Government Procurement Agreement (GPA) (debate)
President
The next item is oral question to the Commission on the renegotiation of the Government Procurement Agreement (GPA) by Daniel Varela Suanzes-Carpegna, on behalf of the Committee on International Trade - B6-0450/2006).
Daniel Varela Suanzes-Carpegna
author. - (ES) Madam President, Commissioner, ladies and gentlemen, we are putting this oral question on the renegotiation of the Government Procurement Agreement, which will end in March, because we are at a crucial moment. Furthermore, in view of the importance of that agreement and its period in force, which will once again be ten or twelve years, it became necessary to raise the issue with the Commission here in Parliament.
The government procurement markets are becoming increasingly important in the world, in view of their volume, which may be up to 25% of world GDP and, furthermore, because they represent a comparative advantage for the European Union, since at the moment we can be competitive in this sector compared to the competition that we are facing from other countries in other sectors, such as agriculture and industry. If we want to adapt to globalisation, therefore, it is important that the European Union develop the sectors in which it can be competitive internationally and thereby create fair and favourable conditions for European companies.
In most countries, these markets are reserved for national companies, which is one of the main non-tariff barriers to international trade. There are two aspects in this renegotiation that I would stress in particular. Firstly, the geographical extension of this agreement, with the entry of significant players, such as China and the developing countries, and, secondly, the need to ensure fair, balanced and reciprocal conditions for the companies of the different countries.
With regard to the first point, the greater the geographical area covered by this agreement on government procurement the more valid it is. Parliament therefore wishes to know whether any new countries are interested in signing up to the agreement in the short term, and particularly whether we can expect substantial commitments from China in relation to the opening up of its public markets. Let us not forget that China committed itself to opening up its government procurement market - which largely remains closed, or has requirements that are unacceptable to European companies - and to beginning negotiations in 2008 on accession to the Government Procurement Agreement, following its accession to the World Trade Organisation.
Secondly, with regard to fair and reciprocal conditions, we must remember that the European Union's public markets are already very much opened up to international competition. This has considerable advantages for the public bodies awarding contracts, since this openness gives them greater choice and therefore makes it possible for them to find better quality goods and services at lower cost. Let us not forget, however, that this may harm European companies in cases where foreign competitors are preferred.
The Union's trade policy is geared towards greater opening up of all aspects of the international markets. The solution is not therefore to close the public markets to foreign companies. For this reason, we have the legitimate right to demand that our companies enjoy similar conditions of access to the public markets of our main trading partners, whose companies currently enjoy access to our public markets. That is not currently the case, however, since the commitments made by our trading partners are very limited compared to those made by the European Union.
Commissioner Mandelson also referred to this imbalance in his communication on a competitive Europe in a globalised economy. In it, he suggests the possibility of introducing concrete restrictions to access to certain sections of the Union's public markets, with the aim of persuading our trading partners to open up their markets in a reciprocal manner.
Having said all of that, I consider this oral question on behalf of the Committee on International Trade to the European Commission, calling upon it to explain its strategy in this renegotiation of the agreement, to be timely - and hence more than appropriate. I would repeat that we are at a crucial time, since we need to reach an agreement over the coming weeks.
How is the Commission going to defend the interests of European companies in the markets of sectors in which we are highly competitive, such as transport, energy and public works, within the context of the objective of continuing along the path towards greater commercial openness, and not the reverse? Within this context, how are we going to deal with the situation of European SMEs, which are already at a disadvantage compared to large companies, compared to the situation of other SMEs in other countries whose governments reserve a proportion of their public contracts for them, as in the case of the United States?
In view of the lack of reciprocal arrangements, the disadvantages faced by European SMEs and their importance in terms of the main objectives of the Lisbon Strategy, we would call upon the Commission to demand that the other parties in the negotiation remove their exceptions or, if that is not possible, to accept our application of an exception of this same kind in favour of European SMEs. In any event, we need that kind of reciprocal arrangement since European companies are currently at a disadvantage.
I would therefore ask the Commission to tell us how the negotiations are progressing, particularly with regard to the issues that I have raised and those referred to in the text of our question. I would also ask the Commission to take note of the concerns expressed by the European Parliament and to take them into account in its negotiations in Geneva.
Charlie McCreevy
Madam President, the issue of the renegotiation of the WTO Government Procurement Agreement, known as the GPA, is important for Europe as it should provide our companies with future opportunities outside the Community. Last December, after many years of long and difficult negotiations, the GPA parties reached a provisional understanding on a new revised text. I consider this to be a major achievement in the current context of the Doha Round. It demonstrates that the political will to reach an understanding on sensitive issues remains alive.
The new text provides for more clarity and transparency, as well as better guarantees for equal treatment in the procurement procedures. It includes, for the first time, provisions for conducting electronic procurement.
The European Community played an important role during the negotiations. The existing agreement is unbalanced, both in terms of procedural guarantees and coverage. Our main objectives were to fill the gaps and to eliminate ambiguities.
We wanted to obtain better legal guarantees for our suppliers, similar to those offered by our internal regime. At the same time we sought to make the new agreement more attractive for developing countries via new specific measures. The final agreement on the new text is subject to a satisfactory outcome of the market access negotiations which are ongoing. Here as well, we need to rebalance the situation in favour of the Community. Hence the coverage our partners currently offer should be extended to the level the Community has offered and it should be more uniform.
We all want to see improved access for our companies to foreign countries' procurement markets. The Council emphasised in its recent conclusions on the Commission's communication 'Global Europe - Competing in the World' that we need to achieve additional improvements in market access with our future major trading partners, namely in public procurement.
The Community has submitted a comprehensive request and offer which will give the other GPA parties all the necessary incentives to offer significant additional procurement opportunities. Should we fail to get a substantial improvement from other GPA parties, we will consider taking the necessary measures to adapt the Community commitments in the new GPA accordingly.
In the absence of improved access for the EU to third-country procurement markets, Commissioner Mandelson and I are reflecting on a market-opening instrument to enhance EU access.
The case of our SMEs certainly deserves particular attention. It will specifically benefit from the new text, with the introduction of rules on electronic procurement and, if negotiations are completed successfully, the lowering of thresholds of some parties. However, let me remind you that the agreement deals with rather large procurement contracts which are mainly undertaken by big companies. SMEs certainly have an important role to play, but mostly as subcontractors. This is why we have asked our GPA partners who currently maintain specific derogations for their domestic SMEs to abandon them.
On the prospects of extending the geographical scope of the agreement, eight WTO members are in the process of acceding to it. Among those, Jordan is the most advanced. China has indicated that it will start accession negotiations by December this year and, following my visit there last year, we are already preparing this important accession. As already mentioned, the Community has pushed for better provisions on the special and differential treatment for developing countries. I believe we have achieved a good result with tailor-made new rules that fully take their specific needs into account.
I am confident that if we succeed, this new agreement will constitute a milestone for international trade and create new opportunities for our companies.
