privacy in relation to aggressive commercial practices that are not wanted by the consumer, and commercial communications that are not wanted by the consumer, or spam.

2.4 These aspects are particularly important today, especially in relation to consumers' rights, chiefly the substance of these rights and the way they are exercised, as well as the associated special obligations incumbent upon the various parties involved, as of the moment they are deemed to be fundamental rights and have to be taken into consideration when defining and implementing various Community policies and measures.

2.5 Indeed, without prejudice to the application of the subsidiarity principle and shared competences governing the EU's legal system in this area, it is nowadays a basic precondition for the smooth operation of the free competition model particular to the market economy system on which the EU is based, that the parties concerned are in possession of all the key facts for rational decision-making in this market.

2.6 One of the consequences of this general obligation is the duty to ensure ‘transparency’ in the operation of the Community institutions, where ‘secrecy’ should be the exception, necessarily warranted by weighty considerations relating to a smoothly functioning legal system, the public interest, law and order, and the protection of privacy. Although there is no doubt that some significant progress has been made by the Community institutions, important initiatives having been taken by the Commission and the European Parliament (1), this guideline was unfortunately not taken on board by the Council; it is to be hoped that the entry into force of the new Lisbon Treaty will secure significant progress. Despite the relevance of this subject for improving information for consumers in general, it will not be broached in detail; readers are referred to the EESC's opinion focusing on this very subject.

2.7 Moreover, despite their undeniable relevance, aspects relating to general education for consumers will not be broached here either, but readers will likewise be referred to the EESC's opinions on this subject (2), in particular the EESC own-initiative opinion on ‘Consumer education’ (3).

2.8 Lastly, although expressly recognising the need for a sectoral approach to the right to information at Community level so as to highlight the specific nature of some areas, products and services - such as foodstuffs, medicines, financial services and e-trade - where steps should be taken to secure harmonisation at the highest level, the limitations inherent to an opinion of this nature are not consistent with such detail.

2.9 One particular focus of this opinion will therefore be the guidelines which should be adopted at Community level to define and characterise consumers' rights to information in general and the various stages in a contractual relationship in particular.

3. The ‘average’ consumer versus the ‘vulnerable’ consumer - the concept of adequate information

3.1 As of the very first Commission programmes for consumer protection (translated into the most important legislative measures of the last 30 years), the Community acquis - backed up by Court of Justice case law and a common line of approach adopted by the top experts in this field - has crystallised the concept of the consumer as the ‘weaker party’ in a legal consumer/seller relationship which is, by its very nature, unequal; moreover, all legislation in this sphere has been geared to restoring a balance in this relationship through special protection measures.

3.2 Recently however, the Commission - in different strategy papers translated into a variety of legislative initiatives (4) - has developed the concept of the ‘average consumer’ who is ‘reasonably well informed and reasonably observant and circumspect’ (5), and in so doing has endeavoured to launch a new approach to European consumer policy, based on full harmonisation, monitoring by the country of origin and mutual recognition.

3.3 This guideline, generally contested by consumer organisations throughout the Member States and opposed by the EESC in various opinions, effectively translates into less consumer protection and an inadmissible step backwards in Community policy in this sphere.

3.4 However, it is precisely in the light of this new guideline that the question of consumer rights has taken on greater importance, since consumers are increasingly required to be well informed in order to take rational decisions in a global market. Indeed the underlying neo-liberal model is based on known premises, particularly:

a)	a critical awareness of one's needs and a prioritisation of preferences;

b)	the possibility of comparing various products and services on the market; and

c)	knowledge - technical and economic - of the quality and price of each good and service (6).

3.4.1 It is, however, also in the light of the above that i) the question of the nature and quality of information to which consumers ought to have access is becoming more relevant and ii) the concept of ‘suitable’ information is assuming increasing importance.

3.5 Contrary to that which is stated in recent Commission papers, it is not the quantity of information that counts; information ought to meet consumers' real needs and expectations and its suitability should be gauged in line with the following:

purpose;

content;

c)	presentation; and

context.

3.6 Information also ought to be permanently subjected to the ‘suitability’ test in order to adjust its quality in line with the purpose for which it is intended and the consumers to whom it is addressed; the main criteria for this should be reliability, topicality, impartiality, precision, relevance, succinct nature, comprehensibility, clarity, readability and ease of access.

3.7 As part of Better Regulation, the EESC calls upon the Commission to introduce consumer testing of disclosures regarding content and form so as to demonstrate their effectiveness and to let consumers determine what is useful for them.

3.8 When it comes to financial services, consumer information and financial education and capability go hand in hand. Information should be simplified and legal and technical jargon must be limited. However, some financial products are complex and information has to be accurate and thus reflect the products’ complexity.

3.9 Disclosures (contents or format) and the related regulatory framework need to be stable over time. Changing disclosure parameters frequently could make it harder for the consumers to understand the information.

4. Information, Advertising and Marketing; Directive 2005/29/EC

4.1 The right of consumers to information in general can give rise to a generalised advantage as a result of the state and other public bodies performing the role of generic information provider and cannot be considered to be a genuine ‘subjective right’. This right can also impose an obligation on suppliers and other parties involved in producing and marketing goods and services to provide such information themselves.

4.2 To this end, commercial communications which do not directly give rise to contractual or pre-contractual relations may nevertheless entail rights which are either collective (likely to be exercised by consumer associations or in collective actions) or even genuine subjective rights particular to them.

4.3 Nowadays, this subject is regulated by Directive 2005/29/EC; the EESC issued an opinion on the proposal for the 2005 Directive to which it would refer the reader (7).

4.3.1 As the EESC rightly warned at the time, use of the ‘full harmonisation’ technique has led to a clear deterioration in the general level of the requirement to provide information for consumers.

4.3.2 However, it is the very definition of misleading commercial practices, either through action or through omission, together with the limited list of practices appended to the directive, which most clearly reveal the serious deterioration this directive has brought about in the role played by advertising and marketing in informing and truthfully informing consumers.

4.3.3 The situation is exacerbated by the explicit confirmation that ‘the common and legitimate advertising practice of making exaggerated statements or statements which are not meant to be taken literally’ is admissible, even when addressing groups of consumers ‘who are particularly vulnerable … because of their mental or physical infirmity, age or credulity’.

4.3.4 This may well be made worse by the fact that, because of the directive, it is impossible to maintain provisions implementing Community or national legislation, such as those stipulating that concrete, objective information in advertising for goods, services or rights should be incorporated into contracts concluded after the directive has come into force, contractual clauses indicating the contrary now being deemed not to apply.

5. Information on contracts; the proposed directive on consumer rights

5.1 One area where a great deal still has to be done is in the definition of a genuine charter of consumers' rights to information. The recent proposal for a directive on consumer rights might be expected to make a decisive contribution to plug this gap in the Community acquis.

5.2 The chapter on Consumer information is most disappointing: instead of a definition of genuine binding rights, as appears in any national legislation, there is a simple list of optional information which has to be provided - ‘if not already apparent from the context’ (8) - which is, moreover, obvious and basic and could be found in any code of good practice for any average profession. Readers are referred to the EESC opinion on this proposal (9).

6. Pre-contractual information

6.1 Although, in accordance with the principle of subsidiarity, most consumer relations continue to be governed primarily by internal Member State law, a growing proportion is affected by information requirements of Community origin, as is clearly the case for pre-contractual information, services in general, package travel and especially financial services, certain consumer goods having an effect on the health and safety of consumers, and also for the distance-selling of goods, services and rights, which are the object of commercial communication and practices or standard contracts.

6.2 Analysis of Community legislation clearly reveals common points and significant differences in the content of and approach to pre-contractual information, in particular:

The complete or partial application to pre-contractual information of mandatory details/banned expressions in the advertising of specific goods, services or rights; this is the case with consumer credit, where standard information is required in advertising, or with package travel, where information is dealt with in terms of mandatory details on essential aspects. It is also the case with medicines, associating consumer information with commercial communications, including advertising, with the focus on the requirement for written information on labels and documents, and also with foodstuffs, where the current proliferation of labels and simplified labels is causing unnecessary confusion, compounded by the information rules on certain nutritional and health claims on foodstuffs, in a market undergoing radical change, with potential risks for consumer health.

ii)

Standardisation of the pre-contractual information to be provided by devising common forms for all products on the internal market – this was the solution adopted, for example, for consumer credit, with the introduction of the Standard European Consumer Credit Information form, and is based on the assumption of a single method for receiving and understanding pre-contractual information within Europe.

6.3 In spite of the advantages recognised in some cases of standardising pre-contractual information for comparing offers, it is crucial that some margin be left to adapt to the specific characteristics of consumers in each Member State. Since many markets remain largely national in nature, the amount of information to be provided for purposes of comparison could generate high costs for transactions, which would not be offset by growth of the cross-border market, and this could be damaging to SMEs.

7. Pre- and post-contractual information

7.1 The information obligation also extends to the contractual phase, especially in consumer contracts that create continuing obligations, or are long-term or complex (e.g. financial services and products, time sharing), or are likely to have long-lasting effects (medicines).

7.2 There are already instances of the right to contractual information in Community law, such as the Package Travel Directive or the Payment Services Directive.

7.3 However, the consumer's right to make a free and informed decision that underpins the imposition of information obligations prior to a contract being concluded extends throughout the entire period of validity of the contract and even, in some cases, after it has been completed. The consumer's decision on whether or not to continue with a contract, and the possible assumption of responsibility for executing the contract, both depend on this information being provided.

7.4 The main obstacles to the right to information in these phases are, in addition to its straightforward refusal, the additional costs incurred by compliance. It is noted that the rule that consumer information should be free of charge is not enshrined in most Community provisions, even with regard to pre-contractual information. However, Directive 2007/64/EC (PSD) introduced two obligations intended to ensure the proper exercise of the right to/obligation to provide information:

i)	cost-free information: the payment service provider may not charge the service user for providing a certain number of items of information;

ii)	charges appropriate to the costs: where the information provided is not free of charge, the charges must be appropriate and in line with the payment provider's actual costs.

7.5 The EESC considers that the right to/obligation to provide information must be recognised throughout the period of execution of the contract and after its completion, particularly in the case of contracts that create continuing obligations, are of medium/long duration or whose effects are long-lasting. The general principle of cost-free information on fundamental aspects of the contract still remains to be established, along with the principle of prices aligned on the costs in other cases.

8. Assistance and advice obligations

8.1 The information arising from the legal obligation on professionals to provide information is often in standardised or pre-formatted form and is not always sufficient for the consumer to be able to take a free, informed decision on whether to conclude or continue with a given contract. The right to/obligation to provide information therefore incorporates the right/obligation to obtain/provide explanations regarding content.

8.2 This right to consumer assistance, as set out for example in Directive 2008/48/EC (10) on consumer credit, should be extended to all consumer contracts, particularly those concerning durable goods and services that create continuing obligations, are of medium/long-term duration, are complex or entail health or safety risks. The information provided under the consumer assistance obligation must, at the consumer's request, be provided in writing.

8.3 The EESC emphasises the need to distinguish the right to assistance, which stems naturally from the obligation upon the professional to provide information, from the right to advice, the provision of which by the professional may only be required in the case of specific products or services that are complex, of high value or could affect the health or safety of consumers.

9. Problems and other consequences arising from a lack of information

9.1 One of the obvious omissions in the directives with an impact on professional duties to provide information is a set of sanctions to penalise non-compliance.

The EU has left this task up to the various Member States which have opted for a wide range of civil and penal consequences, which generates distortions in the single market detrimental to consumers and economic players.

9.2 Only in a few specific cases do some directives stipulate that consumers are entitled to withdraw from a contract that has been concluded from the time at which the information that should have been supplied is forwarded or known (11), or that the burden of proof that the information was provided lies with the professional, as occurs with regard to pre-contractual information in Directive 2006/123/EC (12) on services in the internal market.

9.3 The mechanisms establishing the starting point of the withdrawal period as the date on which the information is provided or the consumer becomes aware of it, and the allocation of the burden of proof of provision of information to the professional, are basic guarantees of the exercise of the right to information and have, along with the principle of liability for loss caused by lack of information, already incorporated into several national legal systems, the natural consequence of the recognition and the importance of consumers' right to information, which should be explicitly and universally established at Community level.

10. Consumer information and the completion of the internal market

10.1 The recent changes in the prospects for the policy of completing the internal market, in connection with the Commission's new guidelines under the 2020 Strategy, are well-known.

10.2 Prominent in all the relevant texts is a view of consumers as the central focus and real beneficiary of an internal market conceived as an instrument for a development and economic growth strategy that is crucial to overcoming the present crisis, with much stronger concern for social aspects and for guaranteeing fundamental rights or citizenship. In this respect, improving consumer information will be instrumental to restore consumer confidence in the Single Market.

10.3 Against this backdrop, there is a clear need to ensure proper information for consumers within a renewed internal market geared to the challenges of the 21st century, in order to gain their confidence and secure their constructive cooperation. This would dispel current fears and well-grounded doubts, hesitation and reluctance regarding more determined participation in cross-border trade.

10.3.1 Regulation of on-line commercial communication at Community level is currently spread across a number of texts (Directive on electronic commerce, distance sales, protection of privacy in commercial communication, unfair commercial practices, etc.). A reform is therefore needed bringing together existing legislation into a single text and ironing out any contradictions.

10.4 This is one of the present opinion's main concerns.

Brussels, 14 July 2010.

The President of the European Economic and Social Committee

Mario SEPI

(1) Cf. The Commission's Green Paper on the European transparency initiative (COM(2006) 194 final) and the EESC opinion on the subject: OJ C 324, 30.12.2006, p. 74.

(2) Cf. EESC Opinion: OJ C 133, 6.6.2003, p. 46.

(3) Cf. EESC Opinion: OJ C 133, 6. 6.2003, p. 1.

(4) Cf. More precisely, Directive 2005/29/EC of 11 May 2005 on Unfair commercial practices, OJ L 149, 11.6.2005, p.22; 98/7/EC on Consumer credit, OJ L 101, 1.4.1998, p. 17; and the recent proposal for a Directive on Consumer Rights COM(2008) 614 final. (EESC opinion: OJ C 317, 23.12.2009, p. 54).

(5) Cf. ECJ Ruling - Case C-220/98, 13.1.2000, Estée Lauder Cosmetics versus Lancaster Group and ECJ Ruling - Case C-210/96, 16.6.1998, Gut Springenheide and Tusky. Cf also the recent ECJ Ruling – Case C-278/08, 25.3.2010, BergSpechte Outdoor Reisen und Alpinschule Edi Kobimuller GmbH versus Gunter Guni trekking at Reisen GmbH, where Internet users are described as ‘ normally informed and reasonably attentive’ (paras. 35 and 39).

(6) Cf. K. SIMITIS, ‘Verbraucherschultz – Schlagwort oder Rechtsprinzip?’, p. 109.

(7) OJ C 108, 30.4.2004, p. 81.

(8) COM(2008) 614 final, Chapter II, Art.5(1) § 1.

(9) EESC Opinion: OJ C 317, 23.12.2009, p. 54.

(10) OJ L 133, 22.5.2008, p. 66.

(11) As in the case of Directive 85/577/EEC which, having established the existence of the right to withdraw among the basic duties of information, fails to provide any penalties for failure to comply with this right. According to ECJ case-law the period in which the consumer may withdraw should be extended indefinitely, from the moment when the consumer is adequately informed cf. ECJ case C-227/08, 17.12.2009, Eva Martín Martín, paragraphs 25 to 29.

(12) OJ L 376, 27.12.2006, p. 36.

11.2.2011

Official Journal of the European Union

C 44/68

Opinion of the European Economic and Social Committee on ‘The Treaty of Lisbon and the Functioning of the Single Market’ (own-initiative opinion)

2011/C 44/12

Rapporteur: Mr Jorge PEGADO LIZ

On 18 February 2010, the European Economic and Social Committee, acting under Article 29(2) of its Rules of Procedure, decided to draw up an own-initiative opinion on

The Treaty of Lisbon and the Functioning of the Single Market.

The Section for the Single Market, Production and Consumption, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 15 June 2010.

At its 464th plenary session, held on 14 and 15 July 2010 (meeting of 14 July), the European Economic and Social Committee adopted the following opinion by 129 votes to two, with eight abstentions.

1. Conclusions and recommendations

1.1 The entry into force of the Lisbon Treaty had originally been set for 1 January 2009, but only took place on 1 December 2009, once the process of ratification by the 27 Member States had been completed. It should be pointed out that this treaty remains complex and hard to understand.

1.2 The comparative study that forms part of the information report (CESE 241/2008) allows us to conclude that the internal market, while not undergoing structural modification as a result of the new Lisbon Treaty, seems to be defined in a more social way. In effect, unlike the Constitutional Treaty which could concern some people with the phrase ‘an internal market where competition is free and undistorted’, the Lisbon Treaty seems to give to the internal market more social aims by working towards ‘a social market economy, aiming at full employment and social progress’.

1.3 The texts that have appeared to date on the Commission's future policy guidelines, on the 2020 Strategy and a number of statements by Commissioners and national political leaders also appear to favour the same approach to the single market that gradually focuses more on the citizen.

1.4 This aspect has also been strengthened by the explicit reference to the binding legal power of the Charter of Fundamental Rights, which has ‘the same legal value as the treaties’, albeit with restrictions in some Member States.

1.5 Furthermore, the legislative process relative to the internal market will be marked by the intervention of the national parliaments, which are required to ensure respect for the principle of subsidiarity, which regulates the sharing of competences between the Union and the Member States. Due to two protocols, one on ‘the role of national parliaments’ and the other on ‘the application of the principles of subsidiarity and proportionality’, they are consequently even able to ask for a review of a legislative proposal at first reading, which improves democratic participation in the EU legislative process.

1.6 If national parliaments' preventive measures work well and if monitoring of the principle of subsidiarity proves to be effective and of high enough quality to fully support the ‘early warning mechanism’ that the Lisbon Treaty has taken from the Constitution, EU legislation might generate less criticism from Member States for riding roughshod over national powers and also be less resented by the European public for demonstrating a type of ‘Brussels-based centralism’. For this reason, national parliaments should also improve their networking, because the influence and effectiveness of the ‘early warning mechanism’, although an individual right granted to each parliamentary chamber, depends on national parliaments' ability to organise themselves on collective lines.

1.7 The Lisbon Treaty also moves towards general use of the ‘ordinary legislative procedure’ (co-decision under Article 251 EC) for the internal market, as witnessed by Article 48 TFEU on measures in the area of social security necessary for the free movement of labour.

1.8 The Lisbon Treaty thus aims to facilitate the development of the internal market by making more general use of the form of co-decision that it renames the ‘ordinary legislative procedure’, but it adds a new partner to the Union institutions in their decision-making: the national parliaments, which from now on will need to be considered for the adoption of all legislative measures applicable to the internal market.

2. Introduction

2.1 The information report on the impact of the Lisbon Treaty on the internal market (1), adopted by the specialised section on 13 June 2008, proposed a comparative study in the form of a table setting out side by side the provisions on the single market contained in the Lisbon Treaty, the EC Treaty (which was still in force at the time) and the Constitutional Treaty (the ‘Constitution’ never actually having been ratified), as well as the comments of the Single Market Observatory on the legal implications of the text adopted in Lisbon on 13 December 2007.

2.2 The Lisbon Treaty's entry into force had originally been set for 1 January 2009, but the planned course of events was upset on 12 June 2008, when Ireland rejected the Lisbon Treaty in a referendum.

2.3 After Ireland obtained guarantees on national sovereignty and assurances that each EU Member State would continue to have a Commissioner of its own, the Treaty was adopted by referendum on 3 October 2009.

2.4 The ruling handed down by the Czech Constitutional Court on 3 November 2009 stating that the Treaty of Lisbon did indeed comply with national law ended the delay in ratifying the Treaty. The signature of the president, Vaclav Klaus, completed the ratification process and the Treaty finally entered into force on 1 December 2009.

2.5 The time elapsing between the adoption of the Committee's information report, on the one hand, and the entry into force of the Lisbon Treaty, on the other, together with the Commission's 26 June 2009 Recommendation on ‘Measures to improve the functioning of the Single Market’, and its 3 March 2010 Communication on ‘Europe 2020: A European strategy for smart, sustainable and inclusive growth’, have all meant that the Committee now deems it appropriate to convert this report into an own-initiative opinion, in order to update the content and, furthermore, publish its opinion on the subject. With the benefit of hindsight, it will also be in a position to consider new issues not addressed in the initial report; the last consolidated version of the treaty was not as readable as it might have been and was not published in the Official Journal of the European Union until 30 March 2010 (2).

3. General comments

3.1 The political events marking the life of the Lisbon Treaty from its signing by the 27 Member States on 13 December 2007 to its entry into force on 1 December 2009, have not fundamentally changed the provisions on the single market, but they have primarily had implications for the institutions.

3.1.1 Indeed, having noted the concerns of the Irish people, which were set out by the Taoiseach (Irish Prime Minister), the European Council of 11 and 12 December 2008 agreed that, provided the Treaty of Lisbon entered into force, a decision would be taken, in accordance with the necessary legal procedures, to the effect that the Commission would continue to include one national of each Member State.

3.1.2 The European Council of 18 and 19 June 2009 gave Ireland guarantees which were legally binding but which would affect neither relations between the EU and the other Member States nor the content and enforcement of the Lisbon Treaty. It was guaranteed that certain subjects, such as taxation, the right to life, education, the family and the policy of military neutrality, would not be affected by the entry into force of the Lisbon Treaty.

3.1.3 Furthermore, the European Council adopted a formal declaration on the importance of workers' rights and public services.

3.2 The Czech Republic's delay in ratifying the treaty has not had any immediate impact on the Lisbon Treaty. In fact, as agreed by the Member States at the European Council of 29 and 30 October 2009, a protocol to the next accession treaty will grant the Czech Republic a derogation from the Charter of Fundamental Rights, matching the derogation granted to the United Kingdom and Poland.

3.3 The information report on ‘The impact of the Treaty of Lisbon on the functioning of the internal market’ and its appendix remain topical and could provide a basis for this opinion in the form of legal analysis and should therefore be considered as integral components of the opinion.

3.4 It is worth pointing out in this regard that the Lisbon Treaty remains a complex text, even in its consolidated version. It is difficult to read and understand, even for legal experts. This is because it is the result of a whole series of amendments made to both the Treaty on European Union (TEU), which forms the general framework for the European Union and the principles on which it is founded, and the Treaty establishing the European Community (TEC), which becomes the Treaty on the Functioning of the European Union (TFEU) and which sets out the implementing methods for the principles laid down by the TEU.

3.5 Because no official consolidated text was available when ratification took place, the Member States ratified a text that was as unclear as it was unreadable, in which most of the new decision-making ‘mechanisms’ were not particularly well defined, except in the protocols to the treaty. Furthermore, their operability had not yet been tested.

3.6 Moreover, unlike the Constitutional Treaty, the text signed in Lisbon was not submitted for consultation to the European Parliament, the European Economic and Social Committee, the Committee of the Regions or to national or regional parliaments or organisations representing civil society at Community, national or regional levels. It was only after the Treaty's ratification that the Commission and the Council decided to publish documents publicising and explaining the content and benefits of the new treaty, in contrast to what had been done for the ‘Constitution’.

3.7 The Lisbon Treaty has returned to the method consisting of amending existing treaties in the framework of an intergovernmental conference (IGC) comprising only Member State representatives, whereas the Constitution had been prepared by a Convention made up primarily of members of national parliaments, including those from future Member States in 2004 and 2007), and Members of the European Parliament, as well as representatives of the fifteen Member States, the twelve countries that were candidates for accession at the time plus Turkey, and the Commission, in addition to representatives of civil society, including the European Economic and Social Committee, as observers.

3.8 The Lisbon Treaty thus clearly marks a return of power to the Member States, in contrast to the Constitution, which appeared to be more federalist in nature. This shift of power is illustrated in particular by the removal of the symbols that the Constitution had introduced and which might suggest the creation of a federal state (flag, anthem, motto, designation of 9 May as Europe day, etc.).

3.9 The Lisbon Treaty merges the three pillars, by giving the TEU and the TFEU the same legal value (3). The European Union also gains legal personality by replacing and succeeding the European Community, whereas until the Lisbon Treaty entered into force, only the European Community had legal personality.

3.10 The primacy of EU law over Member State law had been included in Article I-6 of the Constitutional Treaty as one of the fundamental principles of the European Union. In order to put an end to the controversy caused by inclusion of the primacy principle in the Constitution, which simply reflected the existing case-law of the Court of Justice, this principle is included in Declaration No 17. The Conference decided to append an opinion on primacy prepared by the Council's legal department to the Treaty of Lisbon, noting the source of the primacy principle in case law and its value as a fundamental principle .

3.11 The Lisbon Treaty amends the legal status of the Charter of Fundamental Rights proclaimed in Nice on 7 December 2000. In fact, there was no decision at the Nice Summit on the legally binding nature of the Charter, which meant that it remained a declaration of principle without confirmed legal status.

3.11.1 The Charter, on the other hand, appeared to have acquired binding legal force as a result of being incorporated into the Constitution. Because the Constitution was not ratified, the legally binding nature of the Charter has remained largely theoretical (4). The Treaty of Lisbon remedies this situation without, however, incorporating all the progress made by the Constitution (5).

3.11.2 Article 6 of the Treaty on European Union, as amended by the Treaty of Lisbon, states that the Charter shall have ‘the same legal value as the Treaties’. This means that the EU's institutions, bodies and agencies are obliged to respect the rights laid down in the Charter. The same obligations are imposed on the Member States (governments, administrations, courts) when they implement EU law.

3.11.3 Nevertheless, Protocol No 30 on the Application of the Charter of Fundamental Rights of the European Union to the United Kingdom and Poland states that the Charter does not extend the ability of the Court of Justice of the European Union, or any court or tribunal of Poland or of the United Kingdom, to deem the laws of Poland or of the United Kingdom to be inconsistent with the Charter.

3.11.4 This protocol also states that Title IV of the Charter, on social rights and solidarity, does not create rights applicable to the United Kingdom and Poland, except where these rights are provided for in the national legislation of those countries.

3.11.5 This protocol states ultimately that the Charter will only apply to the United Kingdom and Poland to the extent that the rights or principles that it contains are recognised in the law or practices of those Member States.

3.11.6 The scope of these protocols will in practice be extremely limited: on the basis of the principle of uniform application of EU law, the case-law of the Court of Justice of the European Union must, as an integral part of the EU legal system, be respected in all Member States. Consequently, if a Court ruling were to refer to or issue an interpretation of Title IV of the Charter, British and Polish courts would have to comply with the ruling, whether or not they were involved in the proceedings.

3.12 The Treaty incorporates the option provided in the Constitution for a Member State to withdraw voluntarily from the EU (Article 50 TEU). In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that state, setting out the arrangements for its withdrawal, taking account of the framework for its future relations with the Union.

3.13 Voluntary withdrawal should not be confused with the suspension of the right to EU membership of a Member State that has committed a serious and persistent breach of the values of the EU, as set out in Article 7 TEU (respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, etc.) (6).

4. Specific comments

4.1 Particular attention should be paid to some specific political and economic aspects that have in the meantime arisen as a result of the single market policy developing under the terms of the new treaty, such as the new composition of the European Parliament and the ‘Barroso II Commission’.

4.2 It should be remembered that as early as November 2007, the European Commission published an important communication entitled ‘A single market for 21st century Europe’, in the wake of a European Parliament resolution on 4 September 2007, calling for ‘a Single Market Review: tackling barriers and inefficiencies through better implementation and enforcement’. This echoed a ‘new vision’ for a single market for all ‘that does more to boost Europe's response to globalisation, to create growth and jobs, to ensure fair prices and to contribute to social and environmental protection’. In two opinions (7), the EESC reiterated its view that the single market had always been an instrument contributing to the wellbeing of all Europeans, including professionals, workers and consumers.

4.3 In a Communication of 6 November 2008 (8), the Commission showed that the benefits of the single market were linked to improving administrative cooperation. In its progress report on the Internal Market Information System (IMI), the Commission called on the Member State authorities to cooperate closely so as to build up confidence in each others' systems (9).

4.4 In its Recommendation of 29 June 2009 on measures to improve the functioning of the single market (10), the Commission identified a number of shortcomings in the functioning of the single market, in particular inasmuch as the rules are not properly applied and enforced. The Commission also proposed adopting concrete measures complementing those of the Member States, in a partnership-based approach.

4.4.1 These measures include monitoring compliance with the rules, promoting alternative dispute resolution methods, regularly assessing national legislation, and informing individuals and businesses about their single market rights.

4.5 The financial crisis spread quickly, especially in Europe, with economic and social consequences that were as unexpected as they were unpredictable, as the Committee has highlighted – and resulted in the deepest recession since the 1930s, taking the total number of jobless to over 23 million (11): a level of unemployment not seen since WWII. Shortly before the renewal of its term of office, and having instructed the ‘Larosière Group’ (12) to carry out an in-depth study of the causes of the crisis and the measures needed to counter it, the Commission felt the need to draw up new political guidelines for the future, in this new economic, social and financial climate.

4.6 It was for this purpose that, in the Commission's ‘Political guidelines for the next Commission’, the president, José Manuel Barroso, set out the guidelines for ‘A Single Market fit for the 21st century’, condemning attempts to use the crisis as a pretext to attack the single market and restating the Commission's determination to defend it as ‘a cornerstone of the Treaties’ and the ‘best guarantee of long-term prosperity’, provided it met ‘the demands of tomorrow's economy’. Against this backdrop, it should be emphasised that the aim of revitalising the internal market as the powerhouse of the European economy will only be achieved if an ‘active consumer policy’ manages to ‘to give people confidence to participate fully in the single market’.

4.6.1 At the same time, the Commission President entrusted Mr Mario Monti, former Commissioner responsible for the Internal Market, with the task of drawing up a report on boosting the single market, which was presented on 9 May – Europe Day – at the European Parliament. After underlining the main difficulties facing the single market, the report proposes initiatives to strengthen it, taking due account of social and environmental considerations. Another report, entitled ‘Project Europe 2030, Challenges and Opportunities’ and drawn-up by the task force on the future of Europe, which was chaired by the former Spanish prime minister Felipe González, was presented to the European Council on the same day. This report focuses essentially on mid-term European economic governance, and also refers to the importance of consolidating and completing the Single Market so as to ‘create a win-win situation: a new deal for the Single Market’. Its conclusions on economic governance will certainly have a major impact on the future of the single market.

4.7 The strategy replacing the Lisbon strategy – the implementation of which was, moreover, a partial failure – should be viewed in the light of these new political guidelines. The Europe 2020 Strategy, however, does not appear to attach much importance to the single market, apart from a few lines in the chapter on ‘Missing links and bottlenecks’, which reveals dwindling enthusiasm for the single market.

4.7.1 In order to tackle this bottleneck in the single market, the Commission has announced that it will be proposing legislation, in particular prioritising the wider use of regulations rather than directives, adapting legislation to the digital era and making progress towards optional European contract legislation, especially in the area of consumer contracts. At his hearing before the European Parliament, and especially in recent statements made in Paris, Commissioner Michel Barnier, who is responsible for the single market, has stressed the need to reconcile the needs of private individuals with the market at large, which should exist to benefit the social project. As emphasised by Commissioner Viviane Reding, the single market remains ‘the jewel in the EU's crown’ (13).

4.8 At the same time, the citizens' initiative introduced by Article 11(4) TEU, which is the subject of a detailed study by the EESC (14), could have major consequences for the future development of the single market.

4.8.1 Indeed, this instrument to promote public involvement opens up a new way of promoting issues that are fundamental to civil society but which have not been covered to date due to a lack of interest or political will on the part of the Community institutions, (the European Foundation Statute (15), European collective actions (16), the European right to strike, etc.).

5. Detailed comments

5.1 The comments made in the information report on the provisions relating to the Single Market contained in the Treaty on the Functioning of the European Union (TFEU) remain of topical importance (see, for example, point 6(a).

5.2 Out of the thirty-seven protocols appended to the Lisbon Treaty, four more or less directly affect the internal market.

—	Firstly, Protocol No 2 on the application of the principles of subsidiarity and proportionality, because these are intended to be applied in the context of competences shared between the Union and the Member States; the internal market is one of the areas of shared competence.

—	Protocol No 27 on the internal market and competition will also affect the internal market. In substance, it provides that the internal market should include a system guaranteeing that competition is not distorted.

—	Protocol No 25 on the exercise of shared competences will affect the internal market for the same reasons as Protocol No 2 on the application of the principles of subsidiarity and proportionality.

—

Protocol No 26 on services of general interest will also certainly influence the internal market. It specifies that these services are part of the common values of the Union and stresses the wide discretion of national, regional and local authorities in providing, commissioning and organising services of general economic interest. It also justifies their diversity and the possible disparity of users' needs and preferences due to geographical, social and cultural reasons. Finally, it stresses the promotion of universal access, a high level of quality, security and accessibility for these services and user rights. Article 2 of Protocol No 26 breaks new ground by referring for the first time in primary law to ‘non-economic services of general interest’ and guarantees the competence of Member States to provide, commission and organise these services.

5.3 Two declarations may affect the internal market. Declaration No 18 on the delimitation of competences between the Union and the Member States as provided for in the Treaties states that all competences not conferred upon the Union in the Treaties remain with the Member States and that, within the framework of shared competences, the Member States exercise their competence to the extent that the Union has not exercised, or has decided to cease exercising, its competence.

5.3.1 Indeed, the conferral of powers on the Community was very quickly likened by the Court to a transfer of powers from the Member States to the Community institutions, as demonstrated by the Costa versus ENEL judgment of 1964, which defined the European Economic Community as ‘a Community of unlimited duration, having its own institutions, … and, more particularly, real powers stemming from a limitation of sovereignty or a transfer of powers from the States to the Community …’. (Case 6/64 ECR 1141).

5.3.2 Secondly, Declaration No 42 specifies that, in applying the well-settled case law of the Court of Justice, the principle of conferral of powers should not serve as a basis for widening the scope of Union powers beyond the general framework created by the provisions of the Treaties as a whole.

6. Main effects of the Lisbon Treaty on internal market policy

6.1 As for the specific amendments introduced to the provisions of the treaties concerning the internal market policy, the following should be stressed:

The replacement of the term ‘common market’ by the term ‘internal market’ illustrates the shift in nature from a common market to an internal market, helping to clarify controversial doctrinal concepts and thus reinforcing the idea that the EU is not just a free market in the purely economic sense of a free trade area, but rather an internal market for the people (Article 26 TFEU) (17).

b)	With regard to strengthening the principle of subsidiarity and defining it in greater detail, it can be observed that the preference for directives over regulations apparent in Protocol No 30 of the EC Treaty has been removed from Protocol No 2 of the Lisbon Treaty.

In order to ensure that the principles of subsidiarity and proportionality are observed, national parliaments have been granted almost a right of veto, defined as one third of the total votes allotted to the national parliaments. A single national parliament can also veto a legislative initiative in the field of family law (see Article 81 TFEU).

New powers are given to the European Parliament, thanks to the extension of the co-decision procedure, renamed ‘ordinary legislative procedure’. It is put on an equal footing with the Council in budgetary matters and will elect the president of the Commission. The European Parliament is defined in the Lisbon Treaty as being composed of representatives of the ‘citizens of the Union’, whereas the EC Treaty refers to ‘peoples of the Member States’.

e)	A co-decision procedure (ordinary legislative procedure) with a new system of qualified majority voting at the Council (18) will apply to a number of new areas.

Member States have removed from the Union's objectives the reference to ‘an internal market where competition is free and undistorted’. Competition policy is reformulated in terms of a ‘necessary instrument for the functioning of the internal market’ whilst, by making one of the objectives of the Union ‘an internal market where competition is free and undistorted’, the Constitutional Treaty had evoked fears in some quarters.

g)	A new consideration of the interests of consumers and SMEs, which underpin the New vision ‘package’ and the Communication entitled ‘A single market for 21st century Europe’ (19).

A new understanding of services of general interest (Article 14 TFEU and Protocol No 26) clarifying the responsibilities of the Union and the wide discretion of national, regional and local authorities examined by the Communication on Services of general interest, including social services of general interest: a new European commitment (20) which proposes to consolidate the EU framework for SGI.

Increased concern over the integration of the social aspects of the implementation of the internal market (combating exclusion or discrimination, promoting social justice and protection, equality between women and men, solidarity between generations and protection of the rights of the child) linked with the Communication: Opportunities, access and solidarity: towards a new social vision for 21st century Europe (21).

The Lisbon Treaty demonstrates innovation, by extending the possibilities for enhanced cooperation to all EU action, with the exception of areas falling within the exclusive competence of the Union (Article 2 TEU), provided that at least nine Member States participate in it (irrespective of the number of Member States). This is underpinned by a decision of the Council acting by a qualified majority on a proposal of the Commission and with the consent of the European Parliament (Article 329 para. 1 TFEU) and could, therefore, affect the internal market, the energy market, immigration policy and civil protection, in particular.

Brussels, 14 July 2010.

The President of the European Economic and Social Committee

Mario SEPI

(1) CESE 241/2008 - INT/393 (not published in the OJ).

(2) OJ C 83, 30.3.2010 – Henceforth, all references to the Treaty of Lisbon refer to this consolidated version.

(3) TEU Article 1, para. 3: The TEU and the TFEU are given equal standing, whereas on 13 September 2005, in a ruling on environmental protection in criminal law, the Court of Justice recognised the primacy of EC Treaty over the EU Treaty.

(4) Nevertheless, although the Charter is not legally binding, the Court of Justice of the European Communities frequently refers to it. For a recent example, see in particular: the ECJ ruling of 14 February 2008, Case C-244/06, Dynamic Medien Vertriebs GmbH v Avides Media AG, concerning the free movement of goods. The Court refers to Article 24(1) of the Charter, which provides that children have the right to such protection and care as is necessary for their well-being (point 41 of the ruling). See also the ECJ judgment of 14 February 2008, Case C 450/06, Varec SA v Belgian State, concerning the freedom of establishment. The Court refers to Article 7 of the Charter of Fundamental Rights of the European Union on the right to respect for private life (point 48 of the ruling).

(5) Declaration No 11 of the version of the draft Lisbon Treaty dated 23 July 2007 (IGC 3/07) stated that the Charter of Fundamental Rights would be formally proclaimed by the 3 institutions on the day of the signing of the Lisbon Treaty, but said nothing about its legally binding status.

The EU Charter of Fundamental Rights was proclaimed by the three EU institutions for the second time in Strasbourg on Wednesday 12 December 2007. This second proclamation was needed because explanations and footnotes had been added to the Charter since its original proclamation at the Nice Summit in December 2000.

(6) Article 7 TEU provides for two distinct arrangements applicable to the ‘clear risk of a serious breach’ and to ‘the existence of a serious and persistent breach’.

(7) OJ C 77, 31.3.2009, p. 15 – Rapporteur, Mr Cassidy, co-rapporteurs, Mr Hencks and Mr Cappellini and OJ C 182, 4.8.2009, p. 1 – Rapporteur, Mr Adamczyk.

(8) COM(2008) 703 final.

(9) OJ C 128, 18.5.2010, p. 103 – Rapporteur: Mr Hernández Bataller.

(10) COM(2009) 4728 final; cf. the key EP Resolution of 9.3.2010 (Doc. A7-0064/2009).

(11) According to the latest data provided by Eurostat.

(12) The EESC delivered an opinion on the Larosière Group report: OJ C 318, 23.12.2009, p. 57 – Rapporteur: Mr Nyberg.

(13) Speech given on European Consumers Day in Madrid on 15.3.2010‘An ambitious Consumers Rights Directive: boosting consumers' protection and helping businesses’.

(14) Own-initiative opinion on ‘The implementation of the Lisbon Treaty: participatory democracy and the citizens' initiative’ (CESE 465/2010 - SC/032. Rapporteur Anne-Marie Sigmund) which analyses and comments on the Commission's Green Paper (COM(2009) 622 final of 11.11.2009); and the own-initiative opinion on ‘Civil society organisations and EU presidencies’ (CESE 464/2010 - SC/031, Rapp. Miklós Barabás); cf also the important EP resolution on the implementation of the citizens' initiative, 7.5.2009 (Doc A6-0043/2009).

(15) EESC own-initiative opinion 634/2010 - INT/498 – Rapporteur: Ms Hellam.

(16) OJ C 162, 25.6.2008, p. 1 – Rapporteur: Mr Pegado Liz; and OJ C 128, 18.5.2010, p. 97 – Rapporteur: Mr Calleja.

(17) As far back as 5 May 1982, the Court confirmed (case 15/81 - Schul judgment) that the common market, simply a free trade area, precedes the internal market. The internal market thus entails a higher degree of economic integration.

(18) Protocol on transitional provisions (No 36).

(19) COM(2007) 724 final, SEC(2007) 1517, 1518, 1519, 1520 and 1521.

(20) COM(2007) 725 final, SEC(2007) 1514, 1515 and 1516.

(21) COM(2007) 726 final.

11.2.2011

Official Journal of the European Union

C 44/75

Opinion of the European Economic and Social Committee on ‘Innovation in tourism: Defining a strategy towards sustainable development in islands’ (own-initiative opinion)

2011/C 44/13

Rapporteur: Ms GAUCI

On 16 July 2009 the European Economic and Social Committee, acting under Rule 29(2) of its Rules of Procedure, decided to draw up an own-initiative opinion on

Innovation in tourism: Defining a strategy towards sustainable development in islands.

The Section for Section for Economic and Monetary Union and Economic and Social Cohesion, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 23 June 2010.

At its 464erd plenary session, held on 14 and 15 July (meeting of 15 July), the European Economic and Social Committee adopted the following opinion by 153 votes to 1 with 13 abstentions.

1. Conclusions

1.1 The EESC suggests that On-going life-long learning programmes should be developed specifically for island staff working in the tourism sector – specific funding from the ESF and cohesion funds should be earmarked for this. An appropriate framework of labour relations to promote quality working conditions and measures to support entrepreneurs (networks, marketing, promotion, …) should help foster tourism on islands.

1.2 Similarly, and bearing in mind the growing importance of Internet booking for travel & tourism, small and medium-sized companies in the (island) tourism sector should be offered either EU-supported training, or simplified access to appropriate service providers to develop a successful web-presence, without which they risk losing ‘modern’ customers.

1.3 The EESC proposes that an inter-regional school, supportive of a concept similar to an ‘Erasmus for students and workers in the Tourism sector’ be set up in a strategically placed island.

1.4 Although business, and especially small business, benefits when there is less and better legislation, a specific administrative authority within the European Commission services, e.g. a Directorate General for Tourism should be considered – tourism accounts for some 11/12 % of EU GDP, but attains as much as 25 % of GDP in islands like Malta. The EESC sees such a tourism authority on the Commission as the watchdog of (island) tourism interests within the EU institutions and policies. The EESC has proposed that a European Tourism Agency should be set up in previous opinions on Tourism – the Committee reiterates this proposal.

1.5 Islands have an inherent handicap compared to the mainland: distance, accessibility, insularity. The EESC believes that a favourable fiscal regime should be sought, taking into account the special efforts that have been made on investments, maintaining and creating jobs, adapting the periods that businesses are open, all with a view to mitigating the effects of seasonality.

1.6 The EU definition of islands is inappropriate in a number of cases, and often stand in the way of solutions. Earlier EESC opinions (1) have recommended to modify this definition. This recommendation is hereby repeated.

1.7 The European Union is developing a new concept in regional policy, namely macro-regional cooperation (e.g. the Baltic Sea Strategy – the Danube Strategy). The EESC is persuaded that this concept is an interesting one and one that can certainly be applied to groups of islands. Thus a macro-regional strategy for the islands of the West-Mediterranean could improve some of the problems of accessibility experienced by them.

1.8 The EESC takes a favourable view of, and gives its full support to the CALYPSO programme on social tourism. The EESC believes that after the preparatory actions which started in 2009, a full programme should be pursued. The EESC recommends to integrate the CALYPSO programme in a future macro-regional strategy encompassing the West Mediterranean region.

2. Introduction

2.1 Tourism makes an important and increasing contribution to economic growth and can account for, in extreme cases, up to 70 % of GDP of an island. It represents one of the best opportunities to create income and employment. While the market share of Europe in world tourism is slowly declining, growth of tourist arrivals in the EU is forecast to grow. Growth of tourism, however, cannot be taken for granted as: the 2008-09 financial crisis demonstrated very acutely.

2.2 New forms of tourism are emerging in the place of traditional sea and sun mass-tourism. These include more innovative and, specialised forms of ‘greener’, customised and experience-oriented tourism. Moreover, the expansion of demand for tourism, as well as demographic changes such as (a growing number of ‘senior’ travellers) accelerate the segmentation of tourism-products and the creation of new types of tourism-products which incorporate a high level of novel services.

2.3 Innovation is a major concern for economic policy, both at the EU level, with the Lisbon and EU2020 strategies), and at the regional level, with increasing public investment in research, education, training and support of the ‘most innovative sectors’ (e.g. transport, energy, green industries). This is also true for services, especially those requiring a level of knowledge or qualifications, which is considered typical for most tourism activities (e.g. accommodation, catering, real estate).

2.4 Today's tourist is looking for best quality at the lowest price. Successful island tourism therefore requires not only a well-educated staff to start with, but a commitment of employers and their employees towards life-long learning so as to maintain high standards of service in the fast-changing world of the discerning and demanding traveller. One of the pre-requisites for quality tourism is ensuring that people are well-trained and well-qualified.

2.5 A main area of change and innovation in tourism concerns the use of information and communication technologies (ICT). The pervasive presence of ICT and the Internet in the tourism-industry enables consumers to interact directly with service-providers. For the sector as a whole, this can lead to a reduction of (transaction) costs, which subsequently leads to a process of cutting out intermediaries such as travel agents or even tour operators. Major innovations in the area of mass travel such as the emergence of low-cost airlines have largely influenced the growth and further evolution of the tourism industry.

2.6 Several issues for islands persist. In general, islands lag behind the mainland. Furthermore, many of these new technologies and processes are not controlled, produced or even maintained by the businesses which are directly concerned by them.

2.7 Island authorities are reviewing the implications of these new industry practices for their own tourism policy initiatives and actions. Their primary concern is to ensure that policies and actions support and encourage innovation, which in turn contribute to further development of their tourism-industry.

3. The imperative need for innovation

3.1 In view of the changing dynamics in society, and the demise of mass tourism as organised by the tour operators of the 20th century, island tourism must innovate and adapt to a new paradigm to be successful. Innovation resides within the people actually working in the tourist sector. Paradoxically innovation also disrupts established habits and people will resist change if they do not see an immediate benefit in it.

3.2 During the latter half of the 20th century, supply in the mass tourism market dictated demand. However, as a growing number of destinations became available and saturated the market. Today volatile demand has gained the upper hand in a typically consumer-dominated market. As a consequence, suppliers suffer. This presents a new challenge which can be solved through innovative and creative thinking by developing a rich panoply of niche forms of tourism, such as therapeutic tourism, green/eco tourism, farm tourism, nature tourism, etc.

3.3 In addition, life styles have changed significantly in recent years. The tourism-industry is faced with an ageing, healthier and wealthier population taking more and shorter breaks. For a large group of tourists, the emphasis has moved from ‘lowest available price’ to ‘best quality/for the best price’. Consumer loyalty is declining and tourists are looking more and more for sustainability and authenticity and away from mass tourism. Island tourism must imperatively address the issue of innovation if it is to survive in these circumstances.

4. Island tourism and product innovation

4.1 In large tourism-industry companies, innovation is routine and a standard component of corporate decision-making. To ensure that they will not be caught off guard by unexpected innovations, companies today include innovation as part of their everyday planning. For them, innovation is simply just an additional production factor.

4.2 However, for the destination-oriented small-business tourism industry, the possibility to fully benefit from innovation is restricted. The main limitation is a lack of staff and funding. Above all, SMEs in tourism are all concerned with the day-to-day needs of regular customers and are not in a position to set aside funding for R&D.

4.3 The tourism industry is largely dominated by SMEs and that is particularly true for islands. To survive in an increasingly competitive and global environment, tourism-enterprises, particularly small ones, will need to achieve economies of scale and critical mass in order to reduce transaction costs, increase productivity and gain market power. Restructuring and cooperation mechanisms will help enterprises to adapt to changes and increase their competitiveness.

4.4 A challenge for the tourist industry is to offer new products and services. Experience-based tourism, sustainable tourism and natural/cultural/heritage tourism are some of the strategies that are at the origin of many innovative tourism-products in many European destinations today. Islands should promote these products more as they relate to the core of their ‘insular identity’.

4.5 Experience-based tourism emerges from the interaction between tourists and destinations. Tourists' overall experience is composed of numerous small encounters with a variety of people working in the tourism-industry.

4.6 Increased consumer awareness of environmental issues stimulates tourism-businesses to innovate and improve their environmental performance, both in the interaction of tourists with the environment, and in their own environmental performance. Indeed, the major products in which innovation can be found are in niche areas such as eco-tourism and adventure-tourism.

4.7 Cultural tourism is also a significant and growing sector, attracting relatively affluent and educated visitors. Several islands have undertaken a repositioning of their cultural services and are developing innovations which are aimed at increasing value through culture. They diversify their tourism and increase the length of stays through, e.g. better packaging and promotion of available cultural experiences and events.

4.8 If tourism is not harmoniously integrated into island society, and offers only benefits to a few inhabitants, but disorder to many others, it will not be a sustainable and harmonious part of societal activity. To ensure population ‘buy-in’ to support an island tourism society, bottom-up planning and involvement is needed. Tourism can provide an opportunity to bring an island's population together by getting everyone involved and by helping everyone to understand that tourism has wide-reaching effects on improving the natural and urban environment, land-use and spatial planning, social services and preservation of cultural heritage (architecture, crafts, traditional food specialities, etc.).

4.9 Different types of tourism may prove to be mutually incompatible with each other, especially in a small island environment. For instance, developing a niche market such as summer student language courses can prove to be incompatible with developing a summer market for seniors when the rowdy behaviour of the young after classes clashes with the elderly who are looking for quiet. Again, bottom-up support for the type(s) of tourism an island opts for is needed so that this choice may prove successful.

