Sovereign Wealth Funds (debate)
President
the next item is the joint debate on the following oral questions:
oral question to the Council by Mrs Berès, on behalf of the Committee on Economic and Monetary Affairs, on the EU answer to the challenge of sovereign wealth funds - B6-0164/2008) and
oral question to the Commission by Mrs Berès, on behalf of the Committee on Economic and Monetary Affairs, on the EU answer to the challenge of sovereign wealth funds - B6-0165/2008).
Pervenche Berès
author. - (FR) Madam President, Madam President-in-Office of the Council, Mr Vice-President of the Commission, thank you for giving us the opportunity to hold this debate with the two institutions concerned. I hope, Mr Verheugen, that you will be able to report back to Commissioner Charlie McCreevy on the nature of our debate.
For a long time we have had active sovereign wealth funds in Europe, primarily the Norwegian fund, and yet until now none of the actions of this fund had posed us any problem. Two new events have shaken up the current situation, however. The first is the constitution of important reserves by oil monarchies and countries that have accumulated trade surpluses that feed these sovereign wealth funds. The second event is of course the subprime crisis, which has shed light on the strategic role these sovereign wealth funds could play.
Previously, when these funds were used to invest here and there, particularly in the United States, their strategic character was called into question. Now, when we look at the role taken over by sovereign wealth funds from investment banks in terms of injecting liquidity or own funds, we realise that they have instead become investors of last resort.
In these conditions, emotions come into play, and that is why we wanted to ask this question. It is also undoubtedly why, unlike the Commissioner responsible for the internal market, the President of the Commission himself felt it useful and necessary to publish on 27 February a document that forms the basis of our discussions today.
We run the risk of seeing a strategy being implemented in each of the Member States that, at the end of the day, would not help to tackle the reality, which is that sovereign wealth funds have today assumed a responsibility, an active role in the capital market. As a result, this new situation to some extent places obligations on them and on us in the dialogue we wish to hold with the managers of these funds.
Therefore, on behalf of the Committee on Economic and Monetary Affairs, we would like to raise five questions today.
Firstly, we are of the impression that the Commission's response up until now has been to say: 'Let each Member State implement its own strategy, in terms of the transparency and governance requirements relating to these funds, and at Community level we will simply verify whether the requirements in each Member State infringe the rules of the Treaty or the rules on the functioning of the internal market'.
That does not seem to us to be the correct strategy. In our opinion, in a case like this we should instead be working towards a proactive approach and establishing coordination at Community level: on the one hand to prevent unfair competition among Member States - for it is clear that there is to some extent a race between the Member States to see who can benefit most from the sure, long-term investment capacities of these sovereign wealth funds - and, on the other hand, to define and work together on strategic or sensitive sectors that need to be preserved.
The second question relates to the problem of the registration of these funds. Would it be possible to envisage at Community level registering these funds, just as we are currently considering doing for rating agencies?
The third question concerns the interpretation of Article 58, which provides for restrictions on the free movement of capital on grounds of public order. As far as the Council and the Commission are concerned today, is there one interpretation that should take precedence in this area? We would like further details on this.
The fourth question is as follows: is this not a debate that has an international dimension? In our opinion, the European Union would be much better equipped and better prepared to tackle the international dimension of this debate if we had to some extent defined the position of our base camp, the position of the European Union, rather than the position of one Member State or another that might have rushed into this race, attracted by the financial possibilities.
The last question relates to the exchange rate. What is your view on the situation where the oil monarchies are currently investing in euro assets with funds from oil sales in dollars, thereby aggravating the tense exchange rate situation, with the resulting repercussions on our trade balances?
Madam President, Mr Vice-President, those are the questions the Committee on Economic and Monetary Affairs would like to ask and we look forward to the responses from the Council and the Commission.
Anne-Marie Idrac
President-in-Office of the Council. - (FR) Madam President, Mr Vice-President of the Commission, the questions surrounding sovereign wealth funds have been perfectly summarised by Mrs Berès. I would like to add a number of other reasons why they are being discussed. Of course, they have taken off in recent years: according to the IMF, they generate between EUR 2 200 billion and EUR 300 000 billion today. However, we also need to look at their investment strategies, their transparency, the clarity of these strategies and, possibly, the emergence of new funds.
In October 2007 the finance ministers of the G8 countries asked the IMF and the OECD to look into these issues. In response to these invitations both institutions got to work: the IMF focused on the countries responsible for the sovereign wealth funds while the OECD concentrated on the recipient countries. The IMF examined the funds' current practices, organised a round table focusing primarily on these topics and set up an international working group composed of 25 countries that possess such funds with a view to drawing up a report, which is due to be published at the end of October of this year. The aim is to draw up best practices, which sovereign wealth funds would be free to adopt, particularly as regards transparency, investment strategies and governance. It should be noted in this respect that the Norwegian Government Pension Fund has been highlighted by many as the reference in this area.
As far as the OECD is concerned, emphasis has been placed on best practices for the recipient countries, and the OECD ministers adopted a declaration a few weeks ago. The work will now continue in the Investment Committee, which will focus in particular on peer monitoring of policy development and hold a wider debate on the investments controlled by foreign governments.
I will now move on to the Community dimension. As you know, in February 2008 the Commission presented a communication entitled 'A common European approach to Sovereign Wealth Funds'. In its communication the Commission notes that new legislative measures at Community level are unnecessary, but it advocates a common European approach based on cooperation between the countries receiving the sovereign wealth funds, the funds themselves and those responsible for them, with a view to establishing, and I quote, 'a set of principles ensuring the transparency, predictability and accountability of SWFs' investments'.
The common approach recommended by the Commission should be based on five principles: commitment to an open investment environment, support of multilateral work, use of existing instruments, respect of EC Treaty obligations and international commitments, and finally, proportionality and transparency. It is important to note that the Commission communication is recommending the common European approach as a complement to the prerogatives of Member States regarding the use of their national legislation.
On 4 March the Council examined this communication and submitted a report to the Spring European Council. The latter took over the ideas set out by the Commission, clarifying two principles in particular. On the one hand, rather than expressing its support for the multilateral approach in general, it preferred to express its position specifically on the work under way in the IMF and the OECD, which I have just mentioned. On the other hand, rather than referring to the use of the existing instruments, and once again taking a more general approach, the Council thought it more appropriate to adopt as a basic principle the use of national instruments and EU instruments, if necessary.
So as not to leave anything out, it is important to note, too, that the question of sovereign wealth funds was discussed at the meeting of the Transatlantic Economic Council, with which Commissioner Verheugen is very familiar, held in Washington on 9 November 2007.
As far as national initiatives are concerned, it is true that certain Member States have already taken some or plan to do so. This also applies to other countries that are major recipients of sovereign wealth funds outside the European Union. Of course, such national measures should not contradict the common European approach advocated by the Commission on the basis of the principles I have just mentioned and supported by the European Council. The national measures must be envisaged in the context of a common European approach, which they should complement. I believe that that this corresponds to the concerns expressed by Mrs Berès.
Coordination of the national measures is one of the cornerstones of the common European approach proposed by the Commission. As you suggest, an analysis of the existing initiatives in the Member States will quite probably be necessary in order to establish effectively such coordination and ensure that it does not encroach upon national prerogatives and competences in terms of protection. This analysis of European practices could take its lead from the results of the peer monitoring that will be carried out by the OECD Investment Committee, as I said just a moment ago.
As regards Article 58, which you mentioned, Mrs Berès, it stipulates that the Member States have the right to put in place restrictions on grounds of public order or public security. However, as far as the Council is aware, this article has never been invoked in the context of sovereign wealth funds. In terms of the need to clarify this provision, I will simply point out that the Lisbon Treaty did not amend it.
In conclusion, the Council wishes to look at the European Union's role in the international bodies. The Commission communication clearly demonstrates that we are actively participating and will continue to participate in the work of the IMF, the OECD and other bodies. As sovereign wealth funds have an international scope, it is clearly important for Europe to cooperate with the other recipient countries, on the one hand, and with the sovereign wealth funds and those responsible for them, on the other. The Union should thus play an active role in ensuring that the work in the multilateral bodies I mentioned moves forward, rather than simply following the discussions like a silent observer. That is why the Spring European Council supported the ideas put forward by the Commission. In particular, it explicitly set out its support for the current work to obtain an international agreement on a code of best practice, which the sovereign wealth funds would be free to adopt and which would set out the principles applicable to the recipient countries at international level. The European Council also added that the Union should endeavour to contribute to the current debate in a coordinated manner and it invited the Commission and the Council to continue the work in that direction. The Council fully intends to continue along that path.