Jean-Pierre Audy
Madam President, Commissioner, ladies and gentlemen, I shall start by congratulating my esteemed colleague, Mr Varela Suanzes-Carpegna, and by thanking him for having asked, on behalf of the Committee on International Trade, this oral question on the negotiations under way at the World Trade Organisation regarding the rules on access to public contracts. We need derogations for small and medium-sized enterprises, Commissioner.
The subject bringing us together today is a crucial issue as far as growth and employment in Europe are concerned. The WTO rules on trade in goods and services do not apply to purchases made by a State for its own use, that is to say to public procurement. That is why some countries, operating just outside the Marrakech agreements of April 1994, have voluntarily signed a special annex containing an agreement on public procurement. With the exception of the European Union, all the major countries participating in this agreement - Canada, Korea, the United States and Japan - have excluded from their offer contracts that they reserve for their SMEs. This imbalance is unacceptable, and the public contracts that have thus been excluded are precisely those that concern our small and medium-sized enterprises, while the SMEs from those countries have unrestricted access to all our public contracts.
Our SMEs are thus under-represented where public procurement is concerned, and we need to launch a broad debate on the reasons for this. We need to put right this imbalance by obtaining a derogation on public procurement that favours European SMEs. We cannot accept distortions of this kind.
Commissioner, ladies and gentlemen, over and above this negotiation, the issue at stake is the will of the European Union to provide small and medium-sized enterprises with the favourable environment that they need and to use access to public procurement as an extraordinary lever for growth and employment; also at stake is the need to provide legal certainty, within the European Union, between the international legal system, European law and national laws. We are not talking here about protectionism; quite the contrary, we are talking about increasing the supply by having more businesses to meet the demand.
Commissioner, there are three areas on the planet today: Asia, excluding Japan, which has poor countries but strong growth; the United States, which is a rich country with strong growth; and Europe, which has rich countries but weak growth. We need to reflect. When we regulated the internal market by voting for the Services Directive, we built this market on the laws of competition, and the European Union took a great interest in consumers. We now need to take an interest in our manufacturers. The renegotiation of the multilateral agreement on public procurement that is currently under way at the WTO is, in our view, an extraordinary opportunity to act and to reflect on the place occupied by SMEs in terms of accessing public contracts.
We need, Commissioner, to give the internal market the gift of a European Small Business Act that includes social market economy considerations. The debate is open, and I welcome that.
Erika Mann
on behalf of the PSE Group. - Madam President, it is a pleasure to see you in the Chair.
What is interesting and fascinating about this debate is that we are talking about a plurilateral agreement that is very specific in character. It is, of course, part of the multilateral framework but, as it is plurilateral in character, it allows much more flexibility for those Member States that are part of this agreement.
With regard to this, and as it is its tenth anniversary, could the Commissioner tell us a little bit about it: how it worked in the past, whether he is satisfied with it and thinks it is a worthwhile undertaking that is worth renegotiating. It is not part of his portfolio, but does he consider that it is also worthwhile renegotiating the telecoms agreement, which is also ten years old this year?
With regard to the agreement on government procurement - which Mr Audy mentioned - we are very concerned about SMEs, because we know by experience that they are definitely having much more difficulty in accessing international markets. What is the Commission going to do about it beyond what has been done in the past?
China is of great concern. We are happy to have China as part of the global environment, but it puts a lot of pressure on some companies. So once China becomes a member of the plurilateral agreement, what safeguards will the Commissioner put in place to safeguard the interests of European companies and workers? How much is this exercise part of global Europe? How much is it related to the new approach from the Commission agreeing on different bilateral agreements and what will be part of this connection?
With regard to services of general interest, how, again, will the Commissioner ensure that European interests will be safeguarded? Can the Commissioner tell us more about that? He has not touched on that.
Finally, can the Commissioner ensure that Parliament will be kept informed? Can he promise that the Committee on International Trade, which has just elected its new chairman this morning, will also be kept informed?
Ryszard Czarnecki
on behalf of the UEN Group. - (PL) Madam President, it is entirely appropriate for the House to be dealing with the question of the greater liberalisation of public procurement markets today, and I believe it is regrettable that the same determination was lacking when we debated the liberalisation of services across our continent. Essentially, the issues are the same. It is right to consider extending the geographical scope of the GPA, and it is unfortunate that we did not seize the opportunity of significantly deepening our services market a few months ago.
Both cases involve more than just measures to help the operation of the larger European companies. There is a particular emphasis on promoting the interests of small and medium-sized enterprises. I support contract negotiations that will allow us to participate in the Chinese public procurement market, but it is also important to bear in mind the actual opportunities for participation in the European market for the other side, as Mrs Mann just mentioned. As far as our Chinese partners are concerned, there are two sides to this coin, and it seems to me that we should also take into account the specific challenges that exist for the European market in this area.
Caroline Lucas
on behalf of the Verts/ALE Group. - Madam President, congratulations! It is very good to see you in the Chair.
Commissioner McCreevy, I too should like to start off by talking about how best we support small and medium-sized enterprises. I am very pleased that there seems to be a concern right across the different political groups of this House. I think we all share that.
I would like to ask first of all for some clarification of remarks made by the French Trade Minister, Christine Lagarde, when she came to Parliament's Committee on International Trade just last week. She spoke very passionately and rightly, I believe, about the importance of defending small and medium-sized enterprises in Europe. And yet you, Commissioner, seem to have a very different view of the role of SMEs and how best to support them.
Guaranteeing better access to public procurement contracts for innovative small and medium-sized enterprises is essential. They represent 75 million jobs in the Union and 50% of Community GNI, and they are a vital component of thriving local and regional economies all around the EU.
But it seems that the Commission is voluntarily giving up the right to support its SMEs. There are already five countries- Canada, the US, Israel, Japan and South Korea - that will introduce provisions into their legislation which give privileged access to SMEs for public procurement, and yet the EU, bizarrely, has decided it has no interest in standing up for its own SMEs.
So Commissioner, can you really justify this position? For the EU to forego the right to a level playing field which would allow SMEs to have an equal opportunity to compete like the large multinationals seems both extraordinary and indeed unacceptable. Surely we too should be using the renegotiation of the GPA in Geneva to break down the WTO barriers which prevent Member States from implementing a privileged access measure for SMEs should they so wish. We too should be arguing for derogations as part of the revised GPA to allow us to bring in preferential measures, and by doing this we are simply restoring equality of treatment in order to prevent the large multinational corporations from having all of the advantages.
I very much regret as well that we have not had the opportunity for a prior debate really in Europe about whether it is appropriate to try to extend international trade rules to cover government procurement at all. Many would argue that government procurement has little or nothing to do with traditional matters of trade, tariffs and quotas, and that it is an unacceptable area for negotiations at the WTO, because subjecting government procurement at the national, local or regional level to one-size-fits-all rules at a global level on how taxpayers' funds are spent I think destroys citizens' reasonable expectations that they should have a level of democratic accountability over how their money is spent. Essentially, taxpayers' money is different from private, corporate money, and citizens rightly expect that they should have the right, for example, to lobby to cut off expenditure on companies that were doing business in South Africa when there was apartheid, or to disqualify companies with bad labour or environmental records.