4.10 Finally tourism concerns not just the people directly working in the hotels, restaurants or airlines. It involves many other sectors feeding into the tourist sectors, from the local plumber to the local farmer.

5. Improving Island tourism through process innovation

5.1 The tourism-industry has always been very proactive with regard to adopting new technologies such as global distribution systems. Recent advances in telecommunications, networking, databases, data processing and electronic marketing provide many new opportunities for tourism-business. These are significantly impacting traditional tourism business models. The use of broadband Internet access with information and communications technology (ICT) adds value to tourism services and products and supports the development of industry networks and clusters. The problem for this is the absence of broadband technology and the lack of specialised knowledge and skills to fully benefit from ICT. Specific training should be foreseen for island populations to fill such gaps.

5.2 Consumers are becoming increasingly familiar with the use of ICT to make their tourism-arrangements. At EU level today, 2/3 of future tourists organise their trip via Internet, and more than 50 % buy their trip online. They seek flexible and easily accessible products and like to communicate directly with tourism producers. To take advantage of this ICT revolution, entrepreneurs need to re-engineer the entire marketing process of the industry. Internet technology offers enterprises and consumers alike a great potential for direct on-line business.

5.3 Many European islands with a long-standing tradition in tourism are suffering from growth and production weaknesses. Tourism there is under tremendous competitive pressures. In the liberalised global market for tourism, islands are competing with new destinations that can benefit from resources that are intact or very little exploited and that have very favourable economic conditions including low wages, various forms of state aid and soft currencies.

5.4 As in all service-industries, the quality of the service-offer in island tourism depends heavily on the quality of its workers and people. Good labour conditions are linked to good service levels.

5.5 European island tourism, being predominantly made up of SMEs and characterised by high labour intensity has a productivity problem due to its fragmented nature. This diminished productivity makes it difficult for island in tourism to be competitive. This fact is reflected in the price charged.

5.6 The problem of seasonality has real consequences for job stability and makes working in the tourism sector less attractive. This is why we need to promote special contracts that guarantee stable employment for seasonal workers, with a view to giving them employment and social rights equal to those of permanent workers. The EESC has raised this matter in the past (2).

5.6.1 Fostering and renewing island tourism will require changing and modernising labour relations, especially in areas such as training, occupational advancement and careers, occupational functions, working days, and working hours and conditions, within the framework of social dialogue and collective bargaining between the social partners.

5.7 Access to islands, especially in today's fast-moving world, is mainly through air-travel. Travel by sea is not always a viable alternative. It requires both a solid infrastructure on land linked to a reliable network of maritime connections at sea. Maritime connections are by their very nature weather-dependent.

6. Developing policy instruments for tourism marketing innovation in islands

6.1 A real challenge for the authorities in charge of island-tourism is to determine the most effective way to develop and implement policy instruments which support tourism innovation without interfering with market dynamics. Good practice would be for governments to let the markets do as much as possible and only intervene when market failures occur.

6.2 Islands must carefully balance the potentially conflicting interests of businesses looking for growth, consumer-tourists looking for leisure opportunities and environmentalists seeking to protect nature. With regard to urban planning, a key question is: who to allow to decide on building projects. Potential conflicts exist between local councils, who may be fuelled by local business interests and regional or central authorities who look at the big picture and wish to temper unbridled growth in environmentally sensitive areas.

6.3 Governments should let innovating firms achieve economies of scale and seek innovation through cooperative alliances and other forms of networking. The most successful and promising vehicle for innovation in the tourism-industry can be achieved through cooperation, alliances and/or networks in areas such as technology, marketing, distribution, and sharing of human resources. So far, it appears that cooperation in tourism is insufficient, notably in SMEs. In this respect, governments should support an innovative tourism-policy which promotes coherence and synergy.

6.4 Addressing the issues of tourism is unthinkable without including the spatial dimension. It is above all the commoditisation and marketing of attractions. These are the raw materials of tourism. They create the market destinations. Visitors choose the destination that seems to offer the greatest utility and the goods for which they are willing to pay. Their willingness to pay increases with the uniqueness of the destination. In most cases these are public goods or common resources such as protected landscapes, or land reserved for agricultural use which islanders need to protect and manage, so that they will not be just consumed or destroyed.

6.5 Local attractions and innovative services give destinations their distinct flavour. They also limit the product innovation possibilities, as these innovations cannot be produced without the incorporation of destination goods. For instance, a seaside resort cannot be transformed into a mountain retreat. A tourism country with a variety of attractions can, however, reposition itself on the market.

6.6 Mass tourism based on sun, sea and McDonalds is, in the long term, not necessarily the best form of tourism on islands. Examples in Scotland for instance demonstrate that small-scale, specialised forms of island tourism can be very successful. No one size fits all, and this is particularly important to bear in mind when preparing a tourism strategy for islands. What is ideal for a small Mediterranean island may prove to be inappropriate for a very small island off the coasts of the United Kingdom, Ireland, or Sweden.

6.7 The fate of destinations depends on many independent variables. These include the location and potential of source markets as well as the accessibility as expressed in transport and time-related costs. These variables can only be influenced by the public sector through mechanisms such as Public Service Obligations or Territorial Continuity systems. Moreover they determine the nature of product innovations to a great extent. The challenge for the local entrepreneur is therefore to create additional customer value with new products.

6.8 A current theme in the EU is environmental sustainability; it covers issues such as identifying useful mechanisms for inducing travel related emission reductions and how environmental sustainability has more generally become a key driver of tourism competitiveness.

6.9 What for example is keeping islanders from improving beaches? Or from flaunting their cultural heritage? Why there are just a few indicated tourist resorts when the whole of an island can, for example be a tourist attraction? Why so much concentration in time and so short ‘tourist seasons’ when in other places tourism is an all year round activity? Advertising is just for a couple of spots when it can be for all villages and towns. The residents in each town and village have to learn to be proud of their home town and village and only then can they protect and sell their product and heritage.

6.10 With an increasing number of tourists visiting islands, the authorities will need to invest further to protect the sanitary quality of island destinations, ensuring good quality drinking (and bathing) water, diligent waste treatment, sustainable energy, and safe food supply.

6.11 Building consciousness of competitiveness is very important, as Islanders need to ensure that competitiveness is high on their agenda. This cannot be done by government alone. Workers, entrepreneurs, management and administrative institutions have to all be on board.

6.12 In practice there are three influencing and decisive factors:

—	first is government involvement when it comes to health security, environmental sustainability;

—	secondly the business private sector element which can include ground transport, air transport and ICT infrastructure; and

—	thirdly the human cultural elements of each country's resource endowments.

6.12.1 Government has great influence on the first category. If an island is ranking low on environmental sustainability it is simply not good enough. It shows how right environmental and culture pressure groups are to keep insisting for more awareness of island cultural heritage and the urgent need to invest more to protect it.

6.12.2 When it comes to tourism-infrastructure, there is a lot to be done too. A low score here can give the stimulus to act and take the opportunity to invest more. A period of recession is a good time to review the infrastructure and to devote more resources to upgrade. Islands must upgrade now and seek new market niches through new private and public investments. The government has to ensure that the private sector has greater access to finance and that banks are more accommodating to the small and medium enterprises. They must make full use of all the funds available under the EU stimulus package. More important is that government entities do not impose inappropriate rules on the private sector to squeeze entrepreneurs out of whatever capital they have available for investment.

6.12.3 There is the dark side of island tourism: the underground economy with its additional revenue for islanders yet its negative impact on employment and working conditions. Secondary houses tend to increase the price for island residents but also representing also a source of revenue. Further there is also the saturation of infrastructure for water, waste, energy with as much as 20 times the number of local population to deal with during peak months.

6.13 A consequence of seasonal fluctuation in requirements of labour is the emergence and presence of a black economy. Misuse, even abuse of student labour, or use of illegal labour harms both the legal workers and the illegal workers as it reduces the levels of salary paid.

Illegal labour can make up a significant proportion of people working in the tourism sector. In some countries it exceeds half the workforce.

6.13.1 Cheap and mobile labour from new Member States, e.g. from Poland, Bulgaria and Romania, is an increasingly visible feature in Western tourism, including island tourism. Under EU rules of free circulation of labour, this is an unstoppable trend and the question that entrepreneurs and workers face is how they can respond to it. There is a need to ensure that businesses can be competitive, while at the same time ensuring equality and ascertaining that working conditions are respected and workers are not exploited.

6.14 That is why island tourism needs a measured approach. Tourism is vital for islanders and island SMEs. Now is the time to act. Islanders must benchmark themselves against the competition. The short term immediate problems have to be tackled first. For tourism to remain sustainable and an important engine of economic growth there has to be an effective medium to long term action.

7. Facilitating networks for organisational innovation of tourism enterprises and destinations

7.1 Several branches of the tourism industry, e.g. airlines, hotel chains, tour operators or car rental agencies, are highly concentrated and are often global players. On the other hand, SMEs still constitute the bulk of the tourism-industry in islands. To survive in the face of such global competitors, island tourism-firms should try to engage in competition that is constructive rather than destructive. Whereas the former would grow the available market, broaden the product platform and finally gain successful product differentiation and innovation for world-class products, the latter would result in firms competing for the same market, thus leading to product convergence and price wars. It is therefore important that tourism-entrepreneurs know how to work more together for there to be constructive competition.

7.2 Island-tourism entrepreneurs, particularly small ones, are more sensitive to competition from their partners than to the benefits of working together. In the world of tourism, a distinction can be made between geographical networks/clusters and activity-based networks/clusters such as ‘green’ tourism, wine-country tourism, etc … Networks/clusters can play a major role in building up the capacity of operators to innovate e.g. through lower experimentation costs, increased visibility and better responsiveness to shifting demand. As in other service industries, innovation in the tourism-industry relies essentially on networks and cooperation.

7.3 Cooperation between politicians, employer and trade union organisations, as well as the integration of bodies, foundations and associations which play a part in the tourism sector, is also one of the key factors for the constant growth of the island tourism industry. While the business sector plays the main role in establishing networks, local governments are responsible for the development of infrastructure that enables better cooperation and supports market networks.

Brussels, 15 July 2010.

The President of the European Economic and Social Committee

Mario SEPI

(1) ‘A better integration in the internal market as key factor for cohesion and growth for islands’, OJ C 27 of the 3.02.2009, p. 123.

(2) See EESC Opinion on ‘Socially sustainable tourism for everyone’, OJ C 32 of the 5.02.2004, p. 1.

11.2.2011

Official Journal of the European Union

C 44/81

Opinion of the European Economic and Social Committee on ‘Financial transaction tax’ (own-initiative opinion)

2011/C 44/14

Rapporteur: Mr NYBERG

On 18 February 2010 the European Economic and Social Committee, acting under Rule 29(2) of its Rules of Procedure, decided to draw up an own-initiative opinion on

Financial transaction tax.

The Section for Economic and Monetary Union and Economic and Social Cohesion, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 23 June 2010.

At its 464th plenary session, held on 14 and 15 July 2010 (meeting of 15 July 2010), the European Economic and Social Committee adopted the following opinion by 121 votes to 55 with 7 abstentions.

1. Summary and conclusions

1.1 The total value of all financial transactions has increased from approximately 15 times the value of world GDP in 1990 to approximately 70 times in 2007 (1). There has been almost no change in the value of spot transactions in relation to GDP which means that this fourfold increase in financial transactions consists almost entirely of derivatives, mainly interest rate derivatives. There was a fall in the trade in derivatives during the second half of 2008 but the volume increased once again during the first half of 2009. The behaviour of the financial sector does not seem to have changed much.

1.2 In 2007, the financial sector – whose main task is to support the real economy – accounted for 40 % of all corporate profits in the USA whereas its share of GDP was only 7 %. There has also been a concentration towards a few marketplaces – particularly London and New York – and a concentration towards a few very large financial institutions. Enormous amounts of money have been pumped into this sector in order to save these institutions from collapsing, giving rise to unprecedented budget deficits.

1.3 A financial transaction tax (FTT) could have a decisive impact on the behaviour of the financial institutions by reducing the number of very short-term financial transactions, which are often also risky.

1.4 The EESC in principle endorsed the idea of an FTT in its opinion on the de Larosière report: (2)‘The EESC believes that there is need for a transition from a short-term to a long-term horizon, with bonuses not linked to speculative activities. In this spirit, the EESC supports the idea of a tax on financial transactions’. With the present opinion the EESC wants to take part in the ongoing discussions on this tax and elaborate further on the objectives and effects of such a tax.

1.5 The initial proposal for a securities transaction tax was formulated by J.M. Keynes in 1936. His aim was to reduce destabilising speculation in equities and to strengthen the long-term fundamentals for stock prices. During the 1970s this was further developed by James Tobin. His aim was to slow down the speed of the financial market and align it more with the real economy by a tax on international currency spot transactions. Its objective was the same as one of the objectives currently under discussion – to reduce short-term transactions.

1.6 Tobin suggested sending the revenues from the tax to the IMF or World Bank, but revenues were not his main objective: ‘The more the tax succeeds in the economic objectives that primarily motivated me … the less revenues it collects …’.

1.7 The idea of a tax has once again come to the forefront since the 2008 financial crisis, now for all financial transactions between financial institutions.

1.8 According to the EESC, the primary objective of an FTT should be to change behaviour in the financial sector by reducing short-term speculative financial transactions. In this way the activities in the financial sector can work through the price mechanism of the market. Some of these transactions have even been named socially useless by Lord Turner (British Financial Services Authority). The desired effect could be reached as the FTT hits the most frequent transactions the hardest.

1.9 If an FTT considerably reduces short-term trading in securities and derivatives, it will also reduce the profits in the financial sector, which could lead to a reduction in bonuses but also to lower profit tax revenues. Traditional banking, based on loans to businesses and households, and funded by deposits, and whose profits are generated by the difference in interest rates, will not be affected. This type of banking could once again be the main aim of the financial sector, where savings are allocated to their best use for investments. The new financial difficulties during 2010 and the IMF and EU search for methods of financing for future financial crises should not make us lose this window of opportunity for financial sector improvements away from short-termism.

1.10 The second objective of an FTT is to raise public money. This new source of revenue could be used to support economic development in developing countries, to finance climate policies in developing countries or to alleviate the burden on public finances. The last of these also implies that the financial sector will pay back public subsidies. In the long-term, revenues should provide a new general source for public income.

1.11 The FTT would have a progressive character as the customers of the financial institutions, as well as the institutions themselves, when they are trading on their own account, represent the wealthiest parts of society. Moreover the financial sector is considered as not contributing its fair share of tax payments.

1.12 The FTT should have as wide a scope as possible and preferably apply to both national markets and foreign exchanges. The EESC recommends, for a global system, a tax rate for an FTT as low as 0.05 %. With a European system a lower rate would be advisable in order to ensure that it does not distort the functioning of the financial market.

1.13 The introduction of a tax always reduces the value of assets, but does it affect where the trade takes place if it is not a global tax? A study has found that the current stamp duty in Britain has reduced turnover by 20 %, hardly driving business away from London.

1.14 The introduction of this tax would involve virtually no administrative, technical or economic costs as these transactions are already computerised. There is, however, still no computerised market for OTC (over the counter) transactions but it is in the pipeline for EU legislation. The need to include all transactions, thereby also the OTC market in an organised exchange shows that regulation and taxes such as FTT are complementary, not alternatives.

1.15 With a changed behaviour in the financial sector relying more on long-term fundamentals and at the same time increased public incomes the FTT has what is called a double dividend. But it is also evident that the higher the tax rate the larger the effect on the traded short-term transactions and from this – the smaller the revenues. Therefore, a tax rate has to be searched which leads to a balance between the two objectives of the FTT – change in behaviour and tax revenues.

1.16 If applied across Europe, the tax receipts would amount to around 1.5 % of GDP, with the bulk of it coming from the British financial market. Applied worldwide, the tax receipts would amount to approximately 1.2 % of world GDP. The results are also approximately the same for Europe as for the USA.

1.17 At its meeting in Toronto on 26-27 June 2010 the G20 did not propose a global Financial Transaction Tax. The EESC considers that a European system still should be kept on the agenda for financial reforms.

2. Background

2.1 Many reasons have been put forward for the financial crisis, which dramatically exploded following the bankruptcy of Lehman Brothers (3) in 2008. These include cheap money through low interest rates, the spreading of high-risk securities through securitisation, failures of regulation and supervision, the availability of economic resources for speculation through a long-lasting redistribution of income from labour to capital, the global nature of the financial market, etc.

2.2 The financial sector in relation to GDP has increased almost beyond imagination. In 1990 the value of financial transactions amounted to around 15 times world GDP. By the time of the 2008 crisis they had increased to 70 times world GDP (4). Spot transactions represent almost the same percentage of world GDP as in 1990, so the fourfold increase in financial transactions consists almost entirely of derivatives. These are mainly ‘over the counter’ transactions (OTC), direct agreements between a customer and a financial institution, and most of these concern interest rate related derivatives (5). Even long-term transactions like mortgage bonds have been drawn into the short-term market as they often shift owners. The reasons for much of the new trading can be as well risk-hedging as speculation.

2.2.1 The evolution of the derivative market is a new aspect of the economic system, which is not always connected to the real economy in the same way as traditional capital is. There are many sorts of derivatives, like options, futures, forwards and swaps, and they can be based on for example different goods, foreign exchange, interest rates but also pure gambling.

2.2.2 Statistics reveal that there was a fall in trade in derivatives during the second half of 2008. However, the fall was not particularly large, only a reduction to the level of three years ago. Furthermore, during the first half of 2009, the amount once again started to increase (6). Again, these changes primarily applied to interest rate derivatives. From this we can conclude that not very much has changed in the behaviour of the financial sector. On the other hand, securitisation, the main trigger of the financial crisis, has almost been wiped out of the market (7).

2.2.3 In 2007, just before the crisis, the financial sector, accounted for 40 % of all corporate profits in the USA, whereas its share of GDP was only 7 % (8). When the financial sector takes 40 % of the profits it has deviated from its role as a financial intermediary. In this respect, the oligopolistic character of the financial sector in some countries is not efficient in its funding of the real economy.

2.2.4 There has also been a concentration towards a few marketplaces – especially London and New York At the same time there has been a concentration in a few very big financial institutions. Their size created the slogan ‘too big to fail’, which in turn made it necessary for many governments to save some banks to prevent the financial sector from collapsing. Enormous amounts of money were pumped into this sector, giving rise to unprecedented budget deficits.

2.3 In the de Larosière report, many proposals were put forward to change the financial system so as not to allow crises to develop in the future (9). This was quickly followed by four proposals for regulations on macro and micro supervision of the financial sector from the Commission (10) as well as several proposals to change the rules in the financial sector (11). Parallel to this there is also an intense discussion in the USA.

2.3.1 Proposals for new legislation have mainly been on supervision and on regulating certain financial institutions, partly replacing some of the self-regulation of the financial sector. Only minor parts of the proposals have been aimed at changing behaviour in the financial sector. No proposals have emerged to regulate instruments in the financial sector, despite the fact that some of the real causes for the financial crisis can be found among these.

2.4 Neither have there been any formal EU proposals on a financial transaction tax (FTT), although a general discussion has gathered momentum during the last few years. Such a tax could, according to the EESC, have a decisive impact on the behaviour of the financial institutions and on instruments. This could be achieved through a reduction of some of the presently dominating short-term financial transactions.

2.4.1 At their meeting in Pittsburgh in September 2009, the leaders of the G20 asked ‘the IMF to prepare a report for our next meeting (June 2010) with regard to the range of options countries have adopted or are considering as to how the financial sector could make a fair and substantial contribution toward paying for any burdens associated with government interventions to repair the banking system.’ In the preliminary IMF report presented in April 2010 the emphasis was on measures to counteract future financial crises, mainly a financial stability levy in combination with a resolution scheme. In this opinion the EESC will not make any special comments on these proposals and will limit itself to the brief IMF discussion on an FTT for the present crisis.

2.4.2 The EESC has said yes in principle to an FTT in its opinion on the de Larosière report: ‘The EESC believes that there is need for a transition from a short-term to a long-term horizon, with bonuses not linked to speculative activities. In this spirit, the EESC supports the idea of a tax on financial transactions’. In the present opinion the EESC wants to take part in the ongoing discussions and elaborate further on the objectives and effects of such a tax.

3. Introduction

3.1 The initial proposal for a securities transaction tax (STT) was formulated by J.M. Keynes in 1936 to reduce destabilising speculation in equities and to strengthen the long-term fundamentals for stock prices.

3.2 During the 1970s James Tobin proposed a currencies transaction tax (CTT), the ‘Tobin tax’, to reduce destabilising currency speculation. With free movement of capital, speculative attacks on currencies became easier. His aim was to slow down the speed in the financial market and align it more with the real economy and to strengthen the role of monetary policy. The tax was to apply to currency spot transactions and with a tax rate of 0.5 %. Although it was not aimed at all financial transactions (spot transactions are nowadays less than 10 % of world transactions), its objective was as one of the objectives currently discussed – to reduce short-term transactions.

3.2.1 Tobin suggested sending the revenues from the tax to the IMF or World Bank, but the revenues were not his main objective: ‘The more the tax succeeds in the economic objectives that primarily motivated me … the less revenues it collects …’ (12).

3.3 During the 2008 financial crisis the idea of a tax once again appeared, this time not only for currency transactions but for all financial transactions. It has to be stated that even with this wide scope it does not include financial transactions where households and enterprises are involved. It should be restricted to transactions between financial institutions. Among the proponents of an FTT we can find many types of civil society organisations, economists, persons in the financial sector such as Lord Turner, the chairman of the British Financial Services Authority and now also the European Council in its proposals for the G20 meeting of 17 June 2010 (13). Among those against the introduction of an FTT are the IMF, OECD and the World Bank.

3.4 What are the main objectives for such a tax? On what should it be levied? How high should it be? Can it be applied in one country or is it necessary for it to be applied in the whole of EU or globally? What results could we expect? We discuss these questions and give some figures, based on studies by the Austrian Institute of Economic Research (WIFO) (14) and the Center for Economic and Policy Research (CEPR) and the Political Economy Research Institute (PERI, University of Massachusetts, Amherst) (15).

3.5 A mechanism to influence the behaviour in the financial sector, following the discussions by Keynes and Tobin, is through the effects of the FTT on short-term transactions. Because of the frequency of short term trading, a FTT raises the cost of short-term transactions relative to long-tem transactions. The governments can in this way, by changed relative cost, steer the financial sector through use of the price mechanism of the market to rely more on the long-term fundamentals of the real economy.

4. Objectives

4.1 A detailed look at the financial market reveals that the increased volume mainly is made up of short-term transactions often of a speculative or risk- hedging character. In relation to the real economy many of those transactions are excessively large. As short-term fluctuations tend to build up to long term swings in asset prices, these may also deviate from the development of the real economy (16). Some of these financial transactions have even been named socially useless by Lord Turner.

4.1.1 Therefore, a first, objective of an FTT should according to the EESC be to change present behaviour in the financial sector by reducing short-term speculative financial transactions. Short-term transactions account for the bulk of the increase in financial sector activity during the first decade of the 21st century. The financial sector must again take on its permanent responsibilities for the real economy.

4.1.2 The IMF mentions the behavioural effects of an FTT in its report, but as something negative. Among the negative aspects mentioned it is said that it is not a way to finance a future resolution scheme. This has never been an objective of an FTT. Another objection is that it is better to tax directly those transactions which the aim is to reduce. This is exactly what is done with the FTT when it hits the short-term transactions hardest.

4.1.3 A reduction in the volume of short-term trading also reduces its share of the financial institutions' activities. This means an increased share of other activities such as acting as intermediaries between savers and borrowers. The financial sector is not an end in itself, but an instrument of achieving other objectives in the economy. An efficient financial sector will allocate savings to their best use for investments in the real economy.

4.1.4 Traditional commercial banking is based on loans to businesses and households, where the difference in interest rates generates the profits. To support their customers, banks also help them to raise money in capital markets, hedge and cover currency and commodity exposures linked to international business as well as hedging the commodity futures linked to farming. In providing these services, banks offset their own risks by transactions with other banks, generally in real time. Customer service can involve multiple very short term transactions. In addition, banks also profit from own-account trading of securities and derivatives. All of this should not be deleted from the financial market as it partly represents inter-bank trading to assure the liquidity. But if an FTT considerably reduces this short-term trading of securities and derivatives, it will also reduce the profits in the financial sector, following which the bonuses and profit tax revenues probably will be reduced. Traditional banking will hardly be affected and future profits of financial institutions will be lower and depend mainly on traditional banking activities.

4.1.5 There are different views in the literature but one effect could be a reduction in the volatility of asset prices. With fewer speculative actions, asset prices may become more stable. An alternative view is that occasional trades can be very volatile and random without the dampening effect of volume.

4.1.6 Summarising the potential effects of an FTT on behaviour of different financial institutions we want to underline that such changes could reduce high frequency trading. The new financial difficulties during 2010 and the IMF and EU search for methods of financing for future financial crises should not make us lose this window of opportunity for financial sector improvements.

4.2 The other main objective of an FTT is to raise public money. An FTT would raise a considerable amount of revenue. The discussion about what this new revenue should be used for involves support for economic development in developing countries, financing climate policies in developing countries or alleviating the burden on public finances created by the financial crisis. Following the recent political discussions within the EU the most likely use will probably be as a source of public revenue.

4.2.1 According to the Commission financial support arising to 30 % of EU GDP has been approved. Excluding guarantees it amounts to 13 %. For the UK you have to double that percentage. When we consider this public cost of taking the financial sector through the crisis, one should note that about half of it has never been used and much of will eventually be paid back. The 13 % applies to capital injection (bank equity), purchase of assets and direct support. Much of the guarantees seems not be used at all.

4.2.2 FTT revenues could initially be used to pay for the remaining costs. Where the largest amounts of public money had to be used to save the banks the largest revenues also ought to be raised by an FTT due to the concentration of the financial market. But total public costs have been much higher including loss of social security contributions, costs of automatic stabilisers, higher interest rate payments on public loans etc. Even the IMF writes that ‘the large fiscal, economic, and social costs of financial crises suggest a contribution of the financial sector to general revenues beyond covering the fiscal costs of direct support’ (17).

4.2.3 In the future the FTT should instead be considered as a general new source for public revenue. Considering that financial services are exempt from VAT so that the users of bank services pay less tax for bank services than for most other services and also in the light of the high profits in the financial sector it seems especially justifiable to raise the taxes for this sector.

4.2.4 According to a study carried out by the OECD, the USA will account for almost half of the public deficit of all OECD countries in 2011. In the same year, the budget deficit as a percentage of GDP is estimated to be approximately 6 % in the Euro area. Its real challenges are not only in the euro countries such as Greece, but also in the UK, where it is estimated to be around 12 %.

4.2.5 An alternative to an FTT discussed in the preliminary IMF report is an FAT – Financial Activity Tax – which is levied on profits and remunerations. It is a simple way of taxing financial activities but the most important difference compared to an FTT is that an FAT taxes all kinds of activities with no differing effects on short- and long-term transactions. It is only a way of raising the tax incomes coming from the banks.

4.2.6 Even with a uniform tax rate the FTT would have a progressive character as the customers of the financial institutions as well as the institutions themselves when they are trading on their own account represent the wealthiest parts of society. Although it is important to concentrate on how an FTT could be as efficient an instrument as possible for the financial sector the incidence of the tax also has to be taken into account. In the Commission Staff Working Document (18) it is stated that ‘innovative sources are often seen to have the advantage of finding higher political acceptance, in particular where the fiscal burden is imposed on groups or sectors which are perceived to currently not take on their fair share of the tax burden.’

4.2.7 The European Parliament asked the Commission to ‘elaborate, sufficiently in advance of the next G20 Summit an impact assessment of a global financial transaction tax, exploring its advantages as well as drawbacks.’ (19) Similarly, the EESC can see many technical aspects of an FTT which have to be studied The Staff Working Document put forward by the Commission (20) does not totally fulfil the proposals from the European Parliament. The EESC, therefore, wants to emphasise the need for a complete impact assessment in combination with a formal proposal for an FTT.

5. Construction

5.1 General scope

5.1.1 The tax base should not only consist of international transactions but all financial transactions. Even if the word ‘all’ is used, there is a limit in most calculations either for the type of transactions covered or for the value of the transaction to be taxed. In the CEPR/PERI- study different tax bases are studied. In the WIFO- study an all-inclusive variant is chosen.

5.1.2 A criterion for the choice of transactions to be taxed should be to focus on the most short-term ones. Another starting point is to have as wide a scope as possible. A third choice is whether it should be directed at national markets or include also foreign exchanges.

5.1.3 If both national and foreign transactions are included it covers all financial transactions. A desire not to distort the real economy could be an argument for excluding spot transactions.

5.1.4 Not to include all transactions will have some effects on the competitive situation for different transactions. Such effects are desirable if they put a higher burden on short-term speculative transactions than on long-term non-speculative transactions. This will in fact be the case, as the more frequent the transactions, the harder this tax hits those transactions.

5.1.5 The usage of the notional value of a financial transaction as the basis for an FTT has been criticised as being an almost imaginary basis. The money actually received by the financial institutions in trading of derivatives, the fee, premium or whatever is the cost for the customers, could be taxed as an alternative to an FTT. The development of financial transactions using notional values in relation to GDP is, nevertheless in the EESC's view, a useful measure particularly to show the changes over time of the volumes traded on the financial market.

5.2 Geographical scope

5.2.1 Should the FTT be national, regional (EU) or global? It is without doubt that a global tax is preferable. If not possible, there is definitively a case for an EU-wide coverage. But still there are examples which show that even a national tax is a possibility, particularly for countries with a large financial sector. You could expect this to have large effects on where the trade takes place. However, experience shows that this does not seem to be a problem (21).

5.2.2 The introduction of a tax on assets always reduces the value of the asset, but does it affect where the trade takes place? A study has calculated that the British form of a stamp duty of 0.5 % levied on equities and some bonds has reduced the turnover by 20 % and therefore cannot be said to have withdrawn the activities from London (22).

5.3 Tax rate

5.3.1 Different levels have been proposed for the tax rate, between 0.1 and 0.01 %. The one most often mentioned is 0.05 %. With a global system recommend a FTT with such a tax rate. It is so low that it can be introduced without a risk of having as big effects on short-term transactions as to distort the functioning of the financial market. If an FTT is introduced as a European system, anyhow, a lower rate ought to be considered.

5.3.2 With a changed behaviour in the financial sector relying more on long-term fundamentals and at the same time increased public incomes the FTT has what is called a double dividend. But it is also evident that the higher the tax rate the larger the effect on the traded short-term transactions and from this – the smaller the revenues. Therefore, a tax rate has to be sought which leads to a balance between the two objectives of the FTT – change in behaviour and tax revenues.

5.3.3 All real-world examples of taxes or other levies have always been levied on some financial transactions – not all. When it is levied on all transactions the effects cannot be known exactly in advance. Therefore, the tax rate should be reconsidered e.g. after three years to see whether it ought to be raised or lowered.

5.4 Feasibility

5.4.1 A question of another nature is how easily this kind of tax can be collected. Most transactions for which the tax is proposed are already computerised. This means that there is virtually no administrative, technical or economic cost of introducing this tax. Of course, a special computer program has to be developed. Some tests have already been carried out.

5.4.2 It is necessary to verify the creation and existence of innovative financial products that are not taxed or even deliberately created to avoid taxation. These have to be included into the tax base.

5.4.3 There is not yet a computerised market for OTC (over the counter) transactions. This is in the pipeline for European legislation. The need for including the OTC market in an organised exchange shows that regulation and taxes like FTT are complementary - not alternatives.

6. Effects

6.1 Reduction of short-term financial transactions

6.1.1 There are no precise estimates of how short-term trading could be affected by an FTT. What we have are assumptions. This is a real problem when discussing the FTT. For the main purpose of reduction of short-term financial trading we therefore do not have any statistics. The only statistical estimates which we do have are for the possible amount of tax revenue.

6.1.2 One effect of an FTT is that it empirically reduces liquidity. But what is an optimal amount of liquidity? Had the economies been functioning better than they did in 1990 or 2000 with the extremely high liquidity which existed in 2007? Is liquidity equivalent to the total amount of financial transactions? The answer ought to be no when several of those transactions are based on the same securities so the total amount of transactions could not be an especially good estimate of ‘real’ liquidity. Coming back to the main purpose of the financial sector to be a financial mediator it seems relevant to align liquidity to the level of GDP. Without having an opinion on exactly how large the reduction should be, it is clear that the direction of change should be a reduction of liquidity from the 2007 level.

6.1.3 As an FTT would hit the most frequent transactions hardest there ought to be, as well as a reduction in the number- of transactions, a change between long-term and short-term transactions. A reason given against an FTT is that it could increase the opacity of the financial market as short-term transactions would be less frequent. Considering the present level of such short-term transactions even a large reduction would not eliminate all day-to-day transactions. It can hardly be said that this aspect of the financial sector was opaque in e.g. the year 2000.

6.1.3.1 As described in the WIFO study, the increased use of derivatives has led to an over-shooting in both short-term and long-term prices. Reduced use of derivatives with this background could reduce the volatility of prices on the financial market, not the opposite as sometimes said.

6.1.3.2 Financial trading is almost evenly distributed between banks and other financial institutions. No such figures exist for the distribution between short- and long-term transactions.

6.2 The amount of public revenues

6.2.1 The WIFO study assumes that the volume of transactions, which are taxed, will be reduced by 65 % if the tax rate is 0.05 %. A lower tax rate is calculated to lead to a smaller reduction of transactions, and a higher one to a greater reduction.

6.2.1.1 Applied only to the UK, according to this study, an FTT would lead to tax receipts of almost 7 % of UK-GDP. In the EU-country with the largest share of these financial transactions after the UK, i.e. Germany, this would be a little more than 1 % of GDP. If applied across the EU, the tax receipts would be around 1.5 % of GDP, where the bulk of the revenue would come from the British financial market. Applied worldwide, the tax receipts would be around 1.2 % of world GDP.

6.2.2 In the CEPR/PERI- study the alternatives for how much trading would be reduced are between 25 % and 50 %. To be comparable to the figures given for the WIFO- study, we only give figures for a 50 % reduction of the tax base. Figures are in this study given for separate types of assets traded. The US-dollar figures in the study are transformed into shares of US-GDP.

—	Stocks and equities 0.75 %

—	Bonds 0.18 %

—	Options 0.03 %

—	Foreign exchange spots 0.05 %

—	Futures 0.05 %

—	Swaps 0.16 %

—	TOTAL 1.23 %

6.2.3 The two studies give about the same results for Europe as for the USA. From the CEPR/PERI study we can also see that spot transactions represent a very small part of total transactions.

Brussels, 15 July 2010.

The President of the European Economic and Social Committee

Mario SEPI

(1) Bank for International Settlements (BIS) data.

(2) Report of the de Larosière Group - OJ C 318/11, 23.12.2009, p. 57.

(3) Global financial service firm.

(4) Stephan Schulmeister, A General Financial Transaction Tax, WIFO Working Papers 344/2009.

(5) Bank for International Settlements (BIS); in: Davas/ von Weizsäcker, Financial Transaction Tax: Small is Beautiful, 2010.

(6) Ibid. footnote 5.

(7) H.W. Sinn at a presentation of the Economic report for 2010 of the EEAG group, 23.2.2010, Brussels.

(8) Helene Schubert, Austrian National Bank.

(9) Report of the de Larosière Group - OJ C 318/11, 23.12.2009, p. 57.

(10) Macro and micro prudential supervision- OJ C 277/25, 17.11.2009, p. 117.

(11) Credit Rating Agencies - OJ C 277/25, 17.11.2009, p. 117

‘Prospectus to be published when securities are offered to the public or admitted to trading’ and ‘Harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market’.

(12) Tobin, James: A Proposal for International Monetary Reform, 1978.

(13) European Council conclusions, 17 June 2010: ‘The EU should lead efforts to set a global approach for introducing systems for levies and taxes on financial institutions with a view to maintaining a world-wide level playing field and will strongly defend this position with its G20 partners. The introduction of a global financial transaction tax should be explored and developed further in that context.’

(14) Stephan Schulmeister, A General Financial Transaction Tax, WIFO Working papers 344/2009.

(15) Baker, Pollin, McArthur, Sherman: The Potential Revenue from Financial Transactions Taxes. CEPR/ PERI, December 2009.

(16) Ibid. footnote 14.

(17) IMF, ‘A fair and substantial contribution by the financial sector’. Interim report for the G20.

(18) SEC(2010) 409 Final Commission Staff Working Document: Innovative financing at a global level.

(19) PE432.992v01-00 Motion for a resolution.

(20) SEC(2010) 409 final.

(21) You can also find duties of the same sort in South Korea, Hong Kong, Australia, Taiwan and India, and some similar duties in Belgium, Argentina and Brazil).

(22) The Institute for Fiscal Studies 2002: Stamp duty on share transactions: is there a case for change? Commentary 89.

APPENDIX

to the Opinion of the European Economic and Social Committee

The following amendments were rejected by the plenary session but received at least one-quarter of the votes cast:

Point 1.10 – Amendment 1 tabled by Mr SARTORIUS

Amend as follows:

“1.10

The second objective of an FTT is to raise public money. This new source of revenue could be used to . The last of these also implies that the financial sector will pay back public subsidies. In the long-term, revenues should provide a new general source for public income.”

Reason

There are Member States which have not used public funds to save banks and where the banks have therefore not been a burden on public finances. Nonetheless, it would be advisable to make provision for future crises, and clearly financial institutions should contribute to this fund which would be used exclusively to ensure that the failure of an insolvent institution is managed in an orderly way and does not destabilise the entire financial system.

Point 4.2 - Amendment 4 tabled by Mr SARTORIUS

Delete the first, second and third sentences and replace them with the new wording proposed for point 1.10:

“4.2	. Following the recent political discussions within the EU the most likely use will probably be as a source of public revenue.”

Reason

See reason for amendment to point 1.10.

Point 4.2.3 - Amendment 5 tabled by Mr SARTORIUS

Add a new sentence to the end of the point:

“4.2.3

In the future the FTT should instead be considered as a general new source for public revenue. Considering that financial services are exempt from VAT so that the users of bank services pay less tax for bank services than for most other services and also in the light of the high profits in the financial sector it seems especially justifiable to raise the taxes for this sector. ”

Reason

It is generally accepted in relation to the management of public finances that, if the sole objective is to raise money, taxing transactions between companies is not to be recommended because of its potentially negative impact. It is better to tax the profit on transactions, as taxing the transactions themselves can have a cascade effect, driving up prices. There are more effective money-raising instruments.

These three amendments stated above were voted together.

Outcome of the vote:

For	:	52
Against	:	91
Abstentions	:	9

Point 1.11 - Amendment 2 tabled by Mr SARTORIUS

Delete the final sentence:

“1.11

The FTT would have a progressive character as the customers of the financial institutions, as well as the institutions themselves, when they are trading on their own account, represent the wealthiest parts of society. ”

Reason

This is an unsubstantiated assertion. The financial sector contributes to tax revenue like any other sector. Which sector is the rapporteur comparing it with? Where are the figures to support this assertion?

Outcome of the vote:

For	:	65
Against	:	102
Abstentions	:	10

Point 1.16 - Amendment 3 tabled by Mr SARTORIUS

Add a new point after point 1.16:

“

Reason

This is a fact which needs to be stated in the opinion. The tax will have a negative impact on the financing of the real economy at a very critical time.

Outcome of the vote:

For	:	62
Against	:	116
Abstentions	:	4

Section opinion text that was rejected in favour of an amendment adopted by the assembly with at least one-quarter of the votes cast were in favour of retention of the section opinion text.

Point 5.3.1 - Amendment 8 tabled by Mr NYBERG

Amend the point as follows:

‘5.3.1

Different levels have been proposed for the tax rate, between 0.1 and 0.01 %. The one most often mentioned is 0.05 %. recommend a FTT with such a tax rate. It is so low that it can be introduced without a risk of having as big effects on short-term transactions as to distort the functioning of the financial market. ’

Outcome of the vote:

For	:	102
Against	:	52
Abstentions	:	15

11.2.2011

Official Journal of the European Union

C 44/90

Opinion of the European Economic and Social Committee on ‘The Social Dimension of the Internal Market’ (own-initiative opinion)

2011/C 44/15

Rapporteur: Mr JANSON

On 16 July 2009 the European Economic and Social Committee, under Rule 29(2) of its Rules of Procedure, decided to draw up an own-initiative opinion on

The Social Dimension of the Internal Market.

The Section for Employment, Social Affairs and Citizenship, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 5 May 2010.

At its 464th plenary session, held on 14 and 15 July 2010 (meeting of 14 July 2010), the European Economic and Social Committee adopted the following opinion by 143 votes to 15 with 19 abstentions.

1. Summary

1.1 The social dimension is a core component of the internal market. It has a number of aspects. This opinion deals among others with the economic and legal aspects. Recent developments have raised questions about the social dimension's ability to protect workers. The internal market cannot function properly without a strong social dimension and the support of the citizens.

1.2 The EESC strongly believes that the EU has an important role to play in the social field because social problems cannot be solved by Member States alone. In order to create political acceptance, solidarity and coherence, the EU should place greater emphasis on the social aspects in its policies.

1.3 A number of adverse developments have, among other factors, put the social dimension in jeopardy. The European economy is facing its most serious challenge in decades. Financial bubbles have been allowed to grow and control mechanisms and traditional risk assessments have been sidestepped. As a result unemployment has risen and labour markets and the social situation will continue to deteriorate. Therefore employment must remain at the top of the EU's agenda. Europe needs sustainable growth and a high employment rate combined with a high quality labour market in order to finance welfare systems.

1.4 Over the last decade, welfare systems have been the target of reforms aimed at promoting more effective work incentives in social protection systems, in order to strengthen the value of work and to re-integrate people in the labour market. One result has, however, been a growth in inequality, thus aggravating social problems. Employment and welfare systems are crucial to alleviating poverty and without social benefits the rise of inequality and the social impact of the crisis would be much more rapid and severe. The deterioration of national finances in many Member States, leading to an actual or potential sovereign debt crisis, is putting social welfare systems under considerable pressure. Increased, sustainable economic activity, regulation of financial markets and investments in research and education are some possible solutions to this problem.

1.5 The internal market is an arena in which both the social dimension and other dimensions find their expression. To flourish, sustainable economic growth and jobs must be created which in turn generate tax revenues which are the basis for social entitlements. The levels of unemployment and the fiscal imbalances show that much can be done to remedy the current situation.

1.6 The legal aspects of the social dimension have been brought into question because ECJ rulings in four cases (Viking, Laval, Rüffert and Luxemburg) have led to lively debates particularly in political and academic circles about potential fears of increasing risks of social dumping. The European Parliament, the academic world and employee representative organisations (1) have expressed their concern about the decisions. Others are convinced that the ECJ judgements in these cases will contribute to improved functioning of the internal market.

1.7 The EESC therefore demands:

In the short term the EESC calls for the posting of workers directive to be implemented more effectively. The EESC proposes that the idea of the creation of a ‘European Social Interpol’ be explored, supporting the activities of the Labour Inspectorates of the various Member States.

The EESC urges the Commission to assess the situation in the EU in light of the ECHR's recent judgements.

The EESC also supports measures by the Commission that seek to strengthen social dialogue, including:

—	the promotion of a higher quality social dialogue and a European mechanism for dispute resolution and conciliation;

—	further development of the macroeconomic dialogue with a view to preventing another financial crisis;

—	promotion of the European social model in international relations.

In the medium term the EESC supports a Commission initiative which clarifies the legal obligations for national authorities, business and workers when implementing the Posting of Workers Directive and which ensures that these rules are universally applicable. The EESC finds the proposal in the Monti report, where the right to strike is exempted from the internal market, interesting and believes that it might resolve some of the problems. This should, however, not exclude a partial revision of the Posting of Workers Directive in order to apply the place of work principle consistently, making it possible to establish by law that the same working and remuneration conditions must always apply for the same work at the same location.

In the longer term the European Union should strive to strengthen the social dimension and realise the full potential of the internal market. The Lisbon Treaty and the annexed Charter of Fundamental Rights have not yet had their full impact on the balance between fundamental rights and economic rights. Strengthening the social dimension requires that the fundamental social rights be strengthened and that any limitation of fundamental rights which includes social rights be very restrictive. A Treaty change could be pursued to achieve this objective.

2. The internal market and the social dimension

2.1 In 1987, the EESC adopted an opinion (2) on the social aspects of the internal market. The EESC proposed that the European Community secure a number of basic social rights connected to the labour market. It wanted to ensure that the recently launched internal market did not lead to market distortions and to underline that the Community also had social goals. The social dimension includes legislation and agreements made at European level in order to guarantee that employees enjoy certain fundamental rights at the workplace. However, this also requires cooperation with a view to boosting employment in the EU.

2.2 Following that opinion, the European Commission published a number of documents which were the starting point for the development of a broader and deeper interpretation of the social dimension of the internal market (3). As the Commission wrote ‘The social dimension of the internal market is a fundamental component of this project, for it is not only a matter of strengthening economic growth and stepping up the external competitiveness of European undertakings, but also of using more efficiently all the resources available and of achieving a fair shareout of the advantages deriving from the single market’ (4).

2.3 In 1989, the EESC was instrumental in outlining the content of the Social charter vesting workers with fundamental social rights not to be jeopardised because of the pressure of competition or the pursuit of increased competitiveness. In the view of the EESC, the exercise of such fundamental rights presupposes that there is no unjustifiable restriction placed on them.

2.4 This opinion tries to capture some of the most recent important developments affecting the possibilities for the social dimension to function. In recent years, the EESC has adopted other opinions dealing with the social dimension which this opinion partly builds on (5). What is clear from the outset is that in a social market economy the internal market cannot function properly without a strong social dimension or the acceptance of the European citizens. The advantages of a properly functioning single market are numerous and important for companies, workers, citizens and the economy in general. It appears, however, from the preamble to the treaties that the single market was conceived as a tool to serve the welfare of the people, and not as an end in itself.

2.5 There are thus four fundamental reasons for the social dimension:

—	the free movement of persons;

—

there are indivisible social rights to which any society should adhere and with which it must comply under all circumstances; these are the right to collective action, trade union and collective bargaining freedoms and the other rights set out in fundamental ILO conventions and international and European conventions on social and personal rights;

—	to strengthen the functioning of the internal market and to mitigate the negative consequences of the same, in order to create acceptance for political and economic projects and boost social cohesion;

—	social policy is also one major component of improved competitiveness.

2.6 ‘Social policy’ is a shared competence between the national and the European level. Most of the provisions in this field focused on establishing the freedom of movement for workers and the freedom of establishment for the purposes of the internal market. Nonetheless, the social dimension gained in prominence. Subsequent treaties have extended majority voting to areas such as equal opportunities legislation, the information and consultation of workers and policies to help the unemployed. However legislation did not (and does not) have a legal basis for covering such matters as pay, the rights of association, to strike or to impose lock outs, even if ECJ decisions and EU-legislation do touch upon these issues. The Nice Treaty formalised the status of the Charter of Fundamental Rights of the European Union. The Lisbon Treaty has further formalised rights by making the Charter of Fundamental Rights legally binding.

2.7 Social policies are primarily the responsibility of Member States. However, social challenges arising from global or European developments affect people living in Member States, and so a coordinated European approach is necessary. The EU has tackled the dilemma of dual competencies using different methods. It has tried to uphold social norms by deciding on a range of minimum standards. Another method is the Open Method of Coordination (OMC). The OMC could be used better and more effectively by using the newly introduced ‘common principles’ approach and by allowing organised civil society's participation in formulating and even negotiating the objectives of the Lisbon Strategy at European level (6).

2.8 Europe's social ‘acquis’ is remarkable: about 70 directives and regulations have been adopted in this field since the creation of the European Union. The majority have been adopted since 1985. The EESC strongly believes that the EU has an important social role. Social problems cannot be solved by Member States alone. In order to create political acceptance, solidarity and coherence, the EU should place greater emphasis on the social aspects of its policies, while respecting the principle of subsidiarity.

3. Present developments

3.1 Development of the economy

3.1.1 The European economy is facing its most serious challenge in decades. Since the second half of 2008 (7), the world economy has been experiencing a sharp economic slowdown which is proving to be far worse than expected in most countries. Just as economies were showing signs of recovery from the banking crisis, they are now endangered by the sovereign debt crisis and the severity of the corrective measures being mandated.

3.1.2 Unemployment is rising, aggravating the situation. The repercussions of the financial crisis and lenders' requirements have led to cuts in welfare systems, pensions and social transfers. This will exacerbate poverty and place the most vulnerable groups at a disadvantage, starting a vicious circle. Many European companies that have been affected by the crisis nevertheless have taken measures, together with public employment services, to maintain their labour force and thus keep people in employment.

3.1.3 The sudden explosion of events and their rapid spread show new phenomena in the globalised economy. The causes were many. Monetary and exchange-rate policies which led to excessive liquidity, insufficient or non-existent regulation of certain areas or actors, the search for unrealistically high returns coupled with an insufficient understanding or analysis of the risks involved on the part of market actors and supervisory and regulatory bodies, excessive leverage, insufficiently coordinated macroeconomic policies and inadequate structural reforms (8).

3.1.4 Inevitably, the question arises of whether the EU's present economic framework, including an insufficient macroeconomic dialogue, has in fact aggravated the crisis. The results have been weakened automatic stabilisers, an explosion of credit instead of real wages, falling growth rates and less likelihood of detecting financial bubbles. The EESC is of the opinion that transferring private debt (banks) to public debt (States and citizens) places an excessive burden on citizens, particularly since the deterioration of public finances and the limitations of the growth and stability pact raise questions about how vital investments in welfare systems will be financed in the future.

3.1.5 The latest stage of the crisis has revealed that many Member States have been running unsustainable budget deficits. The corrective action needed to restore public finances will put enormous pressure on tax systems, social policies and programmes.