As regards your final question concerning the link to oil-related financial issues, as stated today in the G8 we are all aware of the importance of the issues involved in reducing the global imbalances. Certain emerging countries, notably oil-exporting countries, have large surpluses. It is crucial that adjustments be made, particularly through adequate currency appreciation. These questions are naturally being very closely monitored in the G7-G8, but also by the IMF with, of course, the participation of the EU Member States.
Günter Verheugen
Madam President, Madam President-in-Office of the Council, ladies and gentlemen, sovereign wealth funds have become major players in the global finance system and more recently have with good reason been attracting increasing public attention. In its aforementioned February communication the European Commission has therefore set out how, in our opinion, Europe should respond to this challenge.
At its spring meeting the European Council unreservedly endorsed the approach being proposed by the Commission. The situation as it stands is simple: the European Union is the world's largest exporter of direct investments and at the same time also attracts a lot of investment capital in the opposite direction. This is all very welcome. Investment and openness are two of the main driving forces for growth and employment in Europe. We cannot step back from our commitment to provide an open environment for investment.
Sovereign wealth funds did not just arrive on the investment scene yesterday but have in fact been investing in Europe for about 50 years. These responsible and reliable investors have pursued a long-term, stable policy that, moreover, has certainly stood the test during the recent turmoil in the financial markets. These funds have provided capital just when it was most desperately needed.
Neither do we at this time have any grounds for assuming that sovereign wealth funds are having a negative impact on exchange rates. There are no real indications that such funds are switching from US dollars to euros and, moreover, their order of magnitude is not yet on a level that would enable them to have a significant effect on developments in the international money markets.
The number and size of these funds is currently growing rapidly. Investment patterns are changing. Even the geopolitical map of those countries that are setting up these funds is changing. The scope and the quality of the information that the funds are making available to the market tend to differ enormously from fund to fund and hence the fear that the investment of these monies could give the foreign governments concerned excessive political influence, and that is a concern that we have to take seriously.
If the funds are transparent and comply with clear rules of accountability then the fact that they are State-owned investment vehicles should not give cause for concern. What we need is confidence in the purely commercial nature of their objectives, which means that transparency and corporate governance are the key factors.
The communication from the Commission sets out some of the options that are available. Regulation is scarcely the best response. All investors in the single market should have to observe the same regulations as they apply to competition, the internal market and employment law. The various instruments on foreign investments that Member States adopt in order to protect public security, law and order must abide by Community guidelines.
However, Mrs Berès, I would like to point out that Member States are entitled to adopt such measures and indeed most have been doing that for some time. The Commission will monitor this closely, though there are as yet no plans to carry out a detailed audit. Any review of investments in sensitive sectors at EU level also has to examine all investment sources, not just sovereign wealth funds. We are certainly in agreement that there are other types of fund that give more cause for concern than sovereign wealth funds and here it is not so easy to talk about transparency and corporate governance.
It is certainly correct to say that we cannot tackle a global issue by adopting a narrow European approach, but rather we need to seek an international and global solution. The Commission believes that the best answer would be a code of conduct that would be developed jointly at a global level by the recipient countries and by the funds themselves. A voluntary code of conduct that lays down basic standards for governance and transparency would ensure greater clarity in the functioning of the funds.
Since the European Council meeting in March signalled its support for this approach the European Commission has been actively involved in the work of the IMF and OECD on the definition of best practices. Progress is being made in both these organisations. I can certainly say that a solution is now beginning to take shape and we have a well-defined and integrated European approach that we are now pursuing.
We should not forget that this is a bilateral process. It is in everyone's interest to achieve clarity. For the funds themselves, this will mean stability and reduce the risk of setbacks. For those national economies in which the funds are investing, a stable, predictable and non-discriminatory framework will eliminate the risk of these important investors voting with their feet, in other words leaving Europe and investing elsewhere.
We intend to take the work of the IMF and OECD further. We have a strong consensus within the Union and this means we have a common approach. Member States have not opted to go it alone. In fact not one single Member State wishes to play a lone hand. This strengthens our argument and it is important that we maintain this whatever happens. With this kind of support we can expect our policies to carry a lot of weight and the Commission is confident that by the end of this year we will have concrete results of a positive nature to report to Parliament.
Piia-Noora Kauppi
on behalf of the PPE-DE Group. - Madam President, I completely agree with the Commission and Council assessment on sovereign wealth funds. They are the trend of the 21st century and this debate is very welcome.
These funds have become more visible again in a time of financial crisis involving multiple banks and investment firms as they stepped in to provide much-needed capital injections to some of these firms.
Sovereign wealth funds are predicted to grow at an increased rate in the near future, which should not scare us. This is a natural part of market development. The capital that sovereign wealth funds bring to the global market is needed to keep investment flowing. They have the capacity to provide liquidity to the financial market and to companies. This is sometimes vital to their survival.
Due to their size and resources, sovereign wealth funds are able to invest where funds are sometimes desperately needed but where others cannot or will not invest.
In theory, like any other investment funds, also SWFs seek good yields from sound investment which moreover tends to be long-term. They do not a priori pose a threat to global financial markets or the European economy; rather they are very beneficial to it.
While there is some concern today with the rising economic power of some oil-rich countries as well as countries such as China and the implications of this, the response to this unease should not be the exclusion of these countries from global financial and investment markets. On the contrary, Europe should welcome the inflow of funds coming from these states and their investment funds.
Naturally the fact that some of these countries are not abiding by the same basic principles with us politically is a cause for some concern. If political objectives drive their investment strategies - however, this has not been the case - there is no evidence that sovereign wealth funds would have caused any major crisis. They have operated in a sound manner without political interference. It is both counter-productive and against the principles of good regulation to discriminate against all SWFs based on their origins.
The basic principle of financial markets and corporate governance regulations should be the same treatment of all actors involved in similar activities. Of course the code of conduct would be welcome but it should be based on this undifferentiation of the source of income.
Elisa Ferreira
on behalf of the PSE Group. - (PT) Opening up to trade and investment is a hallmark of European integration. Sovereign wealth funds have been around for a long time. In the current context of serious economic problems, as has been said, their capitalisation potential and the interest in this potential have increased. The opening up of strategic sectors and the assignment of essential public assets to private initiative is another characteristic of the European Union. However, it is important to guarantee that all operators, and sovereign wealth funds in particular, are guided by clear and transparent rules and that their objectives are compatible with the proper functioning of the markets, with fair competition between operators and with both short and long-term protection of the rights of European citizens.
We welcome the Commission's commitment to a multilateral code of conduct, under the aegis of the International Monetary Fund. However, as is happening with hedge funds and private equities, a code of good practice is not enough. We would ask the Commission for an independent and much stronger guarantee that, in the internal market, the principles of transparency and governance will be duly respected by all financial operators, including these funds, based on European and not solely national or international criteria.
Wolf Klinz
Madam President, ladies and gentlemen, sovereign wealth funds have increasingly become the topic of conversation in recent months because they have been dealing in the European and US banking sector. Many believe that this involvement is just the first step and that sovereign wealth funds are now lining up for a massive shopping spree that will end with many companies in Europe and possibly elsewhere too coming under their influence or even under their control. Here the fear of political influence is mingled with the anxiety that at the very least an attempt might be made to gain access to technologies that would otherwise not be accessible, especially since we are now dealing with partners and market players that have not previously been active on the international stage, namely sovereign wealth funds from Russia and China.
The money is certainly there. With more than USD 3 billion to hand these operations have now twice as much under their charge as the international hedge funds. However, from a historical viewpoint it has to be said that there is no evidence to support this assumption. The funds - as has already been pointed out - have so far always proved to be good shareholders. They are interested in the long-term, positive development of their business and hence in obtaining a good, long-term rate of return on their investment.
Nevertheless we should not be wide-eyed and naive as we watch these events develop. We need a set of rules, but we do not want to have isolationism or protectionism, for sovereign wealth funds are, after all, an example of the fact that the free capital market is working and it is in our interest that this remains so.
We Liberals therefore support the Commission in its approach and in its call for a code of conduct and we hope that such a code will really bring transparency, that the basic motives for the investment of these sovereign wealth funds become clear and that the funds themselves apply good corporate governance and stick to it.
However, we need an EU-wide solution - not 27 different EU solutions - and we need an international solution too. I therefore welcome what the Commissioner has said, namely that intensive talks are now under way with the OECD and the International Monetary Fund.
Over the years the free movement of capital has contributed to growth in Europe and in the world at large. We must not endanger this in the future through overregulation and protectionism but rather should abide by our free market principles.
Cornelis Visser
- (NL) Sovereign wealth funds have been active on the financial market for more than 50 years. The funds in sovereign wealth funds have increased enormously in recent years in, for instance, China, Russia and the Arab states.