I believe we have a really important role to play in defending local sourcing and procurement as a vital instrument of local employment and industrial policy.
Helmuth Markov
on behalf of the GUE/NGL Group. - (DE) Madam President - with my warm congratulations on your election, Commissioner, the Government Procurement Agreement has hitherto applied only to the OECD states, and their expenditure on public contracts in respect of supplies, services and building works make up something between 10% and 25% of their GDP.
China has now been giving consideration to the possibility of joining them. The renewed negotiations currently in progress are, in general, aimed at extending the scope of the Agreement, and that would, of course, give it a vast amount of added significance in terms of the international exchange of goods and services.
While the Commission must certainly, in the revision process, seek to improve transparency and combat corruption in international public procurement, the urgent environmental challenges mean that ecological sustainability in the public sector must be given high priority, and that, as I understand it, means that regulation is needed to deal with it. It must, for example, be lawful and legitimate, when awarding state contracts, for preference to be given to environmentally friendly goods and services, even if they are minimally more expensive.
One crucial question is how one deals with developing countries. It needs to be ensured that public procurement, in the same way as the other Singapore issues, is dealt with absolutely independently of the current Doha development round negotiations, the need for which was expressed very clearly by the developing countries at Cancún.
The document that we are talking about - the one that is due to be renegotiated - can in fact only apply to partners of comparable strength, and so I see something problematic in the idea of non-discrimination or reciprocity, which seem to me once more to tend towards treating highly industrialised countries and developing countries in exactly the same way, which does not work.
The proposed provisions for developing countries, involving a transitional period of three years - or five for the least developed - are quite utterly inadequate when it comes to persuading them to sign up to the Agreement. I think one regrettable consequence of this is that many of these countries will give this Agreement a wide berth, which I, in principle, regard as a disgrace when this is meant to be being handled plurilaterally.
Graham Booth
on behalf of the IND/DEM Group. - Madam President, the debate we are having about this oral question epitomises so much of what is wrong with the European Union. Firstly, we have to deal with the WTO through one man who represents no less than 27 nations. He has no popular mandate and in the light of his record in British politics would not have been chosen to run a village fête. I do not want an EU representative to speak for my country at the WTO. I want a representative of Her Majesty's Government who not only knows my country but cares for it too.
Then there is the whole issue of competitive tendering. China was mentioned as a potential provider in the oral question and it may well be highly competitive. Whilst I condemn the suppression of individual freedoms and rights in China, the Chinese know a few things about running a successful economy. Government spending is only some 20% of GDP, whereas in the eurozone it was 47.5% in 2005. In China, business runs with a light regulatory touch. In the European Union, we are regulating ourselves to death.
In 2005 Mr Blair promised that the British Presidency would cut red tape. It did nothing of the sort. How many thousands of pages did it add to the mountain of legislation? My country was hoodwinked into joining the European Union in 1973 on the basis of it being just a free trade area. This is all it should be: no Parliament, no Commission, no directives. Instead it has become a bureaucratic monster which is wrecking our economy.
Georgios Papastamkos
(EL) Mr President, provisional agreement has already been reached on the revised text of the Public Procurement Agreement and is expected to be reached on the final agreement.
I respect the need for negotiations to be carried out in secret, but do you not think, Commissioner, that you have been late informing the European Parliament about the priorities, demands and offers of the Union during the renegotiation of this important agreement?
I think that the Union's basic negotiating principle should be reciprocity and the achievement of a balanced result between the trading partners. The balanced result should not be at the level of theoretical commitments between the trading partners on behalf of the other partners. It must be evaluated at the level of the real facility to make full use of the volume of invitations to tender subject to cross-border competition. Has the Commission prepared studies on the real access of European undertakings to the market of the other states from the application of the agreement so far? The USA, Canada, South Korea and Japan - the parties to the agreement - have already safeguarded preferential access for small- and medium-sized enterprises to the public procurement market. Paradoxically, however, the Union has not.
I believe the European Union should demand an exemption within the framework of the application of the Public Procurement Agreement for small and medium-sized enterprises. This demand is reasonable, especially as our partners have already acted.
Small- and medium-sized enterprises are the backbone of the European economy and an important source of development and employment, as both Mr Varela, the author, and Mr Audy have emphasised. They contribute to economic and social cohesion. We have an obligation to take initiatives that will safeguard their dynamic role.
David Martin
Mr President, I should like to congratulate you on your appointment.
I am not going to speak about SMEs because many of my colleagues have already done so, but I want to emphasise and agree with them that this is an extremely important issue.
Government procurement accounts for 20% of GDP in developing countries and around 15% of GDP in developed countries. I feel a little bit Janus-faced on this issue, because intuitively I am in favour of opening up public procurement to competition. It should in theory reduce government costs and increase transparency in government procurement and therefore cut out corruption. That should bring benefits both to the developed and the developing world and, in the developing world, would free up resources for health and education. However, if you look at the list of those who have signed up for GPA, there is not a single African country among the 36. It is clear that the African countries and other LDCs feel that the costs potentially outweigh the benefits of signing up to this agreement.
I would ask the Commission what support could it plan to give, firstly, African and other LDC countries to enable them to compete in the European market and the other developed markets on a fair footing and what assistance can they be given to develop their own industry so that they can sustain competition inside their own country if they sign up for opening of the government procurement contracts.
I also worry, as Mrs Lucas has indicated in a slightly different way, how non-trade issues will be taken into account in GPA and the application of GPA, how issues like the environment, human rights and labour rights will be taken into account. I agree with Mrs Lucas that this is public money and that there is a danger, if we simply have GPA without any conditions, that labour and environmental standards could be driven down. On the one hand I can see the advantage of opening up public procurement, but it is fraught with dangers and I hope the Commission will examine these issues.
Syed Kamall
Mr President, I should like to congratulate you once again, and to thank the Commissioner.
In Britain, SMEs are unfairly shut out of public procurement due to well-meaning requirements such as corporate social responsibility and environmental standards; quite often a requirement for three years of audited accounts, which many small businesses cannot meet; a lack of competitive tendering; the bundling of contracts that become too big for SMEs and favour the large companies; and secrecy and a lack of transparency.
We know that the EU directive requires transparency and competitive tendering, but most contracts that SMEs bid for are quite often below the threshold. So when you speak to SMEs and ask them what they want to see, they say they want to see a cut in bureaucracy and paperwork. They want to see authorities avoiding the one-size-fits-all requirement for certification. They want to see contracts advertised on websites such as 'supply2.gov', and they also want to see unbundled contracts. But we have to recognise that government departments are not commercial organisations and will often want to seek to avoid the extra work involved in multiple tenders, so we therefore need to provide incentives for governments and local government.