3.1.6 Despite their shortcomings, it should be noted that the Commission is considering national State subsidies, including in view of labour protection, in the framework of a broader European picture. Competition policy, in particular regarding SMEs and State subsidies to banks, rightly takes account of the socio-economic aim of maintaining a level playing field in Europe.

3.1.7 The EESC has previously (9) noted that European economic policy-makers have recognised the need for a counter-cyclical macroeconomic policy to complement the past reliance of economic policy on supply-side measures. The EESC also welcomed the commitment to provide better protection for the weakest members of society and to coordinate economic policy more effectively. However, it underlined that the EU's economic recovery plan is relatively small in scale compared with the packages adopted in other regions of the world.

3.2 Development of the internal market

3.2.1 The EESC has lauded the creation and development of the internal market in several opinions (10). The internal market, covering all Members States and the EEA countries, benefits consumers, companies and workers by providing a single regulatory space for mobility of goods, capital, persons and services.

3.2.2 The Commission has laid out its vision of the single market for the future (11). It points out that the single market is beneficial for consumers and businesses, that it has supported job creation and stimulated growth, competitiveness and innovation. The key areas for the future according to the Commission are:

—	consumers and businesses, where the single market needs to deliver better results and benefits to respond to the expectations and concerns of consumers and businesses;

—	coping with globalisation;

—	making knowledge and innovation the ‘fifth freedom’;

—	a social and environmental dimension where the Commission promises to improve its impact assessments to anticipate market changes more effectively.

The most serious failure of the internal market has been its inability to stimulate employment and economic activity through inward investment. In particular, there has been a failure to nurture and develop technology and research in order to lay the basis for a transition of the economy. Unless this failure can be corrected, Europe will be left in the slow lane of the world economy.

3.2.3 The EESC calls for a better balance between social development, a favourable economic environment and environmental protection which is key to a functioning internal market and the promotion of long-term sustainable development. The deeper the integration of the internal market, the more vital it becomes to fulfil the treaty objective of ensuring the welfare of the people, and therefore the better the social protection which must be supplied. With 27 labour markets with different legislative traditions, the EU must make sure that rules for internal mobility do not weaken already functioning systems. Precautions need to be taken to make sure that competition between Member States in the common market is geared towards innovation and is not counter-productive or even destructive (12).

3.2.4 Furthermore, in the wake of the crisis, Europe will face a wave of company restructuring. The EESC notes that the EU currently lacks a common strategic vision for how to either combat the negative consequences of such restructuring or to seize the opportunity to make the EU economy more competitive in the global economy. The EESC calls on the Commission to adopt a European position together with the social partners to protect all employees concerned. In this respect the EESC welcomes the initiative of the ESP to deliver a study on restructuring in the EU and set up a ‘Road Map’ for companies on how to be effectively engaged in the process of restructuring.

3.2.5 The EESC (13) has stated that if Europe wants to remain competitive over the long-term, the internal market must ensure a sustainable and long term growth which means also taking the environmental dimension into account. The final goal is to significantly improve the functioning of the internal market within a social market economy, and ensure fundamental social rights are respected. The EESC has also stressed that if necessary and appropriate, suitable specific measures should be adopted as soon as possible to protect workers stating that neither economic freedoms nor competition rules should take precedence over fundamental social rights (14). At the same time the EESC is mindful of the need to stimulate job creation and promote entrepreneurship as well as create healthy and sustainable Member State economies.

3.2.6 One shortcoming which needs to be addressed if the internal market is to fulfil its role is to give more prominence and legal certainty to services of general interest which have played an important role as economic stabilisers during the current economic crisis and to develop the international dimension. We need to promote our social model on the international stage as a factor of development and affirm our identity as a mutually supportive, active body in international forums which aims to provide a stronger framework for globalisation. If globalisation is to be fair then Europe should press for more equal trade and globalisation in its trade related and other international agreements.

3.2.7 The EESC is of the firm conviction that mobility in Europe should remain one of the EU's political priorities. In this respect, the EESC has called on those Member States which continue to apply transitional arrangements with regard to the free movement of persons to follow the procedures arising from the treaties and dismantle these arrangements (15).

3.3 Evolution of social/welfare systems

3.3.1 Despite a partial economic upturn, the employment and social situation will continue to deteriorate, especially in the context of the current measures designed to solve the sovereign debt crisis. The Commission reports that in the next two years the rate of unemployment is forecast to increase to levels not seen in several decades (16).

3.3.2 Steps have been taken in Member States which have had positive effects on keeping up employment and keeping down unemployment. They include stimulating investments, facilitating collective bargaining and specific labour market measures financed by public unemployment schemes. Some have relied on ‘internal flexibility’, such as various schemes to reduce the number of hours worked combined with training. In some countries there have been large-scale redundancies partly due to the absence of such provisions (17).

3.3.3 Employment must be at the top of the EU's agenda. Europe needs a high employment rate combined with a high quality labour market. High-quality labour needs high-quality entrepreneurship as well as investments in the public and private sectors in order to be internationally competitive. The financing of welfare systems relies on the European labour market being able to incorporate as many workers as possible. Europe is still facing barriers to achieving full employment. In order to maintain high future levels of employment in Europe, the emphasis has shifted to flexicurity, employability, higher productivity, and education and training which can contribute to establishing more effective labour markets. More than this, the highest priority should be given to measures that will stimulate jobs and company formation and to measures that will encourage sustainable inward investment.

3.3.4 Over the last decade, welfare systems have been the target of reforms aimed at promoting more effective work incentives in social protection systems, in line with a supply-side oriented philosophy with reductions in welfare benefits and stricter eligibility criteria. Such measures are thought to reduce unemployment. Welfare systems must strike a balance between providing support for getting people back to work and income support in the event of unemployment.

3.3.5 The effectiveness of such policies is open to question. There has been a growth in inequality over the last two decades. Welfare systems are crucial to alleviating poverty and without social benefits the rise of inequality and the social impact of the crisis would be much more rapid and severe. There is a danger that the present crisis will bring the trend of increased employment and improvements in cross-country social cohesion to a halt, while exacerbating a long-term trend in Europe where intra-country income inequality is worsening (18).

3.3.6 The anti-crisis measures in many Member States brought positive results. On the other hand the Commission (19) reports that in many countries, unemployed people do not receive income support. In some cases these benefits are poorly targeted, suggesting that benefit systems not only fail to provide a comprehensive safety net, but also that they are not properly targeted towards those most in need. The quality as well as the sustainability of these systems is at stake (20). Given the effects of the economic crisis and the demographic development there is a risk that welfare systems may shift from protecting living standards to simply establishing minimum standards. This is particularly the case where entitlements are already in excess of the fiscal incomes of certain Member States. While productivity continues to increase in EU countries, so does poverty. Questions need to be asked about why it appears impossible to fulfil people's most basic needs and provide decent employment. One solution in the long term lies with the growth of the economy in the public and private sector driven by the development of competitive companies.

3.3.7 However the EU’s capacity to provide adequate protection against risks and combine economic growth with social progress will only be sustained by intensifying reform efforts. Joint progress must be achieved in increasing employment levels, productivity growth, appropriate fiscal systems and sustainability and possibilities for European social systems to give adequate protection.

3.4 Judicial developments

3.4.1 The ECJ rulings in four cases (Viking, Laval, Rüffert and Luxemburg (21)) have led to lively debates in political and academic circles and have heightened fears, both substantiated and unsubstantiated, of increasing risks of social dumping. The rulings have also generated activities in the European institutions and among the social partners.

3.4.2 In October 2008, the European Parliament adopted a resolution (22) in response to the ECJ's judgments. The Parliament stated that the freedom to provide services does not take precedence over the fundamental rights contained in the Charter of Fundamental Rights of the European Union and in particular the right of trade unions to negotiate, conclude and enforce collective agreements and to take collective action. Furthermore, the Parliament stated that there are loopholes in the current Community legislation which is inconsistent. This was not the intention of the Community legislator, who was looking for a fair balance between the freedom to provide services and the protection of workers rights.

3.4.3 The academic debate (23) has been critical. In June 2009, over one hundred European labour lawyers and academics sent an open letter to the Heads of state and government expressing great concern about the deterioration in fundamental social rights and the impact of recent ECJ rulings on rights of workers, and their organisations. They also expressed concern that the judgments have created serious problems for the effective protection of workers' rights. They insisted that fundamental social rights should not be subordinate to internal market freedoms and competition law, but should rather be fully recognised as necessary pre-conditions for the sustainable economic and social development of the European Union.

3.4.4 In late March 2009, the European social partners began a joint analysis of the ECJ rulings, at the request of the European Commission and the French presidency. To carry out the work, an ad-hoc group was established which has focused its work on a limited number of key issues such as the relationship between economic freedoms and social rights; the obstacles to be removed and the conditions to be put in place to improve free movement and the provision of services; the issue of transparency and legal certainty and the challenge of respecting the diversity of national industrial relations systems (24).

3.4.5 The EESC, while respecting the ECJ's prerogative to interpret existing rules, believes that the judgments present a number of causes for concern as well as the need for analysis and an explanation of their consequences.

3.4.5.1 Hierarchy between economic freedoms and fundamental social rights

With Viking and Laval the ECJ acknowledged that the right to take collective action is a fundamental right and – as such – part of EU law, while emphasising that it is not superior to other EU law, such as the freedom to provide services or the freedom of establishment. Furthermore the ECJ gave the freedom to provide services and the freedom of establishment horizontal direct effect. The ECJ observed that industrial action should not only have ‘a legitimate aim compatible with the Treaty and [be] justified by overriding reasons of public interest, but even if that were the case, it would still have to be suitable for securing the attainment of the objective pursued and must not go beyond what is necessary in order to attain it’ (25). Thus the acknowledgement that collective action is a fundamental right is an acknowledgement in principle rather than a reality. Following on from this, the ECJ deemed collective action to be a restriction on the exercise of those freedoms, asking whether this restriction can be justified. This means that collective action is measured with regard to the restriction that they imply for economic freedoms. Academics have pointed to the fact that the ECHR (26) in recent cases has examined the issue from the opposite perspective, i.e. the question has been to consider what limitations are acceptable in the area of fundamental rights. The ECJ rulings raise possible concerns regarding discrepancy with ECHR jurisprudence.

3.4.5.2 Limitation of fundamental rights

The court has for the first time judged the limits for national level collective action in a transnational context. The EESC finds it especially worrying that the ECJ introduced a proportionality test at this point. This test not only removes the quality of the fundamental right to take collective action, it also infringes on the right to strike. In the light of the ECHR rulings and reactions, the EESC stresses that the process of defining the limits of economic freedoms and social fundamental rights is also dependent on future judgements and the questions they raise.

3.4.5.3 Posting of Workers Directive

The Posting of Workers Directive aims to ensure the necessary harmonisation while respecting national diversity when coordinating national policies for the temporary cross-border posting of workers. The ECJ concluded that the problems that have occurred are due to lack of national transposition of some provisions of the Posting of workers directive (Laval), incompatible national legislation (Rüffert (27)) or an overly wide interpretation of the Posting of workers directive and unclear and unjustified control measures (Luxembourg).

According to the ECJ, the Posting of Workers Directive does not impose equal treatment but ensures that minimum requirements are respected with regard to posted workers. Consequently, it is de facto a maximum instead of a minimum directive. However, the ECJ rulings do not prevent the application of more favourable terms and conditions of employment by the employers. The aim of Article 3.7 of the Posting of Workers Directive was to ensure that the application of the minimum rules in practice in the host Member State did not lead to worse working conditions compared to those to which the posted worker was entitled in the country of origin. It has been argued that the judgements withdraw some of the possibilities at national level of imposing higher standards going beyond the mandatory rules for minimum protection in the directive either through statutory regulation or collective agreements in favour of workers.

This in turn creates distortions of competition domestically and in the internal market where domestic companies have to follow national rules or collective agreements while competitors from other Member States could apply minimum rules.

3.4.5.4 Conflict between different legal systems

Another result of the judgments is the conflict between Community law and international standards (28). Furthermore it can be argued that there is a conflict of law with ILO Conventions No 87 and 98, as well as with Article 6 (4) of the European Social Charter and the case law of the respective institutions, as established by the ILO supervisory bodies (BAPA UK case).

4. Conclusions

4.1 Recent years as well as the present crisis have brought new risks of increased social inequalities. In addition, the EU has increased the risks of social and competition distortions through decisions of its own. The economic, social and judicial developments risk leading to a situation where the social dimension of the internal market is at risk and where the fundamental rights and the basic social rights envisioned in the EESC opinion of 1987 – are undermined. The social dimension of the internal market should therefore be a focal point in coming years, but in order to improve economic aspects – employment, entitlements, tax revenues – the EU will have to correct the evident failure of the internal market to promote growth by means of high-quality jobs and high-quality enterprises and other employers.

4.2 One of the most important aspects of the social dimension is employment. With the pressure on public finances the public sector cannot create an infinite number of jobs so the main burden of job creation must fall on the private sector. Member States must create conditions for a virtuous circle reoriented on the real economy, whereby customers create jobs, companies create customers and investors and entrepreneurs create companies. It is also important to see social investment as supportive of enterprises and a good business climate. In this framework, the social economy makes an invaluable contribution.

4.3 The EESC has helped shape the discussion on challenges facing the European social models and the nature of a European social model (29). The EESC said that the strength of the European Social Model is the way in which competitiveness, solidarity and mutual trust have interacted.

4.4 One way of resolving the conflict between the internal market and social rights would be to return to a policy of ‘More Nation State, less Europe’. The EESC is of the opinion that we need the exact opposite; we need more Europe, but a different one. However, this requires a new regulatory system for economic and social policy in Europe. Only a fully democratic and social Europe can circumvent the danger of Europeans' growing sense of alienation towards the European venture. However, the EU must also respect the different social systems in place in the Member States. If jurisprudence and EU-law fail to take account of the EU's diversity, then the minimum standards may become too low to avoid social dumping in many countries.

4.5 One very important element of the European social dimension is a harmonised and fairer fiscal policy at EU-level. To avoid ongoing harmful tax competition, the EESC supports efforts to secure a common consolidated corporate tax base. It is needed in the long-term if the internal market is to function properly (30). The EESC has also called for greater EU-wide coordination of Member States' tax policy, primarily in areas where the tax base is mobile and the risk of tax evasion and tax competition between Member States is greatest (31). Tax evasion and fraud as well as tax havens must all be combated.

4.6 It must also be remembered that by partly removing the possibility of regulating conditions in the labour market by collective agreements, labour markets are made less flexible. Collective agreements and social dialogue are essential tools for the concept of flexicurity (32).

5. How to ensure that the social dimension functions more effectively

5.1 In the short term, the EESC calls for the improved implementation of the posting of workers directive. Effective controls of the proper application of the provisions on the posting of workers are a prerequisite for achieving the aim of the directive, namely the avoidance of social dumping. Effective transnational cooperation between authorities must be ensured if there is to be any effective control over the pay and working conditions of posted workers. The EESC is in favour of creating a ‘European Social Interpol’ with responsibility for coordinating the activities of the Social Conditions Inspectorates in the various Member States.

5.2 In view of the jurisprudence of the ECHR regarding fundamental rights, the ECHR argues that the ‘Convention is a living instrument … so as to reflect the increasingly high standard being required in the area of the protection of human rights, thus necessitating greater firmness in assessing breaches of the fundamental values of democratic societies and that limitations to rights must be construed restrictively’ (33) The EESC encourages the Commission to assess the situation in the EU in light of the ECHR's recent judgements.

5.3 The inclusion and involvement of workers and their representatives and trade unions is crucial for managing change in a socially acceptable way at company level (34). The EESC has on many occasions stressed the importance of social dialogue and of strengthening industrial relations systems at European and national levels, while respecting the diversity of such systems across the EU (35). The EESC supports all measures by the Commission which seek to strengthen social dialogue, including:

—	the promotion of a higher quality social dialogue and a European mechanism for dispute resolution and conciliation;

—	further development of the macroeconomic dialogue with a view to preventing another financial crisis

5.4 In the medium term the EESC supports a Commission initiative which clarifies the legal obligations for national authorities, business and workers under the Posting of Workers Directive's implementation and ensures that these rules are universally applicable. In this respect the EESC welcomes the commitment made by Commission President Barroso before the European Parliament. The EESC finds the proposal in the Monti report, where the right to strike is exempted from the internal market, interesting and believes that it might resolve some of the problems. This should, however, not exclude a partial revision of the Posting of Workers Directive in order to apply the place of work principle consistently, making it possible to establish by law that the same working and remuneration conditions must always apply for the same work at the same location.

5.5 In the longer term, the European Union should strive to strengthen fundamental social rights.

The EESC has on many occasions called for stronger European social policies, particularly in the light of the ongoing crisis. The EU must be committed to a policy of full employment, reduction of income inequalities, improvement in social conditions, strengthening the welfare state, abolishing socially unprotected conditions of employment and extending workers' rights and industrial democracy. The Lisbon Treaty and the annexed Charter of Fundamental Rights have not yet had their full impact on the balance between fundamental rights and economic rights. This remains to be seen.

However, the strengthening of fundamental rights, which includes social rights, requires that any restriction be limited. The point of departure must be to first look at fundamental rights and not at economic freedoms, in line with ECHR's jurisprudence. Adjustments to directly applicable EU law (primary law) should be pursued in order to strengthen the social dimension.

Brussels, 14 July 2010.

The President of the European Economic and Social Committee

Mario SEPI

(1) The European Trade Union Confederation represents 80 million workers.

(2) See ESC opinion of 19.11.1987 on Social Aspects of the Internal Market, rapporteur: Mr Beretta (OJ C 356 of 31.12.1987, pp. 31-33).

(3) For example the Social Dimension of the Internal Market. Commission Working Paper. SEC(88) 1148 final, 14.9.1988 and the Communication from the Commission concerning its Action Programme relating to the Implementation of the Community Charter of Basic Social Rights for Workers. COM(89) 568 final, 29.11.1989.

(4) Social Dimension of the Internal Market. Commission Working Paper. SEC (88) 1148 final, 14.9.1988.

(5) See EESC opinions:

—	of 6.7.2006 on Social cohesion: fleshing out a European social model, rapporteur: Mr Ehnmark (OJ C 309 of 16.12.2006, pp. 119-125).

—	of 9.7.2008 on A new European Social Action Programme, rapporteur: Mr Olsson (OJ C 27 of 3.2.2009, pp. 99-107) and

—	of 4.11.2009 on The post-2010 Lisbon Strategy, rapporteur-general: Mr Greif (OJ C 128 of 18.5.2010, pp. 3-9).

(6) EESC opinion of 4.12.2008 on the Effective governance of the renewed Lisbon Strategy, rapporteur-general: Ms Florio (OJ C 175 of 28.7.2009, pp. 13-19).

(7) European Commission Economic Forecast Spring 2009.

(8) See EESC opinion of 15.1.2009 on the European Economic Recovery Plan, rapporteur: Mr Delapina (OJ C 182 of 4.8.2009, pp. 71-74).

(9) Ibid.

(10) See EESC opinion of 14.5.2009 on The impact of legislative barriers in the Member States on the competitiveness of the EU, rapporteur: Mr van Iersel. (OJ C 277 of 17.11.2009, pp. 6-14).

(11) Communication from the Commission to the European parliament, the Council, the European Economic and Social Committee and the Committee of the Regions - A single market for 21st century Europe {COM(2007) 724 final}.

(12) Integrated Report on the implementation and the future of the Lisbon Strategy in the post-2010 period.

(13) See EESC opinion of 14.1.2009 on the social and environmental dimension of the internal market, rapporteur: Mr Adamczyk (OJ C 182 of 04.8.2009, pp. 1-7).

(14) See EESC opinion of 14.5.2009 on The impact of legislative barriers in the Member States on the competitiveness of the EU, rapporteur: Mr van Iersel. (OJ C 277 of 17.11.2009, pp. 6-14).

(15) See EESC opinion of 25.3.2009 on Identification of outstanding barriers to mobility in the internal labour market, rapporteur: Ms Drbalová (OJ C 228 of 22.9.2009, pp. 14-23).

(16) European Commission Economic Forecast Spring 2009.

(17) Plant-level responses to the economic crisis in Europe Vera Glassner and Béla Galgóczi WP 2009.01 ETUI.

(18) This trend of growing inequalities is also evident in the OECD-area.

(19) The Social Situation in the European Union 2008.

(20) IRES 115.

(21) Viking C-438/05, Laval C-341/05, Rüffert C-346/06, COM v LUX C-319/06.

(22) EP resolution of 22 October 2008 on challenges to collective agreements in the EU (2008/2085(INI)).

(23) http://www.etui.org/en/Headline-issues/Viking-Laval-Rueffert-Luxembourg/2-Articles-in-academic-literature-on-the-judgements.

(24) Report on joint work of the European social partners on the ECJ rulings in the Viking, Laval, Rüffert and Luxembourg cases.

(25) Viking C-438/05 (75).

(26) ECHR Demir and Baykara v. Turkey (application No 34503/97).

(27) In the Rüffert case, the Court judged that the competitive advantage of paying lower wages is part of the freedom to provide services and therefore is protected.

(28) The ECJ's Rüffert judgment did not take ILO Convention No 94 into account and therefore the interpretation creates conflict between various legal systems

(29) See EESC opinion of 6.7.2006 on Social cohesion: fleshing out a European social model, rapporteur: Mr Ehnmark (OJ C 309 of 16.12.2006, pp. 119-125).

(30) See EESC opinion of 26.09.2007 on Coordination of direct taxation, rapporteur: Mr Nyberg (OJ C 10 of 15.1.2008, pp. 113-117).

(31) See EESC opinion of 4.11.2009 on the post-2010 Lisbon Strategy, rapporteur-general: Mr Greif (OJ C 128 of 18.5.2010, pp. 3-9).

(32) See EESC opinion of 11.7.2007 on Flexicurity (collective bargaining and the role of social dialogue), rapporteur: Mr Janson (OJ C 256 of 27.10.2007, pp. 108-113).

(33) ECHR Demir and Baykara v. Turkey (application no. 34503/97).

(34) See EESC opinion of 29.9.2005 on Social dialogue and industrial change, rapporteur: Mr Zöhrer (OJ C 24 of 30.1.2006, pp. 90-94).

(35) See EESC opinion of 11.7.2007 on Flexicurity (collective bargaining and the role of social dialogue), rapporteur: Mr Janson (OJ C 256 of 27.10.2007, pp. 108-113).

11.2.2011

Official Journal of the European Union

C 44/99

Opinion of the European Economic and Social Committee on ‘Towards an EU policy to rationalise the web offset and rotogravure printing industry in Europe’ (own-initiative opinion)

2011/C 44/16

Rapporteur: Mr GENDRE

Co-rapporteur: Mr KONSTANTINOU

On 16 July 2009 the European Economic and Social Committee, acting under Rule 29(2) of its Rules of Procedure, decided to draw up an own-initiative opinion entitled

Towards an EU policy to rationalise the web offset and rotogravure printing industry in Europe.

The Consultative Commission on Industrial Change, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 1 July 2010.

At its 464th plenary session, held on 14 and 15 July 2010 (meeting of 14 July 2010), the European Economic and Social Committee adopted the following opinion by 145 votes to two with seven abstentions.

1. Conclusions and recommendations

1.1 The European printing industry is having to tackle a huge set of challenges due to the rise of the Internet as a source of information and advertising, the drop in the number of people reading newspapers and magazines, and fierce global competition, which is affecting certain products in the sector.

1.2 The web offset and rotogravure sector is experiencing a particularly difficult situation because of significant overcapacity in production, which some commentators have estimated at 25 % to 30 %. The IFO Kojunkturtest report on the German printing industry stated that levels of investment in the industry were down since 2008, in line with market trends. 2006 and 2007 were reasonably good years for the printing industry (1). Since 2008, however, investment cycles have been kept at much lower levels, mainly in order to rationalise and improve production flow.

1.3 The printing market is running at overcapacity. Other significant factors are influencing competition, such as the attractiveness of new media, low cost imports from producing countries, and decreasing demand. This difficult economic climate has resulted in a drop in prices and is having a negative effect on employees' standard of living.

1.4 The current economic crisis has made it more difficult to access credit. As is the case in many other sectors, these negative trends have increased the need to reduce production costs. This situation has had an impact on recent pay negotiations. In these difficult circumstances there is concern that some printing companies, particularly those working in the more vulnerable segments of the market, are facing large-scale restructuring and mass redundancies.

1.5 In 2007 the European Commission published the results of a study on the factors affecting the competitiveness of the sector. This research led to proposals endorsing an action plan for the printing industry. The EESC supports these proposals, which businesses are starting to implement and which remain relevant. The Committee welcomes the achievements which have already been made but considers that the problems in the sector – which have been greatly exacerbated by the crisis and the recession which has affected all EU Member States – require new initiatives to meet short- and long-term challenges.

1.6 The EESC has been informed about a new year-long project involving trade unions and employers in the sector. The aim is for the social partners to draw up guidelines for restructuring businesses in a socially responsible way. The project was launched in 2009 and allows employers and trade unions to examine the problems in the sector together and discuss the issues to try and reach a joint solution. The focus is on drawing up an action plan to reduce overcapacity in the sector.

1.7 This plan could be part of a longer-term industrial policy which would include examining new models for the printing industry. This work should be followed up by a high-level group made up of representatives from the industry, trade unions and experts, which would be formed under the auspices of the European Commission. The group would be responsible for looking at how the industry might evolve in the future and identifying tools which could be employed to deal with these changes, using a transparent system for gathering information.

1.8 Currently, formal social dialogue between employers and trade unions only exists at company level and at national level. The EESC calls on the Commission to set up a European social dialogue committee for the sector as a whole.

1.9 The agenda for formal, structured European social dialogue could include:

1)	discussing different measures which would maintain employment: training and redistributing tasks coupled with the reduction and better organisation of working time, use of short-term working, and encouraging career change both inside and outside the company or the profession.

2)	examining the work required to ensure that production capacity can be adapted to market demands, without having a negative impact on working conditions.

a joint recommendation from employer and worker representatives on guidelines for long-term investment, which recognises that new investment needs and the scope of these requirements can only be fully assessed by individual businesses. Setting out the elements required for an appropriate investment strategy should ensure that machines can be acquired to act as replacements or to meet market needs, thereby ensuring that businesses have the equipment they require to work effectively in their current or future specialist areas.

the need to analyse the financial situation in the sector by bringing together and consolidating published data, while at the same time ensuring that businesses' strategies remain confidential. This is a top priority to ensure that current room for manoeuvre in the sector can be assessed more accurately.

5)	identifying best practice in terms of working conditions, training and re-skilling, while ensuring that the standards of the European social model are respected and that collective agreements are also complied with where they exist.

1.10 The EESC calls on the Commission to work towards implementing a European-level observatory or sector council for skills and jobs which would measure the sector's current and future needs and help to ensure that the training on offer is in line with demand. The observatory would encourage permanent professional training, career change within the sector, and re-skilling.

1.11 As an immediate step, the EESC suggests that the relevant European associations hold a conference for all stakeholders to establish the current state of affairs in order to work out short-term action and to fund an independent study on the medium and long-term future of the sector. The European Commission should give the associations financial and logistical support to carry this out and should itself attend the conference. The social partners could be asked to suggest what action needs to be taken as a matter of priority to put the market on a sustainable footing and look at how the industry might evolve in future.

1.12 The activity of brokers could be analysed to measure the impact this is having on pricing. The potential use of specialisation agreements could also be examined by businesses to help ensure that production capacity can be better utilised through economies of scale and by improving production techniques.

1.13 The EESC calls on the EU and national governments to facilitate access to public funding for the sector, especially that available via the European Social Fund, the European Regional Development Fund (ERDF) and the European Globalisation Adjustment Fund, for the purpose of promoting training and re-skilling and giving workers in the printing industry the support they need to embark on a career change within the sector. The Committee calls on businesses to examine the ways in which the European Investment Bank (EIB) could help to fund the process of acquiring new technologies for new activities.

2. Background

2.1 Changes in the European printing industry are closely linked to changes experienced by paper, ink and printing press suppliers, as well as their clients, who have their own problems to deal with and are working out the best way forward, which for some will mean a process of concentration.

2.2 These problems are the result of structural changes in the media which have been exacerbated by the financial crisis: the development of the Internet is gradually changing the face of the market. It is making waves throughout the value chain as advertising budgets are cut, taking vital advertising revenue away from the print media – an irreversible trend in part – and having a negative impact on the range of information available.

2.3 New transport and communications opportunities have meant that businesses working with products that do not have to come out on the market so quickly (this applies especially to books of various kinds) are now competing with printing companies operating in India or China. It also appears that brokers who are looking to secure the lowest prices are tending to place orders with Asian firms, causing a deflationary trend which is having a negative effect on investment. And with the growing trend to publish catalogues online rather than on paper, these changes are having a very negative impact on the rotogravure and web offset printing sector in Europe.

2.4 According to the latest figures published by Eurostat, the European printing industry is made up of 132 571 companies and employs more than 853 672 people (2). Seven countries – the UK, Germany, France, Italy, Belgium, the Netherlands and Spain – employ 80 % of the total number of people working in the sector across the EU-25. More than 95 % of European printing companies employ fewer than 50 people, accounting for around 60 % of total employment, and less than 1 % have more than 250 staff, accounting for around 13 % of total employment. More detailed figures – which are currently not available – would be required to gain a broader, more precise picture of the sector.

2.5 This opinion will focus on web offset and rotogravure printing, which involves large numbers of print runs or publications. Newspapers and packaging will not be covered in depth as these sectors are considered to be different markets altogether. In fact, many newspapers have their own printing presses and therefore only have a minor impact on this specific market. The web offset and rotogravure sector is made up of printing companies producing large quantities of products. Web offset and rotogravure are different printing processes and require different types of machinery. Offset is used by large web offset companies and small sheet-fed offset businesses. Taken together, the European offset and rotogravure printing sectors make up 56 % of the traditional printing market in Europe (3), producing books, directories, catalogues and magazines, which tend to be printed in very large quantities, usually between 10 000 and 300 000 copies.

2.6 Magazines account for roughly half of production, with the other half mainly consisting of catalogues, promotional leaflets and books. Overall, 5 million tonnes of paper are used in the production process. Most magazines in Europe are printed using a rotogravure printing press, as are many different types of packaging materials. Total annual capacity in the European rotogravure sector is more than 5 million tonnes, with 80 % of this capacity in just five countries. In total there are 222 rotary printing presses in Europe.

2.7 The web offset and rotogravure sector in Europe does have some large businesses, and this applies both to web offset printing (around 30 companies) and rotogravure printing (around 25 companies). These companies are competing to increase their market share, while overall demand is decreasing. Over the past few years, rotogravure printing has started to face stronger competition from web offset printing. Businesses are under increasing pressure and the social partners are having to negotiate restructuring processes while at the same time attempting as far as possible to maintain employment, working conditions and pay.

3. Reasons

3.1 The problems facing the European printing industry in general are particularly severe for the web offset and rotogravure sector, which has been hit hard by structural and cyclical challenges: sweeping changes in the media sector, with the growth of the Internet reducing the market for printed products providing information; overcapacity and overinvestment, and concentration.

3.2 General developments in the media sector

3.2.1 The decline in the volume production of the heavy printing industry looks set to continue over the next few years because of the rise in online publishing, advertising on the Internet and resulting changes in reader behaviour.

The production of directories and catalogues has been decreasing over the past five years. The production of these items is essential for the European web offset and rotogravure printing industry, however, and if the trend continues, there will be more restructuring, more mergers, more site closures and additional job losses.

3.2.2 The magazines sector in Europe has been experiencing a downward trend over the past ten years, with a drop in sales and decreasing prices (4). According to Intergraf, four out of the six main magazine publishing countries experienced a drop in sales between 2001 and 2004, while there was a slight increase in Spain and Italy. More recent figures show that the Italian and Spanish markets are now shrinking. In 2009, there was a 28.7 % drop in investment for advertising in periodicals in Italy (Nielsen), and magazine production dropped by 10.5 % in terms of weight (Istat). This trend is still in evidence and, as long as there is overcapacity in the sector, it looks set to continue. Companies are targeting more specialised markets to increase sales, so that orders are involving shorter print runs, which is having a negative effect on the web offset and rotogravure sector, where savings in production costs can only be made through large print runs.

3.2.3 Newspaper publishers have reduced the number of their daily titles because of declining readership. In the UK, for example, no fewer than 53 titles (mainly free weekly newspapers) were closed down in 2008. Some of these groups have been rolling out dual paper/online subscription offers, as they try to make these two ways of circulating information and advertising material work together. This could help to stall decline in the sector and could help some employees to find new jobs – although it is difficult to judge the effects with any certainty at this stage.

3.2.4 Paper accounts for more than half of printing costs in Europe and given that companies tend to buy paper on an individual basis, they are finding it difficult to compete with the group purchases made in South-East Asia. In a recent report by the Stationers' and Newspaper Makers’ Company, it was estimated that the demand for newsprint would drop by half (56 %) by 2020. The same report also suggested that demand for magazines would shrink by around a third because of more material being published online and the effect this would have on advertising – and this was without taking into account the impact of digital media on the business magazines sector (5).

3.2.5 Traditionally, large publishers did all their own printing. Over the past ten years, however, many publishers have been selling off their printing presses to focus on their core business, and publishers with their own printing capacity are now few and far between. Publishers are also giving printing jobs to the lowest bidder – and sometimes using brokers' services – which is having an additional effect on printers, exacerbating difficulties in an already weak sector. Overcapacity is allowing these large, powerful publishers to force companies to cut their prices, squeezing printing companies' margins and driving down staff pay.

3.2.6 Publishers of catalogues and periodicals are also exerting a similar type of pressure on the cost of manufacturing their products. Given the strong competition for every contract, most printing companies are attempting to cut their costs by squeezing wages, which is having a negative impact on working conditions.

3.2.7 The financial crisis is having dire consequences for printing companies' access to credit, and the sector does not have a good reputation with the banks, which sets companies at a further disadvantage. The crisis has also led to cuts in advertising budgets, which has a negative impact on the volume of work available for printing companies.

3.2.8 Although diversifying might be desirable, it is difficult for graphic companies to do so because most of them are not currently in a position to invest. This is especially the case for prepress processes due to a shortage of funds and lack of available premises.

3.2.9 In contrast, small and medium-sized production units seem to be able to adapt more easily to structural changes and cyclical problems as their ways of working are more flexible and can cater for different client needs more easily. In future, these businesses could help with re-employing a certain proportion (as yet difficult to quantify) of the employees who have been made redundant from large companies.

3.3 Overcapacity and overinvestment

3.3.1 Increasing overcapacity (6) in the European market for web offset and rotogravure, as a result of decreasing demand in the European market and overinvestment, is having a negative effect on companies' slim margins. There is now a real risk that tougher cost-cutting measures will start to be introduced in a desperate attempt to maintain margins, or simply to survive. Many companies are having to accept a sales price which is lower than their overall production costs to try and minimise their losses.

3.3.2 A study carried out by the printing arm of the trade union UNI Europa showed that, in 2008, production in the graphic sector was back at 2004 levels (7). Despite this unfavourable situation, European rotogravure companies bought 28 new printing presses between 2005 and 2008. Of course, this investment was in part necessary to replace equipment, meet new market demands and provide additional capacity to ensure potential peaks in production could be dealt with more efficiently. These presses can produce printed material more efficiently, thereby increasing overcapacity in the sector, which even before the economic crisis was estimated at 15-20 % (8). With the crisis in full swing, it now stands at around 25 to 30 %.

3.3.3 According to the German trade union Ver.di, increasing Europe's printing capacity has increased competitive pressure, which has become ruinous. Ver.di's analysis of the situation also states that investing in this way has merely increased the pressure to reduce costs and eliminate market competitors, which has already resulted in large-scale job cuts.

3.3.4 Overcapacity and overinvestment have already resulted in a number of spectacular corporate failures. For example, Quebecor World had been one of the main printing companies in Europe, employing more than 20 000 staff around the world. In 2008, it went into receivership, citing increased competition and the rise of digital printing. In 2009, the company repaid its debts and transferred the European part of the business to an investment vehicle called HHBV. The company is now known as World Color. While some companies failed, many others responded to the difficult climate by merging with other companies. This led to large-scale restructuring throughout the sector which, in turn, resulted in job cuts.

3.3.5 As has been the case in many other sectors, the economic crisis has had a severe impact on salary negotiations carried out in 2009. Even where no redundancies are required, the strong pressure on employees to reduce labour costs has a negative effect on working conditions and pay. In 2009, collective bargaining led to an average drop of 0.9 % in the purchasing power of staff in the European graphic industry (9). The enlargement of the market has reinforced the downward spiral of prices and labour costs, exacerbating the competitive environment.

3.4 Concentration

3.4.1 The number of companies producing paper, ink and printing presses has decreased over the past few years, resulting in a higher degree of concentration and putting suppliers in a strong position, allowing them to impose their conditions more easily.

3.4.2 A recent study carried out by the European graphic sector found that excess capacity, overinvestment, weak demand, lower product prices, lower turnover and increasing product market competition had led to mergers and takeovers, and more bankruptcies (10).

3.4.3 Mergers and acquisitions have produced larger companies that are more determined than ever to eliminate their competitors. In 2005, the graphic arms of the media groups Bertelsmann, Gruner + Jahr and Springer merged to form Prinovis, the largest rotogravure company in the European printing industry. The Schlott AG group became the second largest rotogravure company in Europe by acquiring REUS (Plzeň, Czech Republic), as well as folding and printing capacity (Biegelaar, the Netherlands) in 2006 and 2007. At the beginning of 2008, a Dutch investment group took over Quebecor's European graphic operations. The British group Polestar is on the look-out for partners in order to strengthen its market position.

4. Opportunities

4.1 Taken together, these difficulties have left the European web offset and rotogravure sectors in a precarious situation which will be damaging in the long term if urgent, coordinated action is not taken by decision-makers and other stakeholders. The social partners have concluded that the sector needs to be re-organised and re-structured if it is to develop sustainably over the long-term. It is likely that it will be further streamlined over the next ten years, with many redundancies. The social partners therefore believe that action should be taken now to ensure that the crisis in the sector is brought under control and managed in the best interests of employers and employees. The situation is so serious that the trade unions are currently examining the implications and trying to develop constructive strategies to protect jobs, plan for retraining, guard against deteriorating working conditions and maintain pay levels.

4.2 In 2007 the European Commission put forward a proposal, supported by the professional associations, for a six-point action plan for the graphic industry:

Supporting the European printing industry in a globalised marketplace

a)	Partnerships and alliances

b)	Managing production costs

2)	Developing added-value services for clients

3)	Improving training

4)	Strengthening the European standard – standardisation and harmonisation

5)	Improving research and innovation in a coordinated way

6)	Improving the image of the printing industry.

The EESC on the whole supports this proposal, which is broadly speaking still up to date, and welcomes the progress that has already been made. The Committee considers, however, that some urgent measures should be taken to help the sector deal with short-term challenges, given that its problems have been exacerbated by the economic crisis and the recession in all EU Member States.

4.3 The financial crisis has also heightened the need for the social partners to take organised, coordinated action. Developing a proper European industrial policy by building on the Commission proposal is therefore more necessary than ever. Further industry concentration, beyond what is necessary, is undesirable, although a managed consolidation of the industry should be carried out by carefully handling change, even if this involves reducing working time. The aim would be to safeguard as many jobs as possible and plan for effective ways of redistributing tasks and encouraging career change, both inside and outside the company. In accordance with Regulation (EC) No 2658/2000, which is currently being revised, specialisation agreements could be investigated between companies which, taken together, do not make up more than 20 % of the market. These agreements would improve production techniques and bring about economies of scale, helping to ensure companies' survival in the longer term.

4.4 The activity of brokers could be analysed to measure the impact this is having on pricing. The principle of free and undistorted competition should apply, respecting decent labour standards and levels of pay, as well as collective agreements where these are in place in the EU.

4.5 A concerted effort should be made to reduce overcapacity in the sector. Social dialogue and collective bargaining should be rolled out at all levels in all countries to ensure that restructuring is managed in a socially acceptable way. Formal, structured social dialogue at European level is urgently required so that solutions can be developed to meet the challenges facing the industry. The EESC points out that social dialogue in the sector could result in the adoption of opinions, joint declarations, guidelines, codes of conduct, charters and agreements.

4.6 Financial and logistical support from the European Commission is essential to ensure the web offset and rotogravure industry in Europe can thrive in the future. The EESC calls on businesses to use the European subsidies which are available, especially through the European Social Fund, the ERDF, the European Globalisation Adjustment Fund and European funding for research and innovation. It would also make sense to look at the ways in which the EIB can offer financial support to businesses for the process of adapting to new activities which require new technologies. The various support systems should be used solely to facilitate change and should not indirectly fund relocations.

4.7 The EESC suggests that the following four steps should be taken immediately:

4.7.1

Set up a high-level study group made up of employers, employees and researchers to work out how the printing industry needs to be organised in the medium-term and to make proposals on the new business model which needs to be established.

4.7.2

Hold a conference for all stakeholders to establish the current state of affairs and identify possible action in the short-term. The social partners could be asked to look at how the industry might evolve in future and suggest what action needs to be taken as a priority to put the market on a sustainable footing.

4.7.3

Instigate an independent study, funded by the Commission and carried out using structured European social dialogue, to examine the medium- and long-term future of the sector. The study would involve considering new technology, changes in consumer behaviour, and the strategies of suppliers and buyers.

4.7.4

Set up a skills and jobs observatory/sector council to identify current and future job profiles. In order to develop appropriate training and re-skilling policies, it is essential to gain an in-depth knowledge of the skills needed.

4.8 In order to monitor developments in the industry effectively, the Commission should set up a system for gathering information and reliable data which stakeholders can access.

Brussels, 14 July 2010.

The President of the European Economic and Social Committee

Mario SEPI

(1) Ifo, Investitionstest, München, Frühjahrsgutachten 2008 (investment survey, Munich, Spring 2008).

(2) The competitiveness of the European printing industry, European Commission (2007).

(3) Ibid.

(4) Ibid.

(5) The Future of Paper and Print in Europe, Stationers' and Newspaper Makers’ Company (2009).

(6) Gennard, J.: The Impact of the financial crisis on the European graphical industry (2009).

(7) European Gravure and Offset Printing Conference in Verona, Italy, 16-20 March 2009.

(8) Ibid.

(9) Gennard, J.: Report on UNI Europa's collective agreements (2009).

(10) Gennard, J. Annual Collective Bargaining Survey. UNI Europa (2008).

11.2.2011

Official Journal of the European Union

C 44/105

Opinion of the European Economic and Social Committee on ‘Changes and prospects for the textile services sub-sector in Europe’ (own-initiative opinion)

2011/C 44/17

Rapporteur: Mr PEZZINI

Co-rapporteur: Mr BOOTH

On 18 February 2010 the European Economic and Social Committee, acting under Rule 29(2) of its Rules of Procedure, decided to draw up an own-initiative opinion on

Changes and prospects for the textile services sub-sector in Europe.

The Consultative Commission on Industrial Change (CCMI), which was responsible for preparing the Committee's work on the subject, adopted its opinion on 1 July 2010.

At its 464th plenary session, held on 14 and 15 July 2010 (meeting of 14 July), the European Economic and Social Committee adopted the following opinion by 138 votes to 1 with 6 abstentions.

1. Conclusions and recommendations (1)

1.1 The EESC stresses the importance of the textile services industry in Europe, whose development shows promise, both in economic and technological terms and because it is closely related to local operating contexts and employment situations, with the potential to continue making a significant contribution to the development of a European economy providing jobs and economic and social cohesion.

1.2 The EESC calls on the European Foundation for the Improvement of Living and Working Conditions to launch a pilot initiative to map the size and geographical distribution of businesses in the sector and living and working conditions, as well as the extent of the sector's informal economy. At the same time, the EESC calls for a thorough reflection on the NACE definitions for the sector, to ensure that proper definitions are provided with regard to its economic, social and employment development.

1.3 In the context of the Europe 2020 initiatives to combat global warming, the EESC recommends to the European Parliament, the Council and the Commission that the sustainability and efficiency of resources in the textile services industry and its potential for job creation and investment generation be taken into due account in the drafting of the new environmental provisions.

1.4 The EESC believes building structured social dialogue at both European and national and regional levels to be essential, and proposes that the Community fund networks for exchange of best practices for:

—	development of qualifications and professionalism, and the relevant training requirements, to be defined by means of a specific CEDEFOP initiative;

—	definition of fair working, safety and health conditions, with the support of the European Agency for Safety and Health at Work in Bilbao;

—	adequate representation of the sector's social partners in the European maintenance services committee.

1.5 The EESC stresses the importance of correctly applying Community provisions on information, consultation of workers and correct establishment and management of European Works Councils, developing a participatory foresight exercise for the sector at European level, with the support of the Institute for Prospective Technological Studies (IPTS) in Seville.

1.6 The application of European social and environmental standards in ‘green and social’ procurement, with full, transparent implementation of the relevant provisions, is, in the EESC's view, a prerequisite for healthy development of the sector, with all its components respecting technical and social quality standards, particularly as regards the system of subcontracting and responsibilities, which concern the whole certified supply chain.

1.7 The EESC calls for:

—	the annual work programmes under the 7th Framework Programme for RTD,

—	the multiannual competitiveness and innovation programme, and

—	the Structural Funds,

to give sufficient consideration to technological and organisational innovation projects in the sector, particularly as regards efficiency and saving of resources, integrated logistics and traceability of products supplied, not least using Galileo applications. The EIB should facilitate investment, especially as regards SMEs.

1.8 The EESC calls for the European standards bodies to continue the drive to draw up technical regulatory standards applying to all the components in the sector which are increasingly advanced from an environmental, social and technological point of view, including on the basis of instructions from the Commission, to ensure high-quality products, processes and services, reflected in improved working conditions for staff.

1.9 The EESC believes the Structural Funds should be used at regional level to enhance networks of European districts in the sector in an innovative way and develop bilateral bodies, on the basis of successful experiences in various Member States, particularly with a view to training and education, including in the area of languages.

1.10 The EESC attaches importance to the dissemination and exchange of good practices, such as the establishment of bilateral bodies, present in various countries, which have successfully brought about development in respect of human resources in the sector.

1.11 The EESC stresses the importance of a European campaign for safety at work, economic, social and environmental transparency in the textile services industry and better working conditions and employment prospects in the sector, with full implementation of the Charter of Fundamental Rights, in particular trade union and collective bargaining rights.

1.12 The EESC recommends to the European Parliament, the Council and the Commission that a strategic framework for the textile services industry be defined, exploiting the fact that its economic development and growth in the areas of production and employment are fully compatible with the sustainable growth targets provided for by the 20/20/20 targets for 2020.

2. Introduction

2.1 The textile services industry covers a wide, varied range of businesses which provide the following services on an industrial scale:

—	industrial laundries and cleaners, as well as textile rental for manufacturing and service companies and for individuals;

—	rental, repair etc. and maintenance of clothing and workwear, uniforms and protective and safety clothing;

—	washing, rental, repair etc. and finishing of linen for hotels, restaurants and cafes;

—	washing, rental, sterilising, repair etc. and finishing of clothing and linen for medics, paramedics and patients in hospital facilities, nursing homes and communities;

—	rental and sterilising of surgical instruments and textiles and provision/supply of sterile medical kits;

—	supply, rental and repair etc. of smart textile products, with integrated high-comfort, user-friendly functionalities;

—	industrial finishing, filters, absorbent materials for dust control and similar textile services, for production plant and sterile processing environments;

—	hygiene-related textile services, complementary/alternative to textile products;

—	finishing and specific services related to the ‘fashion system’.

2.2 Industrial laundry services are vital to a range of activities linked to the hospitality industry and tourism, such as restaurants, hotels, communities, cruise ships, etc., and to the supply of advanced protective textiles in a wide spectrum of manufacturing and commercial sectors, maintaining a strong local basis with low risks of relocation outside the EU.

2.3 Laundry services are also important to the textile industry, since clothing manufacturers need to subject their products to a testing and washing phase before they can be put on the market. Given the size of the workload and the absolute necessity that the washing gives perfect results, laundry services for the textile industry require operators to be equipped with advanced machinery, and professionally trained staff working in suitable conditions.

2.4 Industrial laundry services supplied to the hotel sector involve the care and washing of all hotel linen, which needs to go through a continuous cycle of maintenance and washing. This rapid turnover requires the laundry service provider to be able to keep up with the pace – through efficient work organisation and professional staff – and thus avoid any delays.

2.5 Alongside laundry services, increasingly sophisticated rental services have developed which have to comply with more advanced technical and operational requirements and increasingly stringent environmental and technical regulatory requirements, in particular for protective equipment and advanced military supplies.

2.6 In recent years, the textile services industry as a whole has developed important high-tech systems, both ‘B to B’ and ‘B to C’ (2), both with regard to the quality and technical and environmental standards pertaining to traditional services – including hygiene-related – provided to hotels and hospitals, and with regard to the supply of advanced or smart protective textiles (3).

2.7 The traditional industry operates on a considerable scale; it has a turnover of some EUR 9 billion (2007), is concentrated geographically and dominated by a few multinational corporations (4). The rest of the market is highly fragmented with myriad small enterprises that generally operate locally. It is a rapidly expanding market, both in terms of turnover (some EUR 10 billion per annum) and staff numbers (over 200 000 employed).

2.8 The high-performance protective clothing sector is fast developing and is related to the new generation of smart textiles, based on: smart materials, advanced production processes, integrated, user-friendly and high comfort functionalities, and risk prevention and management. The market in personal protective equipment (PPE), which is one of the EU's most promising lead markets (5), is estimated at between EUR 9.5 billion and EUR 10 billion, with approximately 200 000 workers directly or indirectly involved in PPE products and services.

2.9 Market demand for these products and services is dependent on more stringent regulation of personal safety standards in the workplace; higher safety performance and more rigorous safety requirements for all staff, and better personal risk management; and dissemination of a culture of reliability and a desire to avert potential claims.