The purpose of sovereign wealth funds is to invest surplus state reserves to yield profits. These countries may well, I think, be entitled to seek the best way to invest their reserves in foreign currency, so I take a positive view on the contribution of these funds. The funds improve the liquidity of the financial markets and create growth and jobs. They also contribute to investment for the longer term. They create stability for the companies they invest in. We should, therefore, continue to allow them the scope to invest. These funds can, however, bring threats along with them too. We will have to look at the type of investments they are making and whether they meet the requirements for transparency.
There is still not complete clarity about the political involvement in these sovereign wealth funds. The disadvantage of this lack of transparency is that it can result in growing uneasiness on our part about these sovereign wealth funds. The Commission should, therefore, take action and that is a good thing. Otherwise countries will deal with these sovereign wealth funds at a national level. I am against too much national policy on this. Europe is the right level to respond to this and we should have a common response.
It is important to have a coordinated position at European level. I am pleased, therefore, with the response of the Council and the Commission to collaborate closely at the level of the IMF and the OECD. I look forward to seeing the guidelines that the IMF, the World Bank and the OECD develop and I hope that they will incorporate transparency, good governance and reciprocity.
When it comes to reciprocity, I take the view that we should confine ourselves to the sovereign wealth funds. We always want private investors, but we can require reciprocity from sovereign wealth funds.
Antolín Sánchez Presedo
(ES) Madam President, more than 30 countries have set up sovereign wealth funds within the last 50 years. Their growth in recent years is due to foreign currency from oil and trade surpluses, and certain countries are now even looking at how they can be used to prop up public pension systems.
Sovereign wealth funds can make a global contribution to financial stability, as we have seen, and also to economic growth in order to ensure solidarity between generations.
They can also lead to problems and distortions. That is why we need a common European approach and to ensure that they operate with transparency, predictability and sound governance. We must prevent conflicts of interest, and the paradox whereby European sectors whose efficiency was entrusted to market logic again become a matter of public discretion; this time, however, it is the discretion of third countries. Not only must we ensure coherence and reciprocity; we must also reflect on this issue and move forward in terms of laying down some international rules.
Olle Schmidt
(SV) Madam President, Commissioner, I am a fervent advocate of free trade and am allergic to protectionism, but that does not mean that I am naive. One of the problems of state-owned funds is their enormous growth. Since February this year alone, their assets have risen by 600 billion dollars to approximately 4 trillion dollars, i.e. 4000 billion dollars. What power! This, combined with the fact that many of these funds do not have adequate transparency, which has been mentioned, as regards their investment practice and that some of them originate in non-democratic countries, I think indicates that we should be interested.
The funds are needed, the investment is needed, but we need rules of play and regulatory systems applicable to all, under which transparency must be exemplary. The Norwegian Oil Fund is, I think, an example which has been mentioned in this debate. It should also serve as a model when the code of conduct is drawn up. Madam President, when the sun shines we do not need umbrellas, but when it rains we may well need them.
José Manuel García-Margallo y Marfil
(ES) Madam President, I will do my best not to repeat some of the comments already made. I must, however, point out that the first time I heard of sovereign wealth funds was the 1993 'KIO scandal' in Spain, which, according to the Kuwaiti authorities of the time, caused more economic damage than Saddam Hussein's invasion in 1991.
Other names have emerged since then. We have already talked about Gazprom, Chinese activity in Africa and Venezuela's use of the funds to export the Bolivarian revolution, and we will be talking more today as a result of the financial crisis. Many companies are being bought up or receiving financial assistance through these funds.
As Mrs Kauppi said on behalf of my group, it is true that the funds have some unquestionable advantages: they help improve allocation of resources, they inject liquidity and reduce volatility, and these are all very useful at this particular juncture.
Some of the concerns aroused by the funds have also been mentioned: more extensive government intervention in economies, intervention that may occasionally be dictated by political rather than economic objectives - which can lead to market distortions and threats to national security - and the national reaction of each government, which could further fragment the internal market.
To paraphrase Lenin, what is to be done? Obviously we must continue to investigate how these funds operate and produce an accurate diagnosis of their workings, and the Community framework must be reviewed. It is true that they are subject to rules on competence and investor protection, but is this sufficient? We must also come up with a voluntary code of conduct to guarantee transparency, predictability and accountability. Finally, the code of conduct ought to be exported to the international framework.
I thus extend a hearty welcome to transatlantic cooperation and cooperation with bodies such as the OECD and the International Monetary Fund. Action must be taken, and it must be taken soon.
Ieke van den Burg
Madam President, I share the concerns expressed here by many speakers about state-owned funds, but I would like to stress as well that private commercial funds, such as hedge funds and private equity, are of even more concern. This is because they often do not have a long-term-oriented focus, whereas sovereign wealth funds, together with pension funds, often have this long-term orientation and can strengthen the role of minority shareholders, as well as having a positive role in providing the market with liquidity.
The point is that they are often not transparent enough in their investment strategy and intentions, and I hope that the Commission will focus on this. The Committee on Legal Affairs recently adopted a report in this Parliament on the transparency of institutional investors, and there we asked the Commission to come up with a directive guaranteeing common standards of transparency. I hope the Commission can react to this request.
My last point is about the code of conduct and the 'comply-or-explain' procedure. Is this also an element which the Commission has considered?
Harald Ettl
(DE) Madam President, sovereign wealth funds have come into the spotlight, especially since last year when China declared its intention to invest USD 3 billion, only USD 3 billion, of its fund reserves in private holding companies. The capital held in sovereign wealth funds now totals well over USD 3 trillion, which is twice as much as that held in hedge funds: reason enough for us now to look into this whole business. So far we only know of a transparent Norwegian system that operates good governance. However, just like private venture capital, sovereign wealth funds can cover up exactly who the entrepreneur is.
Sovereign wealth funds can invest strategically and can grow rapidly. Transparency is therefore urgently required. Employee rights can be restricted and employment conditions altered as a result of corporate transfers that have been influenced by sovereign wealth funds. Transparency and due notification is therefore needed in this area. Another point worthy of mention is that the IMF, the US Treasury Department and the German Chancellor are calling for increased controls and regulation. It certainly seems that we need to do something.
John Purvis
Madam President, I would caution my colleagues against demonising sovereign wealth funds, let alone, Mrs van den Burg, private equity investors. Recycling surpluses is highly desirable, whether by spending or investment. The 1930s Depression was the result of hoarding by surplus countries. Much better that these surpluses are recycled as investments to where they are needed - to our banks with their capital shortfalls, to our infrastructure needing modernisation, our real estate in its current difficulties and our business and industries in general to create and preserve jobs.
Yes, we need reciprocity, but the EU is the biggest investor internationally anyway. This must not be an excuse for protectionism to keep out other investors. Surely we have our competition policy to deal with cartels and monopolies. We have our labour and health and safety rules to protect our workers, and, as a last resort, we have our sovereign right to legislate against unacceptable political interference. Do not look gift horses in the mouth!
Zsolt László Becsey
(HU) Just a few things in brief. We are heterogeneous - for example, I come from the new Member States, and am the first person from there to speak today - poor in capital, with a defenceless public sector and a very unhappy past, which threatens us with its return in an imperialistic manner. And everybody must take this seriously.
The second thing, which has been discussed here, is that these sovereign state funds very often serve imperialistic goals, and not only in medium-term investments but also in the world's energy sources; look at China's shopping in Africa. It is therefore not certain that this international agreement or code of conduct alone will be enough.
After the relevant analysis, we must think long and hard about whether some Member States are taking national security measures on a uniform basis that would prevent foreign bandit investments in strategic sectors, and that this would not act against the free flow of capital but would still mean some security. Thank you.
Margarita Starkevičiūt
(LT) I would like to point out to my fellow Members that perhaps we should not spend so much time on foreign funds but rather concentrate on our own, as Mr Purvis has said - we are investing too much in third countries and are losing money; therefore, we need wealth fund investments. Perhaps we should organise our economic policy in such a way that our citizens' savings could be safely invested in Europe, then we would not have to worry about third-country wealth funds.
I would like to finish by thanking the French Presidency for finally coming to listen to our debates. Slovenia is a much smaller country, but I could not help noticing that its representatives have always taken part in parliamentary debates. The representatives of France, however, France being a large state, have not yet been very active and I do hope that these debates will encourage them to participate more actively in our sessions.
Ieke van den Burg
Madam President, thank you for giving me the floor again. It is because Mr Purvis is saying that we might be demonising sovereign wealth funds and private equity and hedge funds, and I do not think this is the case.
We also chose a very balanced approach in the oral question as it was tabled and in the resolution and I think it is wise not to ignore or deny that it is important for us as a Parliament to take account of what is happening in this field. I think it is our duty, it is our right to do this, and I would not like to see this set aside as mere demonising.
Anne-Marie Idrac
President-in-Office of the Council. - (FR) Madam President, Mr Vice-President of the Commission, ladies and gentlemen, I am struck by the consensus that has emerged from your speeches, which I could summarise as follows: neither demonisation, nor naivety.