In America, targets have been provided as to whether fair competition actually does or does not exist. SMEs do not require quotas, but they need a performance metric to see whether there is fair competition. Also in America there are small SME advisers helping the government to enable SMEs to have fair access. These requirements - benchmarks and competition advocates - would probably not be allowed under the WTO agreement, and I understand the reason, but it does unintentionally forbid measures which ensure fair competition.
The WTO agreement is actually generally positive, as it is anti-protectionist, but it forbids measures which are needed to help small businesses. So while some Member States want an opt-out, others rightly fear that this would increase protectionism. Therefore, let us call on the Commission to seek a compromise whereby an opt-out is secured, but a new agreement is drafted to allow SME-friendly measures and to greatly extend anti-protectionist measures. If we allow SME-friendly measures, the agreement would remove America's reasons for its opt-out, which has been used to retain the Buy America Act. It would also help British and European SMEs to compete globally.
Margrietus van den Berg
(NL) Mr President, a Government Procurement Agreement could mean more transparency and thus less corruption. It could also mean fair prices - which is not unimportant given that public service contracts involve taxpayers' money - with the right, though, to include social and environmental criteria at the tendering stage. Developing countries could also benefit enormously from all these advantages. Needless to say, their participation in the international Government Procurement Agreement in future cannot be ruled out, but the Commission should ensure that they can implement this method - and the same applies to fair competition rules - nationally or regionally at first, just as we did in Europe, and do not need, therefore, to allow in the entire world and the large monopolies straight away. It would then have to be up to the developing countries to determine when they would feel sufficiently developed. Something that, in fact, applies the world over, is that forced large-scale tenders, as a result of which the small and medium-sized enterprises are pushed out of the market, should be avoided at all costs. Unfortunately, I have first-hand experience of exactly that at a train station in Amsterdam where the train station's security service was put out to tender. The company that was previously responsible for the station's security was a small company and was doing an excellent job. During tender, however, this company proved too small to compete for the total tender for many of those stations and was elbowed out of the market, therefore.
My fellow Members have undoubtedly come across similar examples, and that is why we would like to ask the Commission how the SMEs can be guaranteed better access to procurement contracts.
Finally, the forced break-up of the national and semi-public provisions for the sake of large foreign suppliers is fundamentally wrong. Every country has the right to regulate publicly what the public would like to retain. We are talking about basic provisions here, like education and water, provisions that are at the heart of society and that should not be messed with.
Andreas Schwab
(DE) Mr President, Commissioner McCreevy, ladies and gentlemen, it is because the question raised by the Committee on International Trade on the problem of procurement at WTO level directly affects the European internal market that I believe that we have to consider these more closely. Of course, on the one hand, it is the WTO agreement that is at issue here, but, on the other, it must also be clear to us that these international treaties - as is the way of things with globalisation - have direct effects on the European internal market.
Mr Kamall pointed out that, in a number of WTO member states, the United States of America being one of them, certain quotas are to be adhered to even now in the award of national contracts to small and medium-sized enterprises, which means, at the end of the day, nothing other than that the scope of the procurement regulation laid down by the WTO is being restricted. I would like to see an impact assessment indicating whether or not this is of any long-term benefit to small and medium-sized enterprises; that it is, in any case, not certain.
As long as we do not know that for certain, we do not need to worry about the limitation of scope, for it is of course the case that small and medium-sized enterprises live from markets that are as transparent as possible and that they find easiest to access, and if the WTO member states reduce the scope by a quarter, I do not know whether small and medium-sized businesses actually derive any benefit from that.
It would surely be a worthwhile exercise - and it is with this in mind that I, too, support this question - if the Commission were to be able to examine this closely and show us whether this does have positive effects on small and medium-sized businesses.
In the Council, of course - none of whose representatives are, alas, present - a balance must be found between those who would favour an approach like that of the USA and those who want to see the precise opposite of that, that is to say, the reduction of quotas to create a free and open market right across the WTO, giving small and medium-sized enterprises a chance everywhere.
It is for that reason that I believe that the crucial problem for small and medium-sized enterprises in this respect is much more that we have not yet really got a handle on the problem of sub-contractors, for it is in that capacity that small and medium-sized enterprises are often used, being in that way able to create jobs and have the chance to earn money, but they are, ultimately, managed from higher up and that often puts them in a difficult position, with their feet in two different camps.
What I think we should do is give this problem, in particular, closer attention, and so I would be glad if the Commission were to give some thought to this and keep us up to speed with what is going on. In other words, it should start by addressing the problem to which this question refers and then we can make definite demands of the Commissioner.
Stefano Zappalà
(IT) Mr President, ladies and gentlemen, I should like to congratulate Mr Varela Suanzes-Carpegna and to thank him for having submitted his question, which gives us a means of addressing the issue at stake. I was rapporteur in this House on the reform of contracts, supplies and services, in this case Directives 17 and 18.
Even though there is very little time, I think that it is worth pointing out the main aspects of the problem. As I have heard some speakers say this morning, Parliament has very much focused Directive 18, or the general directive on contracts, on environmental issues, the updated system of electronic contracts, the social sphere and the issue of thresholds, and I therefore believe that we have legislation that is without doubt exceptional, but that does not actually concern this morning's subject matter.
The issue raised is completely different: a review is under way of an international agreement that places EU countries - and therefore EU businesses - at a disadvantage compared with others. What is the problem? In 1994 and in subsequent years, very different types of activity were planned worldwide through plurilateral agreements. The United States, China and other countries in reality enjoy privileges that are not enjoyed by EU businesses. This system is now being reviewed, but the methods of reviewing it need to be laid down, because, as my fellow Members and I myself should recall, the United States alone has an annual output of almost USD 200 billion, a sum that actually remains within the United States.
The point is that, while anyone can come and work in Europe, our small and medium-sized enterprises cannot go and set up business in the rest of the world. The GPA agreements are, among other things, agreements that deny European businesses access to the international system.
What decisions can therefore be made today? As I see it, the Commission believes that, by abolishing the privileges of others, we can compete once again on an equal footing. That is not so. I believe that we need instead to protect Europe's small and medium-sized enterprises, by guaranteeing them the same privileges within the European Union and thus with regard to the European Union that are enjoyed by small and medium-sized enterprises from the United States and from other countries in the world.
Therefore, not only am I grateful to Mr Varela Suanzes-Carpegna, but I am also of the opinion that the argument being upheld by France at the moment within the Council should definitely be favoured and supported over the European Commission's position.
Charlie McCreevy
Mr President, I should like to thank all Members for their comments.
I attach the utmost importance to public procurement. Proper, fair and transparent procedures are crucial not only for businesses that want to bid for projects but also for authorities that would be able to save themselves and taxpayers huge amounts of money if they applied the procedures properly.
Getting commitments from our trading partners to open their procurement market for European bidders is essential. Our companies have something to offer. They are competitive, but too often they are simply not allowed or invited to make a bid.