2.10 Of particular importance is the attention that the sector is giving to the environmental impact of textile processing and services. Environmental impact assessments have been carried out on the textile services industry, in the form of life cycle assessments (6).

3. Aim of the opinion

3.1 This opinion examines the conditions for development of the textile services industry which:

—	respects the living and working conditions of human resources, particularly as regards health and safety;

—	is based on sectoral structural dialogue between the social partners at the various levels;

—	is accompanied by increasing staff skilling and professionalism, and employability prospects based on a faster education and training process;

—	ensures greater environmental protection and protection of energy and water resources throughout the life cycle and recycling of the product;

—	invests in technological and logistics/organisational innovation in an open environment, preventing abuse of dominant positions, ensuring an environment conducive to setting up and developing small and medium-sized businesses;

—	promotes competition based on quality and drafting and implementing of advanced technical regulatory standards;

—	ensures transparent public procurement, fully respecting environmental requirements and social clauses, particularly in the subcontracting chain;

—	gives the sector a higher profile and greater transparency, to improve its image.

3.2 On 11 May 2010 the EESC held a public hearing on the subject in Brussels, with participation by national and European trade union and employers' representatives from the sector, as well as representatives from the European Agency for Safety and Health at Work (Bilbao) and the Commission (DG ENTR), bilateral entities active in various national initiatives and individual businesses representative of large-scale production and service enterprises.

4. General comments

4.1 The EESC believes that a prerequisite for drawing up a strategy and action plan for the sector is the launch of a pilot project at European level to map and analyse the various, widely-differing sectors of the European textile services industry and their size and geographical distribution in EU-27, bearing in mind the substantial gender factors and the existence of an unregulated informal sector.

4.2 The EESC feels that a better way of defining the sector should be found, with clearer definitions in the Eurostat NACE code system, to make it easier to keep abreast of its economic trends, investment and innovation, employment and professional qualifications.

4.3 The textile services industry is particularly dynamic and fast-developing, and its development potential is closely related to improvement of the socio-cultural context and the technical and economic capacities of businesses.

4.4 The EESC believes it is important for the European standards bodies to draw up technical regulatory standards for all parts of the sector which are increasingly advanced from an environmental, social and technological point of view, including on the basis of instructions from the Commission, so as to ensure high-quality products, processes, services and working conditions for staff and to be able to be globally competitive.

4.5 The sector's development must be supported by structured social dialogue at both European and national and regional levels to define fair working conditions which can provide a common basis in the sector in Europe, in line with the Community directives on both gender equality, organisation of working time, and worker information and consultation. The EESC believes that the sector should strike a better balance between customer satisfaction and employment motivation principles, as is the case in certain cutting-edge production businesses.

4.6 The EESC feels that full implementation of the Charter of Fundamental Rights, in particular trade union and collective rights, in all areas of the EU production and service sector is essential for the sector's development.

4.7 The EESC feels that exchange of best practice between bodies in the Member States is a European-level solution which could be pursued, funding relevant European cross-border projects.

4.8 The industry must give priority to environmental protection, encouraging dissemination of EMAS and Ecolabels and application of ISO 14000 standards.

4.8.1 The 2006 industry data are an excellent basis for reflection and analysis to study the development of the various sectors (7), but they should be updated at least every two years and analyses of their environmental impact carried out and submitted to the European Parliament and the EESC.

4.8.2 A full assessment should be carried out of the sector's endeavours to disseminate EN 14065 certification with the help of the social partners in order to combat unfair competition, regulating the market and providing tax and other incentives to encourage dissemination of best practices with quality labels.

4.8.3 The functionalities and durability of these characteristics throughout the textile product's life cycle need to be taken into consideration when deciding which clothing should be treated with ‘full service’ solutions.

4.8.4 The EESC feels it is important for the sector to play an active role in how solvents and chemical substances subject to the EU REACH Regulation are used, as well as in the implementation of European legislation on water.

4.9 The EESC calls for the annual work programmes under the 7th Framework Programme for RTD, the multiannual competitiveness and innovation programme, and Structural Funds operations to give sufficient consideration to technological and organisational innovation projects in the sector as regards integrated logistics and traceability of products supplied, not least using Galileo logistics applications. The EIB should facilitate investment, especially as regards SMEs.

4.10 In procurement, full, transparent implementation of the relevant provisions is a prerequisite for ‘green and social’ development of the sector, particularly as regards the system of subcontracting and responsibilities, which must concern the whole supply chain.

4.11 Technological and logistics/organisational innovation require an open environment to prevent abuse of dominant positions, ensuring an environment which is conducive to setting-up and development of small and medium-sized businesses.

4.12 Increasing staff skilling and professionalism, and employability prospects based on a faster education and training process, are needed, with development of a participatory foresight exercise with the support of the Institute for Prospective Technological Studies (IPTS) in Seville; Structural Funds measures should be dedicated to developing bilateral consultation bodies for staff training and skilling and education, including in the area of languages.

4.13 Safety and health at work must be one of the priorities for improving quality in the sector: the sector's social partners at European level must build up structured dialogue and be properly represented in the European committee on safe maintenance.

4.14 The EESC calls on the Commission to submit without delay a Communication on a potential European economic and employment strategy to develop the textile services industry, with a view to drawing up an EU action plan for the industry tying in with the Lead Market Initiative for Europe, where textile services are referred to in terms of strategic potential for success.

Brussels, 14 July 2010.

The President of the European Economic and Social Committee

Mario SEPI

(1) Further information relevant to the opinion, such as presentations at hearings, technical appendices or the results of statistical surveys, can be consulted on the European Economic and Social Committee website:

http://www.eesc.europa.eu/sections/ccmi/Hearingsandconferences/Textile_2010/index_en.asp.

(2) See complex services in Developments in the business service sector in Europe (exploratory opinion) – OJ C 27, 3.2.2009, p. 26–33

(3) See Europe INNOVA – INNOVATION WATCH. Sectoral Innovation Foresight: Textiles and Clothing – INTERIM REPORT JUNE 2009 pp.3-4, 9-10.

(4) Elis, Rentokil, Johnson Service, Davis, Alsco, HTS, etc.

(5) See Lead Market Initiative for Europe/Mid-term progress report. SEC(2009) 1198 final of 9.9.2009.

(6) See Appendix 1 http://www.eesc.europa.eu/?i=portal.fr.textile-services-sub-sector-in-europe

(7) See footnote 5.

11.2.2011

Official Journal of the European Union

C 44/110

Opinion of the European Economic and Social Committee on ‘Promoting sustainable green jobs for the EU energy and climate change package’ (own-initiative opinion)

2011/C 44/18

Rapporteur: Mr IOZIA

On 16 July 2009, the European Economic and Social Committee, acting under Rule 29(2) of its Rules of Procedure, decided to draw up an own-initiative opinion on

Promoting sustainable green jobs for the EU energy and climate change package.

The Section for Transport, Energy, Infrastructure and the Information Society, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 1 June 2010. The rapporteur was Mr Iozia.

At its 464th plenary session, held on 14 and 15 July 2010 (meeting of 14 July), the European Economic and Social Committee adopted the following opinion by 146 votes to four with ten abstentions.

1. Summary of the opinion

1.1 I want to show that by investing in climate friendly and energy efficient technologies, we gain economically. The opportunities are huge.

Connie Hedegaard, Climate Action Commissioner

1.2 The dawn of the third millennium has seen new questions arise over the future of the planet. Given the risks associated with ongoing climate change, the rise in global energy demand, the relatively imminent depletion of traditional energy sources, and the increasing awareness of the public, who are calling for action to combat and mitigate the adverse effects of greenhouse gas emissions, there is a need to rethink the development model, reduce consumption, and increase the use of alternative and renewable energies that help cut emissions. EU policies should be focused on developing a green, social and competitive Europe.

1.3 The need to bolster security of supply and reduce dependency on politically unstable areas or competitor countries, coupled with a gradual shift in the energy mix towards clean renewable sources, would suggest that the new green economy will be a factor in sustainable development and employment growth and contribute to a new economic, social and environmental equilibrium.

1.4 The purpose of this EESC opinion is to analyse the outlook for sustainable green jobs and identify the instruments most suited to sustaining and promoting them.

1.5 In gauging the effects of these new policies, it is important to bear in mind the balance between the new jobs created and the old jobs that have been abolished – e.g. the so-called black jobs (in coal mines and the construction and maintenance of traditional electricity power stations, etc.). These processes of change must be accompanied by policies aimed at safeguarding income and promoting vocational training and retraining. The new green economy should be experienced by workers and the general public as a great opportunity, incorporate the principles of decent work and be a driver of socially, environmentally and economically sustainable development.

1.6 A European strategy for making the transition to a low-carbon-emission economic and industrial policy should be underpinned by dialogue between governments, the social partners and civil society on economic and industrial change and on investment in the requisite technologies for new and decent green jobs and in new green skills.

1.7 If this strategy is to succeed, national and local authorities, companies and trade unions must be involved in continuous dialogue aimed at monitoring the impact on employment and the labour market. There will be no progress without the involvement of the social partners and organised civil society. The Committee welcomes the creation of a directorate-general for climate action (CLIM), which should coordinate both the internal and external policies of the EU on mitigation and adaptation.

1.8 The Committee considers it vital to set up a permanent consultation mechanism to anticipate the fallout from the socio-economic transition, coordinate the activities of the sector councils, and step up dialogue between the social partners and the public authorities. The environment agency should also be given responsibility for the effective traceability of emissions, covering all levels of production and transport, in line with the LCA method, as governed by the ISO 14 040 standard and defined in the Green Paper COM(2001) 68 and in the communication COM(2003) 302 on Integrated product policy, and as also suggested, at least indirectly, in the EU regulations on EMAS (761/2001/EC) and the Ecolabel (1980/2000/EC).

1.9 The EU has a crucial role to play in promoting green jobs. In terms of investment, it should promote a policy that supports activities and sectors and undertake in tandem with the Member States to frame stable legislation that substantially reduces administrative burdens and always takes due account of SMEs' needs. As regards the labour market, the EU should promote the introduction of specific programmes to support vocational training and, above all, the retraining of workers threatened by industrial change, who risk losing their job or level of income. The Member States should foster energy efficiency, and investment in renewables and research and development using tax incentives for companies and users and the revenue from ETS allowance auctioning. In these times of crisis, there is an urgent need for such a policy.

1.10 Public procurement has an important role to play; it accounts for over 15 % of EU GDP. Preferential clauses for environmentally sustainable goods and services could encourage the market to accelerate investment in technological innovation.

1.11 The EU as a whole, at both Community and national levels, is still spending too little on research: less than 2 % of GDP, as against 2.6 % in the USA and 4 % in Japan. Europe needs more investment in R&D and such research must be geared towards a low-carbon society.

1.12 The greatest development potential lies in all the traditional activities and jobs that can be greened. Civil society has a fundamental role here. Environmental education for the younger generations, vocational training and communication and information drives aimed at business, workers and the general public are all vital stepping stones on the road to a new green economy. The Committee is actively engaged in supporting these activities through the Pinocchio project.

1.13 The agricultural industry, for its part, could make an extremely important contribution, in terms of transforming production models, developing agroforestry and cultivating biomass. Ongoing efforts to protect the land and the environment mean that agriculture and its organisations could be leading players in a major awareness and information campaign on the advantages of the new green economy.

1.14 Biomass is by far the most important renewable energy source. Data from 2008 clearly show that biogenic energy predominates above all other renewable energies at EU level. In the EU-27, two thirds of primary renewable energy – i.e. 66.1 % of a total of 6 200 PJ – was produced from biomass.

1.15 In these difficult economic times, with limited availability of capital, efforts should be focused on a limited number of priorities, which are crucial to Europe in terms of global competition, environmental protection and safeguarding jobs in the coming years. As far as the Committee is concerned, renewable energy, sustainable transport and low-carbon housing are the priority areas.

1.16 The public sector should give the utmost support to these sectors during the transition phase. Stop-go policies, an unstable and inconsistent legislative framework and red tape are the main barriers to developing activities and quality, decent green jobs.

2. Introduction

2.1 The energy market

2.1.1 The financial and economic crisis has undoubtedly slowed the growth of activities across the whole new-energy sector.

2.1.2 Oil and gas sector investment plunged in 2009, with investment budgets cut by around 19 %, or over USD 90 billion (2009 IEA World Energy Outlook). Despite the consumption freeze, energy demand is forecast to increase by 40 % by 2030, reaching 16.8 billion tonnes of oil equivalent (toe).

2.1.3 Fossil fuel energy sources will continue to account for over 77 % of the demand increase over the years 2007-2030, with demand for oil set to rise from the current 85 Mb/d (million barrels per day) to 88 Mb/d in 2015 and 105 Mb/d in 2030.

2.1.4 According to the 2009 World Energy Outlook, climate change can be combated and contained, but only if there is a radical overhaul of the energy sector. The report proposes the 450 Scenario which sets out an aggressive timetable of actions needed to limit the long-term concentration of greenhouse gases in the atmosphere to 450 parts per million of carbon-dioxide equivalent and keep the global temperature rise to around 2 °C above pre-industrial levels. To achieve this scenario, says the IEA, fossil-fuel demand would need to peak by 2020 and energy-related carbon dioxide emissions to fall to 26.4 Gt (gigatonnes) in 2030 from 28.8 Gt in 2007.

2.2 Energy efficiency

2.2.1 The EU's energy efficiency programmes have set the target of reducing energy intensity by 3.3 % annually over the period 2005-2020, which should constitute a saving of 860 Mtoe per annum. This is an ambitious objective, which should be subject to binding measures where possible. While substantial investment is required, this should in turn generate considerable savings, estimated by the Commission at some EUR 100 billion annually (Communication from the Commission – Action plan for energy efficiency: realising the potential, COM(2006) 545 final).

2.2.2 In several previous opinions, the Committee has greatly welcomed EU initiatives aimed at rolling out energy efficiency programmes (1). However, it has also noted a lack of similar enthusiasm among the Member States (2). The EESC reiterates that one aspect of green policies often overlooked is their economic benefit. Indeed, the green economy is one of the ways to get out of the world crisis. The emerging green economy is generating new employment opportunities. Commissioner Dimas stated that ‘green investments’ will generate two million jobs in the EU in the next decade. Hence, the ‘green economy’ is not a luxury (3).

2.2.3 The Commission should be prepared to revise the energy efficiency strategy. Progress to date has not delivered the expected benefits. The relative stabilisation of the price of oil, which has gone from the record level of USD 147.27 a barrel of 11 July 2008 to an average for 2009 of USD 53.56 (in 2008 it was USD 91.48) (WTRG Economics) has undoubtedly not favoured investment.

2.2.4 The revision of the directive on the energy efficiency of housing and offices, which will considerably extend the requirement to carry out structural work on new buildings and those to be renovated; the rules on car emissions; and the pending legislation on emissions from light-duty vehicles all demand a considerable effort from industry to reach the emissions targets set. This will translate into a notable gain in energy efficiency and thus a reduction in consumption.

2.2.5 The 2009 EurObserv'ER report (The State of Renewable Energies in Europe, 9th EurObserv’ER report, 2009) analysed the direct employment effects attributable to the various renewable energy technologies, covering 14 EU Member States (Germany, France, Spain, Denmark, Sweden, Italy, Austria, Poland, Finland, the UK, the Netherlands, Slovakia, Slovenia and Luxembourg). In 2008, renewable energy technologies enabled some 660 000 jobs to be created or maintained. Biogenic energy (or more specifically, biomass) accounts for over 42 % of these jobs (approximately 278 000). Investing in biomass creates lasting employment, reduces Europe's energy dependence and considerably improves carbon emission levels.

3. The economic crisis and green jobs

3.1 The current economic crisis has dealt a heavy blow to public finances. The euro zone's aggregate deficit stood at 6.4 % in 2009 and is estimated by the Commission at 6.9 % for 2010. Severe debt-reduction plans will thus be necessary to restore the deficit to the stability pact criteria within a short timeframe. When it comes to fostering green growth, the Committee would warn against rhetoric and political inaction.

3.2 The funds available to pursue the renewable energy incentive plans and the energy efficiency programmes continue to diminish. Member States should allocate more than the earmarked 50 % of ETS auction revenue to energy efficiency programmes and to investment in renewables, sustainable mobility and transport in general.

3.3 There is a risk that the fight against climate change may be falsely perceived as being limited solely to reducing consumption. Due account should be taken of energy return on investment (EROI); furthermore, the concepts of sustainability and development need to be linked, thus creating a new economy that does not pursue the sustainable recession and ‘manageable’ unemployment that inexorably lead to a decline in people's living standards, without bringing about significant change in the health of the planet.

3.4 Moreover, businesses – particularly SMEs – are facing a severe credit squeeze. With fewer funds available for ordinary activities, investing in renovations, which are often costly and take several years to deliver a return, is almost impossible. Targeted support policies are needed.

3.5 Outlining its views on a recent Commission initiative, the ILO (Duncan Campbell, Director, Department of economic and labour market analysis, ILO) proposed a definition:

Green jobs can be defined as those that reduce environmental footprints:

—	cutting the consumption of energy, raw materials and water;

—	decarbonising and dematerialising the economy;

—	bringing down the emission of greenhouse gases;

—	adopting policies to adapt to climate change; and

—	protecting and restoring the ecosystem.

3.6 According to the ILO – which for several years has been carrying out in-depth sectoral studies in the field of green jobs, in conjunction with international employers' and trade union organisations – the particular sectors that come into play here are:

Energy	Integrated gasification/carbon sequestration
	Co-generation (combined heat and power)
	Renewables (wind, solar, biofuels, geothermal, small-scale hydro); fuel cells
Transport	More fuel-efficient vehicles
	Hybrid-electric, electric, and fuel-cell vehicles
	Car-sharing
	Public transport
	Non-motorised transport (cycling, walking), and changes in land-use policies and settlement patterns (reducing distance and dependence on motorised transport)
Manufacturing	Pollution control (scrubbers and other tailpipe technologies)
	Energy and materials efficiency
	Clean production techniques (toxics avoidance)
	Cradle-to-cradle production cycles (closed-loop systems as defined by William McDonough and Michael Braungart)
Buildings	Lighting, energy-efficient appliances and office equipment
	Solar heating and cooling, solar panels
	Retrofitting
	Green buildings (energy-efficient windows, insulation, building materials, heating, ventilation and air-conditioning)
	Passive-solar houses, zero-emissions buildings
Materials management	Recycling
	Extended producer responsibility, product take-back and remanufacturing
	De-materialisation
	Durability and reparability of products
Retail	Promotion of efficient products and use of eco-labels
	Store locations closer to residential areas
	Minimisation of shipping distances (from origin of products to store location)
	New service economy (selling services, not products)
Agriculture	Soil conservation
	Water efficiency
	Organic growing methods
	Reducing farm-to-market distance
Forestry	Reforestation and afforestation projects
	Agroforestry
	Sustainable forestry management and certification schemes
	Halting deforestation

3.7 Green jobs should generally be characterised by a high level of skill and vocational training.

4. The key players and good examples

4.1 At an EESC hearing held on 23 March 2010, key figures from various associations made valuable contributions to the debate.

4.2 The president of Confartigianato, Bergamo [general federation of Italian crafts] spoke about green energy week – 16 events aimed at awareness-raising and debate, 80 speakers and hundreds of participants exploring the regulatory and technical issues around energy saving and environmental sustainability. It was an excellent example of the role that trade associations could and should play in disseminating a culture. New energy services were presented, such as the energy information shop providing expert advice to companies; credit support, to support investment, including via the association's credit consortium; and technical training, in cooperation with the engineering faculty at the University of Bergamo.

4.3 The WWF representative, with responsibility for European climate and energy policy, highlighted in his speech the positive impact that the green economy was set to have on employment, as forecast by studies undertaken by his organisation. Environmental organisations were obviously very favourable towards a policy that supported low-carbon or – better still – zero-emission energy sources.

4.4 The speaker from the Polish trade union NSZZ Solidarnosc (chairman of the secretariat for mining and energy sectors) emphasised the risks associated with a policy that excessively penalised black jobs. It was crucial to safeguard employment, through initiatives aimed at creating new jobs to absorb those that would be lost. We should think in terms of the balance between new jobs created and old jobs lost. Considerable attention should also be given to pay: some new green jobs were less well paid and the cost per KW produced from coal was half of that produced from renewable sources. Without appropriate employment support policies, there was a real risk that unemployment would double within a short space of time. Suitable worker-mobility support measures should also be provided for.

4.5 The president of the European Construction Industry Federation highlighted European companies' high level of involvement and interest in supporting the modernising and enhancing the efficiency of housing and public and private work premises. The industry was not seeking specific economic aid, but rather stable legislation guaranteed for a number of years, to enable programming of investment and industrial plans. The construction industry required a steady and sufficient flow of funding that it could rely on, and not short-term subsidies. An appropriate tax policy could help families move towards this kind of investment. Companies were ready to do their bit as regards the vital training of their staff.

4.6 The president of the Architects' Council of Europe (ACE) stressed the need to further develop training on sustainable architecture in Europe, and disseminate a holistic vision of the programming of territorial measures; this would require an overhaul of the profession. In the ACE's view, ambitious goals needed to be set, in agreement with the construction associations, aimed at enhancing the quality and energy efficiency of buildings. The ACE expressed doubts as regards the outcome of public-private partnerships (PPP) in public procurement, based on recent bad experiences.

4.7 The Commission representative highlighted the great potential for job creation: estimated at over one million jobs. The success of the 2nd Geothermal congress had demonstrated possible trends. In Sweden, for example, 33 heat pumps per 1 000 inhabitants had been installed, as against 0.1 in Spain. Red tape was the scourge of renewable energy development. Energy efficiency was the cornerstone of the whole system, particularly in buildings. The green jobs that would be generated from national action plans would be sustainable and competitive.

4.8 The speaker from the Economics and Technology University, Berlin provided a great deal of information and much food for thought; he pointed out the high degree of international competition in the renewable energy market – the USA and China were the major competitors. China and Taiwan now accounted for almost 50 % of solar panel exports.

4.9 The representative of one of the largest Spanish wind turbine companies underlined the strategic importance of his sector, which owed its development to intelligent, bold policies which had encouraged investment and added value to the economy. Future prospects were good, despite the crisis, provided that pro-renewable policies were maintained. During his speech, he quoted President Obama: The nation that leads the clean energy economy will be the nation that leads the global economy (Barack Obama, State of the Union address, 27 January 2010).

4.10 Finally, a senior adviser at ETUC stressed the commitment of the European Trade Union Confederation to supporting policies that promoted and sustained green jobs, which should respect the dignity of workers, their rights and pay levels. A green job should by definition be a decent job. ETUC considered it crucial that transitional policies be put in place to support training and anticipate industrial change.

5. Outlook

5.1 In the last few years a series of figures have been put forward – varying greatly – in support of the possible employment benefits of green jobs, energy efficiency measures and initiatives to combat climate change. The number of new jobs has been estimated in the hundreds of thousands, but these have been very slow to emerge. Assessing the net increase – i.e. offsetting the jobs that have been lost in the same sector – is very difficult.

5.2 Based on the narrow definition of eco-industries, there are currently 4.6 million green jobs; the figure reaches 8.67 million, or 6 % of the EU-27 workforce, when we take account of activities related to environmental resources, such as forestry or ecotourism. The scale increases greatly if we use a broader definition that includes indirect and ancillary employment, which brings the total employed to 36.4 million, or 17 % of the workforce (GHK et al., 2007). In its recent paper on Employment in Europe 2009, the Commission highlights these differences. Particular growth has been seen in the renewables sector, organic farming and – though still to a modest extent – in activities related to upgrading the building stock.

5.3 The main sectors concerned – Construction

5.3.1 With 16.3 million workers, or some 7.6 % of total employment, construction is Europe's biggest industrial employer. Turnover for 2008 was EUR 1 305 billion, or 10.4 % of GDP. Some 32 million workers are indirectly employed by construction (2009 annual report of the FIEC [European construction industry federation]).

5.3.2 The European construction industry has been actively engaged in projects and initiatives aimed at attaining higher standards of energy efficiency and greater energy savings. Examples include (under FP7) the Sunrise projects on integrating photovoltaics into buildings; Cygnum: the production of pre-insulated timber frames using low-cost recycled materials that give greater accessibility to low-energy housing; and Mobi3con, a 3D operating system for use on construction sites, to prevent errors between design and implementation, which, according to the FIEC (European construction industry federation) should achieve a saving of EUR 6.2 billion.

5.3.3 Despite the serious impact of the financial crisis, which in some countries such as Spain and Ireland has effectively frozen the market, the industry believes that the coming years will see at least 800 000 new jobs for specialised technicians and engineers in programmes to increase the energy efficiency of buildings. In France alone, it is estimated that between 2007 and 2012 the number of jobs in this field will rise from 169 000 to some 320 000 (2008 study by French environment and energy management agency ADEME).

5.3.4 Another sector that is expected to create more jobs is ESCOs (energy service companies). These are companies that implement energy-efficiency measures, taking on the risk and relieving the end customer of the organisational and investment burden. The rise of these companies has been undermined in some countries by large producers fearful of a drastic reduction in consumption (4).

5.3.5 Vocational training and lifelong learning are crucial if industrial change is to be properly managed: the FIEC and the EFBWW (the European Federation of Building and Woodworkers) are actively working together to develop joint initiatives on professional qualifications and cross-border training projects.

5.4 The renewable energy sector

5.4.1 In 2008, the photovoltaic (PV) sector employed 190 000 people (130 000 directly and 60 000 indirectly). With EU-27 market support, the industry envisages creating about 2.2 million jobs by 2030. However, the net employment effect will be limited: assuming a 15 % export share, the net effect for the EU-27 is about 162 000 jobs by 2030 (20 000 in 2010 and 49 000 in 2020) (EPIA - European Photovoltaic Industry Association 2009).

5.4.2 The PV sector requires highly qualified people, for both research and development, and maintenance; architects and engineers will need to give consideration to the integration of these solar panels in historic cityscapes. Europe's cumulative installed capacity has risen from 1 981 MW in 2005, to 9 405 MW in 2008, almost doubling between 2007 and 2008 (EPIA – Global market outlook for photovoltaics until 2013, 2009; A.T. Kearney analysis). Specialised courses are needed to train people for the 50 000 new jobs to be created annually between now and 2030. The existing masters and postgraduate courses devoted to specific training in the use of photovoltaics are still insufficient.

5.4.3 With 64 935 MW of installed capacity by the end of 2008, wind power is the number one source of renewable electricity. The EU wind energy sector directly employed 108 600 people in 2007; including indirect employment, the total comes to 154 000. Wind turbine and component manufacturing accounts for 59 % of the direct employment. The highest concentration of wind energy jobs are in Germany, Spain and Denmark (EWEA – European Wind Energy Association, 2009). The European Wind Energy Association estimates that employment in the sector could more than double by 2020 to reach 330 000.

5.4.4 According to a study carried out in Spain – a country that has invested hugely in alternative energy sources – the number of jobs should rise from 89 001 in 2007 to between 228 000 and 270 000, based on two different reference scenarios (ISTAS - Spanish Trade Union Institute of Labour, Environment and Health; 2009).

5.5 Transport

5.5.1 The automotive and road transport industry employs some 2.2 million people, with a further 9.8 million employed indirectly (ACEA – European Automobile Manufacturers' Association); to this should be added those employed in both public and private transport. The overall total exceeds 16 million when we include employment in rail, shipping, aviation and related services, and road haulage.

5.5.2 The crisis has been very keenly felt in this industry, with a drop in production ranging from 7.6 % in the bus sector, 21.6 % in cars, 48.9 % in minibuses, and 62.6 % in trucks: a veritable collapse in production. The situation is not much better in the other sectors of the transport industry, with a general decline in orders and activities.

5.5.3 More than other industries, transport will be particularly affected by the technological challenges arising from the climate package and the ensuing rules on carbon emissions. The inclusion of air transport in the European emissions certificates (ETS) system will create difficulties for older fleets, whose emissions will incur substantial penalties. Moreover, as already stated by the EESC (5) the application of ETS is far more complicated in the maritime transport than for aviation, and in particular on tramp shipping due to the practicalities of world maritime trade which render ETS calculations very difficult.

5.5.4 A sustained (and desired) increase is expected in both passenger and freight rail business. By 2030, rail is expected to create some 1.2 million jobs in passenger transport and 270 000 jobs in freight transport; this should be seen against a loss of almost 700 000 jobs in road transport (Syndex Etuc Istas research 2007).

5.5.5 Sustainable urban mobility, based on a clear policy in favour of non-motorised transport, such as cycling and walking, will enhance quality of life and make a considerable contribution to cutting carbon emissions.

6. Positive measures to promote green jobs

6.1 Major intervention by the public and private sectors and by public-private partnerships is crucial to tackling the challenges we face: combining economic growth with significant cuts in harmful emissions and with the possibility of creating more and better jobs.

6.2 The current state of public finances does not suggest much leeway, following the measures taken to support the financial system through its major crisis and the subsequent economic crisis which has reduced tax receipts in all Member States.

6.3 The Committee proposes the introduction of a European sovereign fund – backed by the EIB and by specific funds freed up by the European System of Central Banks and the ECB – for the purpose of reaching the goals on energy efficiency and saving. A European Marshall Plan is also needed, in order to provide a secure response to the financial requirements imposed by the drive to combat climate change.

6.4 The EIB – which, to its merit, is already involved in funding activities aimed at developing renewable energy – could administer the Fund and channel resources through the European banking system.

6.5 Rationalising resources is the biggest problem. It is vital to channel and coordinate resources from the Structural Funds, the European Social Fund and the 7th Framework Programme; this role could be performed by the Commission's new DG Energy.

6.6 Private funding is needed. Public-private partnership initiatives should be encouraged through operational and tax incentives within a stable and reliable reference framework.

6.7 Business and workers' organisations and civil society associations working in this field are well placed to play a major role in disseminating skills, highlighting opportunities, raising awareness and fostering education and training. Civil society should always be involved in these kinds of projects.

6.8 ICT applications have a fundamental role to play in optimising resources. A recent Commission study (The implications of ICT for Energy Consumption (e-Business Watch, Study report no 09/2008, http://www.ebusiness-watch.org/studies/special_topics/2007/documents/Study_09-2008_Energy.pdf)) highlighted the need to exploit the full potential of ICT (6). This could have a very positive impact on the creation of new green jobs.

6.9 In a 2008 opinion on the energy efficiency of buildings (7), the Committee proposed certain policies aimed at facilitating controls on building energy standards, and providing incentives to end users to purchase and install suitable equipment, and carry out insulation renovation work.

6.10 With regard to promoting renewable energy, the Committee would advocate support for R&D, programmes to create a stable, self-sufficient market and supporting companies and end users by means of tax relief and incentives for the production and consumption of renewable energy. These should be long-term programmes, based on the model adopted in Germany, which intends to gradually scale back State intervention and enable businesses and the public to plan their own investments.

6.11 A specific chapter should be dedicated to education and training (8). Education is crucial for spreading knowledge and awareness among future generations; training is a prerequisite for advancing the new technologies designed to increase energy efficiency and combat climate change.

Brussels, 14 July 2010.

The President of the European Economic and Social Committee

Mario SEPI

(1) OJ C 10, 15.1.2008, p. 22–35.

(2) OJ C 77, 31.3.2009, p. 54–59; OJ C 318, 23.12.2009, p. 39–42.

(3) OJ C 277, 17.11.2009, p. 20.

(4) OJ C 77, 31.3.2009, p. 54–59; OJ C 318, 23.12.2009 p. 39-42.

(5) OJ C 277, 17.11.2009, p. 20.

(6) OJ C 175, 28.7.2009, p. 87-91.

(7) OJ C162, 25.6.2008, p. 62-71.

(8) OJ C 277, 17.11.2009, p. 15-19.

11.2.2011

Official Journal of the European Union

C 44/118

Opinion of the European Economic and Social Committee on ‘Enhancing the effectiveness of European Union energy policy in favour of SMEs and particularly micro enterprises’ (own-initiative opinion)

2011/C 44/19

Rapporteur: Mr DAVOUST

On 16 July 2009 the European Economic and Social Committee, acting under Rule 29(2) of its Rules of Procedure, decided to draw up an own-initiative opinion on

Enhancing the effectiveness of European Union energy policy in favour of SMEs and particularly micro enterprises.

The Section for Transport, Energy, Infrastructure and the Information Society, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 1 June 2010.

At its 464th plenary session, held on 14 and 15 July 2010 (meeting of 14 July), the European Economic and Social Committee adopted the following opinion with 157 votes in favour and five abstentions.

1. Conclusions and recommendations

1.1 At European Union level:

—	adopt a ‘think small first’ approach in energy policy, ensuring the involvement in the legislative process of organisations representing small companies and micro businesses and impact analyses that include even the smallest businesses and promote a sectoral approach;

—	together with SME organisations set up a forum for ongoing dialogue on the impact of EU energy policy on companies, especially the smallest companies;

—	in coordination with the relevant business organisations, define the measures that European programmes must provide for to enable the businesses in question to adapt as effectively as possible to European Union objectives;

—	analyse the impact on different categories of SMEs of programmes to promote eco-efficiency and circulate a guide to best practice;

—	simplify arrangements for accessing and using existing European Union programmes relating to energy efficiency for SMEs

—	adopt a plan for supporting eco-energy innovations and create a financial instrument to fund innovation that is adapted to the needs of small companies and micro businesses;

—	set up a framework to strengthen the presence and activities of energy service companies (ESCOs) at national level to help small companies;

—	make it easier for small businesses to access the Structural Funds, e.g. through the organisations that represent them;

—	create a framework to promote microgeneration in the Member States.

1.2 At Member State level:

—	set up a national forum for dialogue with SME organisations;

—	develop training and information programmes through sectoral campaigns and one-stop shops, preferably operating in the intermediary organisations of the companies concerned;

—	support investment financing, reduce insurance costs and introduce tax incentives;

—	create financial synergies between the EU, the Member States and business organisations to promote the introduction of different types of support for small companies;

—	provide environmental and energy advisers in intermediary organisations, and independent diagnostic and energy advice services.

1.3 At regional level:

—	include employee energy advice and support, as well as training, innovation support and investment financing in the priorities of regional programmes;

—	support microgeneration through the Structural Funds.

2. Introduction

2.1 Background

2.1.1 The European Union has introduced a policy to improve energy efficiency, which is also part of the EU 2020 strategy. The main implication for SMEs is the radical change in their access to energy and its rational use in-house. Up until now, European Union efforts in relation to energy efficiency have not specifically addressed the situation of small companies and micro businesses, and their impact on these businesses is not known.

2.1.2 In this context it should be noted that in its opinion of 1 October 2009 (1) on Enhancing energy efficiency policies and programmes by end users, the EESC recommended that efforts to systematically involve end users, including small businesses, be stepped up, by: (1) strengthening the sectoral dimension of European Union policies, (2) simplifying European energy programmes, (3) analysing the impact of energy efficiency policies on end users, including SMEs, and measuring the results achieved by them, and (4) introducing at EU level an expert task force and network of independent bodies promoting energy efficiency for end users, particularly SMEs and the craft sector.

2.2 Subject of the opinion

2.2.1 The EESC considers it essential to address the subject by building on the approach of the Small Business Act and the principle of ‘Think small first’, which is the basis for the debate on and framing of European Union programmes and policies. This opinion focuses on the impact of European Union energy policy on small companies and micro businesses, which account for 92 % of businesses in the EU (2).

2.3 Framework and scope of the opinion

2.3.1 The aim of this EESC opinion is to provide some basic ideas that will encourage the European institutions to take SMEs, and especially small and micro businesses, into account in future European Union policies. The opinion will not address the issue of ‘greening’ jobs, but it will look at measures to support employees, and also examine the context in which companies must adapt energy policy priorities.

3. General comments

3.1 General impact of energy policy on small businesses

The EESC notes that the objectives of EU energy policy can provide certain types of SME with substantial opportunities for development and thus job creation. In this context, small businesses and micro businesses find themselves in one of four different situations with respect to energy policy.

3.1.1 Energy users : Most small companies and micro businesses face four problems: (1) they are not yet aware of the advantages of more rational energy usage, (2) they do not measure the impact of energy-saving measures on their activities and employees, (3) they do not know what choices to make and with whom to implement them, and (4) they lack financial means for their eco-energy investments, and the payback time on those investments is also too long.

3.1.1.1 The lack of information is due especially to the fact that, because of their size, such companies do not have staff in-house who are experts in energy and environment issues.

3.1.1.2 The problem of return on investment: investment in reducing energy consumption can be very expensive, while the short-term returns may be very low. In most cases costs cannot be shifted to production or service activities, and the energy savings achieved will only offset the investment in the very long term.

It often takes more than five years to see a return on investment, which is a disincentive for small companies.

3.1.2 System installers : these are companies that install products or systems or provide maintenance services to enhance or rationalise energy usage. They play a role in popularising eco-energy techniques among consumers. Activities that are particularly relevant here include:

3.1.2.1

Construction, with the introduction of systems for eco-construction and use of eco-energy products, or installation of renewable energy systems; small businesses installing innovative products report that insurance companies are reluctant to give them the necessary guarantees, e.g. ten-year guarantees, on the grounds that the long-term stability and efficiency of the product have not been proven. This hesitancy will slow the introduction of eco-technologies for consumers.

The EESC recommends that: (1) training programmes be developed for professionals in the construction sector on new eco-construction techniques, eco-materials, and new ways of evaluating the energy performance of buildings, (2) insurance costs be reduced by introducing a funding or other type of instrument at European Union level that would reduce the cost of the risk for insurance companies.

3.1.2.2

Services relating to the installation and maintenance of energy-saving equipment for individuals or companies. SMEs in this sector compete directly with the major energy producers operating across each country through structures that are directly created and controlled by themselves. These small businesses are totally dependent on the large groups that control them and are more interested in selling traditional types of energy than in improving the energy efficiency of their clients.

The EESC: (1) considers that European and national authorities should oversee this market in order to ensure full transparency and avoid any abuse of a dominant position; and (2) calls for training programmes to be developed for SMEs in order to strengthen their role in motivating and advising individuals and businesses.

3.1.3 Small companies that develop and make energy-saving products are particularly innovative in the sustainable equipment and materials sector.

3.1.3.1 In practice, small innovating companies face numerous difficulties in developing, patenting (European patent?) and marketing their products. They often find themselves in a situation where large groups or industrial laboratories have a virtual monopoly of the market, as well as having to deal with increasingly complex certification systems which ultimately stifle innovation and effectively deny access to the innovation market for small companies.

3.1.3.2 The EESC recommends a number of measures here:

—

introduction of a European Union plan along the lines of the Small Business Innovation Research programme in the US to help the intermediary organisations of small businesses (3) to identify eco-energy innovations, support their development, certification and patenting, and facilitate access to the market;

—	creation of a flexible, easily accessible financial instrument to support innovation in sustainable material and equipment with zero- or very low-interest loans;

—

introduction of simplified, impartial and accessible techniques for standardising and certifying eco-energy innovations of small companies and monitoring to ensure that standardisation and certification are not used to erect barriers to entry to energy efficiency markets. This could be avoided by requiring an impact assessment for every harmonised EU technical standard before its definitive adoption.

3.1.4 Small energy-producing companies: the case of microgeneration

3.1.4.1 This is an underestimated option, but one which is being developed in many Member States. Microgeneration is an alternative energy production method where power stations can use renewable sources at local level. It is particularly suitable for small companies, since it permits a more rational use of energy, which (1) reduces overall costs, (2) guarantees energy supply even in the event of power cuts, (3) boosts the level of energy produced within the EU, (4) helps combat global warming, and (5) encourages the creation of local jobs.

3.1.4.2 The EESC calls on the Commission to frame a legislative and practical framework that would promote wider use of this system by encouraging the Member States to remove the various obstacles that block its expansion. Specifically, the Commission should: (1) analyse existing practice and promote better practice, (2) include microgeneration and its development in the measures that can be financed through the Structural Funds and the various rural development funds.

4. Specific comments

4.1 Absence of a permanent forum for dialogue between the European institutions and organisations representing different categories of SME

4.1.1 The EESC is pleased that the European Commission is engaging in dialogue with representatives of SMEs. However, at the moment, no formal strategic mechanism exists specifically for small companies and micro businesses (4). This omission has three negative effects:

—	it makes it impossible to know whether existing or future initiatives are suited to small companies;

—	there is no information about the level at which initiatives are implemented, and this will be difficult to establish if the current broad-brush policy approach is maintained, which is out of touch with concrete situations;

—	while many Member States have taken measures in coordination with business organisations, there is a lack of awareness of the measures involved, which makes it impossible to learn from good practice and from successes or failures.

4.1.2 The EESC does not deny the usefulness of business panels, but these can never be a substitute for the experience of general intermediary organisations, such as chambers of commerce and craft industries, and sectoral organisations, which talk to companies and give them individual advice that is specific to their situation. It is essentially with these intermediaries that the Commission should set priorities.

4.1.3 The top-down, excessively broad-brush approach at European Union level will result in decisions that cannot be implemented. The EESC recommends a new culture of cooperation based on a bottom-up approach, in line with the Small Business Act for Europe. One priority measure should be to set up a forum – both at European Union level and in the Member States – for dialogue between public authorities and business organisations (especially those representing small companies and micro businesses).

4.2 Lack of information on the impact of European programmes on micro businesses

4.2.1 Several European Union programmes exist to promote energy efficiency in SMEs in general. The EESC notes that there is no information on the impact of these programmes on small companies and micro businesses and that no study at European level has reported on the benefits to them. This lack of information is unfortunate, firstly because it means there is no information on best practice and no guides to good practice can be drawn up, and also because it prevents the Commission from proposing programmes and measures adapted to the circumstances small businesses face.

4.2.2 The EESC calls on the Commission: (1) as soon as possible to carry out an independent analysis of the impact of the programmes on SMEs, and in particular on small companies and micro businesses, including an analysis of problems experienced, (2) to draw up a guide to best practice.

4.3 The crucial role of local and regional authorities

4.3.1 The fight against climate change and management of energy consumption must become key priorities of future territorial cohesion policy. Local and regional authorities are key players in local climate plans and active supporters of innovation, including innovation in energy-saving, based on regional clusters, innovation poles and resource centres, which are also designed with small companies in mind.

4.3.2 However, administrative and local authorities are often unaware of the constraints and needs of different categories of SME.

The EESC calls on regional decision-makers to introduce or step up consultation with the economic and social partners at regional level on energy efficiency and to make energy management measures, for instance in micro businesses, a priority for Structural Fund support. One priority of the ERDF should be providing information and training for owners of small companies and their employees, introducing or enhancing support services and advice provided by sectoral and intermediary business organisations, providing for easily accessible sources of financing and ensuring support on an individual or group basis for all types of innovation.

4.3.3 The EESC is concerned about the very weak contribution of the Structural Funds to small companies, only 1-2 % in certain regions, which is due partly to inappropriate administrative and financial requirements. It seems that the way the Structural Funds are currently managed makes it impossible for such companies to benefit as they should. The EESC calls on the European Union institutions and the Member States to work out the necessary simplifications with SME organisations, especially those representing small companies and micro businesses.

4.4 Problems in raising investment financing

4.4.1 The majority of SMEs face serious financing problems for their investment in more rational energy usage and eco-responsible production. At the moment, banks are not always keen to finance such projects owing to the low sums involved (EUR 20 000-25 000) and absence of specialised staff to evaluate these projects, which are regarded as risky.

4.4.2 Obstacles to support under European Union programmes: although a number of European Union programmes may be of interest to SMEs, small companies and micro businesses actually have no direct access to them. SMEs have to take part in group projects arranged by intermediary organisations. But here too, the administrative and financial requirements, and frequent lack of understanding among the Commission's initiating departments of the situation of small companies and micro businesses, too often result in proposals being rejected.

4.4.2.1 The EESC notes here that reining in European government budgets hampers the economic and social activities of ordinary people and small companies, and effects regional employment levels. It calls on the Commission to initiate a general discussion of this issue in the context of revising the financial regulation.

4.4.3 The EESC calls for investment financing to be simplified and systems at all levels of investment support to be streamlined. Several steps should be taken:

—	facilitating access to EIB and EIF funding for mutual banks, neighbourhood banks and other financial institutions to fund investment in energy rationalisation projects;

—	enhancing bank guarantee systems for SMEs so as to promote this type of investment and establishing a risk guarantee system to enable insurance companies to cover eco-energy investments;

—	encouraging the use of microcredit for low-cost investments and training the staff of neighbourhood banks to objectively evaluate the projects presented by SMEs;

—	revising European Union financing rules so as to relax or adapt requirements and re-introducing exploratory awards and feasibility bonuses;

—	stepping up the introduction of energy efficiency contracts by ESCOs (energy service companies), especially for micro businesses.

5. A policy to promote support and advice

5.1 Information and training

5.1.1 The provision of information to all businesses must be a priority of the European Union action programme, but this information must be targeted, adapted to the sector concerned, and disseminated through all channels of communication, in particular business organisations. Information campaigns have already been conducted by the authorities and intermediary and sectoral organisations in several Member States. This objective can be achieved through:

—	an EU-level information campaign conducted via national and regional organisations, with a guide to best practice being drawn up;

—	providing support for the sectoral information campaigns of professional organisations;

—	setting up or consolidating ‘one-stop shops’ for the environment and energy in the local authority closest to the company;

—	providing support for recruitment of environment and energy advisers in intermediary organisations at regional level.

5.1.2 Adapting to sustainable development means that training company owners and ‘greening’ jobs must become priorities. The EESC calls for part of the European Social Fund to be specifically earmarked for training the managers of small companies and micro businesses and their staff in energy efficiency.

5.2 Support and advice for companies

5.2.1 For small companies and micro businesses it is individual support that can make it possible for energy-efficiency policies to be implemented effectively. Local authorities in several regions provide support, directly or through the Structural Funds, for independent auditing services and energy advice to companies.

In the EESC's view, the priority here should be to introduce or support setting up independent diagnostic services (energy counselling and auditing), for instance in business intermediary organisations and sectoral organisations.

5.3 Introducing a tax incentive policy

5.3.1 In order to encourage small companies to invest in improving the energy efficiency of their activities, the EESC calls on the Member States: (1) to provide incentives for physical investment and investment in counselling, audits and training, (2) to make small companies investing in energy-saving eligible for the national financial incentives already granted to individuals.

Brussels, 14 July 2010.

The President of the European Economic and Social Committee

Mario SEPI

(1) OJ C 318, 23.12.2009, p. 39.

(2) In 2007, of over 20.104 million companies in the EU-27,18.16 million were micro businesses (fewer than 10 employees), 1.49 million were small businesses (10-25 employees), 303 400 were medium-sized businesses (26-250 employees), and 159 000 were large companies (over 250 employees). Micro businesses account for 30 % of all jobs, small companies for 21 %, medium-sized companies for 17 % and large companies for 33 %. Source: EIM Business & Policy Research, EUROSTAT.

(3) According to the Member States, the intermediary organisations of small businesses include: chambers of craft industries, chambers of commerce, sectoral organisations and business associations. Public authorities recognise the representative nature of these bodies, which support all businesses in their region and mount coordinated and joint efforts on their behalf.

(4) The European Council of 23 and 24 March 2006 asked that all types of SME be taken into account and that priority be given to small companies by making the principle of ‘think small first’ the guiding principle for all relevant European Union or national legislation.

11.2.2011

Official Journal of the European Union

C 44/123

Opinion of the European Economic and Social Committee on ‘The Development Cooperation Instrument (CDI) of the European Union: the role of organised civil society and the social partners’

2011/C 44/20

Rapporteur: Mr IULIANO

At its plenary session of 16 July 2009 the European Economic and Social Committee decided, under Rule 29(2) of its Rules of Procedure, to draw up an own-initiative opinion on the

Development Cooperation Instrument (DCI) of the European Union: the role of organised civil society and the social partners.

The Section for External Relations, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 17 June 2010. The rapporteur was Mr Iuliano.

At its 464th plenary session, held on 14 and 15 July 2010 (meeting of 15 July), the European Economic and Social Committee adopted the following opinion by 123 votes in favour with no votes against and no abstentions.

1. Recommendations and conclusions

Decent work in EU cooperation policies and stronger support for the social partners

1.1

The EESC takes an overall positive view of the new DCI, which is of unarguable importance in supporting EU development cooperation policy around the world. That said, the EESC recommends that cooperation policies be given more solid institutional underpinning under the new Lisbon Treaty, upholding the central role and primary responsibility of the Commission for programming development cooperation policies/strategies, and renewing its support for the role of the European Parliament by beefing up the democratic scrutiny and budgetary control procedure.

1.2

The EESC points to the need for ever-greater encouragement for the practical application of the objectives enshrined in the decent work concept. The EESC therefore urges the EU institutions, especially the Commission and the Council, to give concrete support to the implementation of decent work within development cooperation policies and, more specifically, to mainstream decent work into the action plan to achieve the Millennium Development Goals.

1.3

The social partners (workers' and employers' organisations) are actively engaged in social dialogue, a key element of decent work, and must therefore be seen as crucial players and EU partners in this context. The social partners must be fully involved in the political dialogue, and must be entitled to direct support.

1.4

The EESC emphasises the importance of the private sector's role in development. In this regard, the EESC points to the concept of corporate social responsibility which, based on compliance with basic labour and environmental protection standards, gives greater transparency to the social and environmental commitments of companies to ensure fairer development in the countries where they operate.

1.5	The EESC recommends programming that is more closely geared to including the social partners, an approach that should extend to service procurement procedures in areas that are an inherent part of upholding economic and social rights.

The role and representation of civil society and the social partners in the development cooperation instrument (DCI)

1.6

The EESC would emphasise in general the crucial role of civil society organisations in promoting the democratic development of the peoples and states in receipt of aid, in complete independence of governments' political approaches. In consequence, the EESC calls for more resources to be allocated to supporting civil society and the social partners through thematic DCI programmes, and also advocates enhancing the complementarity of the latter with the geographic programmes under the same instrument, especially in the case of budgetary support.