We have all heard the comments by Members that we obviously must not dissuade the sovereign wealth funds from being put to good use, and various uses were described for European prosperity. Nevertheless, there was agreement on a number of political principles that should prevent us from being too naive.
They are the principles of transparency, fairness, predictability and reciprocity. These contributions from Members will certainly help us to continue the work in the Council and in the Commission with a view to drawing up a code of conduct. It is extremely encouraging and important that the Members highlighted the need for coordinated work between the Member States, and from that perspective I wanted to say that it is very satisfying to hear the eurozone countries speaking with a single voice since they are capable of upstream coordination and coordination with the ECB.
Günter Verheugen
Madam President, ladies and gentlemen, I really want to thank you once again for the broad support you have given to the Commission's approach in the course of this debate. I did perceive some differences in priority, but not in the political stance and for that I am particularly grateful.
Someone asked how this work is proceeding at international level. Let me just say that while the activities in the IMF and OECD are running in parallel they are not dealing with exactly the same themes. They could more be described as complementary. The Working Group in the International Monetary Fund, which meets monthly, is attempting to establish how the conduct of the sovereign wealth funds themselves can be influenced in the ways that we have been discussing. The OECD Working Group, on the other hand, is seeking to determine how we ourselves should behave in response to the influence exerted by sovereign wealth funds.
This subject is being tackled from two sides and once again I can say that the progress made to date has been satisfactory. We are quite confident that we shall really achieve something and that - to pick up on what Mr Schmidt said - we will indeed have an umbrella, should we need one.
President
To conclude the debate, I have received one motion for resolution pursuant to Rule 108(5) of the Rules of Procedure.
The debate is closed.
The vote will take place on Wednesday, 9 July 2008.


Adaptation of a number of instruments to the regulatory procedure with scrutiny, "omnibus" Regulation, Part One - Adaptation of a number of instruments with regard to the regulatory procedure with scrutiny, "omnibus" Regulation, Part Three (debate)
President
The next item is the joint debate on
the report by Mr Szájer, on behalf of the Committee on Legal Affairs, on the proposal for a regulation of the European Parliament and of the Council adapting a number of instruments subject to the procedure referred to in Article 251 of the Treaty to Council Decision 1999/468/EC, as amended by Decision 2006/512/EC, with regard to the regulatory procedure with scrutiny - Part One - C6-0432/2007 -; and
the report by Mr Szájer, on behalf of the Committee on Legal Affairs, on the proposal for a regulation of the European Parliament and of the Council adapting a number of instruments subject to the procedure referred to in Article 251 of the Treaty to Council Decision 1999/468/EC, as amended by Decision 2006/512/EC, with regard to the regulatory procedure with scrutiny - Part Three - C6-0474/2007 - 2007/0282 (COD)).
Margot Wallström
Vice-President of the Commission. - Mr President, the 'comitology dossier' has two main features. On the one hand, it is extremely technical, and probably any common citizen would find it difficult to understand. On the other hand, it is very important since it concerns how Parliament exercises its control over implementing acts. The 2006 reform of the Comitology Decision introduced something called the 'regulatory procedure with scrutiny', giving Parliament a veto right on measures of general scope that amend a legal act adopted under codecision.
By the end of 2006, 26 acts identified as particularly urgent were already brought into conformity with the new procedure, which ensures a stronger role for Parliament, and I am happy to see that today we are here to welcome further progress.
Between November 2007 and February 2008 the Commission proposed to bring more than 220 acts into line with the new regulatory procedure with scrutiny. To facilitate Parliament and Council examination of these files, we opted for grouping proposals in a so-called 'omnibus' approach. Four omnibuses were adopted.
The Commission is now very pleased to see that a first-reading agreement is possible on the first and third omnibus proposals and that good and fair compromise solutions have been reached between the three institutions. I would like to thank in particular the rapporteur and the parliamentary committees which worked very hard and very rapidly.
The Commission would like to make the following declaration. In the context of the review of Directive 2005/36/EC, as provided in Article 60 of the Directive, the Commission will assess in particular the implementation of its delegated powers under the Article 61 derogation clause of the Directive.
The Commission strongly supports the political will to move ahead on this topic and the will of Parliament to move forwards as quickly as possible. We hope to see a strong commitment from the Council as well. I will raise this issue with the French presidency and I am confident that it will be active on this dossier. We will continue to cooperate closely with the two institutions to reach an agreement on the two remaining omnibus proposals.
József Szájer
rapporteur. - (HU) Mr President, Madam Vice-President, I would like to begin by repeating what the Vice-President of the Commission said, namely that this really is a two-sided issue we are dealing with. On the one hand it is a highly technical matter - although I would add that it is our job to solve technical problems and carry out any related tasks, so we must understand these things. On the other, meanwhile, it provides a new opportunity for citizens, since the new procedure, the procedure involving scrutiny for the first time actually gives citizens the chance, through their freely and directly elected representatives, to scrutinise the implementing measures and normative measures of the European Commission.
You will have heard many stories, largely put about in eurosceptic circles, of how the European Commission and the European bureaucracy want to regulate a whole host of minutiae. We are all familiar with some of these - from the size of eggs or the colour of paprika, the horror stories abound. Of course we do not know how true any of these stories are, but in any case the myths surrounding the Brussels bureaucracy have proved persistent. One of the reasons why the myths have persisted is that until now the European Parliament did not have genuine and effective powers of scrutiny regarding the normative measures delegated to the Commission.
The present process, which will conclude with the two votes tomorrow, will enable Parliament at least partially to exercise this sort of scrutiny; from now on, these normative measures will be subject to political scrutiny. In terms of what is habitually referred to as the democratic deficit issue, I have to say that this is a significant step. It is also a significant step in terms of eliminating the democratic deficit without involving amendments to the Treaty. I have always done my best to achieve this, and so has Parliament; it was the agreement reached in 2006 between the European Commission and Parliament that served as the basis for the changes under discussion today. I have always supported the idea that we should not wait for the Lisbon Treaty to extend these powers to Parliament. There is no need to wait, since the agreement between the two institutions and the proposals now before us largely resolve these problems. Moreover, I doubt that anyone can say for sure today when the Lisbon Treaty will actually come into effect.
Parliament needs these powers. A word of warning, however: this is a huge task, and one that the Council has been carrying out for a great many years via the comitology committees. For Parliament it is a completely new function, and a great deal of work will be involved in ensuring that we are genuinely able to exercise the new powers assigned to us. Moreover, it is not just a case of being able to exercise these powers as the European Parliament; from now on it will actually be an obligation, since the citizens of Europe can call us to account as their elected representatives over the manner in which we deal with these matters. I would like to thank the Commission sincerely for putting forward these proposals, and I would like to draw attention to the fact that only twelve of the thirty, or rather forty-six or so acts included in 'List 3' have so far been submitted, and we would ask you to submit the remaining thirty-four acts as soon as possible so that we can deal with them. Negotiations with the Council on the first and third omnibus packages have been concluded successfully.
I have every confidence that the Council will continue this process - indeed the Council has given its commitment to do so - and if possible resolve matters and conclude the process by the end of this year. In order for this to happen, all of the institutions must of course continue cooperating with one another. Another reason why this is important is because in this case both the Commission and the Council are relinquishing important constitutional powers to Parliament. I could therefore also say how commendable this is, and how grateful we are to have been granted these powers. However, I sincerely believe that they have taken this step in the interests of democracy in the European Union, and in the interests of eliminating excessively bureaucratic procedures and ensuring a more efficient, more transparent and more democratic European Union. I thank the institutions for their cooperation, and I thank all of the committees for proceeding swiftly to enable Parliament to resolve this matter, at least with regard to the first and third omnibus proposals. Thank you for your attention.
Oldřich Vlasák
on behalf of the PPE-DE Group. - (CS) Mr President, Commissioner Wallström, ladies and gentlemen, the European Commission plays an irreplaceable role in implementing European legislation. Its task is to implement European legislation at Community level and to ensure that the legislation is complied with in individual Member States. Comitology is one of the key instruments for managing this process. Comitology is justifiable and has an irreplaceable role within the policy-making and law-making process. It was created as a response to the practical need to change and amend Community regulations, often rather technical, so that they fit the reality and the situation on the ground. However, this does not mean that the existing system is ideal. Within the framework of comitology, first of all we have to look for the balance between the Commission, the Council and/or Member States and the European Parliament.