SMEs benefit from public procurement. They already have a big share of the market, but I do not think that setting aside quotas or giving preferential treatment is the answer. If we were to do that, so would more of our trading partners and the result would be that European companies would lose out. I believe that all sides are best served by open markets. Our SMEs are dynamic and strong. They will benefit as well.
Mrs Mann asked to be kept informed. I shall ask my officials to keep her committee closely informed. They will attend meetings of the committee and will answer your questions about the details of the negotiations.
Various Members referred to special arrangements for SMEs and that this should be part of our negotiating stance. As I have said, I do not agree. I agree with a lot of what Mr Kamall said, and his observation that Member States themselves could do a lot to assist their SMEs in the area of public procurement without contravening any rules at all. If they unbundled some of their contracts and cut out a lot of the bureaucracy, that would benefit SMEs substantially, and would not require the setting-aside of quotas. Where I would disagree is with the conclusion drawn by some people that the way to do this better for SMEs is to set aside quotas.
Mr Kamall also raised the issue of the United States having a Small Business Act and an agency to deal with these matters. However, the figures show that, either in volume or in quantity terms, SMEs in Europe get a far higher percentage of contracts than they do in the United States. That should be of some interest to people.
Therefore, I say - and people are entitled to disagree with my views on this - that public procurement is all about competing: the best goods and services for the lowest amount. That means value for money. Reserving parts of the market underlines this. We were also discussing SMEs in an earlier debate this morning. Members said that SMEs need opportunities. I certainly agree. However, protectionism is not the answer. But, of course, we will not be naive: we expect our trading partners to open their markets as well.
President
We shall suspend the sitting and resume at 11.00 a.m. for the formal sitting with the President of Bulgaria.
(The sitting was suspended at 10.25 a.m. and resumed at 11.00 a.m.)


Revision of the Broadcasting Communication - State aid for public broadcasting (debate)
President
- The next item is the oral question to the Commission by Mr Visser, Mr Belet and Mrs Hieronymi, on behalf of the Committee on Culture and Education, on the revision of the broadcasting communication - State aid for public broadcasting - B6-0495/2008).
Cornelis Visser
author. - (NL) Madam President, Commissioner, it is unfortunate that Mrs Kroes is prevented from being here this evening because of an accident. I should like to take this opportunity to offer her my sincere wishes for a speedy recovery. Politically, though, I fundamentally object to her interfering with national, public broadcasting.
Last Thursday, together with Mrs Hieronymi and Mr Belet, I organised a hearing for the Group of the European People's Party (Christian Democrats) and European Democrats about the Commission's public broadcasting communication. I can tell you that the interest from the sector and the Member States was considerable. Even the Directorate-General for Competition attended in great numbers. This subject is obviously high on their agenda. The Director-General for Competition was present all morning as a panel member.
Madam President, the Commission proposal reviewing the rules for public broadcasting is unacceptable as it currently stands. Public broadcasters play a crucial role in the protection of cultural diversity, linguistic diversity and media pluralism. I am vehemently opposed to the Commission's plans. First of all, we need to realise that public broadcasting corporations are a national preserve and that, consequently, it is the national authorities, and not the European Commission, that should stipulate their policy. This is also clearly enshrined in the protocol on public broadcasting in the Treaty of Amsterdam. Member States organise and finance the public broadcasters as they see fit. Commissioner Kroes's plans seriously undermine the principle of subsidiary and the Member States' freedom of movement and replace them with European interference. I am very surprised that, as a Liberal Commissioner, she should opt for this route.
Secondly, I am apprehensive about the proposal to introduce a prior market test conducted by an independent supervisor. This would give commercial channels considerable input. Is that what we want? A market test will inevitably increase the level of paperwork. It is very much the question whether the smaller broadcasting corporations will be able to afford extra manpower, and who will absorb the extra costs involved? Should the broadcasting corporations foot the bill? Or the taxpayer, perhaps? This initiative is not workable in small Member States. Moreover, this test is very detailed; the proposal is lacking in flexibility. As a consequence, Member States will no longer be able to adopt policy and procedures that tie in with their national systems. Moreover, it is very much the question whether a prior assessment of the market impact and a public evaluation of the new services will not give commercial competitors too much of a head start.
Thirdly, the proposal fills me with worry because the public broadcasting systems are not organised in exactly the same way in every Member State. There is technological diversity, as well as differences in broadcasting systems, organisation and scope. There are also differences in terms of language and culture. The 'one size fits all' rule that is proposed in the report certainly does not work in this case. The proposal takes no account of this.
Having got my concerns off my chest, I should now like to provide a brief outline of what happened at the PPE-DE Group's hearing last Thursday, where the Commission's attitude was very positive. The Commission admitted that the proposals were probably excessively detailed and that the wording needed editing. The Director-General informed me that it is possible to delay the final communication until after 5 March, the day on which the Culture, Media and Sport Committee will be organising a second hearing on this subject. After the hearing, the Director-General said that the Commission might have to draft a fresh version based on this new information, before it submits its final communication. This was an excellent result.
You will understand, Madam President, that I am pleasantly surprised with these pledges. This means, after all, that the Commission is opening its eyes and is prepared to listen to the voice of the sector, the Member States and Parliament. Excellent.
I should like to ask the Commission a few more questions. First of all, will the Commission stand by this prior detailed market test, conducted by an independent supervisor - a question you may be able to pass on to Commissioner Kroes - is the Commission prepared to abandon this idea of an independent supervisor and this prior market test, or does it insist that it stays?
Secondly, how can technological impartiality be guaranteed? Does the proposal not imply that a difference is drawn between the current services of the public broadcasting corporations and the new media services?
Thirdly, further to the comment by the Director-General for Competition, is the Commission prepared, based on the new information, to draw up a new proposal?
Fourthly, what does the Commission intend to do about the Court of First Instance's judgment in the Danish TV2 case? Will it include it in the new proposal? If not, how will it be implemented?
My final question is, is the Commission prepared to involve Parliament in the follow-up procedure and to await further discussion with Parliament?
I hope for excellent cooperation between the European Parliament, the European Commission and the Member States so that the final version of the communication can be thrashed out.
Androulla Vassiliou
Member of the Commission. - Madam President, as has already been mentioned, my colleague Ms Kroes had a small accident so that is why she cannot be with us.
On 4 November 2008 the Commission published, for consultation until 15 January, a draft new broadcast communication. We are serious about the process of wide consultation. Parliament's Committee on Culture and Education has scheduled a hearing for 5 March and, as has already been mentioned, the PPE-DE Group already held such a hearing on Thursday, last week, in the presence of the Director-General for Competition, Philip Lowe.
This dialogue between the Commission and Parliament is important. We stand ready to listen and to reply to your questions. We also know that Parliament agreed in September 2008 that state aid to public broadcasters should be delivered so that they fulfil their function in a dynamic environment, avoiding the use of public funding for reasons of political or economic expediency. This concurs with our views; both public and private broadcasting are important. The dual system of broadcasting is an answer to Europe's media landscape which must be safeguarded on all platforms.