1.7

These DCI civil society support mechanisms should be strengthened if civil society is to play its role at all levels: in framing and monitoring policy priorities, and in implementing development initiatives. Consequently, the EESC suggests assessing and preparing consultation and operating arrangements for Commission programmes. These arrangements must reflect the characteristics and needs of the relevant actors (actor-based approach).

1.8

In this regard, the EESC accepts the need to recognise the international dimension of civil society to be recognised at both political and operational level. This is most effectively expressed through membership-based organisations in the global north and south: for example, the social partners, the cooperative movement, etc. Because these organisations represent global bodies, it should be possible for them to be consulted officially as part of the process of programming the EU's cooperation policy priorities on a permanent basis. In this context, the EESC could propose to serve as an institution facilitating the involvement of civil society organisations in the EU's decision-making process concerning development cooperation.

1.9

The EESC emphasises the importance of strengthening third country civil society actors, not least through direct support for regional civil society networks in the south. The EESC proposes that for this purpose, resources be included to back network coordination and capacity development activities in the south, in conjunction with those already operating in the north, under Objective 3 of the DCI's Non-State Actors programme, making it possible to ensure the overall consistency of policies and initiatives.

Boosting DCI efficiency

1.10	The EESC welcomes the comments by the EU Court of Auditors and recommends supporting longer-term programmes, known as framework agreements, which are mostly geared to strategic objectives, and aimed at civil society organisations.

1.11	The EESC also suggests the possibility of broadening the criteria for the use of sub-granting that is functional and complements programmes that are based on framework agreements and aimed at more efficient management of available resources.

1.12

The EESC underlines the need to boost the sustainability of development projects, and suggests:

—	including organisational capacity building/capacity development for organisations in the south as a cross-sectoral component of all development projects;

—	the possibility of supporting prior feasibility studies on the projects concerned.

1.13

The EESC considers that the selection, monitoring and evaluation phases of cooperation actions need to be reinforced, in order to enhance their efficiency. It points in particular to the need to:

—	establish a more direct relationship and a strategic dialogue between the European Commission and the applicant organisations, at both central and peripheral level;

—	encourage (strategically and financially) greater direct participation of Commission programme stakeholders in implementing actions, at both central and peripheral level;

—	to appoint an officer within EU delegations, in charge of relations with civil society.

2. EU external assistance instruments and programmes

2.1

A lengthy process of reorganising EU external assistance financial programmes has commenced in the light of the 2007-2013 financial perspective. The resulting framework comprises geographic instruments: IPA (instrument for pre-accession assistance, covering both candidate and potential candidate countries), ENPI (neighbourhood instrument for the countries of the Caucasus, eastern Europe and the Mediterranean), DCI (development cooperation instrument), ICI (cooperation with industrialised countries) – and thematic instruments: EIDHR (democracy and human rights) (1), IfS (instrument for stability) and INSC (instrument for nuclear safety cooperation, to improve nuclear reactor safety worldwide). The thematic instruments do not require the agreement of third country authorities in order to be implemented.

2.2

Within this division of tasks, the DCI is the specific instrument for development cooperation (2). It is in turn subdivided into geographic and thematic programmes (3) whose funds are distributed in various ways ranging, from example, from budget support, grants and contracts to support for international organisations.

2.3

It is important to note that the categories of actors, the potential beneficiaries of DCI resources, have been broadened significantly, particularly where grants are concerned. There has been a shift away from the traditional idea of development NGOs as the main civil society actors in development cooperation, to a more nuanced view that has come to see the social partners, and especially trade unions, as new actors who are eligible to work with this instrument (4).

2.4

The EESC has taken the initiative of presenting the present opinion in response to the current mid-term review of the DCI, in conjunction with the present Structured Dialogue process (5), with the aim of making recommendations backing the fundamental role of civil society organisations in cooperation (6), with a particular focus on the contribution to development made by the social partners.

3. General comments

3.1

Mention should be made of recent developments concerning the general EU framework and development cooperation contained in the Lisbon Treaty that came into force on 1 December 2009. Innovative elements from the institutional Treaty point of view include the appointment of the High Representative for Foreign Affairs and Security Policy of the European Union, and the establishment of the European External Action Service (EEAS) (7), operating under the direction of the High Representative. The EU delegations, fully-fledged diplomatic representations, also come under the direction of the High Representative and will be part of the EEAS. Although the Treaty allocates responsibility for development cooperation policies to the Commissioner for development, the High Representative's mandate remains that of ensuring that the Union's external action is consistent and coordinated. According to the recent proposal put forward by the High Representative (8), the preparation of programming documents for the main cooperation instruments (both thematic and geographic) would be the responsibility of the EEAS (under the supervision of the Commissioner responsible for development policy). This approach could entail a risk of compromising the independence of development policies, as they could in this way be influenced and subordinated to the external policy objectives of the EU and the Member States. The EESC therefore highlights the central role and primary responsibility of the Commission for programming development cooperation policies/strategies, and renews its support for the role of the European Parliament by beefing up the democratic scrutiny and budgetary control procedure.

3.2

The EESC takes an overall positive view of the new DCI, which is of unarguable importance in supporting EU development cooperation policy around the world. It also welcomes the fact that the various pre-existing programmes are now gathered together under a single DCI Regulation, lending greater transparency to programming and resource management. Moreover, the EESC takes note of the continuously growing financial resources earmarked for this sector, and which make the European Union one of the world's biggest funders of development cooperation. The EESC also welcomes the inclusion of the social partners as new partners who are eligible for the DCI. Lastly, the EESC considers that the themes covered by the instrument closely match the strategic priorities identified by its Section for External Relations (9).

3.3	The EESC however intends to underline a number of general requirements regarding the effective application of DCI objectives and the role played by organised civil society and the social partners in development cooperation.

3.4

The EESC points to the need for ever-greater encouragement for the practical application of the objectives enshrined in the decent work concept. At international level, decent work is explicitly included among the Millennium Development Goals (MDG) laid down as part of the United Nations' anti-poverty efforts and consequently as an instrument for development cooperation. At European level, decent work was formally taken on board among development policies in 2006 (10) and included among the DCI objectives. Difficulties persist, however, in putting decent work into practical application in cooperation programming/negotiations between the EU and third countries. It is therefore surprising that the European Commission makes no mention of decent work in its recent Communication on the Spring Package on Development (11). The EESC consequently urges the Commission, the Council and the European Parliament to put decent work back into development policies and give it a more prominent place in practice.

3.5

The EESC recalls that freedom of association and of collective bargaining and social dialogue are crucial elements in implementing policies to support decent work, through the social partners. As the European Commission itself points out, ‘[t]he EU believes respect for social rights and labour standards leads to durable and equitable social and economic development’ and consequently that ‘key players are the social partners (business, trade unions)… trade unions are often the largest mass membership organisations in partner countries, and are watchdogs for international labour standards’ (12). Moreover, in 2005 the Council of the European Union mirrored this concept in its joint statement on the European consensus on development: ‘economic and social partners such as trade unions (…) play a vital role as promoters of democracy, social justice and human rights’ (13). The EESC therefore emphasises that the social partners must be seen as key EU actors and partners in this context. The social partners must be fully involved in the political dialogue and must be able to receive direct support.

3.6

The EESC would stress the importance of the private sector, which is based on the principles of the freedom to conduct a business, to the generation of development dynamics that can facilitate the effective integration of third countries into the global economy. The EESC emphasises that corporate social responsibility (CSR) could subsequently make the private sector responsible for fairer development in the countries where companies operate. Based on compliance with basic labour standards and world environmental protection priorities, CSR strengthens the social and environmental aspects of activities under the DCI banner.

3.7

The EESC recommends programming that is more closely geared to including the social partners, among other aspects, in procurement procedures in areas that are an inherent part of upholding economic and social rights. The EESC notes that contracts for services often touch upon themes such as social dialogue, labour rights and social rights. However, the current selection criteria (organisational and financial requirements of the applicant organisations) often stand in the way of fair and balanced participation by the very social partners who in fact should be seen as the main actors in this sector.

3.8

The trend for the EU to channel a considerable part of development cooperation resources into budget support is becoming consolidated (14). Although this method may reflect a positive approach aimed at making the beneficiary countries more proactive and, at the same, assume greater responsibility in their own development processes, it also runs the risk of restricting the fundamental contribution made by civil society to the real democratic development of the peoples and governments receiving aid (15). Strengthening the independence of civil society is a guarantee of sustainable development and, as such, should be a priority objective of development cooperation policies. The EESC therefore draws attention to the need to boost the resources earmarked for supporting civil society at local level (thematic programmes) (16) in order to fulfil a dual function: effective monitoring of budget support (17), and implementing complementary actions which would not otherwise be practicable through cooperation at government level only (18). The same applies to the geographic programmes (19), where support for civil society should be included according to criteria of transparency, proper programming and the definition of specific objectives, in keeping with and safeguarding the right of own initiative.

3.9

From this point of view, the role of the social partners is essential with regard to thematic programmes (not only ‘non-state actors’) such as ‘investing in people’ (covering areas touching upon social cohesion, human and social development, general equality and health), ‘migration and asylum’ (aimed at consolidating legal pathways for labour migration), or ‘environment and natural resources’ (which also promotes monitoring of environmental sustainability by civil society in developing countries) and ‘food security’. In particular, the ‘employment, social cohesion and decent work’ theme (20) (under the ‘investing in people’ programme) should more closely reflect the role of the social partners and social dialogue. By the same token, developing basic agriculture should be explicitly included among the priorities of the ‘food security’ programme (21).

3.10

On the basis of the DCI objectives, there is a clear need to adopt global strategies for carrying out development cooperation. The same applies to civil society organisations, above all where they have an international dimension. The international dimension of civil society is most effectively expressed through membership-based organisations in the global north and south (for example, the social partners, the cooperative movement, etc. (22). These organisations represent global bodies and it should therefore be possible for them to be consulted officially as part of the process of programming the EU's cooperation policy priorities vis-à-vis the beneficiary governments. In this connection, the EESC would point to the consultation and decision-making machinery in place at the OECD and the Council of Europe (23).

3.11

The EESC emphasises the importance of strengthening third country civil society actors, in part through direct support for regional civil society networks in the south. The EESC proposes that for this purpose, resources be included to back network coordination and capacity development activities in the south (in order to consolidate their representative capacity), in conjunction with those already operating in the north, under Objective 3 of the DCI's Non-State Actors programme. Support for international and regional networks would help to enhance the overall consistency of development cooperation policies and initiatives.

3.12

It would therefore seem necessary for these DCI civil society support mechanisms to be strengthened if civil society is to play its role at all levels: in framing and monitoring policy priorities, and in implementing development initiatives. Consequently, the EESC suggests assessing and preparing consultation and operating arrangements for Commission programmes that reflect the characteristics and needs of the relevant actors (actor based approach). There is evidently at present a notable variety of cooperation actors at international level, characterised by their own areas of action, objective, strategies, and organisational and operational systems.

4. Specific comments

4.1

In its recent report on non-state actors' involvement (24), the European Court of Auditors focused on the need to introduce longer-term programme financing under framework agreements that are more geared to strategic objectives, for civil society organisations. The EESC shares and advocates this approach.

4.2

The EESC would also suggest that the criteria for the use of sub-granting might be extended, in this case complementary in function with framework agreement-based programmes in order to reach grassroots organisations more effectively. This would moreover represent a more effective system for managing available resources on the part of the European Commission, avoiding fragmentation of initiatives.

4.3

The EESC emphasises the need to boost the sustainability of development programmes, and suggests:

—	including organisational capacity building for organisations in the south (i.e. not limited to their management capacity for project-based activities) as a cross-sectoral element in all development projects;

—

the possibility of carrying out advance feasibility studies on the projects themselves: as pointed out in the Court of Auditors' report, delay in getting projects up and running is usually caused by inadequate analysis of on-the-spot needs (25). Forwarding financing of such studies would help to ensure that projects are operational from the outset (26).

4.4

The EESC considers that the selection, monitoring and evaluation phases of cooperation actions need to be strengthened, in order to enhance their efficiency. It points in particular to the need to:

—

review the current project selection procedure, where red tape very often prevents the best proposal from being chosen. There should be a more direct relationship and a strategic dialogue between the European Union and the applicant organisations at both central and peripheral level, adopting a participatory model for the initiatives to be undertaken;

—

encourage (strategically and financially) greater direct participation of Commission programme stakeholders in implementing actions. This would allow effective monitoring of the results, facilitating the funder-beneficiary relationship and, at the final phase, real evaluation of project impact, at both central and peripheral level;

—

appoint an officer in charge of relations with civil society in every EU delegation. Following the entry into force of the Lisbon Treaty, the delegations have become fully-fledged diplomatic representations of the Union. Moreover, as seen above, the delegations will be part of the EEAS and will have to work increasingly in coordination with the representations of the individual Member States. It therefore seems essential to officially strengthen the civil society reference points within the delegations.

Brussels, 15 July 2010.

The President of the European Economic and Social Committee

Mario SEPI

(1) See EESC opinion on the European Instrument for Democracy and Human Rights, REX/263, 2009.

(2) The DCI budget for the 2007-13 period amounts to EUR 16 897 billion: www.developmentportal.eu/wcm/subsite/snv1v2/content/view/58/31/ The European Development Fund (EDF) for African, Caribbean and Pacific Countries also figures among the cooperation instruments, although it does not come under the EU budget. The tenth EDF has a budget of EUR 22 682 million covering the 2008-13 period: http://europa.eu/legislation_summaries/development/overseas_countries_territories/r12102_en.htm.

(3) Geographic programmes: Latin America, Asia, Central Asia, Middle East and South Africa; Thematic programmes: food security, investing in people, migration and asylum, non-state actors and local authorities, and environment and natural resources. See: http://ec.europa.eu/europeaid/infopoint/publications/europeaid/153a_en.htm. For the same 2007-13 period, were allocated as follows: EUR 10.057 billion for the geographic programmes (60 %) and EUR 5.596 billion for the thematic programmes (33 %).

(4) See Regulation (EC) No 1905/2006 of the European Parliament and of the Council of 18 December 2006 establishing financing instrument for development cooperation, OJ L 379, 27.12.2006.

(5) The Structured Dialogue for the inclusion of civil society and local authorities in development cooperation is an initiative launched by the European Commission in 2009 in order to discuss the role of civil society and local authorities in cooperation. Although it is not a negotiating process, the Dialogue seeks to identify common ideas on the relevant issues, bringing together the EU Member States and the European Parliament as well as civil society representatives. See: http://ec.europa.eu/europeaid/who/partners/civil-society/structured-dialogue_en.htm.

(6) In this regard, the EESC recalls that, following the Accra Forum, civil society organisations were fully recognised as ‘independent development actors in their own right’, on an equal footing with governments and international organisations, item 20 of the Accra Agenda for Action: http://siteresources.worldbank.org/ACCRAEXT/Resources/4700790-1217425866038/AAA-4-SEPTEMBER-FINAL-16h00.pdf.

(7) EEAS staff will comprise personnel from the relevant departments of the Secretariat-General of the Council and of the European Commission, together with the national diplomatic services of the Member States. The EEAS is a unique service, separate from and independent of both the Commission and the Council: http://eeas.europa.eu/background/index_en.htm.

(8) Article 8: http://eeas.europa.eu/docs/eeas_draft_decision_250310_en.pdf.

(9) The EESC's ACP Follow-up Committee is responsible for relations with these countries. Consolidated experiences with the EDF … cite bibliography of EESC opinions.

(10) Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions – Promoting decent work for all (COM(2006) 249 final).

(11) Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions – A twelve-point EU action plan in support of the Millennium Development Goals (COM(2010) 159 final).

(12) Communication from the Commission to the Council and the European Parliament – The European Union's role in promoting human rights and democratisation in third countries (COM(2001) 252 final).

(13) OJ C 46, 24.2.2006, p. 1, paragraph 18.

(14) Budget support entails the direct transfer of financial resources by the EU to the beneficiary country via pre-existing financial bodies. Budget support may be general, in support of a national development strategy, or sectoral, being channelled to specific thematic areas such as health, education, etc.http://ec.europa.eu/europeaid/how/delivering-aid/budget-support/index_en.htm.

(15) Opinion of the European Economic and Social Committee on The role of civil society in the new European strategy for the Western Balkans, OJ C 80, 30.3.2004.

(16) The thematic programmes, unlike their geographic counterparts, do not require the agreement of the beneficiary state in order to be implemented.

(17) This refers to the key role that civil society organisations can play in monitoring and controlling resources earmarked for development cooperation, in order to eradicate any form of corruption.

(18) EuropeAid is currently carrying out studies on this aspect, see: Engaging Non-state actors in new aid modalities in: https://webgate.ec.europa.eu/fpfis/mwikis/aidco/index.php/WG2:_T1:_New_aid_modalities_and_CSOs_and_LAs_challenges_and_opportunities%3F and Complementarity of EC financial instruments in the field of human rights and democracy, Information note, aidco.e.4 (2009)338553, 29.10.2009.

(19) The bulk of financial support under the geographic programmes so far seems to have been granted in the form of ‘budget support’, leaving out support for civil society at local level. It should be borne in mind that the geographic programmes require the agreement of the beneficiary state.

(20) It should be noted that the financial resources earmarked for this theme amount to only 21 % of overall financial support for the 2007-2013 Investing in People programme. See the Mid-term of Strategy Paper for Thematic Programme (2007-2013).

(21) EESC opinion, rapporteur: Mr Campli: REX/273 2009, Trade and Food Security.

(22) The social partners (workers' and employers' organisations) are organised at both European and international level. In Europe: BUSINESSEUROPE for employers, and the European Trade Union Confederation (ETUC) for workers. Internationally: the International Organisation of Employers (IOE) and the International Trade Union Confederation (ICTU). The cooperative movement is also organised at European and international level, under the umbrella of Cooperatives Europe and the International Co-operative Alliance. To these should be added the constellation of organisations, cooperatives and mutual benefit societies that make up the ‘social economy’ as defined by the Johannesburg ILO conference of 19-21 October 2009 (The Social Economy: Africa's response to the Global Crisis).

(23) See the role of the TUAC and of the European Youth Forum respectively.

(24) The Commission's management of Non-State Actors' involvement in EC Development Cooperation, Special Report No 7/2009.

(25) Idem, p. 21, paragraph 41.

(26) A rotating fund could be set up to finance such studies, with the Commission making forward payments that would subsequently be deducted from the total cost of a project, in the event that it is selected.

11.2.2011

Official Journal of the European Union

C 44/129

Opinion of the European Economic and Social Committee on ‘What role and perspectives for Africa's social economy in development cooperation?’ (own-initiative opinion)

2011/C 44/21

Rapporteur: Mr JAHIER

On 17 December 2009, the European Economic and Social Committee, acting under Rule 29(2) of its Rules of Procedure, decided to draw up an own-initiative opinion on

What role and perspectives for Africa's social economy in development cooperation?

The Section for External Relations, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 17 June 2010.

At its 464th plenary session, held on 14-15 July 2010 (meeting of 15 July 2010), the European Economic and Social Committee adopted the following opinion by116 votes for, none against, and one abstention.

1. Conclusions and recommendations

1.1 The social economy is a major, world-wide phenomenon which is distinguished by its capacity for innovation, dynamism, flexibility and resilience, including in severe crises, and by its ability to include all population groups, particularly the poorest and most marginalised, in all societies. Very highly-regarded sources estimate that the social economy accounts for 10 % of the world's working population (1) and is growing in all areas of the world. Its characteristics and special dynamism distinguish it from other kinds of economy, but, at the same time, make it fully complementary to and, at times, even synergic with other forms of enterprise.

1.2 In Africa, the social economy is a sector which has thus far to a large extent been neglected by the international community, including the European Union. Its specific situation is not recognised and so it is not actively involved in decision-making and consultation policies and processes. Nevertheless, in Africa it is a deep-rooted part of traditional systems of mutual support and collective and community enterprise, which often become cooperative enterprise or the most varied forms of mutual enterprise. Moreover, many of its structures are a vital part of that huge sector known as the informal economy.

1.3 In a continent in which between 80 and 95 % of the population are employed in the informal sector, the social economy can play a decisive role in gradual development and transformation of this standard of living and work, to bring it into line with high standards of dignity and social protection which will enable these players to operate on the market and make a decisive contribution to Africa's social and economic development.

1.4 In the current context of the aftermath of the economic crisis, the social economy's innovative nature and the major contribution that it can make to local development have been officially recognised by the ILO, which held the first Conference on the Social Economy in Johannesburg on 19-21 October 2009, where it adopted a major Plan of Action. The resilience displayed by the social economy, particularly cooperative enterprises, during the crisis prompted the World Bank and the IMF to show fresh interest in the social economy.

1.5 It is therefore in interests of the EU, as primary world donor, to get involved in this international initiative. A good opportunity would be the United Nations International Year of Cooperatives, scheduled for 2012.

The EESC proposes the following avenues for promoting the African social economy in development cooperation:

—	ensuring formal recognition by the EU of the role and contribution of the social economy to Africa's development;

—	including the social economy in the list of non-state actors of the Cotonou Agreement to be involved in the implementation of the Agreement;

—	doubling the funding for non-state actors in the Country and Regional Strategy Papers;

—	ensuring that non-state actors, including the African social economy, are included in future EU relations with ACP countries in the post–2020 period;

—	integrating the social economy into the EU-Africa Partnership and notably, the 7th Partnership on Migration, Mobility and Employment;

—	including African cooperatives in the EU's policies on agricultural and rural development cooperation in Africa;

—	supporting the African social economy through the EU's Thematic Programmes: Investing in People, and Non-State Actors and Local Authorities in Development;

—	encouraging the creation and strengthening of networks of social economy actors (north-south and south-south);

—	promoting education, training, cultural cooperation and gender equality in EU programmes and policies;

—	recognising the contribution of the social economy to creation of decent jobs in Africa and reflecting this role in EU cooperation policies;

—	including the social economy in the 2010 European Report on Development, which will address social protection;

—	encouraging an enabling environment for the social economy to operate, including the appropriate legal framework, capacity-building, access to financing and networking;

—	promoting European intra-institutional cooperation on the promotion of the social economy;

—	including the social economy in existing Commission-ILO strategic partnerships.

In line with these recommendations, the EESC undertakes to actively involve operators in the African social economy in its activities, particularly in the ACP-EU Follow-up Committee.

2. Situation and size of the social economy in Africa

2.1 The social economy is made up of all those ‘enterprises and organisations, in particular cooperatives, mutual benefit societies, associations, foundations and social enterprises, which have the specific feature of producing goods, services and knowledge while pursuing both economic and social aims and fostering solidarity’ (2). Thus defined, the social economy is a significant economic sector, in both Europe and other continents, starting with Africa.

2.2 Given that it is a very inclusive concept, which focuses on the common features of different organisations and businesses, it is, in practice, impossible to quantify exactly the current spread and size in numerical terms of the social economy in individual African countries or in Africa as a whole. However, it is possible to outline the features of the various types of organisations and businesses making up Africa's social economy.

2.3 Traditionally, one of the fundamental components of the social economy has been cooperatives, defined by the ILO (R193, 2002) as ‘an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise’. In Africa, cooperatives were ‘imported’ by colonial authorities, becoming, as countries claimed their independence, one of the continent's main forms of economic and social organisation (Develtere, Pollet & Wanyama, 2009). In the majority of cases, however, the new independent governments forged very close links with the cooperatives, which were used to raise support and control in various social and economic contexts. Only with the liberalisation of the 1990s were African cooperatives able to move away from the excessively dependent relationship with the state which had marked their history thus far, regaining the autonomy, voluntary nature and internal democracy which are distinctive features of the cooperative model and thereby entering a new phase of renaissance and expansion.

2.4 Over the past 15 years the cooperative model has become much more widespread and popular. As shown by Develtere, Pollet & Wanyama (2009) (3), analysing the data of 11 African countries, in several cases (Kenya, Ghana and Senegal, to name but a few) the number of active cooperatives has more than doubled compared to 1989-1992, to make up a very substantial part of the national economy.

2.5 The majority of African cooperatives are client-owned and operate in the agricultural sector, but they are also very widespread in the credit sector: according to WOCCU, in 2007 there were 12 000 credit unions, with over 15 million members across 23 countries and around USD 3.5 billion of savings (Fonteneau & Develtere, 2009), forming the lynchpin of microfinance institutions in many African regions. Cooperatives are also active in the construction, insurance and distribution sectors. An estimated 7 % of the African population currently belong to a cooperative.

2.6 Mutual benefit societies are basically intended to provide welfare services for their members and members' families, sharing risks and resources and operating in the social protection sector, focusing particularly on all aspects of health and health services. These societies are of considerable size and impact: an estimated 500 or more mutual benefit societies operate in West Africa, reaching some hundreds of thousands of people. In Rwanda, since 2003 the Ministry of Health has incorporated this kind of society into its strategy for expanding access to health services, in view of the fact that, according to the Ministry's data, 75 % of the population belong to at least one. It is not just the health sector which is concerned, however. Here, too, organisations and/or businesses similar to mutual benefit societies operate in other sectors as well. This applies to the tontines in French-speaking Africa, and, as regards the credit sector, credit unions in English-speaking Africa and the funeral societies which provide funeral services in various countries, including Ethiopia and South Africa.

2.7 For the first time, in Africa, the UEMOA Council of Ministers adopted on 26 June 2009 a Regulation (No. 07/2009) on mutual benefit societies. The basic values distinguishing the ‘mutual benefit’ principles are thereby identified and recognised: transparency, social responsibility, democracy, equality, fairness and mutual support. These principles also define other characteristics specific to mutual societies, in particular membership on a voluntary, non-discriminatory basis; non-profit aim; democratic, participatory running of the institution; high level of mutual support; autonomy and independence; voluntary work of the management board; responsible participation.

2.8 Another very numerous group in Africa, present in all possible rural and urban sectors, is that of associations, which include voluntary organisations, community-based organisations, non-profit organisations and non-governmental organisations (NGOs) and so forth. The number of associations connected with the social economy rocketed with the democratisation processes in the 1990s, thanks to better legal frameworks and flexible operating structures which enable the association model to be adapted to the most varied social needs. Particularly important within this group is the role of NGOs, which – often working together with similar organisations and institutions in the north – manage to raise copious resources and thus operate on a wider scale. Similarly, the social partners are also often active in several countries, promoting social economy structures and initiatives.

2.9 Thanks to both their structural and their operating characteristics, cooperatives, mutual benefit societies, associations and other organisations and enterprises related to the social economy have considerable economic and social impact in Africa. First and foremost, they provide jobs and direct, democratic participation in the organisation and distribution of resources. In addition, operating more widely throughout society and often in the poorest rural areas where state initiatives are fewer or non-existent, social economy enterprises and organisations give the most vulnerable groups (the poor, women, people with disabilities, unskilled workers, migrants etc.) access to social and/or economic services. Whether in terms of micro-financing or medical care and welfare assistance for HIV/AIDs sufferers, or participation in a farming cooperative or a burial society, social economy organisations and enterprises provide social protection measures on an inclusive, community basis which, at the same time, generate goods and services with undeniable economic impact, directly helping to reduce poverty.

2.10 The role of social economy enterprises and organisations becomes even more important in the context of the effects of the global economic and financial crisis, which, in Africa, came on top of the effects of the 2007-2008 food and energy crisis (4). As the economic and social situation of a large part of the population deteriorated, developing countries' governments should have reinforced and expanded social protection systems, which were often lacking in some respects. This is an area where the social economy is already present and active, often compensating for the shortcomings and fragmented nature of state initiatives, without taking governments' and institutions' roles and responsibilities away from them.

3. The ILO programme

3.1 The social economy, due to its inherent characteristics, contains within itself the means to create new jobs, increase compliance with core labour standards and promote social protection and social dialogue. It therefore fits in perfectly with the strategic objectives set by the International Labour Organisation to achieve and guarantee decent work, which is defined as such when carried out ‘in conditions of freedom, equity, security and human dignity’. As a longstanding primary objective of the ILO's work, decent work is considered central to poverty reduction plans and is a tool for promoting inclusive and fair sustainable development.

3.2 In its report entitled The Decent Work Agenda in Africa: 2007–2015 (ILO, 2007), the ILO sets out the opportunities and challenges that Africa must face in order to make decent work a reality throughout the continent and in order to ensure adequate economic and social development. The main challenges identified concern unemployment, underemployment and poverty; the role played by social protection in development; problems associated with social exclusion and the spread of HIV/AIDS. The document does not explicitly mention the social economy. However, the concepts, measures, attention to cooperatives and associations, the central importance given to equity, and social participation and protection are all compatible with the foundations of the social economy.

3.3 Over the years, the ILO has gained know-how that is relevant to the social economy, partly through its traditional instruments and partly by setting up a unit for cooperatives (EMP/COOP) and launching a set of technical assistance programmes spanning continents (e.g. CoopAfrica) or individual countries (e.g. SAY JUMP! in South Africa).

3.4 Thus, it is no coincidence that the ILO should be the first to open the international debate on Africa's social economy. After commissioning a series of analyses and studies on cooperatives in Africa, it held a conference on ‘The social economy – Africa’s response to the global crisis’ in Johannesburg in October 2009. The conference, which brought together participants from all corners of Africa, culminated in the adoption of a Plan of Action for the Promotion of Social Economy Enterprises and Organisations in Africa (5).

3.5 The plan of action sets out four strategic objectives:

—

at global level, the ILO and social economy stakeholders undertake to enhance the recognition of social economy enterprises and organisations and increase the number of partnerships between social economy stakeholders in the north and south and between African social economy networks and those in other regions;

—	at regional level, they undertake to promote social economy enterprises and organisations, mobilising resources in order to establish a social economy programme for Africa;

—	at national level, the objective is to establish, strengthen and/or promote an enabling legal, institutional and policy environment for social economy enterprises and organisations and to develop and strengthen social economy structures;

—

finally, at micro and meso levels, the objective is to enhance the efficiency of social economy enterprises and organisations so that they become more effective and contribute to meeting people’s needs in terms of social protection, income creation, employment promotion, rights at work, food security, environmental protection, the fight against HIV/AIDS, social exclusion, and so on.

3.6 The impact of the global economic and financial crisis came on top of the food and energy crises, making the Johannesburg plan of action's objectives all the more urgent. The ILO estimates that about 73 % of sub-Saharan workers are in precarious employment. This percentage may have gone up to 77 % in 2009, in all likelihood exacerbating migration tension both within Africa and between Africa and Europe, with many workers seeking a better future. The crisis has already made itself felt through reduced foreign direct investment in infrastructure and goods manufacturing, and decreasing migrant remittances. Promoting and fostering the establishment of social economy enterprises and organisations helps to create new jobs, thus providing a practical alternative to migration flows.

3.7 The vital contribution of cooperatives to socio-economic development recently led the United Nations to declare 2012 as the International Year of Cooperatives. This will present an opportunity to promote and broaden the role of social economy enterprises and organisations.

4. Perspectives and recommendations for EU involvement and new priority policies

4.1 The social economy is a significant phenomenon in the European Union and its economic and social role is gaining increasing recognition. In 2006 the EESC produced an initial, extensive report to this effect (6).

In 2009, the European Parliament recognised the social economy as a pillar of European integration, ‘whereas the social economy represents 10 % of all European businesses, with 2 million undertakings or 6 % of total employment, and has great potential for generating and maintaining stable employment’ (7).

Lastly, the EESC has recommended the recognition and preservation of the different enterprise models, including the social economy (8).

4.2 The social economy does not have its own specific place among the factors that determine EU action under its external cooperation programmes. However, the main sectors where social economy organisations and enterprises operate in Africa are all among the EU's operational priorities, i.e. social protection, health, social inclusion, employment, agri-rural development, microfinance and culture. As a result, although not specifically directed towards social economy organisations and enterprises, relevant EU instruments and policy areas that could be employed are already in place.

4.3 However, in order for this new socio-economic reality of the African continent to be included in the EU's development cooperation, it is recommended that the EU formally recognise the existence of Africa's social economy. The EU may find a specific interest and added value in including a new priority of this type in its own agenda, as it would encourage explicit cooperation with international bodies, such as the ILO and the World Bank, thus developing system synergies, which are becoming increasingly useful in development cooperation. Moreover, this new priority would include key European social economy stakeholders and consequently, it would help to encourage European public support for increased EU external aid.

4.4 The most effective means for ensuring the conceptual recognition of the role and contribution of the social economy to Africa's development is to promote the sector through existing EU partnerships with Africa, namely through the Cotonou Agreement and the EU-Africa Partnership.

4.4.1 As regards the Cotonou Agreement, it is regrettable that the 2010 revision has already been concluded and that provisions on the social economy were not included in this revision. However, EU delegations in African countries should take steps to rapidly include social economy organisations and enterprises in the list of actors to be mapped and to be invited to consultations.

4.4.2 Moreover, the 2015 revision should provide the opportunity to explicitly recognise and include the social economy in the category of ‘non-state actors’ who are to be informed, consulted and involved in the implementation of the Agreement, in addition to receiving the financial resources and capacity-building to enable them to be involved effectively.

4.4.3 The EESC considers that the reflection on EU relations with ACP countries for the period post 2020, when the Cotonou Agreement will expire, should not only ensure the inclusion of institutional provisions for non-state actors similar to those of the Cotonou Agreement, but should also ensure that the social economy is explicitly included in this category.

4.5 In relation to the EU-Africa Partnership, direct links can be established between the objectives and actions of the 7th Partnership on Migration, Mobility and Employment and the social economy, notably as regards contributing to employment creation, the gradual formalisation of the informal economy and the promotion of decent work. Within this context, the 3rd EU-Africa Summit, to be held in November 2010, and the new Action Plans that will be adopted at the Summit will be a tangible opportunity to promote the social economy. For example, the new Action Plan for this Partnership could include:

—	as an objective: the recognition and promotion of the social economy as a means of bridging the gap between the formal and informal economy and encouraging creation of decent jobs;

—	as an action: enhancing the capacities and skills of African social economy actors by developing curricula in vocational training institutions and universities, notably on management;

—	as an action: facilitating loans and micro-credit for social economy actors;

—	as an action: assisting governments in Africa to establish a legal, institutional and policy environment conducive to the promotion and operation of social economy enterprises and organisations.

4.6 At sectoral level, African social economy organisations and enterprises are very active in the agricultural sector and in rural development. Concrete commitments in this area have been made under the EU-Africa Strategy for agriculture and in the Communication on Advancing African Agriculture (9). However, neither refers to the sector of cooperatives which is among the key pillars of Africa's social economy. However, the opportunities for action and cooperation with African agricultural and rural cooperatives are numerous, and would correspond to the objective of ‘putting emphasis on improved governance of agriculture and supporting capacity-building on the part of African public and private organisations involved in agriculture’ (10).

4.6.1 Moreover, it is worth noting that the European Instrument for Development (DCI) includes a thematic programme on food security, another sector where existing EU instruments and programmes could be used to recognise the fundamental role that African social economy organisations and enterprises can play in European development cooperation.

4.7 An additional thematic programme of the DCI which should be considered is Investing in People. This programme, for the development of human resources, could be used to support the training and the development of entrepreneurship skills of social economy actors in Africa.

4.7.1 This would be in line with the provisions of the ILO Declaration on the development of skills, notably on management. Education and training are fundamental for strengthening the capacity of social economy organisations and enterprises and allowing them to compete in the markets. Particular efforts should also be invested in education and training for women, whose role in Africa's economies is often undervalued, particularly in the agricultural sector and in rural areas.

4.8 As far as education and training for both skills and management development are concerned, the EU should facilitate and foster the relationships between European and African social economy organisations and enterprises. Exchange of experiences, good practices and technical assistance along north-south and south-south axes would help to strengthen African structures (11). Therefore, the EESC encourages the creation and the strengthening of social economy networks (north-south and south-south) as an essential means of cooperation and transfer of know-how among social economy organisations and enterprises.

4.9 Education and training are also important for craftsmanship and, more broadly, for cultural cooperation. Both areas are important for job creation, as the EESC has already stated several times. Consequently, the EU should take these sectors into consideration when including Africa's social economy in its programmes and policies.

4.10 Moreover, with respect to creating employment, which, alongside social protection and gender equality, is a fundamental strand of the social economy, especially as regards rural employment, some aspects of the EU-Africa Strategy could be linked to the objectives of the Johannesburg Plan of Action. This applies to the Africa-EU Partnership on Migration, Mobility and Employment Priority Action 3 on employment and poverty alleviation, which emphasises the principles of decent work.

4.11 Another means to ensure the conceptual recognition of the role of the social economy in Africa's development could be the 2010 European Report on Development. In 2010 the report will address the topic of social protection, an area where social economy organisations and enterprises play a fundamental role, especially in Africa, as already stated (12). Moreover, explicitly including Africa's social economy in the 2010 European Report on Development would allow for the drafting of a specific social protection policy in EU development cooperation, which is currently absent.

4.12 The EESC also recommends that the Commission start mapping how Member States cooperate with African social economy players, to allow greater coordination and division of labour in this area between the EU and Member States.

4.13 In order for the African social economy to effectively contribute to poverty eradication, an enabling environment is required, including the appropriate legal framework, capacity-building, access to financing and networking among African social economy organisations and their European counterparts. As regards the legal environment, African authorities should be encouraged by the EU and the ILO to register social economy organisations and to introduce legislation that will allow for the effective operation of these actors, covering the key issue of ownership of the means of production. The EU and Member States could share best practices from European countries where the social economy is most active.

4.13.1 EU support for capacity-building and networking of social economy actors should be directed at national, regional and European level though, in particular, the Cotonou Agreement, the EU-Africa Strategy and the Thematic Programme Non-State Actors and Local Authorities in Development (European Instrument for Development Cooperation) (13). Activities could include support for coordination, advocacy and dialogue, vertical and horizontal integration of social economy organisations, training, etc.

4.13.2 To this end, social economy organisations should be included in the category of eligible non-state actors in the above Thematic Programmes. In addition, financing for these Thematic Programmes and for additional Thematic Programmes where the social economy could be effectively involved (14) should be increased during the review of the forthcoming European Financial Perspectives (2014-2020) until it has doubled overall, as already called for by the EESC (15). Irrespective of EU financing, coordination, dialogue, synergies and concrete cooperation projects should be encouraged and continued between different sectors of the European and African social economy and, notably, among African organisations. Similarly, funding for relevant programmes of the 11th European Development Fund (EDF, 2014-2019) should be increased, in order for the social economy to benefit from this assistance.

4.14 An additional aspect of an enabling environment is, first and foremost, the genuine existence of the conditions for access to financing for non-state actors, on the basis of simplified procedures.

A particular, innovative aspect is long-term loans for more structured social economy actors. For its part, the EU is called upon to facilitate access to such loans, via existing or new instruments.

4.15 Lastly, the EESC calls for European intra- and inter-institutional cooperation on the promotion of the African social economy:

—

the European Parliament, which has already adopted a resolution on the impact of the social economy on European integration (16), is called upon to adopt a resolution on the contribution of the African social economy to poverty eradication, in the Development Committee and/or the ACP-EU Joint Parliamentary Assembly;

—	the Belgian Presidency of the EU Council, which will be in office during the second half of 2010 when the 3rd EU-Africa Summit is to be held, is called upon to actively increase recognition of the African social economy and support therefor;

—	it is recommended that the Commission explore avenues for including the social economy in the Commission-ILO Strategic Partnership in the Field of Development, which aims to reduce poverty and contribute to achieving the Millennium Development Goals and the Decent Work for All Agenda (17).

Brussels, 15 July 2010.

The President of the European Economic and Social Committee

Mario SEPI

(1) Preparatory document for the Johannesburg ILO Conference, 19-21 October, referred to in Appendix 3.

(2) See Article 1 of the Preamble to the Plan of action for the promotion of social economy enterprises and organisations in Africa, drawn up at the ILO Regional Conference on The Social Economy - Africa’s Response to the Global Crisis, Johannesburg, 19-21 October 2009. See, also, the diagram in Appendix 2.

(3) Op. cit., Appendix 3.

(4) See Opinion REX 285 – CESE 1954/2009, Supporting developing countries in coping with the crisis, rapporteur: Mr Jahier.

(5) See Appendix 1 and http://www.ilo.org/public/english/region/afpro/addisababa/pdf/se_planofaction_en.pdf.

(6) CIRIEC, The social economy in the European Union, CESE/COMM/05/2005.

(7) European Parliament resolution of 19 February 2009 on Social Economy; rapporteur: Ms Toia.

(8) OJ C 318, 23.12.2009, p. 22.

(9) Communication from the Commission to the Council and the European Parliament - Advancing African Agriculture - Proposal for continental and regional level cooperation on agricultural development in Africa (COM(2007) 440 final).

(10) The Africa-EU Strategic Partnership - A Joint Africa-EU Strategy, point 73.

(11) A positive example of north-south social economy network is the Réseau ESMED (Réseau Euro-méditerranéen de l'Economie Sociale), which includes organisations from Spain, France, Italy, Morocco, Portugal and Tunisia. It helps and fosters exchanges and cooperation projects within the framework of the Euro-Mediterranean Partnership.

(12) See points 2.8 and 2.9, above.

(13) Article 5.1.2 of this programme states that the EU will support initiatives that contribute to an ‘increased number of trans-national exchanges, confidence building, networking and coordination activities between non-state actors and local authorities (north-south, south-south)’.

(14) For example, the Thematic Programmes of the European Development Cooperation Instrument Investing in People and Food Security.

(15) See point 6.3 of Opinion REX/285-2009 on Supporting developing countries in coping with the crisis, rapporteur: Mr Jahier.

(16) See footnote 4.

(17) http://ec.europa.eu/europeaid/what/social-protection/documents/memorandum_of_understanding_ec_ilo_en.pdf.

11.2.2011

Official Journal of the European Union

C 44/136

Opinion of the European Economic and Social Committee on ‘European Technology, Industrial and Science Parks in the crisis management, preparation of the after-crisis and post-Lisbon strategy period’ (additional opinion)

2011/C 44/22

Rapporteur: Mr TÓTH

Co-rapporteur: Mr SZŰCS

On 14 July 2009, the European Economic and Social Committee, acting under Article 29(2) of its Rules of Procedure, decided to draw up an additional opinion on the

European Technology, Industrial and Science Parks in the crisis management, preparation of the after-crisis and post-Lisbon strategy period.

The Consultative Commission on Industrial Change, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 1 July 2010.

At its 464th plenary session, held on 14 and 15 July 2010 (meeting of 14 July 2010), the European Economic and Social Committee adopted the following opinion by 147 votes with seven abstentions.

1. Recommendations

1.1	The EESC acknowledges the significance of the Technology, Industrial and Science Parks (TISPs) in the support of economic development and modernisation. The structures established support industrial change by the smart specialisation, concentration of resources and knowledge base.

1.2

The EU needs a more focused and integrated approach geared towards sustaining and developing the TISPs of the 21st century. Particularly in the crisis and post crisis context, a more comprehensive strategy should be followed, to capture the potential benefits of parks for economic growth and competitiveness. These actions have to be implemented with leadership and ambition on behalf of the EU.

1.3	It is advised to identify and develop synergies with the flagship EU initiatives in the field, particularly with the European Institute of Technology and Innovation and its Knowledge and Innovation Communities.

1.4	The development of new generations, a new form of parks has to be noticed and encouraged. The role of the parks in shaping the innovation structures should be promoted.

1.5

The regional dimension: in line with the subsidiarity principle, local governments', agglomerations' involvement in the development of TISPs should be strengthened. There is a need to improve networking activities between the actors of the public sector, the business community and the higher education institutions.

1.6

Cooperation with scientific institutions, especially universities and research institutes, as well as R&D aspects, are becoming more and more important in park development; however there is currently less cooperation with parks than there should be. Parks could serve in their function as bridges between the academia and the industry. The partnership with parks may be part of system of criteria for awarding the excellent universities.

1.7

The observatory – evaluation – accreditation activities in the field should be initiated and supported, together with the dissemination of good practices. Assessment and comparative empirical studies are required to frame concerted European and national policies and instruments related to park formation and growth. It is desirable to support the mapping of TISPs across Europe in the form of comprehensive database. This may facilitate collaborations among the parks by creating an interconnecting matrix that promotes connectivity to overcome regional barriers to growth.

1.8

The continuous professionalisation in the development and operation of the parks is acknowledged in the organisational-management, complex (regional) development aspects and also in the integration of the research component, the structured clustering approach and the quality element. Further enhancing the standards of operations of the parks remains however a requirement

1.9	The EU offers possibilities for greater cohesion and catching up; we need to tap into more of the development potential which this offers and to keep track of it in the long term.

2. Introduction

2.1

The EESC approved in November 2005 a comprehensive own-initiative opinion in the theme of Technology-, Industrial-, Innovation- and Science Parks. Particular attention has been paid to the parks in the new Member States however the findings and recommendations made have been valid for the EU in general.

2.2	It can be noted that the above opinion has pronounced several relevant statements and formulated appropriate recommendations, which have had significant policy impact in the past years. The resulting progress has been in synergy with the regional, industry and innovation policy efforts of the EU.

2.3

The following findings and recommendations with clear impact may be recalled:

a)	Parks meet the criteria for instruments to facilitate innovation, parks therefore can be considered as ‘innovation poles’.

b)	It is highly relevant to facilitate interaction between science, technology and economic development and creating synergies through cooperation between business and research institutions, thus promoting their market access.

c)	The parks provide comprehensive framework to facilitate, stimulate innovation and regional development and have played a prominent role in these efforts, by enhancing competitiveness, helping to overcome unemployment and the gap between divergent levels.

d)	There is a need of economic strategies capable of addressing the complex nature of opportunities offered by the parks and of providing leadership.

e)	Parks have a key role to play in promoting innovation. In this context the mobilisation of intellectual resources from universities and other research institutions is becoming increasingly important.

f)	The networking of parks at trans-regional levels, development of pan-European networks by supporting integrated cooperation programmes between parks and industrial districts has been a desired but not fully achieved concept.

2.4

It is timely to take stock of impact of the previous opinion, both as for the policy lessons and the practical lessons learnt. The follow-up opinion also elaborates the role and possibilities of parks in the management of the economic crisis. In this document, the EESC focuses on park specialisation, on new expectations of industry, employees and other civil society stakeholders, on new challenges facing parks at regional, national and European level, and on the complex tasks of organisations managing parks.

2.5

The Technology-, Industrial-, innovation and Science Parks (TISPs) are seen increasingly as a means to create dynamic clusters that accelerate economic growth and international competitiveness. They are contributing the European industrial change, enhancing the innovation-, clustering-, B2B- activity, supporting the SME sector and the job creation. A definition of clusters has been discussed in detail in paragraph 2.3 of the EESC own-initiative opinion on ‘European industrial districts and the new knowledge networks’ (1).

2.6

The EU should also be prepared for the after-crisis period, where the concentrated innovative, scientific and industrial capacities and resources are there in the TISPs all over the EU. It is relevant to highlight the potential role of the parks in the preparation of the post 2010 Lisbon Strategy planning. The aim of this follow-up opinion is to set up recommendations in line with these findings.

3. The changing role and positioning of the TIS parks

3.1

The profound economic and social changes in the past years, in particular the process and consequences of the economic crisis, the robustly emerging sustainability, energy security and climate change issues have re-positioned for Europe and the whole world the notions and tasks related to modernisation, growth and economic development. In order to be efficient in this environment, parks have to develop new functions, services and produce new business models that enable emerging activities and sectors to flourish.

3.2

The significance of science and technology parks and alike, as concentrated and integrated development structures has been increasing. Innovation and creativity have been receiving special attention in the EU and worldwide. These structures are acknowledged as promoters of an innovative and competitive economy, supporting both creation and consolidation.

3.3

Parks around the world vary considerably in terms of their mission and scale. A fuller understanding of the different variants of parks bears upon determining needs, setting priorities and elaborating strategic planning. Many definitions of a park have been advanced, by professional organisations. Common among these definitions is that a park is a type of public-private partnership that fosters knowledge flows - often between park firms and universities and among park firms - and contributes to regional economic growth and development.

3.4

The term ‘science and technology park’ has come to encompass any kind of high-tech cluster such as: technopolis, science park, science city, cyber park, hi tech (industrial) park, innovation centre, R&D park, university research park, research and technology park, science and technology park, technology park, technology incubator, technology park, technopark, technopole and technology business incubator. While similar in many respects, experience suggests that there is difference between a technology business incubator, science park or research park, science city, technopolis and regional innovation system.

3.5

It is advisable to distinguish between Science Parks and Research Parks. While the former denomination is the most common in Europe, the latter is widely used in the United States and Canada. Science parks in Europe coexist with technology parks and the main differences between the two concepts regard size or the possible admission of productive activity. A science park tends to be more reduced in size, with strong links to university and less emphasis on manufacturing activities, while a technology park is of medium-sized/big size and allows for productive activities. Geographically, science parks tend to follow the ‘British model’, while technology parks refer to a ‘Mediterranean model’, typical of countries like France, Spain, Italy and Portugal.

3.6

Admittedly, the organisational factors essentially contributing to the success of flagship TISP initiatives have been:

a)	long-term and sustainable public/private partnership;

b)	parks run by professionals with innovation expertise;

c)	strategic operations agreed through joint decisions involving the main stakeholders: regional authorities, businesses and research institutions, and the local community;

d)	an explicit advantage when parks have a well defined specialisation;

e)	reaching critical mass in time for enabling research findings to be implemented, even though the incubation process is unusually time-consuming.

4. Networking, clusters and university-industry collaboration

4.1	As a result of the prevailing connectivity in the European post-industrial economy, the societal and economic renewal emerges in creative eco-systems of innovation. It is desirable that parks cooperate with other similar entities, both nationally and internationally.

4.2	Clusters are most relevant examples of competitiveness-supporting ‘ecosystems’. Science and technology parks have been proving to be good drivers of cluster organisations.

4.3	Recent development of economy puts increasing emphasis on producing, exploiting, transferring and applying knowledge. There is a need to develop and strengthen networking activities between the actors of the public sector, the business community and the higher education institutions.

4.4

A conscious, multi-layered management, ensuring synergy between the various levels of government – EU, national, regional and local – and encouraging partnership between businesses, universities and NGOs is required, which enable the creation of broad links between knowledge-generating and innovative institutions.