The importance of the European Parliament and its role in adopting European legislation is irreplaceable. That said, we have to remember that the possibility of monitoring the implementation of legislative instruments is limited by time, technical aspects and knowledge. In my opinion, Parliament has too much involvement in the process, thereby adding more bureaucracy and jeopardising the whole process. Our aim should be exactly the opposite: decreasing bureaucracy. Hundreds of comitology committees, thousands of meetings and implementing acts hardly contribute to the transparency of comitology. In my opinion, there should be a higher degree of formalisation of the comitology system. There is no doubt that the whole process must be streamlined and simplified. Ladies and gentlemen, comitology, just like the Lisbon Treaty, is something the citizens do not understand. For the purposes of our debate on comitology we should therefore see the Irish 'no' as a warning.
Manuel Medina Ortega
Mr President, this evening Parliament is doing something new. I think that all the speakers, starting with the Commissioner, have highlighted the somewhat abstruse nature of comitology. The proof of this is that we do not have anyone from the public following this debate this evening, and if I had to explain to my electorate what I am doing here tonight at eleven o'clock, it would be very hard work.
I think that the various speakers have mentioned this difficulty, and I think that, with our concern to make the EU institutions a little more attractive, we will need to find some sort of procedure for explaining to citizens what we are actually discussing.
Of course, the package of measures that we are considering is quite broad. As the Commissioner said, there are four omnibus packages. We are only looking at the first and the third, and article by article we are seeing the problems that arise from the point of view of implementation. As the rapporteur and the other speakers said, this is a necessary exercise, but obviously we should try to clarify it.
Perhaps it is worth mentioning some of the subjects. For example, Council Directive 76/160/EEC concerning the quality of bathing water or Council Directive 91/271/EC concerning urban waste-water treatment. The procedure adopted will have practical consequences for citizens, but the question is how to make them aware of it.
I think that Mr Szájer has done a good job, that in Parliament we have tried to act with a sense of responsibility, that we are going to continue doing so and that the only thing that is going to remain for us to do is this part, which is conveying to citizens what we are really doing here, and this is quite difficult. I think that this will be our challenge, and, continuing what we have achieved and what we are doing this evening, I think that we will have to do that second part in the future so that the parliamentary debate then will not be as bleak as the one we are having this evening.
Lidia Joanna Geringer de Oedenberg
(PL) Mr President, the inclusion of the European Parliament in comitology procedures is necessary in view of the development of its legislative competences and especially as part of the codecision procedure envisaged in Article 251 of the Treaty. This is the direction followed by the Council Decision of 17 July 2006 and of Article 5a introducing the new procedure under which Parliament will decide jointly with the Council on the grounds for proposing certain implementing powers. The new 'regulatory procedure with scrutiny' will relate to measures of a general scope which seek to amend non-essential elements of a basic instrument adopted in accordance with codecision.
The Council Decision is of revolutionary significance for the course of the legislative process, as it enables Parliament to veto a Commission proposal relating to implementing powers. As a result it will be possible to modify a proposal or return to the legislative path. It is very important that the alignment package is adopted as quickly as possible, in order for the new procedure to be applied straight away to the existing acquis. I am therefore calling for us, in the forthcoming vote, to adopt the Commission's proposal covering a list of legislative instruments that are to be aligned to the new procedure along with amendments proposed by the competent parliamentary committees.
At the same time I would like to point out that what will be of crucial importance to the success of the current comitology reform is the way in which Parliament makes use of the potential that is appearing before it. The requirement for an absolute majority of votes to reject the Commission's proposal on implementing powers or extending the procedure caused by, for example, the need to translate documents into the 23 EU languages may have a negative impact on the progress of the procedure. We should also bear in mind that Parliament may become the target of enhanced pressure from various circles that have an interest in influencing the final shape of implementing powers. An extra challenge, both in general and for organisational reasons, will also be to take into consideration the enormous number of implementing instruments that will come before Parliament in the future.
József Szájer
rapporteur. - (HU) Mr President, Madam Vice-President, ladies and gentlemen, there is not much left for me to do other than to thank my fellow Members in the Committee on Legal Affairs and the other Committees for their close cooperation. I also thank everyone who worked alongside the Committee and provided me with assistance in this highly complicated and difficult matter. I am very pleased that we have managed to reach an agreement with the Council on this issue and hope that we can conclude the process at the first reading. I would also like to express the hope that this process will continue at the same rhythm and tempo in the case of the second and fourth omnibus proposals - the fourth is possibly somewhat tougher and trickier. Negotiations on these have already begun, and I have every confidence that there is a good chance of concluding this process by the end of the year or even sooner, and that the official process can get under way.
The Lisbon Treaty will introduce this system in the context of secondary legislation, but it would not have been right to waste two years without the comitology procedure. I am convinced that Parliament needs this learning process; it needs to learn how to handle these matters. One speaker mentioned that it is crucial that we ourselves should be able to distinguish between important and non-important matters; the role of the legislature is really to concentrate on vital matters and for this reason it needs to delegate certain powers to the executive, in other words to the Commission, but we must retain the possibility and the right to scrutinise implementing measures drawn up by it. The comments made have been incorporated into the proposals. Thank you very much for your attention, and I wish every success to Parliament, the Commission and the Council in carrying out the tasks that are still to be done, given that this piece of legislation is number sixty-something and the bulk of the acts are still to be dealt with, and I hope that the matter can be resolved in the second half of the year. Thank you very much for your attention. Thank you for listening.
President
The debate is closed.
The vote will take place on Wednesday 18 June 2008.


Zero tolerance regime for unauthorised GMOs and the economic consequences thereof (debate)
President
The next item is the debate on the oral question to the Commission by Neil Parish, on behalf of the Committee on International Trade, on the zero tolerance regime for unauthorised GMOs and the economic consequences thereof - B6-0151/2008).
Struan Stevenson
deputising for the author. - Madam President, I should first of all thank my colleague Mr Parish, Chairman of the Committee on Agriculture and Rural Development, very much indeed for giving me the opportunity of coming here at this late hour to ask this oral question. He, unfortunately, has for many months had a longstanding arrangement to go to Denmark with Commissioner Fischer Boel and had to leave for Copenhagen this afternoon. So he sends his apologies for his absence and also sends his greatest respects to Ms Vassiliou and welcomes her to the Commission.
This is a reality check. We have a very competitive and successful poultry and pig industry in the EU. They are completely unsupported. They do not receive a single farm payment; they do not receive any subsidy at all and they have to stand alone in the marketplace.
With poultry and pigs the biggest cost of production is the feed. Pigs and chickens do not graze the fields and therefore everything they eat is cereal-based. If you have an unsupported industry you must make sure that they have access to competitive feed from around the world.
In Europe we take over two years on average to license a perfectly safe GM product. Herculex, one of the few approved GM seeds, took 33 months to achieve EU approval. In the US the average approval time is half that: 15 months.
There is no excuse for this. With food prices and costs for the poultry and pig industry both rising, we cannot afford this time delay in licensing feed. We have got to speed things up.
In the US many of these GM products are by-products from the bioethanol industry and they are significantly cheaper than feeds that can be accessed here in the EU by our poultry and pig producers. So all we are doing is denying ourselves access to cheaper world market feeds, making it virtually impossible for our producers to compete and therefore we are in grave danger of haemorrhaging jobs and exporting our industry outside the EU.
Those purists who say that we must not have poultry or pigmeat produced with GM feed will not have won any kind of victory if we deny ourselves these feeds. The end result will be that we will have lost our industry to our non-EU competitors while we continue to import poultry and pigmeat from animals that have been fed on precisely the same GM feed that we have denied our producers access to. This is the politics of the madhouse.
We also need clear labelling and products so that consumers can make an informed choice. They must know if the meat they eat has been fed on GMs. With rising food prices, much GM-fed meat is cheaper and this gives consumers the choice and access to low-cost meat if that is what they desire.
The other major issue so far as feed is concerned is zero tolerance on non-GM feed coming into the EU. Again, the great hair-shirted brigade can beat their chests and say that we are making sure that there are no traces of GM products in any non-GM feed that is entering the EU. But what is the effect of zero tolerance when a shipload of non-GM soya is being loaded in Brazil to be brought to the EU? There is a chance that a very tiny residue of GM soya could be picked up through the loading equipment at the port in Brazil. When that ship docks in the EU, if even a small trace of GM soya is found, even if that soya has been licensed in the EU, the whole cargo can be turned away.
Therefore the result of the zero-tolerance regime is to reduce dramatically the amount of non-GM feed coming into the EU. So, even those poultry and pig producers who want to use non-GM feed find it incredibly difficult to access the quantities that they need, when they need them. Once again, this makes it much more difficult for them to compete fairly in open world markets.
If we really want to export our poultry and pig industry outside the EU and feed our citizens on Brazilian chicken and pork and even chicken from Thailand, all of which has been fed on GM, then the present policies of zero tolerance on non-GM feed and the appallingly slow licensing of GM feed within the EU are exactly the way to go about it.