The draft broadcasting communication therefore seeks to consolidate the Commission's state aid case practised since their existing 2001 communication. The draft ensures that our rules reflect the rapidly changing new media environment. The objective of modernising the communication is to increase transparency and legal certainty. The draft communication clarifies that public broadcasters shall provide audiovisual services on all media platforms while leaving private operators sufficient incentives to stay in the market. This is ensured by the so-called Amsterdam test, which balances the value and the negative effects of publicly financed media services at the national level.
Why do we have these tests? Because having these tests at the national level helps to avoid Commission intervention. The Commission increasingly receives complaints about borderline cases where a public media activity may have no clear value for citizens but where the market impact appears considerable. The Commission, however, feels that repeated interventions in this sector would not be in the spirit of subsidiarity. This is why we want Member Sates to share the Commission's responsibility for controlling the market impact of state finance media services.
The Amsterdam test will ensure that new media services of public broadcasters satisfy the social, democratic and cultural needs of viewers and listeners while limiting the collateral damage for state aid for private operators to a minimum. We cannot agree that the Amsterdam test would involve an unjustifiable administrative burden. Of course, any test involves work but the minimum effort we require is reasonable and necessary. Firstly, the test is only foreseen for important and truly new services; and here our draft leaves a large margin of appreciation to Member States. Each Member State can decide when a new audiovisual service actually merits being tested. Secondly, the draft exempts pilot projects from the test. Public broadcasters can therefore continue experimenting with new media without any preliminary tests. Thirdly, the draft leaves Member States full freedom to choose their adequate procedures and institutions which apply the test. It is finally worth mentioning that smaller Member States, such as Belgium and Ireland, already implement such tests. The solutions found in these countries are proportionate to the resources available. As the test is quite broad there is also no possibility of infringing on editorial freedom. The test merely requires that a public media service satisfies the social, democratic and cultural needs of society and that its impact on the market is commensurate. To safeguard editorial independence we also open the possibility in the draft that, under certain conditions, the test is done by a public broadcaster itself.
In summary, I would say the Amsterdam test should be seen as an opportunity rather than as a threat. It will help to maintain media pluralism in the new media environment by safeguarding fairness and certainty for both commercial media, including online newspapers and our excellent public media.
Ivo Belet
on behalf of the PPE-DE Group. - (NL) Madam President, Commissioner, ladies and gentlemen, good evening, I should first of all like to ask you if you could pass on our good wishes to Mrs Kroes. We hope that she makes a speedy recovery, as we gather that she missed the bend on a slippery surface. We hope, naturally, that Mrs Kroes will be back with us as soon as possible.
Obviously, Commissioner, we agree that you as a Commission guarantee, now and in future, a level playing field for all players in the audio-visual field, namely both the public and private broadcasting corporations. This is crucial for a balanced supply, and it also benefits quality.
What the Commission has now presented, though, is diametrically opposed to this for various reasons, as Mr Visser has already made quite clear. I should like to start by making a brief comment, Commissioner, in relation to what you said a moment ago. This market test that you propose is already being applied in Belgium, among other countries. Well, to some extent, this is true, but not entirely. This market test, or impact analysis, is indeed already being applied to some extent, by the broadcasters themselves, among others, but not according to the modalities as these have been set out in the Commission proposal, which look somewhat different.
I should like to share our reservations with you regarding the proposal. My main objection is that it clashes with the Lisbon Strategy. Indeed, it is the case today that in many Member States, it is precisely the public broadcasting corporations that bring about and encourage innovation in the media. This should, obviously, stay this way. We are, to my mind, moving in the wrong direction with the patronising administrative attitude that holds back innovation. New platforms, particularly in the digital context, on broadband, on the Internet, and suchlike cost a great deal to develop. Investments of this kind are ideally spread as widely as possible and developed in concert. Private and public broadcasting corporations can then offer content on a shared platform, and it is in terms of content that competition should come in, so that the customer can derive maximum benefit.
Do not get us wrong, though. We are 100% behind balanced competitive relations between the public and private broadcasters. There should be room for both to be able to provide quality content. It is obvious, in this connection, that the public broadcasting corporations should account for the government funds they spend and with which they work, even though we are convinced that there are better ways of doing this. In this connection, we would refer to the British example of the BBC, where alliances have been proposed between different partners in terms of development, production and distribution. This is a good example, to my mind, and I would kindly invite the Commission to start thinking with us along those lines.
Katerina Batzeli
on behalf of the PSE Group. - (EL) Mr President, Commissioner, the revision of the basic guidelines on state aid for public broadcasting put forward by the French Presidency is an extremely topical debate both internally in numerous Member States and for the position of the mass media at European and international level.
At the same time, however, the revision of the telecommunications package, which basically restructures the way in which and the criteria by which the radio spectrum is allocated at European level, has demonstrated that the rules governing the financing of broadcasting services are now of fundamental importance to the future regulation or deregulation of services relating to the information society, innovation and services of public and economic interest. This is the political question which we are basically required to resolve.
Clearly the debate on state aid focuses primarily on so-called public service broadcasters, as defined by each Member State, given the basically minimal resources which they have at their disposal and, above all, the important public service role allocated to them. The important role of broadcasters is mentioned in the UNESCO Convention, the Amsterdam Protocol and in the 2001 Commission communication. In other words, there is already a platform on which the role of the public mass media is clearly defined.
However, the dossier has been opened on the state aid debate and we must take account of certain new circumstances, as you stipulated, and of certain actions which are being taken either wittingly or unwittingly, due to the confusion which often exists between public and private agencies.
I should like to mention certain points: firstly, the question of the definition of the public service mandate should not be confused with the question of the financing mechanism selected in order to provide such services. While public-sector television may engage in commercial activities - such as selling advertising time - in order to generate revenue, this has been condemned by certain governments, such as the French Government, and is being overturned on the basis of national legislation.
On the other hand, commercial broadcasters required to provide a public service also play an important role. The coexistence of private and public service providers is a basic component of the European market.
I should like to close with one other point: the ex-ante procedures proposed by the Commission for examining state aid should worry us, not because subsidiarity is being suspended or superseded, but to see if they are compatible with the terms of state aid.
Finally, I would note that the question of national aid to radio stations and the mass media should be examined within the framework of international relations, because European organisations have to compete with international behemoths and strict legislation will damage European achievements and the acquis communautaire.
Ignasi Guardans Cambó
Mr President, I shall try to be brief and, of course, I must begin by also extending my warmest wishes to Commissioner Kroes in the hope that she recovers from her fall. Here, at least, the doorway to the building has been gritted with lots of salt, but I see that there was not enough salt in other places.
The debate we are having is of the utmost importance and, in the end, therefore, its basic objective is to demand, to request, that the Commission involve Parliament. That is the reason for our debate: not to end it here but, rather, to make sure, before the Commission's communication is formalised, that we really are going to have a debate here and that we will all be involved.