4.5

Aligning incentives and missions of universities, other scientific and research institutes and TISPs, together with encouraging new ways of collaboration is required. Parks can considerably increase their powers of attraction by offering a broad range of activities, like technology transfer, patent support, tutoring of start-ups and spin-offs, project management and financial support. All services provided in TISPs must be up-to-date and high quality, enabling them to genuinely support the necessary forms of cooperation.

4.6

Cooperation with scientific institutions, especially universities and research institutes, as well as R&D aspects, are becoming more and more important in park development; however it has to be acknowledged that the less than desirable extent of cooperation between scientific circles and the business community has been a problem and there is currently less cooperation with parks than there should be.

4.7

Parks could serve in their function as bridges between the academia and the industry. In evaluating the quality of performance and impact of universities, it is desirable that their impact on the industry and economic sector receives higher attention. In increasing the entrepreneurial spirit at the academia, the Chambers of Commerce, regional authorities may have significant role, supported by adult training measures. The presence of business parks may be part of system of criteria for awarding the excellent universities.

4.8	The role of parks in decreasing the distance between university and industry may have particular significance in the new member states.

5. European governance, operation and control initiatives and measures

5.1

The EU needs a more focused and integrated attitude geared towards sustaining and developing the TISPs of the 21st century. Particularly in the crisis and post crisis context, the EU should pursue a comprehensive strategy to capture the potential benefits of research parks for economic growth and competitiveness.

5.2

Following the only partly achieved goals of the Lisbon strategy and trying to learn from its experience, the initiatives regarding the post Lisbon Period should be rationally streamlined with focus on a limited number of concrete, measurable and nationally differentiated objectives, building on the development potential of the different capacities located in the TIIS parks. These actions have to be implemented with leadership and ambition on behalf of the EU.

5.3

The companies, the jobs, the knowledge, the economic and innovation capacity, located in the TISPs, are hidden asset of the EU. We know that vast number of all is existing, but we do not have an overall view, neither exists a common strategy to approach and involve those assets. Fragmented knowledge and limited actions are only available at EU, national or regional level. Special emphasis should be placed on the importance of work by regional or national-level professional and civil society organisations active in park territory. These organisations should be encouraged to cooperate with one another; such cooperation must also be enabled to develop a technology platform at EU level.

5.4

Key to the success is to make TISPs an integral part of strategic and targeted planning that will underpin Europe's strong determination to grow and become internationally competitive through significant regional investments in science-based economic development. These initiatives should officially feature in the European plan for research and innovation, thus reflecting the importance of TISPs in European innovation policy.

5.5

It is desirable that the Commission DGs undertake horizontal joint actions in order to promote synergies among the different instruments, to intensify governance and coordination between the different programmes. This should lead to the setting up of platforms, bodies or high level groups to remove barriers to the co-funding of activities and to design and launch co-financed actions.

5.6	Criteria for evaluation , assessment and mapping of parks should be developed. Evaluation, assessment and comparative empirical studies are required to frame concerted European and national policies and instruments related to park formation and growth that can carry TISPs to a new level.

5.7

There is a need furthermore for public accountability, i.e. development and implementation of evaluation methods and tools which quantify the net spillover benefits that result from public sector support. There is now no clear consensus on the parameters of success (e.g. financial criteria - investment, turnover etc. - indicators of innovation patterns (start-ups, patents, new products). The difference in park types and national/regional contexts also poses benchmarking difficulties.

5.8	It is desirable to support the mapping of TISPs across Europe in the form of comprehensive database. This may facilitate collaborations among the parks by creating an interconnecting matrix that promotes connectivity to overcome regional barriers to growth.

5.9	Greater investment in education and training is again emphasised in knowledge and innovation, in information and communications technology, in sustainability and a greener economy.

6. The regional dimension

6.1	Regions are important players in the knowledge based economy by focusing on the integration of R&D and innovation into their development strategies. The regional authorities in support of restructuring the economy, should even more shift focus to innovation.

6.2	The Regional Innovation Strategies and on their basis, the development of specific operative programmes has to be encouraged. National authorities should focus on improving the local conditions by establishing a stable and predictable economic and political climate.

6.3

Access to financial resources (venture capital, seed capital) for technology and science parks has been a real bottleneck and constraint of systematic development. The appropriate allocation of local and regional funds should complement in an organic way the European resources. Enhanced know-how supporting the access to co-financing from European funds is necessary. The use of EIB and EIF funding should become a structured and regular practice.

6.4	For TISPs, availability of funding over a sustained period is key success factor. In a crisis situation, it is critically important to ensure that parks benefit from financial and policy support from the member state governments and the EU level.

6.5	The attraction and management of talents, representing a special asset from the perspective of the sustainable, long-term, organic development in the region is required.

6.6

The excellence of the parks' management is a key factor for ensuring the outstanding quality of the park operation. Managers' continuous training, professional development is important to maintain the quality of services. Structured programmes should be available so as to build the necessary capacities in the TISP park manager organisations.

7. A strategic EU initiative – the European Institute of Technology and Innovation

7.1

The European Institute of Innovation and Technology (EIT) aims to become a flagship for excellence in European innovation. EIT aims to deliver innovation through collaboration between all the actors in the ‘knowledge triangle’, to transform education and research results into tangible commercial innovation opportunities, favour sustainable economic growth and job creation throughout the Union. The EESC has great expectations of this new EU body, and hopes that TISPs and suitably qualified associated institutions will be useful partners and participants in projects organised by the EIT.

7.2

As operational tool, the ‘Knowledge and Innovation Communities’ (KICs) have been selected on a strategic basis as responses to the challenges currently facing the EU, addressing climate change adaptation and mitigation, renewable energy and the future information and communication society. KICs are highly integrated public-private partnerships of universities, research organisations and businesses, embedding the business dimension in all knowledge activities, generating innovation in areas of key economic or societal interest.

7.3

The EIT also represents an opportunity for regional and local development. Its role and impact may be significant by providing expertise in regions where such knowledge and experience is missing. Furthermore, through spin-off effects and by attracting new people and resources, regions and cities can benefit from the activities of the EIT and the KICs.

7.4

The EIT is representing a new concept of knowledge clusters, relying on virtual networks, instead of geographically linked communities. The current economic crisis is reinforcing the timeliness of the EIT initiative. It is therefore more than reasonable to explore the possible support potential, existing in TIIS parks of the EU.

8. TIIS parks and the economic crisis – changes needed and actions for recovery

8.1	The economic crisis has affected to different extent and in different ways the functioning of the TISPs Parks and the companies located there. Companies may react to the crisis with activity reduction, staff reduction and expenditure reduction, cessation of projects and investment.

8.2

The management of the TIIS parks is preferably reacting by an active policy to retain the companies and works together to minimise the crisis impact:

a)	Providing leadership for the communities.

b)	Facilitate coordinated actions among the companies in the park.

c)	Help with assessment of the business situation and possibilities, new market and product search.

d)	Monitoring action on the companies located in the parks, review the business and management models.

e)	Information and lobbying on public programmes and support, collaborating with agencies and businesses.

f)	Keeping contacts with the stakeholders (business associations, local boards, trade unions) to activate potential workgroups in order to manage problems.

g)	Improve services and internal management of parks.

8.3

Demand for more sophisticated products and services of the companies may meanwhile also appear. The new industries: biotechnology, cutting edge information and communication technologies represent opportunities and challenges. The recognition of new competitiveness factors coming up - sustainability, value creation and corporate social responsibility – in the new economic environment and social atmosphere is inevitable.

8.4

The entrepreneurship gets new emphasis under the present circumstances and in particular, in the context of the parks. Businesses and their associations, by deeper understanding of the strategic situation, may provide leadership. It is important to identify and properly highlight the competitive elements of the parks.

8.5

Both the Single Market and Foreign Direct Investment (FDI) play a significant role in park development. The signs of turnaround of FDI from production to R&D should be noted in this respect. The EESC supports these processes and advocates enabling key sectors clearly defined in EU industrial policy to benefit in the course of becoming established in parks.

Brussels, 14 July 2010.

The President of the European Economic and Social Committee

Mario SEPI

(1) OJ C 255, 14.10.2005, p. 1.

11.2.2011

Official Journal of the European Union

C 44/143

Opinion of the European Economic and Social Committee on the ‘Report from the Commission — Report on Competition Policy’ 2008

COM(2009) 374 final

2011/C 44/24

Rapporteur: Mr METZLER

On 23 July 2009 the European Commission decided to consult the European Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on the

Report from the Commission - Report on Competition Policy 2008

COM(2009) 374 final.

The Section for the Single Market, Production and Consumption, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 15 June 2010.

At its 464th plenary session, held on 14 and 15 July 2010 (meeting of 14 July), the European Economic and Social Committee adopted the following opinion by 111 votes to one with eight abstentions.

1. Summary and conclusions

1.1 The European Economic and Social Committee (EESC) welcomes the fact that the Commission has for the first time devoted a chapter to the issue of consumers in the field of antitrust law. It would like to point out that the collective action procedure still has to be transposed. In addition, the impact and significance that competition and antitrust law can have on and for other areas of European civil society and the economy should be highlighted. Reports should be compiled on this in the future.

1.2 The EESC welcomes and supports the Commission's efforts, when recovering state aid and state guarantees, to restore and enforce fair competition in the pan-European market. The EESC is convinced that this is key to the credibility of European competition law.

1.3 The EESC encourages the Commission to make greater and more strenuous efforts to put these aspects of its work across to the European public through improved communication.

1.4 The EESC asks the Commission to explain whether and to what extent it will make changes to the rules and guidelines in place to date on the basis of its experience with emergency relief for the finance system and the real economy with state aid, triggered by the crisis. The Committee hopes that this will give an insight into how the Commission will in the future approach state aid for systemically relevant industries, such as the car industry.

Competition policy should also take into consideration the circumstances and requirements of globalisation.

1.5 The EESC would reiterate the statement made in its opinion on the 2007 Report, namely that the Commission should direct its attention to the importance of social dumping and non-compliance with employment protection legislation, inter alia, and report on its findings. This should be a particular priority in the field of transport.

2. Content of the 2008 report

2.1 The European Commission's report for 2008 places particular emphasis on cartels and consumer protection. Citing as examples the banana cartel and the automotive glazing cartel (2008 proceedings), the Commission has demonstrated how producer cartels have a negative impact on not only consumers and the prices they pay, but also the innovation capacity of particular sectors.

The Commission has shown that the set of instruments under the Leniency Notice rules is effective. The creation of the possibility to take into account cooperation in uncovering cartels as a mitigating factor when imposing fines has a positive impact on the Commission's work and its successes. The Commission has set out how the imposition of heavy fines underpins the general deterrent effect of competition and commercial law.

2.2 In 2008, the Commission continued to take decisive action against cartels. It imposed fines totalling EUR 2 271 billion on 34 companies in seven cartel cases.

In the same year it made estimates of the damage. To do this, it looked at 18 cartels that were the subject of Commission decisions between 2005 and 2007. It added 5-15 % of the product prices of the cartel participants and estimated the damage caused by these cartels at between four and eleven billion euros.

Estimates by the British Office of Fair Trading (OFT) show that for each cartel that is discovered, five other undiscovered ones form and/or are dissolved before they are discovered. Based on these assumptions, the 18 cartel decisions taken in the years 2005 to 2007, including the deterrent effect, may have prevented damage to consumers amounting to around EUR 60 billion.

3. Instruments

3.1 Antitrust – Articles 81 and 82 EC Treaty

3.1.1 On 2 April 2008, the Commission adopted the White Paper on damages actions for breach of the EC antitrust rules. Because of the instrument of individual actions against violators of antitrust law, this project by the European Commission on antitrust and competition law was much discussed. The EESC has expressed its support for a Community instrument that would harmonise certain aspects of individual and collective actions claiming damages for breach of Articles 101 and 102 TFEU.

The Commission has also introduced a simplified settlement procedure for combating cartels. The package for settlement procedures entered into force on 1 July 2008. It was made up of Commission regulations and communications from the Commission. Reasonable cartel members who ‘confess’ once the procedure is opened and documents are accessed can thus have their fines reduced by up to 10 %. This really does make things much simpler.

3.1.2 Also in 2008, the Commission published statements on its priorities in the application of Article 82 to cases of unfair hindrance of competitors by dominant firms. These set out the Commission's analytical framework that enables it, when taking decisions, to understand and explain the process of harm to consumers.

3.1.3 In that same year, the revision of the block exemption regulations for vertical agreements, the motor vehicle sector and the insurance industry was started and/or continued.

3.1.4 Application of the rules to copyright unrelated to antitrust law

3.1.4.1 In 2008, the Commission prohibited the International Confederation of Societies of Authors and Composers from continuing restrictive practices through exclusivity agreements in their reciprocal agreements and thus maintaining territorial restrictions.

3.1.4.2 The Commission also acted in the area of abuse of dominant market position by imposing a definitive penalty of EUR 899 million on Microsoft. The dispute proceedings were completed in December 2009.

3.2 State measures for public enterprises or enterprises with exclusive and special rights

3.2.1 The public sector is also subject to EU competition policy under Article 86 of the EU Treaty.

The Commission had its say in this area with decisions on postal monopolies and the energy industry.

3.3 Merger control and monitoring of remedial action

3.3.1 Communication on remedial action

In October 2008, the Commission published a new communication and an implementing regulation on this subject. The aim of both is to make consumer protection more noticeable in this area, with the aim of lower prices, for example through tougher information requirements and systemisation of the information that has to be supplied with the product.

3.3.2 Enforcement of the rules

In addition, the Commission has set out what measures were used and steps taken to protect consumers. Here, too, the number of proposals reported to the Commission in 2008 was again very high at 347 (mergers and cases of collusion). The Commission made 340 final decisions.

3.4 State aid rules, development of rules on competition policy

3.4.1 This is where the Commission argued and exerted the greatest pressure for change in 2008. In the context of the financial crisis, it pushed on with implementing the action plan on state aid. Three communications on the role of state aid policy in overcoming the crisis and the process of recovery were published.

3.4.2 As regards the general development of competition rules, the Commission, as announced, adopted an implementation plan for the general block exemption regulation.

3.4.3 Communications on state aid in the form of guarantees (OJ C 155, 20.6.2008 and OJ C 244, 25.9.2008) set out how the aid elements of a guarantee should be calculated and provide for simplified rules for SMEs.

3.4.4 Also in 2008, the Commission continued working on improved enforcement and monitoring of compliance with decisions on state aid. It was concerned to demonstrate, by publicising the implementation of recovery decisions and their effective and immediate enforcement, that it was willing and able to limit the impact of state aid.

As already announced in the relevant action plan, the Commission launched proceedings in five cases under Article 88(2) and in eight cases under Article 228(2) of the EU Treaty against Member States that had not adequately enforced recovery decisions.

3.4.5 It is clear from the 2008 state aid scoreboard that EU Member States are complying with the Commission's wish that state aid be better targeted. 80 % of the cases of state aid provided by the Member States in 2007 thus have a horizontal aim.

3.4.6 With regard to the Community framework for research, development and innovation, DG Competition dealt with the state aid aspect (88 cases).

The Commission approved 18 risk capital schemes under the Risk Capital Guidelines in the area of risk capital financing for SMEs.

4. Sector developments

4.1 Energy and the Environment

The concentration in the energy sector and environmental aspects of climate change with support for the switch of energy production to CO2-friendly processes were all looked at by the Commission. The Energy Council adopted compromises on 10 October.

Cartel investigations in this area focus on unfair hindrance of competitors, exploitative abuses and collusion. In particular, the issue of transmission for new energy suppliers keeps coming up in proceedings in almost all EU countries.

4.2 Financial Services

4.2.1 Aid to the financial sector in 2008 had a very significant impact on competition in the financial services sector.

The European Commission, together with the Member States, needs to monitor state aid in this area.

4.2.2 The Commission issued guidelines for state measures. It has now looked at appropriate measures for recapitalising financial institutions and put in place a minimum number of measures to combat disproportionate distortions of competition. On the basis of these provisions, specific measures for guarantees, individual aid and liquidity aid were approved in respect of more than 16 countries of the European Community and innumerable institutions in those countries.

4.2.3 The Commission considers that it acted quickly so as to restore market confidence.

4.2.4 By taking the measures it did, it demonstrated that competition law is an effective set of instruments for overcoming crises.

4.3 Instruments for the real economy

4.3.1 For businesses in the ‘real economy’, the Commission authorised state aid, loan guarantees, subsidised loans and risk capital aid.

Proof of market failure as a prerequisite for approval of export credit guarantees was simplified.

4.4 Electronic communication

4.4.1 Here, the Commission worked to convert national monopolies into competitive markets. The Commission recommendation of 2007 is showing an impact. In 2008, most national regulators came to the conclusion that national specifics were not an obstacle.

4.4.2 In the area of information technology, major proceedings were completed or made ready for completion. The transition from analogue to digital broadcasting is mentioned in the report, as are critical comments on state aid for public broadcasters.

4.5 Transport

4.5.1 Here, the Commission reports on proceedings regarding rail and multimodal transport and on the entry into force of the guidelines on state aid for rail operators, as well as merger control and decisions on promoting rail transport in multimodal transport. In respect of maritime transport, it raises the prospect of the process of reforming the competition rules being completed. As in the case of air transport, services of general economic interest are the subject of specific activities in this area too.

Further concentration can be expected in this area.

4.5.2 There are no comments on maintaining social standards for competition in the transport sector.

4.6 Pharmaceuticals

4.6.1 The Commission acted in this sector on the basis of information and tip-offs. In particular, it examined the area of bringing generics onto the market and noticed a general decline in innovation.

Over 100 companies and samples of 219 chemicals were investigated.

The Commission noted that the introduction of a single Community patent and a unified and specialised patent judiciary in Europe would be good for this sector's innovation capacity. Marketing authorisation, pricing and reimbursement procedures, which are different in individual countries, should, according to the Commission's report, be simplified.

4.7 Food

4.7.1 The Commission did not note any trend towards consolidation in the food sector or other supply sectors. The Commission has drawn up two communications on food prices (COM(2008)321/F and COM(2008)821/F), which support this view.

5. Consumer Liaison Unit

5.1 The Consumer Liaison unit was created in 2008 within DG Competition. It passes on information that is helpful for a better understanding of the markets and receives information and findings on market failure. The Consumer Liaison unit successfully carried out consultations with consumers' associations and took part in the debate with the EESC in the context of the process to draw up the own-initiative opinion on ‘Economic democracy in the internal market’. It is hoped that this cooperation will continue, ensuring that the end goal of competition policy is both the wellbeing of consumers and the defence of civil society values.

6. The European Competition Network and national courts

6.1 In 2008, cooperation within the European Competition Network between the national competition authorities and the Commission Directorate-General worked smoothly and is described by the Commission as a success.

6.2 The same applies to work and cooperation with the courts.

7. International activities

7.1 The Commission reports that, in the area of international cooperation, it worked together with China and Korea in 2008. It plays an active role within the OECD and the International Competition Network.

8. Interinstitutional cooperation

8.1 DG Competition highlights its excellent relations with the EP, the Council and the EESC.

9. The EESC's stance

9.1 Consumer protection

9.1.1 The Committee welcomes the fact that DG Competition has placed more emphasis on consumer issues, with particular reference to the publication of its White Paper on damages actions for breach of the EC antitrust rules, which warrants the EESC's support. It is to be regretted, however, that more than two years on, the judicial collective action mechanism for consumer protection to which it refers and for which the EESC has stated its support in a number of opinions, has still not materialised.

9.1.2 The Committee considers that placing emphasis on cooperation with consumer protection – if these activities continue without limitation – should not lead people to forget or neglect the fact that antitrust law must cover areas other than consumer protection, such as:

—	ensuring access to fundamental rights and freedoms;

—	ensuring that democratic and free institutions are not jeopardised by economic power (‘too big to fail’);

—	preventing system or sector dominance; and

—	protecting SME structures.

9.2 State aid

9.2.1 The Committee supports efforts to supervise Member States in recovering the loans and guarantees so that a level competitive playing field can be restored.

9.2.2 From specific reports on individual proceedings, the EESC can see that the Commission has achieved a number of successes with the new set of instruments in terms of creating new packages aimed at settling antitrust proceedings out of court. It therefore believes that procedural law in particular continually needs to be adapted to changing circumstances.

9.2.3 In the financial sector, the credibility of European competition law will be put to the test over the coming decades. The re-establishment of a level playing field is missing. The action the Commission takes will determine public confidence in European institutions and legislation.

9.2.4 The Committee calls on the European Commission, when monitoring state aid and the conditions relating to it, to ensure that - in the financial sector - the recapitalisation of the banks remains linked to the restoration of financial flows and the supply of credit. The burden on public finances can only be justified if the beneficiaries' role in the real economy is supported sustainably.

9.3 The Commission is asked to explain whether and to what extent a) its case-by-case approach and consideration of political expediency when approving state aid for the financial sector represents a long-term break with the principles and rules it has applied hitherto and b) by extension, authorisations under Article 107 (2A3) for other key industries (e.g. the automotive sector) are likely to be given.

9.4 Services of general interest

9.4.1 The Committee supports the Commission's efforts to ensure that the arrangements for the provision of electricity, gas, telephone and public transport services are beneficial to consumers.

9.5 Transport

9.5.1 The Committee supports the efforts of the European Community.

Commenting on the 2007 report, the Committee noted that compliance with social provisions has a competition aspect in this sector.

9.5.2 The EESC calls for more attention to be paid to this aspect in the interests of transport workers. There is still a competition-distorting disparity in social standards in the European transport sector. The Committee considers that the European Commission should be firmer in standing up to the Member States in this area.

9.6 Electronic communication and media

9.6.1 The EESC considers that consumer interests, democracy, transparency and civil society's freedom of expression are all affected.

More attention should be paid to these as aims.

9.7 Consumer Liaison Unit

9.7.1 The Committee welcomes the establishment and operation of the Consumer Liaison Unit and supports the Commission in its expansion.

9.8 European Network and cooperation among Member States

9.8.1 The EESC notes that the European Competition Network is operating both among national competition authorities and the courts.

9.8.2 The international importance of competition law is not, in the EESC's view, accorded the significance it deserves.

9.8.3 In its opinion on the 2007 competition report, the EESC made clear statements on the significance to competition law of social dumping, non-compliance with employment law and non-compliance with environmental regulations. At the time, it called on the Commission to report on these matters. This has not happened, and needs to be remedied.

9.8.4 The EESC calls on the Commission to strike a balance between industrial policy and competition policy.

9.9 Competition and globalisation

9.9.1 The Committee proposes that aspects of globalisation, namely GATT and WTO guidelines, also be taken into account when assessing competition issues.

9.9.2 An area that, in the EESC's view, is missing from the 2008 competition report is that of tackling the competition-distorting effect of state ownership of holding companies, including those outside the EU. In addition, the effect of European businesses being bought out using funds from other states – including those outside the EU – and the exercising of strategic state interests through equity participation is an area of concern.

10. Competition and copyright

10.1 The competition aspects of copyright should also be looked at.

10.2 Fair trade and free trade cannot fully work where copyright violators are involved. Competition law is an effective weapon in this area. The Commission would do well to pay attention to it.

11. Cooperation with other European institutions

11.1 The European Economic and Social Committee points out that it is willing to engage in such cooperation.

Brussels, 14 July 2010.

The President of the European Economic and Social Committee

Mario SEPI

11.2.2011

Official Journal of the European Union

C 44/148

Opinion of the European Economic and Social Committee on the ‘Proposal for a regulation of the European Parliament and of the Council on jurisdiction, applicable law, recognition and enforcement of decisions and authentic instruments in matters of succession and the creation of a European Certificate of Succession’

COM(2009) 154 final — 2009/0157 (COD)

2011/C 44/25

Rapporteur: Mr CAPPELLINI

On 20 November 2009, the Council decided to consult the European Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on the

Proposal for a regulation of the European Parliament and of the Council on jurisdiction, applicable law, recognition and enforcement of decisions and authentic instruments in matters of succession and the creation of a European Certificate of Succession

COM(2009) 154 final — 2009/0157 (COD).

The Section for the Single Market, Production and Consumption, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 15 June 2010.

At its 464th plenary session, held on 14 and 15 July 2010 (meeting of 14 July), the European Economic and Social Committee adopted the following opinion by 119 votes with 1 abstention.

1. Conclusions and recommendations

1.1 The Committee welcomes the current Commission's proposal and notes, however, that it falls short of the expectations raised by the Green Paper and even further short of the proposals made by the EESC in its opinion of 26 October 2005.

1.2 The Committee considers the Proposal for a Regulation (PR) an important tool for civil society, to increase legal predictability and to facilitate fast and cost-effective solutions of international successions in EU Member States. The EESC draws the Commission's attention to the need to revise the various language versions of the PR and ensure their consistency and use of proper legal terminology.

1.3 The Committee expresses some concerns, in particular on the role of non-EU Members law and on some features of the succession certificate. Such concerns are met by a recommended new Article 26 and a longer term in Art.43, Par.2. A thorough analysis and presentation of this complex document, which is the PR, would require a longer working document, beyond the EESC's ordinary standards.

1.4 The Committee strongly recommends the following changes to be adopted in the PR:

insert ‘These divergent rules also hinder and delay the exercise of the legitimate heir’s right of ownership on the deceased's property’ and ‘Unilateral action by Member States would be insufficient to achieve all the objectives of the PR’ in point 1.2 and point 3.2 of the PR's Explanatory Memorandum (see 3.4.3 and 3.4.4);

ii.	insert in Art.1, Par.1 the clarification that the PR applies only to succession ‘having an international character’ (see 4.1.1);

iii.	replace ‘subsequent’ by ‘additional’ or ‘other than’ in Art.21, Par.1, in all languages (see 4.3.8);

iv.	replace Art.25 by a new article: ‘Universal nature: This Regulation specifies the applicable law even if it is not the law of a Member State’ (see 4.3.9);

replace Art.26 (Title: ‘Renvoi’, and not ‘Referral’) by a new article: ‘If the deceased has not chosen a law pursuant to article 17 and the applicable law according to this Regulation is the law of a non-EU Member State and its rules of conflict of laws specify as applicable the law, either of a EU Member State, or of another non-EU Member State which would apply its own law, the law of this other State applies. This article does not apply to agreements as to succession whose connecting factor set forth in Article 18, Par.2 is the law which has the closest links ’. (see 4.3.10.1);

vi.	insert in Art.27 ‘manifestly’ before ‘incompatible’ in all languages, and ‘international’ before ‘public policy’ at least in French and Italian (see 4.3.11);

vii.	replace ‘its clauses’ by, ‘its provisions’ in Art.27, Par.2, in all languages (see 4.3.12);

viii.

extend to 9 or 12 months the time period in Art.43, Par.2 (see 4.6.1.).

2. Background

2.1 The proposal deals with a complex topic which is important to any person having his/her habitual residence (with some extensions in Art.6), regardless of his/her nationality, in the European Union. A Green Paper on succession and wills (1) opened a broad based consultation process on intestate and testate international successions.

2.2 The practical importance of the PR as a uniform standard-setting instrument, results from the current variety that EU Member States present in their legal rules with regard to:

a)	the determination of the applicable law;

b)	the scope of jurisdiction of their tribunals on international wills and successions cases;

c)	the conditions under which a judgment given in another EU Member State may be recognised and enforced; and

d)	the conditions under which authentic instruments drawn up in another EU Member State may be recognised and enforced.

2.3 For the sake of clarity, the PR aims at providing a uniform regime to these rules, which all belong to private international law and make the outcome of international wills and successions dependant on the law which is applicable to them according to the specific conflict of law rules (contained in the PR) of the forum (a EU Member State). Inversely, the PR is not intended to have per se any effect on the domestic substantive law of EU Member States which governs the status, the rights and duties, of the heirs with regard to the property (or estate) of the deceased. Moreover, the European Certificate of Succession established under Chapter VI is not an exception, but concerns evidence of status and provides no uniform domestic substantive provisions on the conditions necessary to acquire such status. More generally, besides this PR, substantive domestic law is not within the competence granted under Art. 65 b of the Treaty.

3. General Comments

3.1 In its Opinion (2) on the Green Paper on succession and wills, the EESC has inter alia:

a)	welcomed the Green Paper, considering that ‘it raises fundamental and pressing questions’;

b)	drawn the Commission's attention ‘to taxation issues that might face the heirs to an estate located in two or more countries’; and

expressed openly its interest by observing that it ‘considers the issue of wills and successions to be one of major interest for the citizens of Europe; their hopes for a simplification of formalities, greater legal and fiscal certainty and a speedier settlement of international successions, which they expect from a Community initiative, must not be disappointed’.

3.2 This EESC's declaration of interest for the issue of wills and successions, which was declared ‘one of major interest for the citizens of Europe’, needs to be updated, four years after the analysis of the Green Paper, with regard to the structure and the concrete provisions proposed by the Commission in its PR.

3.3 Current PR's Potential and Stakeholders

3.3.1 It should be noted that the EESC invited the Commission in its opinion (3) to consider taxation issues and expressed interest in ‘greater (…) fiscal certainty’. However, in view of the PR's scope, under the narrow competence granted by Article 65 of the Treaty, the PR addresses the private international law aspects of wills and successions, and is not intended to have a direct effect on the law of Member States related to the fiscal aspects of international wills and successions.

3.3.2 While wills, if any, are made before death and may be revoked by the testator until then, and rules on succession apply right after death, both wills and successions are effective and operate legally not before death, and govern its patrimonial consequences. The PR thus concerns anyone, any category of stakeholders in civil society.

3.3.3 However, for the sake of clarity with regard to its scope of application, it should be noted that the PR:

a)	applies only to those wills and successions which present an international character - the latter not being defined in the PR - and not to the much more numerous purely domestic successions; and

b)	applies to individuals, i.e. to natural persons, but not to legal entities of private or public law.

3.4 Objectives and Subsidiarity Principle

3.4.1 Certainly the uniform and binding nature of an EU Regulation upon EU Member States, their domestic legislation and courts, explains the fact that the PR will increase substantially legal predictability on all the topics it regulates. This effect represents the direct added-value of the PR. Ensuring quality and accurate drafting of its provisions is a priority.

3.4.2 The stated objective ‘to eliminate all the obstacles to the free movement of persons’ should not lead to disregard the fact that whether or not an individual has the status of ‘heir’ and has legal ‘rights’ on the property of the deceased in a EU Member State, are questions to be answered by not private international provisions (which is the subject-matter of the PR), but the relevant substantive provisions of the domestic applicable law on wills and successions of EU Member States. The PR implies no change in this regard as it does not uniform such substantive provisions. Following the entry into force of the Treaty of Lisbon, the proposal's explanatory memorandum should be revised and, where appropriate, amended. The EESC reiterates the call it has made on the positions of the United Kingdom, Ireland and Denmark, to the effect that these Member States state their willingness to implement this regulation.

3.4.3 This being clarified, - point 1.2 of the PR’s Explanatory Memorandum contains an accurate statement (‘Today, such persons are therefore faced with considerable difficulties in asserting their rights with regard to an international succession’) and a less convincing and far-reaching conclusion, extended to the right of ownership (‘These divergent rules also prevent the full exercise of private property law’). Instead, milder terms, such as ‘These divergent rules also hinder and delay the exercise of the legitimate heir’s right of ownership on the deceased’s property’, seem more accurate and suitable.

3.4.4 In the statement ‘Unilateral action by Member States would therefore run counter to this objective’ the terms ‘run counter’ are over-stated. If EU Member States so desire, they can, regardless the Regulation, pursue at least the objective of a uniform determination of the applicable law, by ratifying the 1989 Hague Convention on Succession. The EESC believes that milder terms, such as ‘Unilateral action by Member States would be insufficient to achieve all the objectives of the PR ’, seem more suitable.

4. Specific Comments

4.1 Chapter I Scope and Structure

4.1.1 The PR is intended to cover wills and successions which have an international character, but provides no definition of such a character. A reference to the application of the PR only to ‘situations having an international character’ is to be included in the PR for sake of clarity.

4.1.2 As reflected in its title, the PR covers both jurisdiction (Chapter II) and recognition and enforcement of decisions (Chapter IV), i.e. those two branches of private international law which, with the exception of the rules on applicable law, are the subject of Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (hereafter ‘Regulation No 44/2001’), which excludes from its scope wills and successions. This gap explains the importance of the decision taken to have the PR cover, and provide uniform rules for, all three branches of private international law, i.e. applicable law, jurisdiction and the recognition and enforcement of judgments, on international successions.

4.2 Chapter II Jurisdiction

4.2.1 Chapter II (Articles 3-15) is on ‘Jurisdiction’ and applies to all courts in the Member States, and to non-judicial authorities only where necessary.

4.2.2 General jurisdiction is granted to the courts of the Member State on whose territory the deceased had his/her habitual residence at the time of death. Clearly, there is no condition of nationality. It should be observed that also the general EU regime on jurisdiction, or lex generalis, which is Regulation (EC) No 44/2001, grants general jurisdiction on the basis of domicile, leaving aside any consideration on nationality.

This general jurisdiction under the PR applies to (deceased) EU nationals but also to non EU nationals, if they had their habitual residence at the time of their death in an EU Member State.

4.2.3 In cases where the habitual residence of the deceased at the time of death is not located in a Member State, the courts of a Member State have nevertheless a ‘residual jurisdiction’ in a number of cases, which extend the jurisdiction of tribunals of EU Member States far beyond the simple case where the habitual residence of the deceased at the time of death is located in a Member State. Nationality is not a condition for the purposes of general jurisdiction, but becomes ground of residual jurisdiction.

4.2.4 The courts in the Member State in which the property is located have no general jurisdiction per se under the PR. One partial exception exists with regard to the transmission of the property, its recording or transfer in the public register.

4.3 Chapter III Applicable Law

4.3.1 Chapter III provides uniform rules (Articles 16-28) on the applicable law. The general rule is that the law applicable to the succession as a whole is that of the State in which the deceased had his/her habitual residence at the time of his/her death. No other condition, such as nationality, applies. No distinction is drawn between movable and immovable property.

4.3.2 To be noted that the conflict of law rules of the PR, to be applied by EU Member States courts, specifies the applicable law regardless whether the State of the applicable law is an EU Member State or not (Art.25).

4.3.3 Traditionally, private international law recognises ‘party autonomy’, i.e. the possibility for the parties to choose any applicable law in contractual matters. Under the PR a person may choose the law to govern the succession as a whole, but he/she may choose only the law of the State whose nationality he/she possesses.

4.3.4 For the sake of legal predictability, such choice must be expressly determined and included in a declaration in the form of a disposition of property upon death.

4.3.5 A different topic, not to be confused with the choice of law to govern the succession as a whole, is ‘Agreements as to succession’. An agreement regarding a person's succession shall be governed by the law which, under the PR, would have been applicable to the succession of that person in the event of his/her death on the day on which the agreement was concluded. Favor validitatis alternative connecting factors are used.

4.3.6 From both a comparative and uniform law perspective, a very important issue is the scope of the applicable law. The PR extends the scope of the applicable law as to govern the succession as a whole, from its opening to the final transfer of the inheritance to the beneficiaries. The rationale is clearly to include as many as possible legal issues under one and only applicable law, with a view to increasing legal predictability and reducing the complex and time-consuming consultation of more than one (often foreign) law(s). The PR offers a long and non-exhaustive list of issues to be governed by the applicable law, thus including also non-listed issues of the succession, from its opening to the final transfer of the inheritance to the beneficiaries.

4.3.7 The applicable law governs the succession as a whole, from its opening to the final transfer of the inheritance to the beneficiaries, but it is no obstacle to the application of the law of the State in which the property is located where, for the purposes of acceptance or waiver of the succession or a legacy, it stipulates formalities subsequent to those laid down in the law applicable to the succession.

4.3.8 With regard to this provision, it is recommended to seek clarification as to whether in Art. 21, Par.1, in the part of the sentence ‘formalities subsequent to those’, ‘subsequent’ (i.e. occurring after) is the proper term, or what is intended is rather ‘additional’ or ‘other’ (‘formalities’). It is submitted that ‘additional’ or ‘other’ would be preferable in the context of the provision.

4.3.9 The EESC is of the opinion that the terminology used in the provision on ‘Universal nature’ (Art 25) should clearly reflect only what Chapter III of the future Regulation actually does: specifying an applicable law. A simpler and preferable terminology would thus be: ‘Universal nature: This Regulation specifies the applicable law even if it is not the law of a Member State’.

4.3.10 Leaving the choice of his national law by the deceased aside (Art.17), the Regulation generally applies the law of the forum, the court of the EU Member State in which the deceased had his/her habitual residence at the time of his/her death. However, under residual jurisdiction (Art.6) the law of a non-EU Member State may apply. In such cases, it is necessary to prevent that the Regulation defeats the unity of connecting factors that may already exist with some non-EU Member States (unity which is beneficial to any deceased and his heirs) and confers competence to a national legal system that does not see itself, from its own perspective, applicable to a specific succession. In order to ensure this need, and a better and balanced coordination between EU and non-EU Member States, it is recommended to replace the current Art.26 (Title: ‘Renvoi’, and not ‘Referral’) with the following article:

4.3.10.1

‘If the deceased has not chosen a law pursuant to article 17 and the applicable law according to this Regulation is the law of a non-EU Member State and its rules of conflict of laws specify as applicable the law, either of a EU Member State, or of another non-EU Member State which would apply its own law, the law of this other State applies. This article does not apply to agreements as to succession whose connecting factor set forth in Article 18, Par.2 is the law which has the closest links ’.

4.3.10.2

This new provision adapts to the Regulation (4) and attempts to improve (5) a similar provision which was retained in the important Hague Convention on Succession for the same necessity, i.e. ‘because most delegations (…) recognised it as an attempt not to destroy unity where it already exists’ (6). Furthermore, the flexibility that this provision (new Art.26) grants is in line with the law and practice on ‘renvoi’ in some non-EU Member States, as for instance the U.S.A (7).

The fact that Regulations ‘Rome I’ and ‘Rome II’ have excluded radically any provision on ‘renvoi’ simply reflects the fact that their subject matter (contractual and non-contractual obligations) is very different from succession matters. Such exclusion in Rome I and II is not per se a serious argument to exclude the new Art.26 recommended above, which is key and beneficial in successions matters both, to any deceased and his heirs, and to a more balanced coordination of connecting factors between EU and non-EU Member States.

4.3.11 A traditional but nevertheless key provision is Art. 27 on public policy. Following a rather standardised use, it is recommended that ‘manifestly’ be inserted before ‘incompatible with the public …’ in all languages of the Regulation, and ‘international’ be inserted before ‘public policy’ at least in French and Italian (and where appropriate in other languages). Innovative and useful is the specifically tailored to succession matters exclusion of this device ‘on the sole ground that its clauses regarding the reserved portion of an estate differ from those in force in the forum’.

4.3.12 In Art.27 par.2, the English version ‘its clauses regarding’ is not identical to the French version ‘ses modalités concernant’. It is recommended that ‘its provisions’ (regarding etc.) be retained, in all languages of the Regulation.

4.4 Chapter IV Recognition and Enforcement

4.4.1 Following the model of Regulation (EC) No 44/2001, Chapter IV of the PR entails Articles 29-33 on recognition.

4.4.2 A simplification of international successions in Europe will result from the principle that a decision given in an EU Member State pursuant to the PR is recognised in the other Member States without any special procedure being required.

4.4.3 The decision given in a Member State is not subject to any review as to its substance in the Member State where recognition is sought, and is not recognised only in four cases.

4.5 Chapter V Authentic Instruments

4.5.1 An additional substantial simplification of international successions will result by the fact that the authentic instruments formally drawn up or registered in a Member State, which are common in successions matters, are recognised under the PR in the other Member States.

4.6 Chapter VI European Certificate of Succession

4.6.1 The European Certificate of Succession introduced by the PR constitutes proof of the capacity of heir or legatee and of the powers of the executors of wills or third-party administrators. It is recommended that the time period be extended to 9 or 12 months in Art.43 Par. 2.

4.6.2 The model application form should be simplified and the unnecessary information requested in 4.7 deleted.

Brussels, 14 July 2010.

The President of the European Economic and Social Committee

Mario SEPI

(1) COM(2005) 65 final.

(2) OJ C 28, 3.2.2006, p. 1.

(3) OJ C 28, 3.2.2006, p. 1.

(4) And thus extends the operation of ‘renvoi’ from non- to EU Member States.

(5) By excluding its operation not only in case of Professio iuris (Art.17), but also with regard to connecting factors of a different nature and methodology (exception clauses, as the law which has the closest links, in Art.18, Par.2.

(6) Waters Report, p.553, Proceedings of the Sixteenth Session, 3 to 20 October 1988, T.II, Hague Conference of Private International Law, 1990. Art.4, Convention on the Law Applicable to Succession to the Estates of Deceased Persons. (1 August, 1989). Also P.Lagarde, La nouvelle Convention de la Haye sur la loi applicable aux successions, RCDIP 1989, p.249 (258).

(7) With regard to Art.4 of the Hague Convention, E.F.Scoles, The Hague Convention on Succession, AJCL 1994 p.85, (113).

11.2.2011

Official Journal of the European Union

C 44/153

Opinion of the European Economic and Social Committee on the ‘Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions – Global Monitoring for Environment and Security (GMES): Challenges and Next Steps for the Space Component’

COM(2009) 589 final

2011/C 44/26

Rapporteur: Mr IOZIA

On 28 October 2008 the European Commission decided to consult the European Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on the

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions – Global Monitoring for Environment and Security (GMES): Challenges and Next Steps for the Space Component

COM(2009) 589 final.

The Section for the Single Market, Production and Consumption, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 15 June 2010.

At its 464th plenary session, held on 14 and 15 July 2010 (meeting of 14 July), the European Economic and Social Committee adopted the following opinion by 135 votes with one abstention.

1. Conclusions and recommendations

1.1	The Committee welcomes the Communication from the Commission, and hopes that coherent operational decisions, funding and policies will ensue from decision-making bodies, taking heed of the proposals and indications it contains.

1.2	The EESC has always expressed its support for the Commission's proposals in the area of space policy: a technological priority that should be developed more intensively. The responsible and sustainable use of space for non-military, peaceful purposes is a powerful instrument for development.

1.3

Space research in general, and GMES in particular, is a fully-fledged part of the ‘new green economy’. The development of applications for agriculture, managing climate change, accurate weather forecasting and territorial management underpins a new model which sees sustainable development as a priority for innovation and technological research.

1.4

The Committee shares the Commission's concerns about the lack of information regarding the timeframe applied to the GMES programme. The EESC believes that the programme should be planned to continue until at least 2030, and provision should also be made for basic functions to continue in subsequent years.

1.5

The Committee considers that the financial resources are insufficient, both because they fail to take account of the evolution of technological component prices for the Sentinel satellite constellation and because of the meagre sums earmarked for R&S, and especially data collection requirements to tackle climate change and ensure security. At least a further EUR 700/800 million for the 2014-2020 period are required to meet these needs. Launch costs have risen significantly, as have the costs of electronic equipment.

1.6

The ‘space dream’, which has engaged entire generations, should be revived through ambitious programmes; attracting young people back to space studies, offering stable job prospects, stressing the high social value of projects such as GMES, which can contribute to reducing the negative effects of climate change, helping human activity, thereby helping to anticipate extreme natural events such as flooding and prolonged drought. Monitoring harmful emissions in the atmosphere will make it possible to test the efficiency of CO2 reduction measures, for example, or to take the right steps against human trafficking violations, in coordination with Frontex activities.

1.7

GMES can make a decisive contribution to waste management policy, by identifying illegal sites and toxic substance spills. It is essential that the GMES space programme should also deal with ‘space’ waste material: recovering obsolete stations and satellites that no longer emit data. The ESA space surveillance programme, in cooperation with the German TIRA system, can contribute to controlling the mass of space debris. Since 1957, 5 000 satellites have been launched, and at present approximately one satellite is launched every two days.

1.8

The positive spin-off of a sufficiently long-term programme could, in the EESC's view, generate momentum for the direct involvement of public and private enterprises in the sector, enabling them to plan investment in developing technologies to produce sensing systems that are ever more efficient in terms of cost of service quality. The ability to attract private investment and to create a service market will be crucial to the entire operation's success.

1.9

Member States that are still very far from engaging in a space policy could find the guarantee they need to launch initiatives in the certainty of continuity of Community programmes. In this regard, the EESC views the decision taken in February 2010 to set up the GMES Partners Board, actively involving the 27 Member States, as a positive move towards achieving a new balance of knowledge and political commitment to space policy. This body should be opened to civil society representatives.

1.10

The availability of a long-term programme would moreover provide a means of giving greater strength and political weight to the EU vis-à-vis other parts of the world now operating in the space sector, and can serve as a positive factor in negotiations to secure the necessary financial contribution that could stem from access to programmes and the results of missions not controlled by the EU.

1.11

GMES has the capacity to make a contribution of vital importance in a number of key sectors such as oceanography, air quality monitoring, precision mapping for land use purposes, or rapid production of maps of areas affected by natural disasters, thereby providing essential support for civil protection.

1.12

Against the current backdrop of deep economic crisis, this need for substantial resources cannot, in the EESC's view, act as a brake on investment: on the contrary, by mobilising as many available resources as possible, and with the support of public opinion, once made aware of its full potential, the GMES programme can help to bring the crisis to an early end by providing a formidable pool of scientific and production potential, with all the ensuing positive spin-off effects, capable of restoring the EU's flagging leadership position in the sector.

2. Introduction

2.1

The EU's decision to equip itself with an integrated European Earth observation system to deliver information and services in the environmental and security fields, called Global Monitoring for Environment and Security (GMES), is a strategic choice enabling the EU to maintain and strengthen its leading position in the civil aerospace field.

2.2

According to the 2001 Outline GMES European Commission Action Plan, the GMES initiative seeks to bring together the needs of society regarding the environment and security with the advanced technical and operational capability offered by terrestrial and space borne observation systems. It is a response to ensure timely access to information on the environment at global, regional and local scales without sacrificing independence in the following policy areas: sustainable development, global climate change, common defence and security policy, the European research area and the European strategy for space.

2.3

The system is based on analysing Earth observation data provided by satellites and in situ monitoring networks. Once analysed and coordinated, the data are made available to the final users: national, regional and local authorities and agencies, environmental and civil protection organisations, etc. The GMES initiative is jointly promoted and operated by the European Union (EU) and the European Space Agency (ESA). The ESA makes the decisive contribution to developing the space component, and the EU acts as promoter and demand aggregator.

2.4	The GMES programme is divided into three parts: the space component, the in situ component, and the services component, regarding which the Commission has issued a proposal for a regulation, on which the EESC has in turn drawn up an opinion (1).

2.5

Of the three components, the space component is by far the mostly costly, and determines the quality and quantity of the services that can be delivered. It comprises six series of Earth Sentinel observation missions, five of which are financed, that should be launched from 2012. Everything concerning the space segment is controlled, coordinated and implemented by the ESA: not only contracts with industry to develop the satellites and the necessary infrastructure, but also the management of the pilot projects under way in this phase, which will be assessed for future applications.

3. The Communication from the Commission

3.1	In the Communication, the Commission reports on the achievements so far in the services and in situ components, which have already provided good results using existing space infrastructure, in particular on the EUMETSAT and ESA missions, and national missions.

3.2

The foundations for the system's architecture were laid down in 2008, especially the financial requirements and related budget policies. The resources needed to implement the strategy will have to be allocated under the next EU multiannual financial framework. The ESA forecasts expenditure of EUR 4.23 billion over the 2014-2020 period (2).

3.3	The document analyses some crucial aspects of European space policy, of which GMES, together with the European GNSS programmes (EGNOS and Galileo), is a pivotal element.

3.4	The Commission indicates the funding priorities for completing and developing Sentinels 1, 2 and 3, continuity and accessibility of data, and the need to overcome Member State reticence about the project's duration, currently planned to run until 2020.

3.5	The Commission believes that a policy of full, guaranteed access requires a data ownership regulation. It also addresses the issue of infrastructure ownership and management.

3.6	A significant part of the document concerns procurement policy, which must effectively ensure both cost efficiency and continuous availability of data.

3.7

International cooperation is a cornerstone of the entire GMES programme. Here, GMES represents the EU's contribution to the Global Earth Observation System of Systems (GEOSS) programme. The Commission will develop further exchanges and partnerships within the Committee of Earth Observation Satellites (CEOS), which has specific responsibilities with regard to monitoring the effects of climate change.

3.8	In its conclusion, the Commission summarises the document and undertakes to maintain close oversight of project completion and its constant updating in response to user demand.

4. The Committee's comments

4.1

The Committee considers space policy to be among the technological priorities demanding the most intensive development, and therefore welcomes the Communication from the Commission, hoping that coherent operational decisions, funding and policies will ensue from decision-making bodies, taking heed of the proposals and indications it contains.

4.2

The Committee, while taking a positive view, shares the Commission's concerns about the lack of clarity on the part of the Member States regarding timeframe applied to the GMES programme. It is crucial that they give clear backing to a programme that at present is to be planned at least until 2030. Provision will certainly have to be made, however, for the possibility of continuing its basic functions beyond that date.

4.3	It is also essential that the business sector be able to plan investments over a sufficient period of time and to develop technologies to obtain sensing systems that are ever more efficient in terms of cost and service quality.

4.4

The Committee considers EUR 4 billion, based on estimates from the ESA's Long-term scenario, to be insufficient. The approximately EUR 600 million a year fails to take account of the evolution of technological component prices for the Sentinel satellite constellation. The amount earmarked for R&D also looks to be insufficient, especially with regard to significant data collection requirements to tackle climate change and ensure security.

4.5

While fully endorsing the Commission's proposals, the Committee would urge bolder steps regarding the necessary financial resources: at least a further EUR 700/800 million would be required for the 2014-2020 period, as would a shift of the project's timeframe to at least 2030, an opening up of the space market to all Member State SMEs, clear and open regulation of data access policy, close coordination between all project stakeholders, and lastly a stronger international dimension for the project.