Commissioner, we are delighted that you were so resoundingly endorsed as a Commissioner for Health and Consumer Protection DG. We wish you well but we hope that you will be the first to resist the tabloid Frankenstein food mythology and put in place some policies that will allow our farmers to compete internationally on a level playing field.
Androula Vassiliou
Member of the Commission. - Madam President, the Commission recognises the risk that feed imports may become more difficult and more expensive, due to asynchronous approvals of GMOs in exporting countries and in the EU. I am aware of the Agriculture and Rural Development DG study on the issue of feed shortage. I must stress that the effects of a zero tolerance policy for unauthorised GMOs on feed imports only become an issue in the event of so-called asynchronous GMO approvals. One of the key factors is the difference in the duration of the GMO approval procedure in third countries and in the EU, in combination with the lack of appropriate segregation mechanisms in exporting countries and the marketing strategies of the seed industry in these countries. The increased use of GMOs by your main trading partners in commodities also has an important influence.
Against this background, the Commission is focusing its efforts on addressing these key factors. Discussions with the European Food Safety Authority have been initiated with the aim of making efficiency gains in the duration of the authorisation procedure, without compromising on the quality of the EFSA scientific assessment. I would like to remind you of the importance in this respect of the cooperation of Member States in the Standing Committee and in the Council.
Last but not least, I would like to note that the Commission recently adopted the authorisation of GA 21 maize, which will facilitate imports with the advantageous presence of this GM event from Argentina. The Commission is also currently in the process of sending to the Council a proposal for the authorisation of a GM soya bean, after the Standing Committee failed to reach a qualified majority. This soya bean authorisation will also enable a number of feed imports and thus contribute to the temporary improvement of the feed shortage problem that the Honourable Member raises.
The EU legislative framework on GM food and feed aims primarily at ensuring the safety of the products placed on the market. This is why GM food and feed products are subject to pre-market approval. The zero tolerance approach for unauthorised GMOs currently applied by the EU has been laid down in EU legislation, having been approved by the European Parliament and the Council as the best way to protect human and animal health and the environment. It is similar to the approach followed by the vast majority of third countries, including major GMO producers.
At international level, the Commission, in close collaboration with the Member States, continues to support the development of Codex guidelines on the issue. The Commission, however, recognises the possibility of incidents of the type indicated among the reasons behind your question and recognises that such occurrences are becoming easier to detect because of constant improvements in measurement techniques. The Commission will examine whether it is appropriate and feasible to come up with an individual solution for this specific problem, in full respect of existing legislation.
In the case of the WTO complaint brought against the European Community in 2003, the corresponding panel report, concluded in 2006, did not call into question the EU legislation, but rather the way it has been implemented in the past. The Commission has managed to contain this dispute until now in the context of a regular dialogue on biotech issues with the complainants. We clearly showed the complainants that there is currently no moratorium or undue delay in the EC approval system of biotech products.
Sixteen products have been approved since the establishment of the WTO Panel, with only seven in 2007. We cannot rule out that complainants, notably the United States, will take into consideration the trade implications of the issue of advantageous presence in their decision on whether to proceed with further dispute settlement. However, the European Community would be in a good position to defend its case, and the present dialogue makes this eventuality unlikely.
Esther De Lange
on behalf of the PPE-DE Group. - (NL) Mr President, Commissioner, yesterday in this House we spoke about the rise in food prices and the effects of that in the European Union and for developing countries. Now we are here again this evening, talking about genetically modified animal feed. It might have been an idea to combine the two debates. After all, this somewhat technical subject of animal feed of course fits in with the wider debate on food safety and rising food prices. How sensible is it actually to destroy or reject whole shiploads of animal feed because they unintentionally contain traces, very small quantities, of genetically modified products? That does not seem very sensible to me, either from the point of view of the food safety I mentioned, or in the light of rising prices.
Because animal feed prices have indeed gone up considerably recently and they will do so even more if we continue to take that attitude. Many producers are seeing their costs increase as a result and I think it cannot do any harm to emphasise once again that the rising prices we keep talking about do not necessarily mean that farmers are also earning more. In fact it has already been said that, in the pigmeat sector for example, the costs of feed are going up and the margins are actually only smaller.
How can we get out of this deadlock now? Not by suddenly dealing carelessly with approval procedures. No, that is certainly not the way, but in my opinion there is a problem in two areas, and we have to find a solution. Firstly, as Mr Stevenson said earlier, it takes much longer in the European Union for a GMO to be approved: two and a half years for us, barely a year in the United States. I have taken note of what the Commission says about making EFSA more efficient, but of course that is not the whole problem. The problem also lies in the to-ing and fro-ing in the Council committees, which are then unable to achieve either a qualified majority for approval or a qualified majority against approval, and then finally, after a long tussle, the decision is passed to the Commission. So that is also part of the problem, and that procedure needs to be quicker. It is certainly not an argument for automatic approval of products, but I do think people have the right to know more quickly whether or not a product can be approved for the European market.
Secondly, we need to find a solution to the unintentional presence of genetically modified traces in animal feed, for instance through a threshold value, certainly in the case of GMOs that have already been approved by EFSA, and certainly when you consider that chops from pigs that have eaten feed outside the European Union are regularly available in our shops. Talk about unfair competition! I think it is a pity I have not heard anything from the Commission about threshold values. It refers to existing legislation. Let us be honest, though, with the labelling we are using a threshold value, so I think it is possible.
In short, producers and consumers must not become the victims of the indecision on the part of the Council committees. It is time now to offer clarity and speed.
Bernadette Bourzai
on behalf of the PSE Group. - (FR) Madam President, Commissioner, ladies and gentlemen, as its title suggests, this question deals with the economic consequences of the GMO authorisation procedure.
I would therefore like to ask the Commissioner whether the Commission has requested any studies on the causes of the rise in the price of animal feed and I would like to know, too, what proportion of the feedingstuffs imported in recent years has contained traces of GMOs not authorised in Europe and where these products came from. That would be useful in assessing the scope of these incidents.
Unlike Mrs De Lange who has just spoken, I refute the causal link drawn between the principle of zero tolerance of GMOs and the considerable increase in the price of feed. The two should not be lumped together since we know very well that this increase is due to the combination of several factors, which I will not go into here, but primarily to stock market speculation on future agricultural markets. Moreover, this increase affects all countries, including those with very flexible legislation on GMOs.
Nevertheless, it is true that European livestock farmers are in great difficulty and the main reason for this is the fact that the EU is highly dependent on feed imports. My main question is thus as follows: why are we so dependent and how should we respond? I want to ask the Commission if it has carried out an analysis of the economic consequences of the Blair House Agreement, for which the European Union gave up its own production of animal feed.
In order to reduce this dependency, there are two options, in my opinion. The first is to do everything we can to save - and I mean save - the last European fodder and protein crops and to encourage restructuring, avoiding, for example, the complete decoupling of aid during the CAP Health Check, particularly as these crops offer indisputable environmental qualities for crop rotation and, consequently, for the soil.
On the other hand, the Commission must look into diversifying our source of supply. In December 2007 I took part in a conference organised by the GM-Free Network, which demonstrated that supplies of non-GMO feed do exist and that contacts need to be established between producers and importers.
I hope that everyone is aware that consumers have a right...
(The President cut off the speaker)
Jan Mulder
on behalf of the ALDE Group. - (NL) Mr President, I should first like to thank the Committee on Agriculture and Rural Development and this plenary sitting for following up my initiative to debate this topic here this evening.
One remarkable thing is that all over the world the cultivation of genetically modified crops is on the increase, but only we in Europe are terribly scared about it. The big question is why. The Commissioner says quite categorically that that is how the legislation is and so we have to comply with it. However, if changed circumstances make it necessary to amend the legislation, the Commission will have to do that. I think it is time to do it now. I was still asking questions about it a little while ago, but one genetically modified crop is not like another. There is a big difference between transgenesis and cisgenesis. One is species-specific, the other is not. Both are covered by the same legislation and the Commission must address itself to the matter to amend the legislation from that point of view.
In my view, the crux of this whole story is zero tolerance. There are few situations in the world where you can require absolutely zero tolerance. There must always be a possibility of leaving a certain margin of difference. If you drive too fast for a distance of 50 kilometres, in most countries you have a margin of tolerance of about three kilometres before you are fined. Why is that not possible for imported goods? Why is a tolerance of, for instance, 0.8% or 0.9% not possible? Can the Commission give me a clear answer on that?
I also welcome the fact that talks are under way with EFSA to shorten procedures without endangering quality, but has EFSA indicated yet whether or not that is possible? Talks alone are not enough, because time is pressing.
There is also another point. Perhaps the Commission can explain to me how I, as a politician, can tell the general public that we can consume a whole lot of products here that we are not allowed to produce. We can import without restriction from all over the world any products from animals that are fed products which are banned here. What is the point of that? What is the explanation? Perhaps the Commissioner can suggest an idea to me for the forthcoming election campaign.