Why? Because it is not only our television model that is at stake here; a great deal more is at risk because television broadcasters are not - as we all know, and as we were well aware in our debate on the Audiovisual Media Services Directive - the same as they used to be; what they do, in fact, is process content that they supply via a linear or non-linear platform, and everything interacts perfectly in both areas. Therefore, it is no longer appropriate to talk about public service broadcasting as if this debate were being held in the 1970s or 1980s.
On the other hand, it is clear that this debate must take place, since not everything that is labelled a public service today is actually a public service, and it does not always make sense to use public money to do what certain television companies are doing with public money. At the same time, however - and this is the core of our concern, I believe, and I understand it is also that of some of my fellow Members - public television broadcasters are absolutely vital in protecting our cultural and linguistic diversity and ultimately in binding our societies together because, in theory, they are looking for something more than direct profit.
This financial balance, therefore, must be protected. We must look for new models of financing; we should be creative and open up this debate, but we cannot do so in such a way that we risk something so vitally important to our societies - namely, our current public television broadcasters.
Helga Trüpel
on behalf of the Verts/ALE Group. - (DE) Mr President, Commissioner, ladies and gentlemen, the Barroso Commission had announced the abolition of European over-regulation as one of its major political goals. We get the impression with the proposals you are making now that you are actually encouraging over-regulation. The hearing held by the Group of the European People's Party (Christian Democrats) and European Democrats last week made it clear that there are grave doubts regarding how much you are now interfering in the competences of the Member States. What is now on the table has the stink of over-regulation, and that is not something that we can approve of.
It is correct that we must find a balance between the possibilities for developing public and private broadcasting services. But this also means - particularly in the digital age - that public broadcasting, which stands for quality, cultural diversity, cultural and social cohesion, must have opportunities for development in the digital age. We require this as part of the Lisbon Strategy. If public broadcasting is denied this opportunity, it will be turned into a dinosaur. Then it will not be able to develop well.
When we think of our economic and financial crisis, we have all come to the conclusion that markets must be regulated. Social and ecological regulation is not a position against markets but in favour of fair markets - and that means regulated markets. The same applies to the relationship within which the private and public sectors are able to develop in future if we want to be successful in the digital world.
Erik Meijer
on behalf of the GUE/NGL Group. - (NL) Madam President, for 80 years, public broadcasting has had the task of informing the public in the broadest possible sense. This service can survive by public funding that may be collected via a separate radio and television tax and that may be topped up with membership contributions to broadcasting organisations, as has been the case in the Netherlands for a long time.
Alongside this, in recent decades, public broadcasting has been encouraged to earn its own money. This is achieved not only through advertising time but also by making much of the information material collected by the broadcasting house available in the form of audio and video material. It is expected that, as a result, viewers and listeners will feel more closely associated, new target groups will be reached and government costs will be limited. This task, which has grown over the years, poses no problems as long as commercial channels do not feel adversely affected.
From the perspective of commercial channels, the much older public broadcasters may be seen as competitors that are given a serious advantage as they collect funds through taxpayers' money. The question is now whether the public broadcasters' right to exist should no longer be derived in the first instance from their usefulness to society as a whole, but from the possible distortion of competition in respect of commercial channels. As public and private interests no longer clash, the European Commission is faced with conflicting demands.
The future of public broadcasters will be in the balance if their room to manoeuvre is limited in favour of commercial companies' scope for profit. Things will be even worse if this is done without this Parliament's involvement, with the express objections of 19 of the 27 Member State governments being dismissed.
Over recent years, I have asked the Commission a number of times to abandon this fatal plan. This appears to be the only possible solution to me, given the current widespread concern. Moreover, this is a matter that falls within the competence of the Member States, not that of the European Union. I endorse the questions and position adopted by Mr Visser and the other speakers.
Manolis Mavrommatis
(EL) Mr President, Commissioner, as my fellow Members who signed the oral question have emphasised and as distinguished speakers stated in greater detail at the public hearing in Brussels last week, we all need to look on public-sector television as a medium for supplying a service to our citizens which will, to a great extent, coincide with the obligation to operate it.
The public dialogue, the independent supervisory authority and the diversity of programmes, in keeping with the history and culture of each Member State, need to be protected in the wake of the development of new technologies and the host of companies that spring up on a daily basis.
Within the framework of healthy competition, the Commission needs to promote new ways of protecting the public interest and public broadcasting.
Mainly, the definition of the public mission of broadcasters needs to be made clear; we need a better evaluation of state aid but also, as regards the rule of transparency, we must not impose pointless administrative and financial burdens on the Member States and public broadcasters in the ex-ante evaluation carried out by the Commission.
More effective control mechanisms also need to be adopted in the new mass media environment. Furthermore, given that public broadcasts play a decisive role in cultural and linguistic diversity, all these media, as well as the public corporations and public television, are obliged to provide quality programmes and, at the same time, within the framework of competition with other similar bodies, they must be able to respond positively to the challenges of the times by broadcasting events of global interest, such as the Olympic Games, the World Cup and so on. Unfortunately nowadays this is something that tends to be prevented simply by reason of the fact that, as private companies have more money, public television cannot afford them. Consequently, citizens will not be able to watch these events alongside other programmes.
To finish, I should also like to point out that what is currently available on the market and the interests of commercial media in defining the scope of the competence and activity of public broadcasters is not, by the same token, conducive to the more general interest, with of course a few exceptions, and the Commission needs to take serious account of that fact.
Maria Badia i Cutchet
(ES) Mr President, Commissioner, may I also wish Mrs Kroes a swift recovery.
I would like to make a few general comments on the review of the communication on broadcasting. Firstly, I would like to say that I consider this review initiated by the Commission to be positive, insofar as it will enable the content of the 2001 communication to be adapted to the changes that have occurred both in the field of technology and in Community law.
Furthermore, it retains the main thrust of the 2001 communication, which recognised the essential role of public service broadcasting in guaranteeing quality of democracy and pluralism. I am basically referring to the principles whereby the Member States should define and delimit the supply and content of the public service licences taken up by the corresponding public bodies, and should have the freedom to choose the funding model, thereby avoiding any distortions to free competition.
Furthermore, the licence should be assigned to a specific corporation or group by means of a formal resolution and there should be external, independent supervision of the licence; on this point, I wish to stress the vital role of the regulating authorities for the audiovisual sector.
As far as the most significant additions to the proposal are concerned, I welcome the ex ante controls on public broadcasters' provision of new services, but only if enough flexibility is retained for these controls to be adjusted to the institutional model of each State and adopted gradually.
Finally, I believe there must be a very careful assessment of the possibility that certain services that come under the umbrella of public service audiovisual provision may be subject to remuneration or valuable consideration on the part of the citizens who use them, taking into account both the free and universal nature of traditional public service audiovisual broadcasting and the risks of exclusion that may come about should this method of funding be accepted. I hope that the Commission will take these comments into consideration.