4.6

The Commission itself mentions the need for greater investment in security and in a recent communication (3) reports that a call has been published under the 7th Framework Programme (space theme) for proposals to develop pre-operational GMES service capabilities for maritime surveillance. An integrated approach using all available instruments is needed in order to protect the environment, safeguard our seas and coasts from illegal trafficking and save people who put their lives in the hands of ruthless criminal organisations.

4.7

Additional resources are needed, to support both on-going training for operators in the sector and projects to encourage young people to study space and its possible applications. In recent years, partly due to the waning public attention to the topic, interest in aerospace engineering has declined, and the number of students following courses and gaining degrees in this subject has plummeted. Technicians are also beginning to be in short supply, and a dedicated policy is needed to direct those interested towards these studies. One of the most common reasons for not taking up this subject is the job prospects, which do not appear either secure or lasting.

4.8

The Committee supports the Commission's proposal to take over direct ownership of the system and, consequently, assume management responsibility. The choice of open, continuous and free access seems appropriate and well-considered, provided that security guarantees are put in place by a specific regulation. Guaranteed access can create the right conditions for attracting the interest of private investors in providing services. The emergence of a GMES-related market could, as well as offering economic opportunities and providing a public service, allow certain terrestrial service management costs to be shared.

4.9

Proper data management will hinge crucially on the choice of system architecture. Commercial exploitation should always entail a contribution to expenditure, following an appropriate period of market adaptation, as is currently occurring with certain web services, which had until now been free of charge but are gradually introducing user charges. Data for public administrations should in principle be free and accessible, with a range of platforms depending on confidentiality and security requirements.

Significant applications for satellite monitoring have recently come into being. The altrimetric satellites of the My Ocean project identified the recurrence of the El Niño phenomenon in 2009; the MACC (Monitoring Atmosphere Composition and Climate) project, a GMES service, has provided information for model simulations on the extent of the Icelandic volcanic ash plume; another GMES service, SAFER (Services and Applications For Emergency Responses) aims to provide detailed mapping within six hours of natural disasters such as earthquakes, floods and landslides, which could be absolutely vital to civil protection operations; G-MOSAIC (Pilot services for security) will carry out surveillance for security purposes ranging from the surveillance of nuclear plants, irregular migration routes and borders to the analysis of war damage and needs.

4.10

Procurement policy warrants special attention. The principles contained in the Small Business Act must always apply in public procurement procedures, especially Community ones. A robust support policy for SMEs is needed, particularly those in countries which do not yet have a strong production system and should also benefit from the impending huge investments in the sector. The GMES space component needs not only large companies specialising in aerospace electronics, but also the innovative solutions that small businesses too are capable of providing. Given the European nature of the project, the Commission should encourage the formation of consortiums between transnational companies.

4.11	The Committee recommends increasingly close cooperation between the various project stakeholders – the Commission, the Member States, the ESA and EUMETSAT – and supports the Commission's proposal to share responsibilities among these stakeholders, as described in the Communication.

4.12

The Committee believes that the ESA has all the necessary skills to qualify it as the final manager of space infrastructure, in cooperation with the national agencies with regard to the maintenance, development and replacement of the satellite constellations. It strongly recommends testing all legally possible initiatives to assist in following this natural option.

4.13

The Committee believes that it will be essential to continue with efforts to strengthen international cooperation. The fight against climate change is necessarily unfolding on a global scale, and data-sharing will be vital to real-time identification of the on-going effects of greenhouse gas emissions and the ensuing climate changes. The Commission has rightly looked into this aspect, and the Committee recommends also involving other nearby partners, possibly involving them with the European strategy for territorial defence, the seas and security. The Union for the Mediterranean, for example, could be an ideal platform for developing such cooperation under existing priority programmes concerning civil protection, cleaning up the Mediterranean and combating climate change. Similarly, the ability to identify the particular characteristics of other specific areas, such as activities currently under way in the Baltic or Danube regions, can also make a positive contribution.

4.14

The EESC supports the establishment of the 27-member GMES Partners Board, which also provides for the participation of Switzerland and Norway as ESA members. This body, chaired by the Commission, has as its task to establish cooperation between all Member State bodies, to assist the Commission in monitoring the coherent implementation of the programme and in preparing a strategic implementation framework, and to bring about an exchange of experience and good practice in the field of GMES and Earth observation. This representative body could help to redress the current imbalance in space know-how and activity between the old and new Member States. The establishment of a private users' forum would be ideally suited to the timely analysis of the system's prospects, not to mention cooperation with the Council.

4.15	Specific attention is required regarding the short-term programmatic needs, in particular the operation of the A series of Sentinel satellites, the launch of the B series and the procurement of crucial components for the C series.

4.16

The Spanish presidency, which is committed to the GMES regulation, and the Belgian presidency, with respect to European space policy, both agree on the need for new impetus. The European Parliament is very much in favour of supporting it. As a result, the conditions are in place to define those aspects still requiring clarification: identifying and allocating the resources the project needs; removing the doubts still surrounding the GMES timeframe, thereby enabling the Sentinel constellations to be developed in accordance with the established programme; strengthening international cooperation and investing more in research and development.

Brussels, 14 July 2010.

The President of the European Economic and Social Committee

Mario SEPI

(1) CESE 96/2010 on the Proposal for a Regulation of the European Parliament and of the Council on the European Earth Observation Programme (GMES) and its initial operations (2011-2013), COM(2009) 223 final – 2009/0070 (COD).

(2) ESA C/ (2009) 36.

(3) Towards the integration of maritime surveillance: A common information sharing environment for the EU maritime domain COM(2009) 538 final.

11.2.2011

Official Journal of the European Union

C 44/157

Opinion of the European Economic and Social Committee on the ‘Proposal for a Regulation of the European Parliament and of the Council setting emission performance standards for new light commercial vehicles as part of the Community's integrated approach to reduce CO2 emissions from light-duty vehicles’

COM(2009) 593 final — 2009/0173 (COD)

2011/C 44/27

Rapporteur: Mr RANOCCHIARI

On 20 November 2009 the Council decided to consult the European Economic and Social Committee, under Article 251 of the Treaty establishing the European Community, on the

Proposal for a Regulation of the European Parliament and of the Council setting emission performance standards for new light commercial vehicles as part of the Community's integrated approach to reduce CO2 emissions from light-duty vehicles

COM(2009) 593 final — 2009/0173 (COD).

The Section for the Single Market, Production and Consumption, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 15 June 2010.

At its 464th plenary session, held on 14 and 15 July 2010 (meeting of 14 July), the European Economic and Social Committee unanimously adopted the following opinion.

1. Conclusions and recommendations

1.1 As part of the Community strategy for reducing CO2 emissions and following the adoption of the Regulation on passenger cars in 2009, the proposal on reducing CO2 emissions from light commercial vehicles is an appropriate complementary measure. No initiative supported by an adequate integrated approach can be overlooked when it comes to reducing greenhouse gases, as this is a key part of fighting climate change.

1.2 The new proposal is modelled on the Regulation on passenger cars, laying down mechanisms for penalties, premiums, derogations, eco-innovations, etc. for this area too.

1.3 However, the EESC fears that these arrangements do not take into sufficient account the substantial difference between cars and LCVs (light commercial vehicles): the former are consumer goods and the latter capital goods, with the result that there is a clear difference in their role and the size of their operating costs. In addition to this, the proposal on LCVs is in some respects even more ambitious than the Regulation on passenger cars, as regards timeframes, penalties, costs, etc. The EESC believes that, given the lead time (1) for commercial vehicles, which is at least two years longer than for passenger cars, the proposal should be reviewed, not least in the light of the severe crisis hitting the sector, which has had significant commercial impact and is continuing to do so.

1.4 Furthermore, it is feared that too great an effect on industrial costs and, therefore, prices, could further weaken a market which is already in severe crisis, thereby causing job losses and further slowing down renewal of the fleet and, hence, endeavours to limit emissions.

1.5 The EESC therefore calls for the May 2009 Competitiveness Council recommendations to be taken into account, which stressed that ‘given the current economic situation in the sector, creating additional burdens for the industry needs to be avoided if possible’, and that any decision should be preceded by thorough impact assessments.

1.6 The EESC points out that the proposal is based on an impact assessment dating from before the economic crisis and calls on the European Parliament and the Council to request that the impact assessment be updated on the basis, not least, of careful monitoring of emissions following the entry into force of Euro 5.

1.7 In the light of the above, the EESC, while confirming the need to reduce CO2 emissions, calls for the timeframes laid down by the Regulation to be revised, bringing phasing-in into line with the lead time for the sector (launch in 2015 and completion during 2018), with a more precise, up-to-date impact assessment also covering the longer-term targets beyond 2020, which, it is estimated, could gradually reach 150-160 g/km with the progress of technology, notwithstanding the need for a review in good time.

2. Introduction

2.1 Commission Communication COM(2007) 19 final of February 2007 – Results of the review of the Community Strategy to reduce CO2 emissions from passenger cars and light commercial vehicles – announced that the Commission was going to propose a legislative framework for achieving the Community target of 120 g CO2/km. The December 2008 Regulation on CO2 emissions from passenger cars, intended to reduce emissions from these vehicles to an average of 130 g/km, is a key part of the Community strategy. The legislation underpinning the strategy sets out a number of complementary measures for a further 10 g/km reduction of CO2 emissions (integrated approach); these measures include the new proposal to limit CO2 emissions from light commercial vehicles.

2.2 The European Union has committed to a reduction in total greenhouse gas emissions by 2020 of 20 %, or 30 % if a general international agreement is achieved. Clearly, all sectors will have to contribute to this reduction. According to the Commission, emissions from light commercial vehicles account for around 1.5 % of total CO2 emissions in the European Union.

2.3 The new proposal follows on from two Commission Communications issued in February 2007 – COM(2007) 19, mentioned above, and COM(2007) 22 on A Competitive Automotive Regulatory Framework for the 21st Century – and the call from the June 2007 Environment Council to draw up a proposal to improve energy efficiency of light commercial vehicles.

3. The Proposal for a Regulation

3.1 On 28 October 2009 the Commission adopted a Proposal for a Regulation to reduce CO2 emissions from light commercial vehicles.

3.2 As mentioned in the Introduction, the new Regulation complements Regulation 443/2009 (CO2 emissions from passenger cars) as part of an integrated approach to achieve the EU target of 120 g CO2/km for all new light-duty vehicles. For the year beginning 1 January 2014, and each successive year, each light commercial vehicle (LCV) manufacturer is to ensure that average specific CO2 emissions from their vehicles do not exceed the target laid down in the Regulation.

In particular:

3.2.1

Scope

The proposal's scope is confined to N1 vehicles. The Commission will decide whether to extend its application to N2 and M2 (2) vehicles only after the 2013 review, using the comitology procedure.

3.2.2

Short-term target

The objective of the proposal is to reduce average CO2 emissions from all new vehicles to 175 g CO2/km by 1 January 2016, with interim targets of 75 % of vehicles in 2014 and 80 % in 2015.

3.2.3

Utility parameter

The proposal keeps the mass of the vehicle in running order as the utility parameter (the basis of the calculation for measuring emissions). However, Article 12 stipulates that the Commission is to assess whether alternative parameters could be used (footprint, payload) (3) in 2014.

3.2.4

Penalty system

The proposal stipulates that:

a)	the penalty is to be calculated by multiplying excess g CO2/km by the number of new vehicles registered that year;

for a transitional period (up to and including 2018), a flexible arrangement is provided for, whereby the unit penalty increases according to how far the target is exceeded: i.e. EUR 5 for the first gram over the target, EUR 15 for the second, EUR 25 for the third and EUR 120 for each gram after that;

c)	after the transitional period (after 2018), the unit penalty is no longer to be calculated on the basis of by how far the target is exceeded, being fixed at EUR 120 for each gram over the target.

3.2.5

Super-credits

In calculating the average specific emissions of CO2, allowances are laid down for manufacturers producing vehicles with exceptional performance. Each new light commercial vehicle with specific emissions of CO2 of less than 50 g CO2/km will be counted as 2.5 LCVs in 2014, 1.5 LCVs in 2015 and 1 LCV from 2016.

3.2.6

Derogations for certain manufacturers

A manufacturer of fewer than 22 000 new light commercial vehicles registered in the Community per calendar year may apply for a derogation from the specific emissions target (see point 3.2) if:

a)	they are not part of a group of connected manufacturers; or

b)	they are part of a group of connected manufacturers that is responsible in total for fewer than 22 000 new light commercial vehicles registered in the Community per calendar year; or

c)	they are part of a group of connected manufacturers but operate their own production facilities and design centre.

3.2.7

Eco-innovation

Upon application by a supplier or a manufacturer, the Commission is to consider, according to procedures yet to be defined, CO2 savings achieved through the use of innovative technologies, outside the normal test cycle for measuring CO2. The total contribution of those technologies to reducing the specific emissions target of a manufacturer may be up to 7 g CO2/km.

3.2.8

Pooling

Manufacturers of new light commercial vehicles, other than manufacturers which have been granted the derogation referred to in point 3.2.6 of this Opinion, may form a pool for the purposes of meeting their obligations.

3.2.9

Incomplete (or multistage (4)) vehicles

The proposal states that the specific emissions of a ‘completed vehicle’ are to be set equal to the highest value of those of all ‘complete vehicles’ that are of the same type as the base vehicle on which the completed vehicle is based.

3.2.10

Long-term target

By 1 January 2013, the Commission is to complete a review of the specific emissions targets, with the aim of defining the modalities for reaching, by the year 2020, a long-term target of 135 g CO2/km.

4. General comments

4.1 As in previous opinions on Commission legislative proposals on reducing CO2 emissions, the EESC confirms its support for all Community initiatives aiming to achieve specific targets in reducing greenhouse gases, as this is a key part of combating climate change. To this end, no reasonable measure to reduce LCV emissions as well can be overlooked, as these vehicles make up over 10 % of the fleet.

4.2 The instrument chosen – a ‘regulation’ – is, moreover, the most suitable to ensure immediate compliance with the provisions adopted, avoiding distortion of competition which could have implications for the internal market.

4.3 However, the EESC feels that the proposal, which is modelled on the Regulation adopted for passenger cars, underestimates the differences between passenger cars and LCVs, the most important of which are:

—	a longer development and production cycle than for passenger cars;

—	the function of these vehicles, which are used for a business activity in which engine efficiency and fuel consumption are often the most significant operating costs. It is no coincidence that 97 % of the LCV fleet run on diesel;

—	the profile of buyers, over 90 % of which are small and micro craft businesses which are highly sensitive to any variation in cost.

4.4 The EESC would also point out the complexity of this review, which should aim to achieve further CO2 emission reductions without jeopardising the competitiveness of the vehicle sector, which is operating on an extremely competitive world market and is experiencing a huge crisis. Total light commercial vehicle sales in 2009 were down over 30 % on 2008, and more specifically down 30 % in Western Europe (Italy -23.4 %, germany -24.7 %, Spain -38.8 %, France -21.3 %, United Kingdom -37.1 %) and down 49 % in the new Member States (e.g. -28.0 % in Poland and - 67.0 % in the Czech Republic).

4.5 The EESC cannot overlook the concerns voiced regarding the potentially excessive impact on industrial costs and, therefore, on vehicle sale prices, with risks of output cutbacks and, therefore, job losses, on the one hand, and also of fewer buyers, slowing down renewal of the fleet with less-pollutant vehicles.

4.6 The EESC does not, of course, dispute the decision to lay down CO2 emission standards for LCVs, not least to avoid the risk that the market will be tempted to officially categorise larger vehicles as LCVs in order to obtain lower vehicle tax or other potential benefits. What is worrying here is the practical feasibility of a proposal which, on the one hand, is based on assessments dating back to 2007 - in other words to before the crisis which struck and is continuing to affect the sector heavily - and, on the other, fails to lay down sufficient timeframes for implementation.

4.7 The current proposal makes a change to the approach previously adopted regarding targets: no longer 175 g CO2/km by 2012 and 160 g CO2 in 2015, but, as stated above, 175 g CO2 by 1 January 2016, phased in from 2014, and, lastly, 135 g CO2 by 2020. This revision, as will also be seen later on, is, regrettably, insufficient as it fails to take into account the sector's lead time and no industry launches a programme of particularly costly investments if it is not certain of the regulatory framework which will be adopted.

4.8 In this regard, the EESC refers to the Competitiveness Council conclusions on the automotive industry adopted on 29 May 2009, which warned against new rules which could lead to excessive costs for businesses in all production sectors. As regards the automotive industry in particular it stated: ‘given the current economic situation in the sector, creating additional burdens for the industry needs to be avoided if possible. New legislative measures need to be taken with utmost caution and should be preceded by thorough impact assessments respecting the current conditions’.

4.9 Moreover, the EESC notes that the Commission has not taken account of parallel, ‘rival’ legislation making the achievement of the stated goal more difficult. Its impact assessment overlooks the fact that reducing tailpipe emissions from vehicles necessary for Euro 5 and 6 diesel in terms of nitrogen oxides (NOx) and particulate matter (PM) has a negative impact on fuel efficiency.

4.10 Lastly, the EESC points out that, thus far, there has been no official monitoring system for light commercial vehicle emissions in force and there are therefore no official data on the subject. The danger might arise of imposing practical burdens on the industry and related sectors without having access to the necessary information.

4.11 In the light of the above, the EESC calls on the European institutions – as it has already done in the opinion on regulating CO2 emissions from passenger cars (5) – to revise the timeframes laid down in the Regulation, bringing phasing-in into line with the lead time for the sector, so that it starts in 2015 with completion in four phases, as for passenger cars, by 2018.

4.12 One target, which is still ambitious but more realistic as of 2020, could be around 150-160g/ CO2/km, to be phased in taking into account monitoring of data which have become available in the meantime. The EESC calls for the reflection launched in the EP and the Council to lead to revision of the initial proposal on this point too.

5. Specific comments

5.1 The EESC points out that the proposal is more stringent than Regulation 443/2009 on passenger cars, in that:

5.1.1

The timeframes are actually shorter. Phasing-in of targets is planned to start around four years after the Commission has adopted the proposal. This is in line with Regulation 443/2009, which was adopted by the Commission in late 2007 and published half way through 2009. However, as is well known, commercial vehicles have longer design and production cycles than cars (7-10 years compared to 5-7), and they therefore need more lead time than is provided for in Regulation 443/2009. Moreover, phasing-in timeframes for LCVs are shorter than for passenger cars, and the percentage of vehicles affected at the start is higher (75 % for LCVs, 65 % for passenger cars).

5.1.2

The costs are higher. Most commercial vehicles run on diesel (around 97 %); potential for improvement is smaller, thus making abatement costs higher. Therefore, the expected impact on prices is greater (between 8 % and 10 %, as against 6 % for passenger cars), as is the marginal emissions abatement cost (around EUR 160 as against wide variation between EUR 25 and EUR 150 per car).

5.2 The EESC notes that the proposal uses mass of the vehicle in running order as the utility parameter but states also in Article 12 that the Commission is to assess whether alternative parameters could be used (footprint, payload) in 2014. The EESC calls for the European Parliament and the Council to discuss whether it might be appropriate to assess in the immediate term different parameters which would take the role of commercial vehicles into greater account. For example, the EESC feels that the gross vehicle mass specified on the registration certificate would be a more appropriate parameter for the purpose, as it would allow load capacity to be taken into account as well.

5.3 The penalties for light commercial vehicles are greater than for passenger cars: the basic unit penalty is much higher (EUR 120 as against EUR 95). The EESC stresses the need to preserve the sector's competitiveness and concludes that a level of penalties for commercial vehicles which is similar to that for passenger cars would be sufficient to ensure compliance with the rule, as the impact assessment points out. In fact, it is not clear why a given volume of CO2 emitted by a commercial vehicle should be punished more severely than the same volume of CO2 emitted by a passenger car.

5.4 The proposal states that using innovative technologies can help reduce specific emissions targets for manufacturers by up to a maximum of 7 g CO2/km. The EESC advocates introduction of these technologies, which provide opportunities for jobs and development in the component sector as well.

5.5 As regards ‘super-credits’ for particularly efficient vehicles, the EESC notes that the super-credits provided for are less generous than those provided for in Regulation 443/2009, as the emissions limit laid down for vehicles likely to be eligible for super-credits (<50 g CO2/km) is the same as that for passenger cars. However, average light commercial vehicle emissions (and targets) are much higher than for passenger cars and the Commission should establish figures which are closer to reality, differentiated according to the masses of the three classes of LCV N1 (6).

5.5.1 Here, too, the EESC would have preferred a more in-depth impact assessment. It feels it would be methodologically inaccurate to set an absolute figure (50 g CO2/km) when the function of a chassis in a commercial vehicle can change completely, depending on the configuration and the weight being transported, ignoring the fact that such a low figure is not in practice achievable with current internal combustion engines but would require a ‘technological break with the present’ (7), which is not currently possible.

5.6 The long-term target of 135 g CO2/km by 2020 is subject to the outcome of an updated impact assessment which will verify the feasibility of the target during the 2013 review. The EESC upholds the need to set long-term targets for LCVs as well, but the proposed figure seems, even at this stage, not to be achievable in the specified timeframes: technological progress expected in the coming years has been overestimated and, therefore, once again, the lead time for the sector and the impact of external factors which should be part of an integrated approach have been overlooked.

5.7 The EESC believes that the above comments are confirmed by the fact that the existing impact assessment is insufficient, for the following reasons:

5.7.1

The proposal fails to specify how the 135 g CO2/km target was reached and to provide a cost assessment for this target level. The impact on prices is only specified for 160, 150, 140 and 125 g CO2/km. The latter is discarded as it is too costly (it would increase the price by EUR 4 000, around 20 %). An increase in costs of between 15 % and 20 % of the price can therefore be expected in order to achieve 135 g CO2.

5.7.2

It fails to take into account the fact that increasing the price could slow down the fleet renewal cycle and therefore lead to an increase in overall emissions (lower average emissions from new vehicles but higher overall emissions from the existing fleet).

5.8 The EESC supports the inclusion of derogations for small and niche manufacturers, in that particular circumstances require flexible arrangements.

5.9 With regard to incomplete vehicles, the EESC fears that the proposed system will not be capable of managing the problem, given the absence of appropriate data. The EESC therefore welcomed the initiative of the Spanish Presidency, which, together with the Member States and the Commission, is reviewing the matter. In the current revision, amendments will be made to the final text which are more in line with the situation in the sector. However, it is important that an official monitoring system for data on CO2 emissions from multistage vehicles is put in place without delay.

5.10 The EESC welcomes the decision to limit the scope to N1 vehicles, with N2 and M2 vehicles only to be included following a specific impact assessment when emission data are available (8). However, it stresses the need to take the characteristics of these vehicles fully into account. In particular, M2 vehicles should be excluded as of now, given their particular nature as niche vehicles.

Brussels, 14 July 2010.

The President of the European Economic and Social Committee

Mario SEPI

(1) The time needed for the industry to implement any new requirement involving structural changes to a vehicle.

(2) N1 = vehicles designed for the carriage of goods and having a maximum mass not exceeding 3.5 tonnes; N2 = vehicles designed for the carriage of goods and having a maximum mass not exceeding 12 tonnes; M2 = vehicles designed for the carriage of passengers, more than eight passengers, maximum mass not exceeding 5 tonnes.

(3) Payload: the ‘payload’ of a vehicle is the difference between the technically permissible maximum laden mass under Annex III to Directive 2007/46/EC and the mass of the vehicle. The footprint of a vehicle is calculated by multiplying wheelbase by track width.

(4) Multistage vehicles are vehicles which are sold by the manufacturer in the form of cab+chassis only (base vehicle) and are then completed by others to make them suitable for the intended use (which can vary considerably). Multistage vehicles represent around 15 % of the market. These vehicles can be type-approved in successive stages under Directive 2007/46/EC, which distinguishes between ‘base vehicles’ (type-approved in the first stage of a multi-stage type approval process), ‘completed vehicles’ (type-approved at the end of a multi-stage type approval process) and ‘complete vehicles’ (type-approved in a simple type approval process).

(5) Regulation (EC) No 443/2009 of 23 April 2009 setting emission performance standards for new passenger cars as part of the Community’s integrated approach to reduce CO2 emissions from light-duty vehicles (OJ L 140 of 5.6.2009, page 1) – EESC Opinion: OJ C 77 of 31.3.2009, page 1.

(6) Class I: max. mass 1 305 kg and load capacity 2.5 m3, Class II: max. mass 1 760 kg and load 6 m3; Class III: > 1 760 kg and load capacity 17 m3.

(7) See EESC Opinion, footnote 5.

(8) Measurement of CO2 emissions from N2 and M2 vehicles was introduced by the Euro 5 & 6 Regulation for new registrations as of January 2011 and September 2015 respectively. For vehicles type-approved under the Regulation on heavy-duty vehicles, CO2 emissions might not be available until Euro VI emissions become mandatory (31 December 2013).

11.2.2011

Official Journal of the European Union

C 44/162

Opinion of the European Economic and Social Committee on the ‘Proposal for a Regulation of the European Parliament and the Council amending Council Regulation (EC) No 2007/2004 establishing a European Agency for the Management of Operational Cooperation at the External Borders of the Member States of the European Union (FRONTEX)’

COM(2010) 61 final — 2010/0039 (COD)

2011/C 44/28

Rapporteur: Mr PEZZINI

On 18 March 2010 the Council decided to consult the European Economic and Social Committee, under Article 304 of the Treaty on the Functioning of the European Union (TFEU), on the:

Proposal for a Regulation of the European Parliament and the Council amending Council Regulation (EC) No 2007/2004 establishing a European Agency for the Management of Operational Cooperation at the External Borders of the Member States of the European Union (FRONTEX)

COM(2010) 61 final — 2010/0039 (COD).

The Section for Employment, Social Affairs and Citizenship, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 16 June 2010.

At its 464th plenary session, held on 14 and 15 July 2010 (meeting of 15 July 2010), the European Economic and Social Committee adopted the following opinion by 78 votes to one with one abstention.

1. Conclusions and recommendations

1.1 The European Economic and Social Committee welcomes and endorses the Commission's work to adapt and update Regulation (EC) No 2007/2004.

1.2 Member States having abolished internal border controls in compliance with the Schengen Convention are entitled to entrust external border control to the authority of their choice.

1.2.1 Nevertheless, following the enlargement of the EU and the gradual extension of the Schengen area to almost all Member States, together with the diversity of national legal systems, differences have been noted between Member States in terms of responsibilities for controlling the European Union's external borders.

1.3 As a result, at the conclusion of the Laeken European Council of December 2001, Member States committed themselves to establishing a common operational consultation and cooperation mechanism, in order to coordinate the action of national services responsible for controlling the EU's external borders.

1.3.1 This commitment has become all the more urgent due to the substantial growth in trans-national communication, which has promoted the multiplication of identities and encouraged the emergence of new nation-states.

1.4 Taking a comprehensive approach to border ‘security’ and the fight against ‘illegal migration’, the European Commission therefore decided to propose the establishment of FRONTEX Joint Support Teams (FJSTs) provided by EU Member States on a voluntary basis.

1.4.1 For this reason, in keeping with the ‘Schengen Borders Code’ and the powers of national authorities, and in order to develop a common policy in the area of fixed and mobile infrastructure, the abovementioned teams should be given responsibility for the ‘surveillance’, and subsequently the ‘integrated control’, of border crossings.

1.4.2 This means being able to check identification documents and question foreign nationals concerning the reason for their stay, always in accordance with Member State guidelines, and to board ships within the territorial waters of a Member State (1).

1.4.3 The EESC believes that the teams should be given the financial and transportation resources (ships, aircraft, helicopters) necessary. The assets used for Frontex operations are to be identified and made known in each EU Member State.

1.5 We nevertheless need to give some thought to the risk of ‘militarising’ the surveillance and control of external borders. As a result, any ‘overlap’ with the investigative, military and customs functions that individual Member States entrust to their own police, land, naval and air forces, and customs authorities needs to be carefully coordinated, ensuring that their control capacities are not diminished but enhanced (European added value).

1.5.1 Furthermore, questions concerning international legislation relating to intervention on the high seas, as well as under the UN Convention on the Law of the Sea, i.e. the Montego Bay Convention of 1982 (2) remain ‘open’.

1.6 The adoption of the Lisbon Treaty, incorporating, inter alia, the Charter of Fundamental Rights, has significantly increased the responsibilities and powers of the European Union in the area of immigration and asylum. The EESC considers that prerogatives pertaining to apprehending and detaining individuals should continue to be governed by ordinary human rights protection law, and not by so-called ‘exorbitant’ rules. As an ‘agency’, Frontex cannot be controlled by an external service or mere budgetary rules, but must remain subject to the same requirements to respect people which apply throughout the European Union, and more specifically through the application of the Council of Europe's penal rules (3).

1.7 The Committee, aware of Europe's social and legal tradition in the area of human rights and asylum rights, recommends that the members of these teams be given clear and sound initial training, with regular updates, on the psychological and behavioural aspects (thus ensuring regular oversight) that allow better relations with those who are more vulnerable, and who are trying to improve their social well-being, as has been the case for many Europeans over the centuries.

1.7.1 The EESC believes that these teams should be of an operational nature rather than a border police force, with operations that allow the implementation of the Schengen Code.

1.7.2 In the Committee's view, Frontex activities should be aimed at the exposure and prosecution of international criminals who are involved in human trafficking and who turn human beings motivated by legitimate aspirations to improve their wellbeing and social conditions into victims of humiliating and degrading exploitation.

1.7.3 Furthermore, Frontex teams should, with GMES support, actively contribute to rescuing migrants in difficulty in the Mediterranean basin, in accordance with Member State guidelines.

1.7.4 In view of the foregoing, the EESC advocates ongoing contact and close cooperation with NGOs.

1.7.5 The EESC believes that given the role and functions of NGOs, their involvement is indispensable in providing support and cultural mediation throughout all phases of procedures laid down in EU and national rules, in relation to people in precarious situations.

2. Introduction

2.1 Borders ‘juxtapose’ and separate two states or geographical regions along lines that restrict reciprocal relations between peoples.

2.1.1 Natural borders (mountains, rivers, expanses of water) are a source of continued rivalry between the populations on either side.

2.1.2 Even political or agreed borders are the outcome of conflict and compromise, spanning long periods of historical change.

2.1.3 In the era of globalisation, strong growth in international communication tends to promote the multiplication of identities and to increase the number of sovereign nations, with the emergence of new nation-states and nation-regions.

2.1.4 As a result, there has been an increase in borders and the ‘sanctity’ of single states, whose fragile borders are a source of potential and real conflict.

2.2 European states are a significant exception in the global framework because, through the Schengen Agreement, they have abolished internal border controls, thereby diminishing the weight of national sovereignty.

2.2.1 However, ongoing strong migratory pressure on the EU's land and maritime borders creates a need to strengthen and develop new common systems for the surveillance of external borders (EUROSUR).

2.3 EUROSUR

2.3.1 The EU is currently studying the establishment of a European external border surveillance system.

2.3.2 The implementation of the project should reduce the number of illegal migrants and the mortality rate in transit, as well as prevent cross-border crime and increase internal security.

2.3.3 Thus, there are plans to set up a European integrated border management system based on a common network of information and surveillance systems.

2.3.4 A ‘protected electronic communication network’ is in the pipeline in order to ensure exchange of data and coordination of activities between the various Member State centres, and between them and Frontex (4).

2.4 The road to FRONTEX

2.4.1 Regulation (EC) No 2007/2004 established a European Agency for the Management of Operational Cooperation at the External Borders of the Member States.

2.4.2 Regulation (EC) No 863/2007 then established a mechanism for the creation of Rapid Border Intervention Teams (RABITs) and amended Council Regulation (EC) No 2007/2004 as regards that mechanism and regulated the tasks and powers of guest officers.

2.4.3 Thus, through the Agency, a Member State can ask for rapid border intervention teams of appropriately trained experts from other Member States to be deployed in their own territory (5).

2.5 Directive 2008/115/EC sets out common standards and procedures to be applied in Member States for returning illegally staying third country nationals, ‘in accordance with fundamental rights … including refugee protection and human rights obligations’.

2.5.1 On 5 April 2010, following the adoption of the Handbook for the processing of visa applications (6), available to all the Member States' Consular staff, the Community Code on Visas came into force for the Schengen area, which comprises 22 Member States and three associated states.

2.5.2 The Hague programme (7) provides for the development of Frontex on the basis of a fixed programme.

2.5.3 The multi-annual Stockholm programme for an area of freedom, security and justice, adopted by the European Council on 10-11 December 2009, decided to build the capacity of Frontex, in part through a review of its legal framework, and specifically provides for the integrated management of EU borders.

3. Gist of the Commission proposal

3.1 The European Commission proposes a review of the legal framework of the Frontex Agency, with the following key points:

—	Member States remain responsible for controlling their external borders in accordance with the principle of subsidiarity (Article 74 of the Treaty), with their own police force and intelligence services.

—	Member States may call on the Agency's assistance, in the form of coordination, when other Member States are involved and greater technical and operational assistance is being requested.

—	Current heavy illegal migratory flows of third-country nationals to Member States require Frontex's role in EU immigration policy to be strengthened.

—	The impact assessment accompanying the proposal (8) sets out exceptions to the Frontex Agency's legal framework and situates the amendment to the Regulation as a further development of the Schengen acquis in combating the organisation of illegal immigration.

—	The proposal for an amendment aims to increase coordination and operational cooperation among Member States, with more harmonised criteria and procedures for a higher level and more uniform management of surveillance.

—	Technical equipment and human resources must be increased. To this end, a pool of border guards on detachment, comprising highly qualified and trained national experts, may be created.

4. General comments

4.1 Strict compliance with the principle of non-refoulement under the Geneva Convention, the UN Convention against ‘inhuman and degrading treatment’ and the European Convention on Human Rights must be guaranteed in all Frontex operations.

4.2 Frontex missions must be carried out with an unconditional regard for safeguarding human life, protecting women, minors, and the most vulnerable. They must also avoid externalising border control to countries (9) that do not recognise the right to asylum or the Geneva Convention (10).

4.3 Frontex activities should focus mainly on the following priority values:

—	pursuing and disempowering international criminal networks engaged in human trafficking;

—	making asylum law a reality for victims of injustice, as foreseen in the EU Treaty;

—	assisting migrants in difficulty, even in international waters.

4.4 The EESC endorses the Proposal for a Regulation, when it provides that, while respecting the competences of the Agency, Member States can continue to pursue operational cooperation established with other states and/or third countries at external borders if this cooperation complements the Agency's action, while respecting human rights, in accordance with European social-Christian and legal traditions.

4.5 The EESC believes that in order to ensure the best possible cooperation, Frontex should be given the resources (ships, aircraft, helicopters) necessary. The assets used for Frontex operations are to be identified and made known in each EU Member State, and, bearing in mind their budgetary impact, Frontex should be in a position to use them in coordination with all national services that already have such resources.

4.6 The EESC can endorse the possibility given to Frontex to finance and implement technical assistance projects in third countries and to send liaison officers, provided that such projects and assistance involve NGOs with long and significant experience in providing development aid and training, and safeguarding human dignity.

4.7 Frontex should avail itself of the new SIS II (11) system (second-generation Schengen Information System) as soon as possible.

4.8 Frontex could be afforded substantial support for rescuing migrants in difficulty in the Mediterranean basin through the use of GMES data provided by the Neustrelitz station (12).

4.9 The role set out for Frontex in coordinating joint return operations should also, in the Committee's opinion, be carried out in close cooperation with humanitarian NGOs with a recognised awareness and long experience in dealing with people in difficult or vulnerable situations.

4.10 The EESC believes that Frontex can only be given a limited mandate to process personal data related to fighting criminal networks organising illegal immigration, and always in close cooperation with the national prosecution authorities.

5. Specific comments

5.1 The EESC considers the proposed amendments to be consistent with the objective of strengthening the role and functions of Frontex, in order to improve the control of EU external borders and to ensure, at the same time, the freedom and internal security of Member States.

5.2 The following points may nevertheless be raised.

5.2.1 Recital (10) [The rapporteur's proposed amendment to the Italian version of this recital, replacing the word ‘procurando’ with ‘assicurando’, with a view to making it more legally binding, does not affect the English version, which already uses the word ‘ensuring’ (=‘assicurando’)].

5.2.2 Recital (13) – the word ‘lists’ should be replaced with the expression ‘dedicated registers’, which seems more suited to establishing an obligation to manage resources rigorously.

5.2.3 Recital (14) – the adjectives ‘trained and specialised’ should be included in the expression ‘an appropriate number of skilled border guards’.

5.2.4 Recital (15) – the expression ‘on a semi-permanent basis’ seems vague and should be substituted with more precise wording.

5.2.5 Recital (23) – rigorous ‘limits’ should be set to the Agency's ability to ‘launch and finance projects of technical assistance’ etc.

5.3 Article 1a(a)(2) – the expression ‘adjacent to’ should be more clearly specified, mainly in order to avoid issues of unwarranted interference in national sovereignty.

5.3.1 Article 2(1)(c) – the Agency's mandate to carry out ‘risk analyses’ should be extended to the ‘costs’ involved in dealing with pressure on the external borders of the most exposed Member States. Indeed, it only seems fair that all Member States, and not just the ‘border’ countries, should bear the burden.

5.3.1.1 The provision should be coordinated with the provisions of Article 4.

5.3.2 Article 2(1)(iii)(h) – it seems appropriate to specify that the Agency can only be given a ‘limited mandate’ to process personal data related to fighting criminal networks organising illegal immigration. The provision should be appropriately coordinated with the provisions of Articles 11, 11a and 11b.

5.3.3 Article 14(1) – it seems appropriate to clarify the detailed arrangements under which the Agency would ‘facilitate’ operational cooperation between Member States and third countries.

5.3.4 Article 14(2) – the possibility for the Agency to deploy liaison officers in third countries should be better clarified, insofar as officers seconded as observers and/or consultants can ‘only be deployed to third countries in which border management practices respect minimum human rights standards’, with the added proviso that these third countries must also have formally subscribed to binding international Conventions on human rights, asylum and international protection.

Brussels, 15 July 2010.

The President of the European Economic and Social Committee

Mario SEPI

(1) Under Article 77 of the Treaty on the Functioning of the European Union, Frontex agents may act on the orders of the Member States' border guards, in compliance, therefore, with the Member States' sovereignty.

(2) In addition to disagreements with other Member States regarding the correct application of rules on reception and the illegality of ‘push-back’ operations, the Italian courts have now charged civil and military officials with harassment for the refoulement to Libya of 75 illegal migrants intercepted in international waters in August 2009. The Italian government does not, however, share the views of the Syracuse public prosecutor's office. The UNHCR, for its own part, maintains that the push-back operation jeopardised the migrants' ability to avail themselves of asylum procedures in Italy.

(3) Since all Member States have now ratified Protocol No. 14 to the Convention for the Protection of Human Rights and Fundamental Freedoms, its Article 17 and the ratified Lisbon Treaty open the way for the EU to accede to the ECHR it is all the more necessary for Frontex not to deviate from this course.

(4) The electronic network must then be coordinated with the Commission Decision of 20 January 2006 laying down detailed rules for the implementation of Council Decision 2005/267/EC establishing a secure web-based Information and Coordination Network for Member States’ Migration Management Services (ICONET), mainly through the rapid exchange of information to combat illegal migration.

(5) The above-mentioned tasks are closely linked to those of the European Law Enforcement Agency (EUROPOL), set up in 1992 for the purpose of providing European level intelligence on crime. This framework also includes the Schengen Information System (SIS), which enables the relevant authorities in Schengen states to share data on the identity of' specific categories of persons and goods.

(6) Adopted by the European Commission on 19.3.2010.

(7) OJ C 53, 3.3.2005, p. 1.

(8) SEC(2010) 149.

(9) For example, Libya.

(10) Directive 2008/115/EC of the European Parliament and the Council of 6.12.2008 (which will come into force in December 2010) sets out common standards and procedures to be applied in Member States for returning illegally staying third country nationals, ‘in accordance with fundamental rights, … including refugee protection and human rights obligations’.

(11) The SIS (Schengen Information System) should be operational by 31 December 2011 (EP Coelho Report).

(12) The Neustrelitz station, in Germany, will ensure the planning and production of very high resolution data for Europe and the Mediterranean basin via the Geo Eye-1 and Ikonos optical satellites.

11.2.2011

Official Journal of the European Union

C 44/167

Opinion of the European Economic and Social Committee on the ‘Proposal for a Council regulation implementing enhanced cooperation in the area of the law applicable to divorce and legal separation’

COM(2010) 105 final/2 — 2010/0067 (CNS)

2011/C 44/29

Rapporteur working alone: Mr RETUREAU

On 29 April 2010, the Council decided to consult the European Economic and Social Committee, under Article 304 of the Treaty on the Functioning of the European Union (TFEU), on the

Proposal for a Council regulation implementing enhanced cooperation in the area of the law applicable to divorce and legal separation

COM(2010) 105 final/2 — 2010/0067(CNS).

The Section for Employment, Social Affairs and Citizenship, which was responsible for preparing the Committee’s work on the subject, adopted its opinion on 16 June 2010.

At its 464th plenary session, held on 14 and 15 July 2010 (meeting of 14 July 2010), the European Economic and Social Committee adopted the following opinion by 134 votes to one, with six abstentions.

1. Recommendations

1.1 The legal basis is Article 81(3) of the Treaty on the Functioning of the European Union which confers upon the Council the competence to adopt measures in the field of family law with cross-border implications; the proposal complies with the foreign element stipulated by the treaties.

1.2 The Committee notes with interest the possibility opened up by this proposal for a regulation to implement the enhanced cooperation procedure (1) provided for by Articles 326 et seq. of Title III of the Treaty on the Functioning of the European Union in an area that is neither straightforward nor easy, that of law. It hopes that in future, the use of enhanced cooperation, also in other areas, will enable obstacles and difficulties to be overcome so as to move forward in fields or issues which cannot achieve unanimity at the time, but on which a given number of Member States wish to deepen their cooperation.

1.3 The Committee endorses the Commission’s observation that the principles of subsidiarity and proportionality are complied with in the proposed regulation, which would be applicable by the requesting Member States following its adoption. The initiative is in line with the Charter of Fundamental Rights and Member States’ international commitments on human rights.

1.4 The proposed solutions are designed to prevent a rush to the court having jurisdiction by one of the spouses and to meet their legitimate expectations as regards the applicable law, in principle, that of their habitual residence at the time of filing for legal separation or divorce. Marriage annulment proceedings are not covered by the proposed regulation, and all other issues are governed by existing Community law on matrimonial matters and matters of parental responsibility for the children of both spouses.

1.5 The Committee also notes that the proposed regulation has no impact on the substantive law of the Member States.

1.6 Lastly, it endorses a proposal which would offer a quicker resolution to divorce or legal separation procedures between residents of countries which have joined this cooperation, thus contributing to the free movement of persons and of judgments that have acquired the force of res judicata.

2. Commission proposal

2.1 Rules on the law applicable to divorce and legal separation are not yet part of Community law on matrimonial matters. The first Community instrument adopted in the area of family law, Council Regulation (EC) No 1347/2000, set out rules on jurisdiction, recognition and enforcement of judgments in matrimonial matters as well as judgments on parental responsibility for children of both spouses given in the context of a matrimonial proceeding. It did not, however, include rules on applicable law.

2.2 The entry into force of Council Regulation (EC) No 2201/2003, which repealed and replaced Council Regulation (EC) No 1347/2000 as of 1 March 2005, did not entail any change in this respect.

2.3 However, Council Regulation (EC) No 2201/2003 allows spouses to choose between several alternative grounds of jurisdiction. Once a matrimonial proceeding is brought before the courts of a Member State, the applicable law is determined on the basis of the national conflict-of-law rules of that State, which are based on different criteria. The majority of Member States determine the applicable law on the basis of a scale of connecting factors that seek to ensure that the proceeding is governed by the legal order with which it has the closest connection. Other Member States apply systematically their domestic laws (lex fori) to matrimonial proceedings.

2.4 The failure by Member States in recent years to reach a unanimous agreement on solutions regarding applicable law and conflict-of-law rules with regard to divorce and legal separation, and the fact that there does not seem to be any prospect of a solution in the near future, has prompted several Member States to propose enhanced cooperation between themselves to this end, pending a final agreement on this matter, which requires unanimity within the Council. Thus, ten Member States addressed a request to the Commission indicating that they wished to establish enhanced cooperation between themselves in the area of applicable law in matrimonial matters and asking the Commission to submit a proposal to the Council to that effect. On 3 March 2010, Greece withdrew its request (2). However, other Member States are considering joining the enhanced cooperation. To date, fourteen Member States have expressed an interest.

2.5 Noting that the proposal for enhanced cooperation did not call into question existing Community law, the Commission drew up a proposal for a regulation, pointing out that the initial ten Member States’ initiative constituted a step forward vis-à-vis its own proposal to amend Regulation (EC) No 2201/2003 as regards jurisdiction and introducing rules concerning applicable law in matrimonial matters of 17 July 2006 (COM(2006) 399 final), which is still before the Council and has not been adopted. The impact assessment carried out at the time remains valid, and another assessment is not necessary.

2.6 In accordance with Article 329(1) of the Treaty on the Functioning of the European Union, on 4 June 2010 European justice ministers authorised by a qualified majority the Commission proposal to establish enhanced cooperation with some of them on divorce and legal separation. The European Parliament gave its assent a few days later (on 16 June 2010). It only remains now to await the formal adoption by the Council of the EU of the decision authorising enhanced cooperation.

2.7 Concerning the regulation implementing enhanced cooperation, the ministers approved a general approach to the key elements and requested that issues pending be examined afresh. The Council of the EU, acting on the basis of Article 81(3) of the Treaty on the Functioning of the European Union, must approve this regulation unanimously (3).

3. The Committee’s comments

3.1 The Committee has already stated on several occasions that European citizens must be able to have final court decisions that have acquired force of res judicata with regard to them in one Member State recognised in another Member State without being obliged to use an enforcement procedure.

3.2 In the area of civil and in particular matrimonial law, the Committee had adopted an opinion on the Green Paper on divorce (4) which in fact served as inspiration for the draft regulation which is still blocked in the Council and endorsed the measures proposed in the field of mutual recognition of judgments, conflicts of legislation and jurisdiction in applicable law.

3.3 At the time, it had warned the Commission about the possible contradictions between the applicability of foreign law, in particular of certain third countries, and provisions in this law which could run counter to Community public policy or the laws of the court (unequal treatment of men and women, custody systematically awarded to one of the spouses on the basis of their gender, etc.). The Committee is therefore pleased that a public policy exception clause will exclude any provisions of an applicable foreign law which, for example, might go against the EU Charter of Fundamental Rights, which is now part of primary law (with the same legal value as the treaties). Member States will invoke the international public policy of their domestic court to bring an exception to a third-country law which violates it.

3.4 The Committee again endorses the solutions selected to determine the competent court, in principle that of the last joint habitual residence of the spouses (5). This is intended to avert the possibility of either spouse rushing to court if there were different criteria for determining the competent court. However, the applicable law could be the one closest to the law on marriage, according to cumulative criteria, a law which the weaker spouse would be entitled to expect, and not necessarily that of the court as is currently the case in some Member States. The applicable law can also be chosen by joint agreement between the spouses insofar as there are objective connecting factors.

3.5 This would provide greater certainty and security in an area often characterised by conflict, whether divorce or separation (often the preliminary step towards divorce proceedings). The other rules applicable to matrimonial matters are the same as set out in Regulation (EC) No 2201/2003, in force in all Member States.

3.6 The Committee therefore endorses and supports the draft regulation, and hopes that the enhanced cooperation procedure, which is being used for the first time and which could have been used since the Treaty of Amsterdam came into effect in 1999, will finally become part of the body of usual procedures, allowing Europe to move forward in areas requiring unanimity but where unanimity is not to be expected quickly. This will avoid any bottlenecks or delays in the adoption of common legislation or measures and enable countries wishing to do so to cooperate more closely, despite the absence of unanimity or a quorum.

Brussels, 14 July 2010.

The President of the European Economic and Social Committee

Mario SEPI

(1) OJ C 83/189, 30.3.2010.

(2) The countries proposing enhanced cooperation: Austria, Belgium, Bulgaria, Spain, France, Germany, Hungary, Italy, Latvia, Luxembourg, Malta, Portugal, Romania and Slovenia.

(3) Article 81(3) stipulates that measures concerning family law with cross-border implications shall be established by the Council, acting in accordance with a special legislative procedure. The Council shall act unanimously after consulting the European Parliament. Measures implementing enhanced cooperation in this area must be adopted according to the rules laid down in this article.

(4) See OJ C 24, 31.1.2006, p. 20.

(5) Subject to some minimum length of residence (generally one month or one year) at the date when the procedure opens.

11.2.2011

Official Journal of the European Union

C 44/173

Opinion of the European Economic and Social Committee on the ‘Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions - Towards the integration of maritime surveillance: a common information sharing environment for the EU maritime domain’

COM(2009) 538 final

2011/C 44/32

Rapporteur: Mr LIOLIOS

On 15 October 2009 the European Commission decided to consult the European Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on the

Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions - Towards the integration of maritime surveillance: a common information sharing environment for the EU maritime domain

COM(2009) 538 final.

The Section for Transport, Energy, Infrastructure and the Information Society, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 1 June 2010.

At its 464th plenary session, held on 14 and 15 July 2010 (meeting of 14 July 2010), the European Economic and Social Committee adopted the following opinion by 164 votes to 1 with 6 abstentions.

1. Conclusions and recommendations

1.1 The EESC welcomes the Communication and supports the range of possible measures for integrated maritime surveillance (IMS) towards the effective understanding of all activities carried out at sea that could impact the security, safety, economy, or environment of the European Union (EU) and its Member States.

1.2 The EESC agrees in principle with the recommendations made by the abovementioned Communication and believes that the inclusion of rules on the dissemination and handling of data as well as the introduction of control mechanisms from/to all participating organisations will improve the situational awareness in the maritime domain.