Finally I should like to ask what are the consequences of the attitude of the Commission as regards the WTO? Can we simply do this?
Janusz Wojciechowski
on behalf of the UEN Group. - (PL) Madam President, there are three areas in which GMOs may prove dangerous.
The first of these is public health. There are more and more indications that GMOs are potentially dangerous to human health, but these indications are being disregarded. Hard evidence of the damaging effects of GMOs may emerge at any moment. There was a time when there was no evidence of the harmful nature of asbestos, and when the evidence did emerge the cost was enormous. Billions had to be spent on removing the asbestos. The difficulty with GMOs is that if their use becomes widespread, it will be impossible to get rid of them.
The second area is the environment. Many scientists believe that GMOs may have disastrous consequences for the environment. This is one of the reasons why a store of traditional seeds has been created deep in ice on the Norwegian island of Spitsbergen, in case traditional seeds are damaged by increased use of GMOs.
The third danger relates to the economy. Increasing the use of GMOs is a way of making farmers financially dependent on large biotech concerns. Farmers will grow GMO crops under conditions imposed by powerful concerns that hold the patents for the seeds.
Europe is not hungry at present. Food is becoming more expensive, but the Union's agricultural policy continues to consist of imposing administrative limits on agricultural production. Europe does not need to seek highly intensive technologies for food production. Instead, Europe should opt for the production of healthy food using traditional methods.
Of course, there is also the problem of competition. On this matter, I fully agree with Mr Stevenson and other previous speakers. Our farmers should not be the only ones affected by a ban on GMO crops and the use of GMO feed. Such a ban should be accompanied by a ban on the import of both plant and animal products containing GMOs. A clear principle must be applied, namely that producers exporting their products to the European market will be subject to the same requirements imposed on our own producers.
Caroline Lucas
on behalf of the Verts/ALE Group . - Madam President, I would like to start by strongly challenging the assumption that seems to lie behind this oral question. Trying to link the rise in animal feed prices in Europe and the corresponding crisis in the livestock industry to the EU's GM laws in general, and its zero-tolerance policy in particular, is completely false and disingenuous.
It is certainly true that times are hard for livestock farmers, but I make the case that this has nothing to do with Europe's GM policies and everything to do with a combination of factors, including poor weather conditions leading to reduced harvests, deregulation of markets, increased demand by countries like China, the rapid and misguided increase in biofuel production and growing financial speculation.
Much is also being made by the GM industry of DG Agriculture's report on the potential impact of the EU's GM regime on the availability and price of animal feed. The worst-case scenario in the report rests on the assumption that Brazil will rapidly commercialise a GM soya bean variety not approved in the EU. But absolutely no evidence is presented that Brazil is even considering new GM soya beans.
The report finds that US approvals will be unaffected by EU policy and that Brazil and Argentina will, in fact, be much more cautious about approving new GM crops that could otherwise damage their exports to the EU. For example, Argentina has introduced a certification scheme for maize exports to the EU, precisely to avoid unapproved traits.
Moreover, there is no evidence either of major distortion of competition caused by imports of meat from animals that may have been fed with GMOs not authorised in the EU.
So, frankly, all of these questions are ill-informed and tendentious. But I do have some questions of my own with regard to any proposed threshold for EU non-approved GMOs. First, how can the Commission be sure that EU non-approved GMOs are safe?
Second, in the case of damage, which institution or company will have to pay? The EU, which allows such contamination? The company, which has developed the GMO but has so far no valid market approval? Or the company responsible for the import?
Finally, should such a threshold also apply to genetically engineered plants that produce substances like pharmaceuticals? What assessment has been carried out on the contamination of daily food with active pharmaceutical substances?
I look forward to hearing full answers to these crucial questions at the end of this debate.
Kartika Tamara Liotard
on behalf of the GUE/NGL Group. - (NL) Mr President, Commissioner, you and I really know too little about the health risks of genetically modified organisms. Do we therefore want to allow such GMOs - I call them messed around food - simply because that meets an economic need? Not as far as I am concerned. For me the real priorities are public health, the environment and biodiversity. Brussels already requires countries to approve certain GMOs, even when they are not willing to do so. That is at odds with the Cartagena Protocol, under which countries may reject new GMO products if they have doubts about their safety. Let the Member States decide for themselves which risk products they will allow.
I am not the only one to protest. Many citizens are worried about GMOs. We have seen that in Poland, Romania, Austria and Cyprus. Resistance to the Monsanto experimental fields is growing in places like Raalte and Gemert-Bakel in the Netherlands,. There is a real risk of modified seeds blowing over from Monsanto to nearby traditional or organic farms, when the farmers do not want those weeds. I am also concerned about the plans for Monsanto to take over the Dutch seed company De Ruiter, a firm that is amongst the top ten in the world. It is all too obvious that Monsanto is trying to infiltrate more into Europe. Either in expectation of more flexible rules, or simply to be able to put pressure on the politicians to relax the rules very quickly. We have to resist that fiercely. Public health, the environment and biodiversity are more important to us than commercial profits.
Jim Allister
Madam President, what a laughing stock the EU must be to its competitors! With sanctimonious fervour we ban GMOs in animal feedstuffs, even to the ridiculous point of zero tolerance of any unauthorised GM trace, but simultaneously meat derived from animals reared outside the EU and fed with the very GMOs which we refuse to authorise can be imported freely anywhere within the 27 States.
It sounds like zero sense to me. The EU strains at a gnat and swallows a camel, and who suffers? Our own producers, who have to pay sky-high prices for GM-free feedstuffs. It seems that, within the EU, if the political correctness boxes can be ticked then we should be happy, never mind the lunacy which we create.
Rosa Miguélez Ramos
(ES) Madam President, although European livestock generates over 40% of added value in our agriculture production, it is also true we now lack sufficient raw material to feed our animals. In my country, Spain, the situation of beef, more dependent on feed than in other Member States, is devastating. In the case of pigmeat and poultry, the terrible situation is similar all over Europe.
As has already been mentioned, Community legislation permits the sale of feed containing GMOs, provided these are authorised in the EU, but does not envisage any minimum levels for unauthorised GMOs. This is causing problems in trade with third country exporters and also with the European livestock sector per se which, as I have said, is experiencing shortages.
This is not the first time I have agreed with Mr Mulder, and on this occasion I listened to him and I think we also agree on this issue, for a possible solution could be to accept accidental GM contaminations up to a certain threshold, provided these have been positively assessed by the EFSA and authorised by a third country, in accordance with Codex principles and operating a clear labelling policy.
Another solution could be to produce more in European territory, but it would appear that the Commission has shut off that particular avenue by its checking proposals. The case of desiccated feed as an essential component of animal fodder is paradigmatic. Even though it acknowledges the danger involved in abandoning production, the Commission still insists on applying the decoupled payments.
I therefore wish to emphasise that we are facing a serious problem of animal feed shortages, and the European Commission is responsible for dealing with this situation.
Kyösti Virrankoski
(FI) Madam President, a genetically modified crop species is cultivated by changing its genotype with the help of precise scientific technology. This technology is based on developments in genetics going back a good half-century. It has helped to cultivate species in a way that requires less effort and less use of pesticides, and has made it possible to produce bigger harvests. For that reason, their cultivation has increased fast.
The European Union has been unable to be involved in this development because it adheres to a system of strict bureaucratic monitoring. Whenever trials and research carried out by the European Food Safety Authority have shown a species to be risk-free and of benefit to the consumer, it still has to go through a lengthy process before it is approved. The Commission's proposal first goes to a standing committee, which approves or rejects the proposal by a qualified majority. If it cannot make a decision, the next step is the Council, and if they cannot make a decision either, the proposal goes back to the Commission, which in the end makes a decision. It has, however, all taken time.
A lot of GM animal feed is imported into the European Union. Countries which try and restrict the cultivation of GM species are even happy to use it. Because the EU has not had time to approve all the species now being used, the feed may contain small traces of these. In such cases the entire shipment is returned. This causes the industry to incur costs and affects the competitiveness of European food production. This is why we need to apply reason in this area. Infinitely small traces of species approved in other countries should not have such unreasonable consequences, especially when European agriculture is up against global competition anyway.
Dimitar Stoyanov
(BG) A Latin proverb says that natural is good. Naturally, this is not to say that GMOs, which are artificial, are bad, but as yet we do not have conclusive scientific data proving beyond any doubt that they are good for you. On the contrary, we have the example of the United States where the highest tolerance towards GMOs is combined with the highest obesity incidence. Genetics and bio technology are still an inexact science. The hold a lot of promise but at the same time by using them we run the huge risk of losing a lot, losing perhaps more than we can afford.
The current EU policy of caution to genetically modified organisms is a good policy for the time being, considering available scientific achievements. I believe, however, that we should nevertheless remember European producers. The current situation is, in a way, quite unnatural and the Commission should strike a balance where European producers are not discriminated against, while achieving a situation where European consumers can indeed choose whether to consume GMOs or GMO-free crops. I am glad that I am a young person in the European Union and I would enjoy being able to make this informed choice.
Avril Doyle
Madam President, given the high import dependency of the EU for protein-rich feedingstuffs such as soya bean meal and corn gluten feed, how can the Commission justify the current situation in which even feedingstuffs with only the smallest trace of unauthorised GMOs are banned and destroyed at our ports, whereas meat derived from animals that are fed with these very same unauthorised GMOs can freely enter the EU into the food chain and be consumed by our consumers, thus causing a major distortion of competition to the detriment of European farmers?
A threshold value - as is already the case for the adventitious presence of traces of authorised GMOs for the labelling of products as GMO-free - should be applied for the adventitious presence of traces of unauthorised GMOs that have already obtained a positive assessment from the EFSA or that have undergone a feed and food safety risk assessment in accordance with the Codex GM plant guidelines. Is the Commission planning to come forward with concrete proposals to that end, and when?
Our lengthy authorisation process lacks scientific rigour and integrity and is the road to serious world trade disputes and, embarrassingly, arises from interinstitutional prevarication on this issue. No other trading block is resisting change in this way.
Csaba Sándor Tabajdi
(HU) The time has come for us to have a serious and worthwhile debate on genetic technology in Europe, for up to now we have only heard religious polemics, in many cases only whipping up hysteria. Science cannot and must not be stopped. With an explosion in population and food prices, we cannot dismiss the opportunities offered us by biotechnology and genetic engineering. We cannot have the green revolution without them.
My report on biogas, approved in March, shows that the European Parliament expressed consensus on licensing GM plants to be grown for bio-energy. While there was consensus among the parliamentary parties in Hungary on the preservation of GM-free agriculture, we have to see that this is an illusion. Eighty-five per cent of the soya imported as animal feed is now genetically modified.
It is obvious that genetic modification is not a game, the risks are huge. It is imperative that a credible, science-based specialist supervisory agency at Union level, independent of big business, is set up, able to inspect GM products, able to provide protection against hazards and quell groundless anxieties. On the one hand, the multinational companies concerned with GMOs are somewhat reluctant to issue detailed documentation about their products, and are not partners in scientific trials although, for consumer protection, this would be an essential requirement. On the other hand, there is also a lot of confusing information and unscientific scare stories put about by GM opponents. That is why this debate is so important. Thank you for your attention.
Paulo Casaca
(PT) I should also like to express the extreme concern that the agricultural sector in the Azores, my region, has about the current situation. I believe it has been shown in this debate that nothing can justify the existence of a policy which prohibits the use of GMOs in animal feed at the same time as allowing the consumption of meat produced using these GMOs.
I also believe that the exaggeration existing in the zero tolerance policy has been made clear. Finally, I should like to say that anyone who knows the animal feed industry cannot doubt the obvious impact that both these factors will have on food prices. This impact is very clear, particularly for corn gluten feed and the waste from using maize to produce alcohol. I have already called on the European Commission to take account of the situation of farmers throughout Europe.
Paul Rübig
(DE) Madam President, ladies and gentlemen, in the agriculture debate, we currently face the challenge posed by the Health Check. I would be interested to hear whether the GMO debate plays a role, and to what extent it is being discussed, in that context.
We all know that there is a heated debate worldwide about the food/energy security issue at present. We need to see what implications this debate has for us.
I myself am always in favour of zero tolerance when it comes to labelling. It should be clear to the consumer what he or she is buying. From that perspective, we should ensure that the legislative bodies at regional level also have a chance to decide on this issue.
Marios Matsakis
Madam President, even at this late time of the day, listening to the debate, I feel the need to say just three things.
First of all, it is true that there is no scientific evidence that GMOs pose a hazard to human or animal health. However, as a previous speaker, who has now gone, mentioned, asbestos was not thought to be hazardous and, yet, we know today that it causes mesothelioma - lung cancer. And, of course, smoking was not thought to be hazardous to anybody until a few years ago and now, of course, we know that it causes lung cancer, pulmonary disease and coronary artery stenosis. So it is better to be safe than sorry.
Secondly, Mr Allister and Mr Casaca talked about the difference between GMOs in feed and animals that have been fed on GMOs. There is a large difference between the two. There is a difference, because, in the feed, the GMO is in a completely different state from the GMO that has been fed to the animal, digested by the animal and metabolised by the animal, and then is just, probably, present - but it is not - in the animal's meat in a completely different form than in the feed.
Jean-Pierre Audy
(FR) Madam President, it is clear that this topic of genetically modified organisms is a democratic urgency, an economic necessity and a legal imperative. I congratulate our committee for tackling the subject.
As far as our debate is concerned, it is clear that the European Union is highly dependent on imports of protein-rich feedingstuffs. That goes back to the scientific debates, and the import of animals fed with feed that does not comply with the European rules leads us to wonder whether the European Union is capable of protecting its citizens.
The protection regime is not protectionism, it is simply a question, and I would like to ask the Commission if it feels that the quality of our customs system, which has in my view deteriorated considerably, would allow it to respond to all of the considerations raised in this excellent debate.
Jan Mulder
Madam President, when the Commissioner answers, could she say something about the possibilities of increasing the tolerance level from zero to a higher percentage, say 0.7%, 0.9% or whatever it is? From listening to the debate, I think that is the essence of what has been said. Zero tolerance in the present circumstances is a bit too stringent.
Androula Vassiliou
Member of the Commission. - Madam President, I listened very carefully to the various comments that the honourable Members have made.
We do recognise in the Commission that asynchronous approvals of GMOs can represent a problem for the availability and cost of feed imports. Although the rising costs in this sector are the result of different, complex and sometimes much wider factors, all these factors have been taken into consideration in the study that was made by DG AGRI.
The Commission's efforts are targeted at addressing some of the key factors behind this issue, both at internal level, though the authorisation of new GMOs in the full respect of the EU legislative framework, and at international level, through the discussions with our major trading partners.
Several speakers have posed the question whether the Commission would be prepared to move from zero tolerance to something higher. I must remind you that to do so we need codecision both from Parliament and the Council, and we need to have the support of Member States. You know what the stance of the Member States has been in the various standing committees, where we rarely, as far as I know never, managed to get a qualified majority.
I would like to say that to impose restrictions over imported animal products which are the product of animals fed with GMOs would probably fail to comply with our international commitments.
Lastly I want to say a few words about the delays in the authorisation process, which was mentioned by a number of speakers. There is an ongoing discussion between the Commission and the EFSA to verify the possibility of efficiency gains in the authorisation procedure without any compromise on the quality of the scientific assessment.
One of the elements which have been highlighted is the need to better communicate to applicants the requirements for the authorisation in order to improve, from the start, the quality of their dossiers.
Furthermore, and as a result of this discussion, the Authority has taken the commitment to carry out the preliminary validity check within six weeks from the submission of the application, thus significantly reducing the timeline for the authorisation procedure.
It is also important to note that the approval process could be significantly shortened if the Commission had greater support from Member States in the comitology process for the authorisation of GMOs.
Lastly I want to reply to a comment that was made by a speaker that in our risk management we take into account economic grounds only. I would say that, for us, the primary factor is the safety to human and animal health and the environment as well.
Having said that, I would like to say that the Commission remains open to discuss possible suggestions in this field, but only on the precondition that any proposed solution respect the fundamental aim of guaranteeing the safety of the products placed on the EU market.
President
Thank you, Commissioner.
The debate is closed.
Written statements (Rule 142)
Diamanto Manolakou
in writing. - (EL) The EU's policy on GMOs favours multinationals at the expense of consumers. Farmers become ever more dependent on monopolisation and the multinationals take control of agriculture.
GMOs are detrimental to public health. Some of them have been scientifically proven to be implicated in allergies and to undermine the immune system.
The irreversible effects on the environment make the danger of GMOs many times greater. Biodiversity is restricted and the limitation of contamination can certainly not be guaranteed.
This policy is economically harmful. GMOs are one of the contributing factors to increased food prices and world hunger, as international economic organisations now openly assert.
The proposal to adopt zero tolerance is spurious and ineffective; it is the result of compromising with the interests of multinationals. It permits the cultivation of certain GMOs and the consumption of products deriving from genetically modified fodder, such as meat from non-member countries.
This policy has the specific aim of limiting the vehement protests of the workers in EU Member States who are demanding safe, GM-free food, at accessible prices.
We believe that genetically modified crops should be totally banned in Member States, as should imports of products showing traces of GMOs. At the same time, however, measures should be taken to protect Community production and consumers.