1.3 The EESC notes that the surveillance communication is a positive contribution to the increased security problems faced by the EU including illegal immigration, trafficking, drug selling as well as efficient and effective protection of the environment and of the life and wealth of EU citizens.

1.4 The EESC acknowledges that the sustainability of the integrated maritime policy for the EU depends on the sustainability of its policy actions and amongst them the Integrated Maritime Surveillance is no exception. To this extent, the proposed integrated maritime surveillance system should be built to provide in a sustainable manner accurate, timely, quality and cost-effective data when and where needed and for the exact reason required. Therefore, the expandability of the IMS system must also be considered.

1.5 The EESC supports a common EU wide surveillance mechanism based upon a harmonised legal framework which will cater for the sharing of sensitive and non-sensitive information amongst the EU Member States' authorities, agencies and users.

1.6 The EESC acknowledges the importance of the international dimension of the maritime domain and urges the need to develop technical and legal standards and explore the cooperation opportunities with third countries.

1.7 The EESC believes that interlinking maritime surveillance systems presupposes thorough consideration of diverse legal issues related to the exchange of information collected for different purposes and from different sources. Member States have different obligations and data confidentiality and the protection of personal data are key issues. It is yet to be defined the nature of the data involved, the purposes (and the methods) of the exchange and the potential recipients of the data, the necessary safeguards with regard to the confidentiality and security of data and the protection of personal data, where relevant.

1.8 The EESC suggests that data should be disseminated ‘on a need to know basis’ in order to safeguard data protection and undue proliferation of data. It is also imperative to define clearly the confidentiality levels as well as the authoritative level for data usage, through the development of a concrete and transparent access right granting scheme.

1.9 The EESC understands that the validation of collected data is a critical and difficult task, and proposes the development of a framework that will collect that data and verify its correctness, as well as ensuring information security during its dissemination process.

1.10 The EESC advocates that a roadmap should be followed towards the implementation of the integrated maritime surveillance, utilising the experience of pilot projects, expert groups, and impact assessment in dealing with the legal and technical aspects of information integration.

1.11 The EESC recommends the development of single national coordination mechanisms and one information hub per national user group (community) in order to facilitate the development and operability of the integrated maritime surveillance.

1.12 Bearing in mind the numerous existing systems, the EESC proposes to avoid overlapping of existing systems, so that the integrated maritime surveillance will not change how information is collected but how information is disseminated.

1.13 The EESC invites the EU to adopt a more centrally managed network approach where coordination will be achieved through the network’s formal structure and central communications.

1.14 In order to safeguard the interlinking process of the user communities, the EESC suggests that the EU should define a clear and robust platform regarding the access granting scheme, based on a common EU understanding of the different political views as well as on an operational effectiveness. The beneficiaries of the access right provided have to be governed by the EU Transparency Regulation.

1.15 The adopted system architecture should have feedback loops to enable adjustments and updates utilising inter alia the evolving legal framework.

1.16 The EESC recommends that advanced security risk management should remain a top priority for the European maritime domain. To this extent, a tiered architecture that ensures data validity and data security is preferable.

2. Introduction

2.1 On 15 October 2009 the Commission published the Communication ‘Towards the integration of maritime surveillance: A common information sharing environment for the EU maritime domain’ (COM(2009)538 final) and referred to the European Economic and Social Committee based on Article 262 of the EC Treaty to give an opinion on this matter.

2.2 The European Commission in its Communication ‘An Integrated Maritime Policy for the European Union’ aims before 2013 to ‘take steps towards a more interoperable surveillance system to bring together existing monitoring and tracking systems used for maritime safety and security, protection of the marine environment, fisheries control, control of external borders and other law enforcement activities’.

2.3 The EU has already established a number of surveillance initiatives integrating more than one sectoral activities: Vessel Traffic Monitoring including data on ships' movements and cargoes are collected and exchanged between Member States, SafeSeaNet (Directive 2002/59/EC) (1), an exchange of maritime data between Member States' maritime authorities aims to prevent accidents, marine pollution as well as to increase the efficiency of the response in case of incidents or accidents at sea.

2.4 To that extent, the European Index Server (EIS) is operated and STIRES (SafeSeaNet Traffic Information Relay and Exchange System) is under development. In addition, short range maritime traffic data are currently collected and long range data will in the future be available on demand from the EU Long Range Identification and Tracking Data Centre (EU LRIT DC - Resolutions of the IMO Marine Safety Committee MSC 202 (81) and MSC 211 (81), amending the International Convention of Safety of Life At Sea, 1974 (SOLAS)) in cooperation with Member States. Furthermore, the development of the European Border Surveillance System (EUROSUR) envisages an integrated surveillance solution for the EU.

2.5 Further to the above, this Communication considers all the additional relevant actions taken by the EU, including the creation of the European Maritime Safety Agency (EMSA), the European External Borders Agency (FRONTEX), European Defence Agency (EDA) and the Blue Book for Transport. In parallel two pilot projects to test in a theatre of operations how integrating maritime surveillance can work in practice are being launched. One in the Mediterranean basin and another in the Northern European sea basins.

2.6 The goal of the proposed IMS policy is not to create an additional surveillance system, but to set up interfaces and subsequently integrate existing systems across sectors and borders, in order to improve the effectiveness of national authorities in charge of implementing surveillance actions and increase the cost-efficiency of actions carried out at sea. Work towards the development of a secure cross-sectoral network that can meet the ever increasing requirements for the provision of a common and recognised picture will need to carefully plan access rights and security provisions of users.

2.7 The EESC recognises that materialising an IMS includes complex, multifaceted and numerous activities which often overlap and but are to the interest for the EU as a whole.

2.8 The EESC welcomes the Communication as a basis for integrating the currently existing stand alone systems into a Common Information Sharing Environment that will be able to support the future European maritime transport policy, to safeguard the environment and European shipping services for both global and European trade as well as improving the daily life of EU citizens, especially those populating EU external sea border areas.

2.9 The EESC points out that this Communication comes at a critical time of serious challenges affecting maritime transport: (a) the world economic and financial crisis aggravating the structural and cyclical shipping crisis, (b) illegal immigration taking place especially in the southern and eastern EU borders, (c) illegal activities including trafficking, arms and drug trade, (d) sensitive material for military and nuclear installations all need to be monitored and confronted.

2.10 The EESC stresses also the fact that security and piracy issues affecting EU maritime services occurring in non EU waters (i.e. East Africa, Indonesia, etc) which have to be addressed and controlled.

3. Communication on the integration of maritime surveillance through a common information sharing environment for the EU maritime domain

3.1 As stated in a previous opinion (2) the EESC ‘endorses the proposals regarding the European network for maritime surveillance and the improved cooperation between Member States coast guards. Such measures will promote maritime safety and security, fisheries control and control of external borders and protect the marine environment. […] The EESC reiterates that a coordinated approach regarding bilateral ship boarding agreements with third countries is desirable to meet enhanced security considerations. It also urges EU action concerning the proliferation of incidents of armed robbery and piracy at sea against merchant vessels in South East Asia and Africa’.

3.2 The EESC welcomes the Communication and supports the range of possible measures whereby the EU could contribute to safer and more secure provision of services in the maritime domain. The EESC agrees in principle to this communication and welcomes further refinements that will add to the rapid materialisation of an IMS.

3.3 The Communication on an EU strategy on better integration of surveillance systems lays down four guiding principles towards the development of a common information sharing environment, that is: (1) An approach interlinking all user communities, (2) Building a technical framework for interoperability and future integration, (3) Information exchange between civilian and military authorities, and (4) Specific legal provisions to materialise this Common Information Sharing Environment. Since this communication is at level of principles, the opinion will be limited to a set of proposed principles. It remains of course, that further refinement would be required to turn these principles into legislative actions.

3.4 The EESC acknowledges that due to the global character of European shipping, situational awareness is significantly important because (a) the ship’s movement is a spatial and temporal dynamic system, (b) safety, security and environmental aspects are not border constrained, and (c) decisions taken by one entity might affect other systems.

3.5 It should be noted that there are two concerns to be resolved, the public policy framework and the system workability. The implementation of an IMS might be hindered by confidentiality or other concerns at Member States level, thus the IMS must be refined to a clearly workable application.

3.6 The EESC considers that there are three major issues in materialising the IMS: legal, technical/technological and managerial issues. The most important legal issues seem to relate to confidentiality, with respect to the mixture of personal, business and military data. In addition, data (security) policies may prohibit or restrict the sharing (or further use) of certain data.

3.7 Regarding confidentiality, the provisions of key monitoring and surveillance instruments qualify a significant amount of maritime reporting and surveillance data as (commercially) confidential. As a consequence, the processing of these data will be affected by the duty of confidentiality and professional secrecy of the persons authorised to have access to the data.

3.8 Current systems have a uni-sectoral nature but they are hampered by confidentiality issues. Extending data sharing beyond that sector might induce further challenges and questions concerning confidentiality given the range of additional actors that will be involved.

4. Specific comments

4.1 The EESC agrees and supports the principles set in the integrated maritime surveillance communication.

4.2 The EESC recognises the need for further analysis along policy, legal, market and technology perspectives that would lead to a specific action plan for the IMS implementation, emphasising the legal and technology challenges. This analysis will develop a specific implementation roadmap with an exact timeframe and might be based on relevant experience gained from projects like SafeSeaNet, Freightwise, e-Freight and AIS as well as from all relevant initiatives.

4.3 The EESC reiterates the importance of examining the results of the currently running pilot projects prior to undertaking certain decisions. Pilot projects have to be targeted both to business settings and administrations operating in representative EU maritime domains. In addition, these pilot projects should also report on the long term sustainability of the IMS. To that extent, the launching of additional pilot projects will benefit our understanding of the issues in developing the IMS. Furthermore, specific time frames should be set and monitored for the timely completion of these pilot projects.

4.4 The EESC would like to point out that the IMS strategy could draw lessons as to implementation of data sharing from other practices in the transport sector, including the Single Transport Document, which is considered to be the equivalent information sharing scheme from the business perspective (a transport document is required today to follow the carriage of goods (Regulation (EEC) 11/1960 and Directive 92/106/EEC); according to the Freight Transport Logistics Action Plan, a Single European Transport Document will be established that can be used in all transport modes enhancing the framework offered by multimodal waybills or multimodal manifests). In addition, information exchange should be based on the most widely used language in the maritime sector.

4.5 The IMS sustainability must be ensured through the provision of built-in expandability in order to accommodate the integration of future stand-alone surveillance systems.

4.6 Regarding the sharing of information the EESC advocates in favour of the principle ‘as much information as needed on a need to know basis in line with conditions of use […]’ instead of ‘[…] as much information as possible […]’. Information has to be shared to all user communities based on a clear framework ensuring the protection of personal data and other sensitive data as well. Additionally, it is imperative to control the disclosure beyond the ‘grantee’ organisation, i.e. to follow EU legal frameworks.

4.7 Regarding technical aspects, the EESC recommends open source platforms to support the design, development, deployment and maintenance of relevant solutions. The core of the system should provide: (a) maritime domain ontology for automated data exchange; (b) tools for the design, simulation, performance analysis and optimisation of surveillance solutions; (c) registry of services; (d) tools to help resolve interoperability conflicts; (e) mechanisms for automated discovery and integration of suitable services; (f) secure interoperability; and (g) controlling and auditing mechanisms.

4.8 The EESC consents with the proposed layered system architecture. This approach will enable the cutting edge ‘cloud architecture’ currently used by all IT developers. Nevertheless, it should be born in mind that such architectures are more security breach prone and thus increased security mechanisms should be adopted. However an intra-organisational hierarchical decision making and data access framework might improve data confidentiality.

4.9 The EESC acknowledges the availability of technological means to collect, homogenise and disseminate meaningful data to all interested parties and urges the EU to define the common platforms to be effectively used by all interested parties in all Member States. Additionally, regarding the prevention of duplication of data collection and storage, mechanisms should be developed to avoid problems.

4.10 Regarding the first principle set in the Communication, the EESC proposes an active attempt towards establishment of common standards and data rules both at a sectoral and at a functional level in order to improve data quality.

4.11 Given the fact that the maritime domain is broad, data security may be potentially weakened from a flexible information sharing environment and the potential threat this implies.

4.12 The EESC considers that technical interoperability is important and should lead to a facilitation of data exchange by all interested industrial and governmental stakeholders (including Administration to Administration - A2A, Administration to Business – A2B, and Business to Business - B2B communications).

4.13 Regarding the third principle set in the Communication, the EESC acknowledges that further analysis for the integration of civilian and military interconnection is necessary in order to better integrate data and to facilitate better use of the information. The EESC agrees that surveillance information should be shared between civilian and military authorities. The EESC repeats the necessity for establishing underlying mandates; common standards and operating procedures for access to and use of the relevant information should be in place to allow for a legal two-directional information exchange where data usage is bound by community laws.

4.14 Regarding the fourth principle set in the Communication, the EESC would like to stress the need for further analysis regarding the protection of personal data in the scope of this document and urges the EU to reconsider and adopt all necessary actions that ensure the security of sensitive data. Although this implies a burden to this process, i.e. building up such system, it is considered to be an essential principle.

4.15 The EESC concurs with the sectoral approach for information sharing proposed in the directive. In any case, specific guidelines should be set for granting access rights to competent authorities and to authorised personnel.

4.16 The EESC invites the Commission to further investigate the existence of bilateral agreements on information sharing between EU Member States and third countries and, if necessary, activate enforcement of the acquis communautaire (Regulations 4055/86 and 4058/86).

4.17 With regard to the issue of space generated data specific mention is made of the GMES. Besides that, the EESC would also like to see in the communication specific mention on the use of the Galileo navigation system.

4.18 The EESC understands that processing personal data for military, state security and criminal law enforcement currently remains outside of the general legal framework for data protection. The EESC concurs with the conclusions of a study (European Commission, ‘Legal Aspects Of Maritime Monitoring & Surveillance Data’ – Final Report Framework Service Contract, No. FISH/2006/09 – LOT2) commissioned by the Commission on legal aspects of maritime surveillance data which clearly states that data protection is an outermost obligation for the EU and has to be addressed both at Community and Member State level. It is anticipated that advanced safeguards are required in case it would be envisaged to share personal data between authorities falling within the scope of the existing legal framework for data protection (e.g. fisheries authorities) and authorities (currently) falling outside that scope (e.g. military, state security or law enforcement authorities).

4.19 The EESC considers very important the development of a legal framework addressing issues, such as data quality, further use of data, data security, access granting mechanisms, nature of data involved, purposes (and methods) of the exchange, potential recipients of data, necessary safeguards respecting the confidentiality and security of certain data, protection of personal data and relevant procedures among others.

4.20 The EESC believes that data should be shared on a ‘what, why, for how long and with whom’ framework. Especially for the former, it is critical to define the designated authorities that will be entitled to control, disclose and receive the data both within EU and more cautiously with authorities outside EU.

4.21 The EESC asks the European Commission to publish an annual report on the implementation and results of its maritime surveillance activities.

Brussels, 14 July 2010.

The President of the European Economic and Social Committee

Mario SEPI

(1) OJ L 208, 5.8.2002, p. 10-27.

(2) EESC opinion on ‘An Integrated Maritime Policy for the European Union’, OJ C 211, 19.8.2008, p. 31-36.

11.2.2011

Official Journal of the European Union

C 44/178

Opinion of the European Economic and Social Committee on the ‘Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on “Transforming the digital dividend into social benefits and economic growth” ’

COM(2009) 586 final

2011/C 44/33

Rapporteur: Ms DARMANIN

On 28 October 2009 the European Commission decided to consult the European Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on the

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on ‘Transforming the digital dividend into social benefits and economic growth’

COM(2009) 586 final.

The Section for Transport, Energy, Infrastructure and the Information Society, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 1 June 2010.

At its 464th plenary session, held on 14 and 15 July 2010 (meeting of 15 July 2010), the European Economic and Social Committee adopted the following opinion by 141 votes to 1 with 1 abstention.

1. Conclusions and recommendations

1.1 The EESC welcomes the Commission Communication on Transforming the digital dividend into social benefits and economic growth. This is a very important step forward in fulfilling one of the EU2020 objectives of a Smart, Sustainable and Inclusive growth, whereby the Digital Dividend will be an integral part of the Digital Agenda for Europe.

1.2 The EESC in fact supports the Commission in ensuring that the 2012 deadline for the freeing of the spectrum is kept by the Member States. The EESC understands that a few countries may have difficulties and realistic reasons for not keeping to such a deadline. However the non-conformance to the deadline should be based on valid reasons and the period after January 2012 for their compliance should be as short as possible.

1.3 The EESC recognises that the Digital Dividend, resultant from a very limited resource that is spectrum, could, provided that its use is properly defined and guaranteed, have significant economic and social benefits for Europe. These would further enhance the single European market and could furthermore increase economic, social and territorial cohesion, thus ensuring that some of the social aims advocated within the EU are reached.

1.4 The EESC also identifies this project, the flagship for the Digital Agenda, to also be a strong tool for the promotion of the benefits of the EU. In an era where EU scepticism is on the rise and where the people do not fully grasp the potential of a unified Europe, this can be a clear and tangible benefit for both individuals and enterprises. This project shall also enhance the level of consumer protection and the process should not result in unnecessary costs to the end user.

1.5 The EESC urges the Commission to initiate an integrated communication strategy which would show the motivation of changing from analogue to digital and the benefits derived there-from.

2. Introduction/Background Information

2.1 The switchover from analogue to digital terrestrial TV in Europe will free up highly valuable radio frequencies due do the greater efficiency of digital broadcasting transmission. This ‘digital dividend’ has great potential for the provision of a wide range of services.

2.2 It represents a unique opportunity for Europe to meet the growing demand for radio spectrum, particularly to provide wireless broadband to rural areas, thereby bridging the digital divide, and to stimulate the take-up of new wireless services. It can therefore contribute significantly to the goals of competitiveness and economic growth and satisfy some of the social, cultural and economic needs of European citizens.

2.3 The digital dividend spectrum will become available throughout Europe within a relatively short space of time, as all Member States should complete the switch-off of analogue TV by 2012 at the latest.

2.4 The Commission has recognised the importance of high-speed broadband infrastructure for many of the developments that are crucial to the transition to a knowledge-intensive, low-carbon digital economy. Already, the Economic Recovery Plan, which has been endorsed by the Council, has set a target of 100 % broadband coverage to be achieved between 2010 and 2013.

2.5 New opportunities for innovation will be created. The most obvious opportunities for innovation are in broadcasting, as the digital dividend offers large amounts of spectrum for broadcasters to develop their services. There will also be ample opportunities in service-oriented sectors, providing significant social benefits such as health care, e-learning or e-government, e-accessibility and in areas where small and medium-sized enterprises can take advantage of better access to the economy.

3. Economic and social benefits within the digital dividend

3.1 The potential economic impact will depend on the actual level of future demand for new services, which is difficult to quantify at this stage. Nevertheless, a recent Commission study estimates the potential benefit from EU coordination of the digital dividend spectrum as a whole, if achieved before 2015, to range between EUR 20 and 50 billion (over a 15 year period) compared to EU countries acting alone. This estimate takes into account the potential new applications, such as advanced terrestrial broadcasting and wireless broadband.

3.2 Harmonised conditions within the EU will benefit the technology industry, since most of the equipment used will be standardised and streamlined. Furthermore, the potential for innovation within the sector will increase substantially and will be more targeted. This is particularly beneficial for the industry especially the players that have been investing heavily in innovation.

3.3 The main social impact derived from freeing up the spectrum would be greater broadband access for all. Even today, rural areas are sometimes deprived of proper internet access. Through the digital dividend, internet could be accessible to all and internet services will be more widespread, thus consolidating even further the internal market. Since broadband will be available also in most rural areas, the EESC envisages that there shall be more scope for enterprises not to require to be within urban zones, consequently bringing about delocalisation of industry that till today still conglomerates in urban areas due to communication and logistic reasons. The impact of such delocalisation would be of possible more employment in rural areas and also environmental (since overpopulation within urban zones is not conducive to sustainable practices). However, the Committee reiterates its position maintained in different opinions regarding the need for a universal broadband service for all citizens with accessibility measures for unimpeded access to disabled persons.

3.4 Customer choice will be enhanced, since there will be more choice of TV channels, together with premium quality services, at the same time as less spectrum is used. Furthermore, the potential of viewing TV content through mobile multimedia gives a new dimension to TV accessibility. Furthermore the digital dividend will bring about a considerable improvement in the quality of life of the users. The EESC points out that Member States should guarantee that consumers remain adequately protected in the course of the ASO and ensure that unnecessary expenses are not pushed on to the consumer.

3.5 An additional benefit derived from the digital dividend is demonstrating the potential and advantages of a single Union whose countries work on a same standard. In a period where EU scepticism is on the increase the digital dividend is another tangible benefit the whole of the EU would be enjoying.

4. Necessary considerations

4.1 The analogue TV switch-off and the subsequent digital TV switch-on will undoubtedly produce a much better use of spectrum. In fact, with digital TV, every Radio Frequency (RF) channel (8 MHz-wide) can broadcast on average five or six TV programmes. This means that after the complete transition to digital TV, the spectrum used for TV broadcasting purposes should drop to one fifth or one sixth of that previously needed. In countries where Single Frequency Networks (SFN) are introduced, the spectrum gain may even reach a factor of ten after an optimal roll-out of the various TV networks.

4.2 There is no doubt that the spectrum freed up is a precious resource, especially in countries where cable TV is barely developed and thus the radiofrequency spectrum is indeed a limited resource. This newly available spectrum can be optimally used for wireless broadband services, which are particularly precious for rural areas where there is no doubt that the absence of high-speed internet services is a cause of economic inertia and social exclusion. The Committee believes that these services will serve to deepen the economic, social and territorial cohesion of these areas.

4.3 The reason for the switch over from analogue to digital may not have been evidenced clearly in the past. The public may have the perception that such a switch over is purely for commercial gain of the TV operators, as there may be a cost to the change in the household equipment. Hence it is crucial that a proper communication strategy is prepared and implemented so that the real reason for this switch over is known.

4.4 It is crucial that all the Member States share a common band in order to allow a universal service all over the EU and to all European citizens. The optimal choice is the 800 MHz band, which is located in the UHF sub-band 790-862 MHz.

4.5 CEPT (European Conference of Postal and Telecommunications Administrations) is responsible for producing the technical specifications for the harmonisation of the 800 MHz band, in close cooperation with the various National Regulatory Authorities (NRAs), which are well aware of the current spectrum issues in their countries.

4.6 In order to open the 800 MHz band to wireless broadband communication, it is essential that Member States complete the ASO (Analogue Switch-off) procedure by a given date. It seems that the current deadline of 1 January 2012 will not be met by all member states; however it is essential that the one who do not make the ASO in time do so in a relatively short period within 2012.

4.7 Because of their critical financial situation, many TV operators that are currently forced to switch on digital TV transmitters in those Member States which are implementing the ASO are not able to purchase equipment that performs well (typically manufactured in the EU). In these difficult circumstances, they find themselves forced to purchase cheaper but also lower-performance and less reliable broadcasting equipment, typically manufactured in the Far East. As a result, this equipment could already be out of commission after only two or three years, thus forcing the broadcasters to once again purchase new broadcasting equipment (hopefully of higher reliability and performance).

4.8 Within the current economic scenario TV operators, particularly the small operators, may be struggling so as to finance the changing of the equipment due to the digital switch over. Hence the EESC believes that some form of pre-financing structures should be put in place so as to assist such SMEs in the adaptation process to the new technologies. Such assistance may not necessarily be in the form of grants, it may be linked to the availability of funds prior to the investment which shall then be returned over a feasible period, as in the case of loans. Furthermore guarantee schemes ought to be also targeted at assisting SMEs within the field.

4.9 The overall result may be poor TV Quality of Service (QoS) for the end users and an economic loss for the broadcasters, who, due to the temporary financial difficulty, are forced to invest twice. A longer timescale for the ASO process or financial help to broadcasters would avoid these problems and enable a harmonised network implementation in all Member States.

4.10 Member States will be recommended to free the 790-862 MHz sub-band for the digital dividend, but they will not be obliged to do so. If a particular country's spectrum situation is such that all TV broadcasting services cannot be packed into the remaining part of the UHF spectrum, the country in question will be allowed to keep TV broadcasting services in the 800 MHz band. Countries may also choose to accommodate simultaneous operation of TV broadcasting and wireless broadband services as a compromise solution.

4.11 Since all Member States are likely to use the 800 MHz band for wireless broadband services on the long term, it is essential to develop appropriate technical specifications in order to avoid harmful ‘border effects’ which would certainly damage the wireless broadband services because of the lower power levels used for the wireless cellular networks.

4.12 The same problem arises where non-EU countries at the borders of the EU are concerned. In these countries the existing high-power broadcasting services in the 800 MHz band will most likely interfere with the wireless broadband services adopted by the EU neighbouring countries. When an interference problem arises with an adjacent non-EU country, the only solution is to negotiate an agreement with that country on the frequency allocation of their TV transmitters located near the border with the EU, though this may be no easy matter.

4.13 The optimal target for the EU Member States adopting the 800 MHz band for the purpose of the digital dividend is to establish a proper balance between the economic and social benefits generated by the use of the spectrum by telecom operators (which will benefit from new available bandwidth) and by broadcasting operators (which will benefit from a better use of the available bandwidth and of additional high-added-value services such as interactive applications including e-health, e-learning, e-government, e-accessibility and so on).

4.14 Member States should work towards the implementation of public utility services through the digital TV network and at the same time allow for easily accessible services with the new mobile broadband services created thanks to the digital dividend band. If they do this, their policies will operate in a neutral way, guaranteeing the economical interests of both broadcasting and telecom operators.

4.15 A very interesting aspect of the new digital dividend implementation is the fact that TV services will be increasingly available over new generations of mobile telephone networks (3G and higher). This means that in some ways mobile operators would offer the same services as those typically offered by traditional TV broadcasters, thus opening up a new competition scenario. It is advisable, however, to avoid implementing hybrid networks managed simultaneously by broadcasters and telecom operators. This will allow the two business entities to remain entirely independent and prevent business models that may not be consumer friendly.

4.16 The interactive applications that may be offered by TV broadcasters within their new digital programmes may be developed on any standard for interactive TV services. Nevertheless, it is advisable to use technologies such as the MHP standard (Multimedia Home Platform, an open middleware system standard designed by the DVB project for interactive digital television) since it is European technology and also completely open. It thus requires no royalties and offers economic advantages to operators and, above all, to end users. Other technologies are also available, but it is advisable to select an open standard, whichever that might be, for the sake of end-user accessibility to this new technology.

4.17 The more efficient way to achieve the ASO in the EU is co-ordinated cooperation between Member States in order to achieve a continuous exchange of experience, especially in the field of digital TV network planning and of optimal spectrum efficiency. We believe that national public broadcasters should play a fundamental role in this intra-EU exchange. In fact, their ‘public status’ implies that they should offer a public service. National public TV operators should therefore be available to offer consultancy services to the public TV operators of other (EU and non-EU) states. A typical benefit of this approach would be quick and effective training for TV operators in new Member States, which are usually at an earlier stage in the development of their digital TV networks.

4.18 An element to be considered in the process of opening the 800 MHz band to the new wireless broadband services is that the TV broadcasters that are currently broadcasting in the VHF band may have to move (at a date yet to be determined) to the UHF band in the case the corresponding VHF channels would be used by Digital Audio Broadcasting (DAB). The transition to digital radio will not in itself contribute to the digital dividend because it is not yet clear if traditional analogue radio broadcasting will be switched off. Moreover, even if it is switched off, the portion of the freed band is too small to significantly contribute to the digital dividend. Nevertheless, the new DAB services will certainly use the same VHF band currently used by TV operators, so this issue will further contribute to the spectrum squeezing in channels 21-60 of the UHF band.

4.19 It should also be noted that, in the process of opening the 800 MHz band to the new services, the TV broadcasters which currently use channels 61-69 (in the 800 MHz band) will have to move to another channel in the UHF band, while the broadcasters which are at present using channels 21-60 will not be obliged to make any change. This is a clear disadvantage for broadcasters using the 800 MHz band and they will need to spend money and time. At the same time, they will be forced to switch off their transmitters during the channel change, thereby also suffering the temporary loss of on-air advertising. For these disadvantaged broadcasters, then, the basic equity principle would require financial help to be provided according to the provisions of the Treaty on State Aid.

4.20 To achieve an optimal spectrum efficiency, it is strongly recommended that the new technologies adopted (such as MPEG-4 encoding and DVB-T2) shall make it possible to further carry [or transmit] TV programmes into a narrower band. At the same time, the adoption of these new technologies should not have a strong impact on the end users' costs, otherwise the universal accessibility of the new services would be seriously impaired.

4.21 Another useful technology to optimally exploit the (scarce) spectrum resources is the implementation of Single Frequency Networks (SFN). With this technology a regional network can be implemented using a single spectrum channel, while with standard multi-frequency networks at least three or four frequencies are needed for medium-sized TV networks. In order to use a single frequency, all the transmitters of the network must be synchronised by using a common time reference. The only method currently used is the Global Positioning System (GPS), which is a military application wholly managed by the USA. This means that all the SFN Digital TV networks are 100 % dependent on this system, which might be altered or switched off at any time by the USA authorities, thus creating a huge problem for these TV operators.

4.22 The GPS, however, is not the only system that enables network synchronisation. Other potential alternative systems could be a source of common synchronisation. The EU might work towards the rapid completion of the GALILEO project, which could become a European alternative to GPS and would allow the complete independence of EU Member States from a US military system.

4.23 One of the proposed systems to optimally exploit the digital dividend band is to use intelligent wireless broadband equipment capable of automatically searching for free radiofrequency bands (even between existing TV broadcasting services) and dynamically use the available bands by continuous frequency tracking during their normal operation. These systems (called ‘cognitive radio’) would certainly be a perfect technical solution for maximising the digital dividend, but the risk is that the final cost to the end user would increase to a level which would prevent universal accessibility to the digital dividend.

4.24 In order to open the 800 MHz band completely for the new wireless broadband services, all the low-power transmission systems used for entertainment or sport events (the ‘wireless microphone’ systems) should be relocated to frequencies outside of this band to avoid harmful interference to the new services of the digital dividend. These systems typically operate as secondary uses in idle spectrum left between two active broadcasting coverage areas. Some of these systems are for professional use (e.g., the ones in operation during the Olympic Games or during official music concerts) and use regularly licensed portions of the UHF spectrum. Many others systems operate under general authorisation which does not require individual licences. Thus a careful regulation of these services should be planned in a co-ordinated manner at EU level in order to avoid the digital dividend band being impaired by residual interferers in the spectrum even after the Analogue TV switch-off has been successfully accomplished.

4.25 Another very delicate situation to deal with is the presence of military UHF services in some Member States and/or in some neighbouring non-EU states. These services will be another source of interference for the new communication services of the digital dividend. Careful negotiations should be carried on with the military authorities of the relevant countries with a view to shifting these existing services to different portions of the radiofrequency spectrum.

Brussels, 15 July 2010.

The President of the European Economic and Social Committee

Mario SEPI

11.2.2011

Official Journal of the European Union

C 44/182

Opinion of the European Economic and Social Committee on the ‘Proposal for a Regulation of the European Parliament and of the Council on the Citizens’ Initiative’

COM(2010) 119 final — 2010/0074 (COD)

2011/C 44/34

Rapporteur-general: Anne-Marie SIGMUND

On 27 April and 19 May 2010 respectively, the Council and the European Parliament decided to consult the European Economic and Social Committee, under Article 304(1) of the Treaty on the Functioning of the European Union, on the:

Proposal for a Regulation of the European Parliament and of the Council on the Citizens' initiative

COM(2010) 119 final — 2010/0074 (COD)

Given the urgent nature of the work, the European Economic and Social Committee appointed Ms Anne-Marie SIGMUND as rapporteur-general at its 464th plenary session, held on 14 and 15 July 2010 (meeting of 14 July 2010), and adopted the following opinion by 155 votes to four.

1. Conclusions and recommendations

1.1 The Committee welcomes basic principles of the Commission's proposal, especially the three-stage approach of formal registration, an admissibility check of the subject-matter, and political evaluation.

1.2 The Committee sees its role in two phases: firstly, as a facilitator of embryonic citizens' initiatives, enabling those involved to network and possibly to meet, etc.; secondly, as an institutional mentor, issuing an opinion to assist the Commission in evaluating a successful initiative, holding hearings, and so on. The Committee will also take part in publicity campaigns.

1.3 However, the Committee does have a number of improvements to propose, including:

—	a clearer reference to the values of the Union as grounds for turning down registrations;

—	scrapping the requirement for various identity numbers when an initiative is signed;

—	using the residence principle to classify signatories;

—	extension of the time-limit to eighteen months;

—	development of open-source software for online collection of signatures;

—	lowering the minimum number of Member States to 1/4;

—	lowering the threshold for an admissibility check to 50 000 signatories;

—	a review of the regulation after three years;

—	instigating inter-institutional cooperation.

2. Introduction

2.1 The Committee welcomes the basic principles of the Commission's proposal for a regulation on the European citizens' initiative. This opinion complements that on ‘The implementation of the Lisbon Treaty: participatory democracy and the citizens' initiative (Article 11)’ (1), adopted on 17 March 2010, and only addresses issues where the Committee sees further room for improvement.

2.2 The Committee draws particular attention to the intentions of the European Convention, which explicitly sought – as part of the ‘democratic life of the Union’ – to create an agenda-setting instrument for the public which would be on an equal footing with the Parliament and the Council.

3. Suggested amendments to the proposal for a regulation

3.1 Registration of proposed initiatives (Article 4)

3.1.1 A three-step approach

The Committee expressly welcomes the Commission's proposed three-step approach, which comprises:

—	formal registration of an initiative,

—	a legal admissibility check once a quorum has been reached, and

—	a political evaluation of a successful initiative.

The admissibility check at the time of registration, as proposed by various parties, seems questionable, since it will delay or hinder the start of many initiatives. It would also lay the Commission open to charges of making assessments prematurely, or even of censorship.

On this point, the Committee stresses that the citizens' initiative is not only an innovative, transeuropean element of direct democracy, but also an extremely important communications instrument with which to liven up the European political debate. It is the only way of feeding into the European discourse a broad range of suggestions and ideas which would otherwise never reach the stage of signatures being collected – and this in itself is worthwhile.

3.1.2 Required information

The Committee supports the Commission's proposal regarding the information required (Annex II). This is in the interests of the greatest possible transparency and hence the acknowledged legitimacy of the proposed initiative. Whether the specific legal basis is mentioned should be a matter for the organisers and not compulsory.

3.1.3 Formal registration

In the Committee's view, the criteria set out in the proposal as grounds for rejecting a registration (‘improper’, ‘abusive’, ‘devoid of seriousness’) are unenforceable. These terms are also too open to interpretation.

For this reason, the Committee proposes that the only matters to be checked administratively at the formal registration are whether:

—	there is a unity to the initiative proposal; in other words, whether it does not seek to cram several disparate issues into a single initiative;

—	it includes any phrases that are defamatory of individuals or groups;

—	it does not infringe the Charter of Fundamental Rights and the Union's values (Article 2 TEU).

3.1.4 Appeals

As a general principle, of course, the right of citizens to good administration (Article 41 of the Charter of Fundamental Rights) must be respected. If registration is denied, the organisers could appeal on this basis to the European Ombudsman or, of course, if all else fails, take legal proceedings themselves.

The Committee thinks that the regulation should make this clear – at least in the explanatory memorandum – for the sake of transparency.

3.1.5 Subsidiarity monitoring

The linkage with the subsidiarity principle called for by various parties appears to the Committee unnecessary. The Commission will in any event check for compliance if it decides to propose legislation as the result of a citizens' initiative.

3.2 Collection of statements of support (Article 5)

3.2.1 Identity numbers

In the Committee's view, the proposed form (Annex III) asks for a disproportionate amount of personal data, which will undoubtedly discourage people from signing. For this reason, it is against these numbers being required. It is unlikely that people who are passing by on the street and are persuaded by some issue will get out their identity cards or will have an identity number memorised. The Committee also draws attention to the negative opinion of the European Data Protection Supervisor (2) on this issue.

Since not all Member States require or know these numbers, and each Member State requires very different documents (3), this would lead to a patchwork of required information. The same conditions for the collection of signatures everywhere would thus cease to apply and the principle that all European citizens be treated equally would be infringed, thus frustrating the goal of having a uniform procedure.

The Committee therefore takes the view that the data required to establish identity – name, address, date of birth and nationality – must suffice. To this should be added a declaration of honour that the person concerned has signed the initiative only once.

3.2.2 Residence principle

Generally speaking, the residence principle should be used to determine to which country EU citizens are considered to belong, regardless of their nationality.

EU citizens who have their place of residence in a third country would be assigned according to the nationality they give.

3.2.3 Time-limit

In the Committee's view, the twelve-month time-limit proposed by the Commission is too short to enable the successful completion of a Europe-wide initiative. It therefore continues to advocate a period of eighteen months.

3.3 Online collection systems (Article 6)

The EESC expressly welcomes the envisaged possibility of online collection and endorses the Commission's view that the utmost care will be needed in setting this up. Given the fact that there is as yet no comparable system anywhere in the world for collecting signatures in an initiative process (in contrast to legally much less binding public petitions), the Committee thinks the following aspects should be explored:

—	The Commission must encourage the development of open-source software for online initiatives and make it generally accessible.

—	Initiators would have to have this software certified in the Member State in which the data gathered using the online system is stored.

—	Additional electronic identification procedures, such as using a verification email, should make it possible to ensure that checking is reliable.

—	The signatory would tick a box to confirm that he has only signed once.

3.4 Minimum number of signatories per Member State (Article 7)

3.4.1 Number of Member States

The EESC stands by its proposal of 1/4 of Member States. This will reflect the equal standing of parliament and the public by using the same principle as that followed in establishing European political parties (4). The hurdles to be surmounted by a European citizens' initiative cannot be higher than those for registering a European political party.

3.4.2 Number of signatories per Member States

The Committee expressly welcomes the proposed minimum number system (Annex I) and its degressively proportional approach.

According to the residence principle (see point 3.2.2), those with dual nationality or EU citizens living in another EU country should also be counted in their declared country of residence. Cases of people signing twice should in practice be very limited and this should not cast doubt upon the instrument as a whole.

3.5 Decision on the admissibility of a proposed citizens’ initiative (Article 8)

3.5.1 Number of required signatures

The Committee supports the Commission's three-stage approach. However, the Commission's figure of 300 000 signatures before an examination for admissibility is conducted is far too high. It places a very high hurdle in the way of the organisers – and just as high would be the level of frustration experienced by signatories if they were to be told that the initiative was not even admissible.

Instead, the check should take place once 50 000 signatures have been collected (without verification) from three Member States and be completed within two months at the latest. During this time, the organisers can continue collecting signatures.

3.6 Verification and certification of statements of support by the Member States (Article 9)

The Committee agrees that random checks are reliable in the evaluation process.

3.7 Submission of a citizens' initiative to the Commission (Article 10)

In the interest of the greatest possible transparency, each signatory should be able to find out who is organising and funding the initiative. The Committee therefore reiterates its call for the organiser to provide information about the funding and support behind a citizens' initiative when signatures are being collected.

3.8 Examination of a citizens' initiative by the Commission (Article 11)

3.8.1 Equal standing with initiative procedures of the Parliament and Council

The Committee asks that citizens' initiatives be treated by the Commission in the same way as initiatives proposed by the Parliament or the Council under Article 225 TEU and Article 241 TEU respectively. They should acquire the same standing.

3.8.2 Right to a public hearing

Since the EU citizens' initiative is also a communications tool intended to improve the dialogue between the public and the European Commission, a public hearing should be held following the submission of a successful initiative. The EESC is ready to be of help in this or, for example, to organise such a hearing itself. In this way, the Committee would be fulfilling its role as a bridge between the EU and the public.

3.8.3 Informing the consultative bodies

The Commission's communication on how it will proceed further should also be addressed to the European Economic and Social Committee, as well as to the Committee of the Regions.

3.9 Review clause (Article 21)

Given the lack of experience with this new, transnational instrument, the Committee recommends that the regulation be reviewed after only three years. The Commission should also consult the Committee on that occasion.

3.10 Entry into force of the regulation (Article 22)

The Committee endorses the date proposed by the Commission for the entry into force of the regulation, even if, for example, not all the details regarding online collection have been finalised. The public's expectations of this new instrument are so high that it should enter into force as swiftly as possible.

3.11 Other questions to be resolved

3.11.1 Financial support

The Committee reiterates its call for the Commission to give some measure of financial support to a citizens' initiative that passes the admissibility examination once 50 000 signatures have been collected.

3.11.2 Translation

The Committee thinks that, once a citizens' initiative is registered, the Commission's services should translate a brief summary of its subject-matter (no more than 800 characters, in line with Annex II) into all official EU languages.

After the first 50 000 signatures have been collected and the initiative formally admitted, the Commission should undertake to have the whole text of the registered initiative translated into the official languages of the Union.

4. Specific EESC proposals

The Committee draws attention to the offer made in its opinion of 17 March 2010 (referred to above) and sets this out in detail below.

4.1

Communication and information

The Committee stresses the need to conduct a thorough publicity campaign as soon as the regulation comes into force. The EU institutions should work together on this and coordinate their approach. The Committee is already at work on an information brochure designed to explain to the public and civil society organisations not only what the citizens' initiative has to offer, but also the nature of consultation and civil dialogue. It is also planning a conference of relevant stakeholders as soon as the regulation is adopted. There could also be further initiatives – aimed at schools, for example, to raise the awareness of the younger generation.

4.2

Inter-institutional cooperation

It is important that the staff of the EU institutions and consultative bodies dealing with the citizens' initiative coordinate their work closely to make sure that people's need for information is efficiently met. The synergy effect this seeks to achieve – while respecting the different competences of all – is really needed if we want the citizens' initiative to become an effective tool in the service of a European model of modern democracy.

4.3

The Committee's involvement

The Committee sees its role in two phases:

4.3.1

Phase 1: The Committee as facilitator

While an initiative is being planned or is in progress, the Committee is prepared to act – in its role as a platform for dialogue and information – as a facilitator enabling citizens' initiatives to network, perhaps meet, and so on, without this binding the Committee in advance to endorse the substance of the initiative.

4.3.2

Phase 2: The Committee as institutional mentor

In keeping with its core function – advising the Commission, Parliament and Council – the Committee can operate in this phase as an institutional mentor for a citizens' initiative. In this spirit if offers to support the Commission with an opinion while it is conducting its internal discussions and forming its views on a successful initiative. It is also prepared to offer its infrastructure for holding hearings on a successful initiative.

4.3.3

Strengthening of existing bodies

This offer – together with that made in the opinion of 17 March 2010 – may entail a reinforcement of existing Committee bodies and could also require extra resources in order to ensure an appropriate response.

Brussels, 14 July 2010.

The President of the European Economic and Social Committee

Mario SEPI

(1) Not yet published in the Official Journal.

(2) Opinion of 21 April 2010 on the proposal for a Regulation of the European Parliament and of the Council on the citizens' initiative (http://www.edps.europa.eu/EDPSWEB/).

(3) Regulation of the European Parliament and of the Council on the citizens’ initiative - General approach (10626/2/10 rev. 2).

(4) Regulation (EC) No 2004/2003 of the European Parliament and of the Council of 4 November 2003 on the regulations governing political parties at European level and the rules regarding their funding (OJ L 297, 15.11.2003).

		ISSN 1725-2423 doi:10.3000/17252423.C_2011.044.eng
Official Journal of the European Union		C 44

English edition	Information and Notices	Volume 54 11 February 2011

Notice No	Contents	page
	I Resolutions, recommendations and opinions
	OPINIONS
	European Economic and Social Committee
	464th plenary session held on 14 and 15 July 2010
2011/C 044/01	Opinion of the European Economic and Social Committee on How to foster efficient partnership in the management of cohesion policy programmes, based on good practices from the 2007-2013 cycle (exploratory opinion)	1

2011/C 044/02	Opinion of the European Economic and Social Committee on The impact of population ageing on health and welfare systems (exploratory opinion)	10

2011/C 044/03	Opinion of the European Economic and Social Committee on The added value of a common European asylum system both for asylum seekers and for the EU Member States (exploratory opinion)	17

2011/C 044/04	Opinion of the European Economic and Social Committee on The open method of coordination and the social clause in the context of Europe 2020 (exploratory opinion)	23

2011/C 044/05	Opinion of the European Economic and Social Committee on The Development of social welfare benefits	28

2011/C 044/06	Opinion of the European Economic and Social Committee on Child poverty and children's well-being (exploratory opinion)	34

2011/C 044/07	Opinion of the European Economic and Social Committee on The employment impact of industrial change caused by ecological, energy and climate-related challenges (exploratory opinion)	40

2011/C 044/08	Opinion of the European Economic and Social Committee on the subject Toward the wider uptake of electric vehicles (exploratory opinion on request of the Belgian presidency)	47

2011/C 044/09	Opinion of the European Economic and Social Committee on Energy poverty in the context of liberalisation and the economic crisis (exploratory opinion)	53

2011/C 044/10	Opinion of the European Economic and Social Committee on Building a sustainable economy by transforming our model of consumption (own-initiative opinion)	57

2011/C 044/11	Opinion of the European Economic and Social Committee on Consumer information (own-initiative opinion)	62

2011/C 044/12	Opinion of the European Economic and Social Committee on The Treaty of Lisbon and the Functioning of the Single Market (own-initiative opinion)	68

2011/C 044/13	Opinion of the European Economic and Social Committee on Innovation in tourism: Defining a strategy towards sustainable development in islands (own-initiative opinion)	75

2011/C 044/14	Opinion of the European Economic and Social Committee on Financial transaction tax (own-initiative opinion)	81

2011/C 044/15	Opinion of the European Economic and Social Committee on The Social Dimension of the Internal Market (own-initiative opinion)	90

2011/C 044/16	Opinion of the European Economic and Social Committee on Towards an EU policy to rationalise the web offset and rotogravure printing industry in Europe (own-initiative opinion)	99

2011/C 044/17	Opinion of the European Economic and Social Committee on Changes and prospects for the textile services sub-sector in Europe (own-initiative opinion)	105

2011/C 044/18	Opinion of the European Economic and Social Committee on Promoting sustainable green jobs for the EU energy and climate change package (own-initiative opinion)	110

2011/C 044/19	Opinion of the European Economic and Social Committee on Enhancing the effectiveness of European Union energy policy in favour of SMEs and particularly micro enterprises (own-initiative opinion)	118

2011/C 044/20	Opinion of the European Economic and Social Committee on The Development Cooperation Instrument (CDI) of the European Union: the role of organised civil society and the social partners	123

2011/C 044/21	Opinion of the European Economic and Social Committee on What role and perspectives for Africa's social economy in development cooperation? (own-initiative opinion)	129

2011/C 044/22	Opinion of the European Economic and Social Committee on European Technology, Industrial and Science Parks in the crisis management, preparation of the after-crisis and post-Lisbon strategy period (additional opinion)	136

	III Preparatory acts
	European Economic and Social Committee
	464th plenary session held on 14 and 15 July 2010
2011/C 044/23	Opinion of the European Economic and Social Committee on the Proposal for a Directive of the European Parliament and of the Council laying down a procedure for the provision of information in the field of technical standards and regulations and of rules on Information Society servicesCOM(2010) 179 final — 2010/0095 (COD)	142

2011/C 044/24	Opinion of the European Economic and Social Committee on the Report from the Commission — Report on Competition Policy 2008 COM(2009) 374 final	143

2011/C 044/25	Opinion of the European Economic and Social Committee on the Proposal for a regulation of the European Parliament and of the Council on jurisdiction, applicable law, recognition and enforcement of decisions and authentic instruments in matters of succession and the creation of a European Certificate of SuccessionCOM(2009) 154 final — 2009/0157 (COD)	148

2011/C 044/26	Opinion of the European Economic and Social Committee on the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions – Global Monitoring for Environment and Security (GMES): Challenges and Next Steps for the Space ComponentCOM(2009) 589 final	153

2011/C 044/27	Opinion of the European Economic and Social Committee on the Proposal for a Regulation of the European Parliament and of the Council setting emission performance standards for new light commercial vehicles as part of the Community's integrated approach to reduce CO2 emissions from light-duty vehiclesCOM(2009) 593 final — 2009/0173 (COD)	157

2011/C 044/28	Opinion of the European Economic and Social Committee on the Proposal for a Regulation of the European Parliament and the Council amending Council Regulation (EC) No 2007/2004 establishing a European Agency for the Management of Operational Cooperation at the External Borders of the Member States of the European Union (FRONTEX)COM(2010) 61 final — 2010/0039 (COD)	162

2011/C 044/29	Opinion of the European Economic and Social Committee on the Proposal for a Council regulation implementing enhanced cooperation in the area of the law applicable to divorce and legal separationCOM(2010) 105 final/2 — 2010/0067 (CNS)	167

2011/C 044/30	Opinion of the European Economic and Social Committee on the Proposal for a regulation of the European Parliament and of the Council on freedom of movement for workers within the UnionCOM(2010) 204 final — 2010/0110 (COD)	170

2011/C 044/31	Opinion of the European Economic and Social Committee on the Proposal for a Regulation of the European Parliament and of the Council amending Council Regulation (EC) No 861/2006 of 22 May 2006 establishing Community financial measures for the implementation of the common fisheries policy and in the area of the Law of the SeaCOM(2010) 145 final — 2010/0080 (COD)	171

2011/C 044/32	Opinion of the European Economic and Social Committee on the Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions - Towards the integration of maritime surveillance: a common information sharing environment for the EU maritime domainCOM(2009) 538 final	173

2011/C 044/33	Opinion of the European Economic and Social Committee on the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on Transforming the digital dividend into social benefits and economic growth COM(2009) 586 final	178

2011/C 044/34	Opinion of the European Economic and Social Committee on the Proposal for a Regulation of the European Parliament and of the Council on the Citizens’ InitiativeCOM(2010) 119 final — 2010/0074 (COD)	182