Ieke van den Burg
Mr President, it is clear that the issue at stake here is the tension between the public interest and its role in society against the impact on fair competition and the functioning of the internal market. The borders between public service broadcasting and private broadcasting, but also other media, are increasingly blurred and this is particularly the case when new media such as internet, iPods, SMS etc. are at stake.
As some people have said, public broadcasting is often the leading actor in innovation in services, but it is clear that this is an impact which is cross-border and across media sectors. Therefore, it is important to have consistency between the broadcasting communication and the general framework of services of general economic interest. This is an important issue which we have dealt with in Parliament's Committee on Economic and Monetary Affairs. In particular, the PSE Group Members on this committee have stressed that it is important to create more legal security for services of general economic interest, and we would like to see a framework directive and sector legislation on this decided at a political level.
The consultation on the draft communication, which is now before us and has been presented by the Commission, can be commented on until 15 January, and it is important to give a clear signal again that this more horizontal general framework would be an important tool to place discussions like this discussion on public broadcasting in a broader context.
It is important to see who decides the rules and what balance exists in the rules between market interests and public interests. I have the implicit feeling that the market test mentioned in the communication should give primacy to market and commercial considerations instead of these public considerations. This was our intention with the new horizontal rules on services of general economic interest.
I am a bit surprised that the PPE-DE Group is now focusing so much on these specific issues, whereas they were quite hesitant in supporting our appeal for the more general framework. Here is a clear example - also in this case of broadcasting - that, if you do not have a broader clear framework which places more emphasis on and gives more dominance to the public interest aspects, it is always the market interest that will dominate in this type of discussion.
I would like to take the opportunity to repeat our appeal for this framework of service of general economic interest, which, horizontally, should reinstate the balance between those interests in favour of the public interest.
Emine Bozkurt
(NL) Mr President, public broadcasting stands for pluralism, diversity, cultural diversity in Europe, the heart of democracy - I did not make this up, the Commission can confirm this - and public broadcasters are of national importance. There are now plans afoot to introduce a market test that is to be conducted beforehand, particularly for new media activities. I do not think this is a good idea, because Brussels should not dictate beforehand how Member States should organise their public services. How the public interest is served should, in my view, be assessed at national level and no compulsory market test is necessary for that purpose.
I should also like to say a few words about the red tape. Whilst I am in favour of checking things through, we should ensure that we do not end up with more rules and more costs for the various Member States.
Moreover, as for supply, I think that we should not draw a distinction between old and new services because, in practice, the lines between the two are blurred. It is not a case of either/or; television programmes often go hand in hand with new services and vice versa. So, just as in Europe, the two are intertwined. It is not just about the market, but also about the public importance of our public broadcasters, which is universally acknowledged, not least by the Commission. I should like to hear from the Commission whether this will be included in the adapted version of the communication and whether the responsibilities will be assigned appropriately, namely to the Member States, even though these will be accompanied by rules for services of general interest that should be drawn up in consultation with the European Parliament and the Council.
Thomas Mann
(DE) Mr President, public broadcasting is more than an economic factor. I was at the hearing held by the Group of the European People's Party (Christian Democrats) and European Democrats last week in Brussels. The importance of information and of the diversity of European culture and education was noted. If 22 Member States are against revision or intensification because we have different framework conditions and different markets, then it is quite wrong to want an extensive administration, a time-consuming test procedure such as this obligatory ex-ante test, or European interference with an unwieldy bureaucratic concept.
There are already controlling bodies for public broadcasting: the broadcasting councils. We monitor the adaptation to technological change. We monitor the measures in order to ensure fair competition. I am a member of such a body, as the representative of the Union of European Federalists at Hessian Broadcasting [Hessischer Rundfunk]. Our independence is guaranteed by law. We are in turn completely and rightly controlled by the public. This is how an effective media policy works.
Zuzana Roithová
- (CS) Mr President, the state agrees with my fellow MEPs that state support for public interest broadcasting requires legislative clarification. We have been calling for this in the European Parliament for a long time. However, I would still like to draw your attention to further urgent matters that the Commission must resolve as quickly as possible. Out of the many problems I will mention three. Firstly, there is a need for the general introduction of shared television aerials to include digital broadcasting, particularly on blocks of flats owned by housing cooperatives, in accordance with the exceptions under Article 5 of the information guidelines, as this is a problem for millions of citizens in the new Member States, including the Czech Republic. The second point is support for greater cooperation between the national councils for radio and television broadcasting and the European institutions in order to achieve better application of public service provisions. The third point is to improve coordination between national monitoring authorities for television broadcasting in respect of fines for inappropriate broadcasts that threaten the moral development of children and young people.
Androulla Vassiliou
Member of the Commission. - Mr President, I thank you all for your very fruitful discussion, which I will certainly convey to my colleague Mrs Kroes.
Let me comment on some of your remarks. The Amsterdam Protocol points to the need to balance financing with state aid and effects on competition. We want Member States to take the lead on this, because otherwise we will have to do it in Brussels on the basis of complaints.
Our aim is to give Member States more possibilities to develop public service broadcasting, as long as the Treaty provisions on competition are respected. Public service broadcasting should continue to innovate, educate and, of course, entertain. The Commission agrees with these goals.
It is up to Member States to decide on how to finance public service broadcasting. This is clearly stated in the Amsterdam Protocol. Public broadcasters will be able to experiment freely with new projects. The draft communication makes clear that pilot projects are exempt from the tests. We have always recognised the possibility of providing funding for a public service mission, which includes a wide range of varied and balanced programming by public service broadcasters. This will also remain the case for the future.
The Commission also wants to guarantee a mixture of public and private. The Commission aims at promoting public broadcasters to benefit from new technologies in order to serve the social, democratic and cultural needs of society.
The Amsterdam test allows Member States to provide funding for new media services by public broadcasters. It protects the ability to keep up with changes in our fast-moving media environment. At the same time, it is also in the public interest to maintain the incentives for private operators. Innovation by both public and private broadcasters is important for realising the Lisbon objectives, and it goes without saying that public broadcasters will also remain free to launch any kind of new service on a commercial basis in the future without prior assessment.
I want to assure you that we take the consultation very seriously. We will review the text to take into account legitimate concerns. I will ask our services to take Parliament's and Member States' proposals into account as we review the draft.
President
The debate is closed.


Implementation of the Single Euro Payments Area (SEPA) (debate)
President
The next item is the oral question to the Commission by Mrs Berès, on behalf of the Committee on Economic and Monetary Affairs, on the implementation of the Single Euro Payments Area (SEPA).
Pervenche Berès
Mr President, I am speaking on behalf of the Committee on Economic and Monetary Affairs. Commissioner, the European Parliament, under the authority of our rapporteur, Mr Gauzès, has been very committed to ensuring that the legislative measures necessary for implementing the SEPA - Single Euro Payments Area - project come into existence.
When we drew up the accompanying legislation, the Directive on Payment Services, we asked ourselves some questions. We now realise that these questions were probably justified.
Now that this project is to be launched, we have some concerns, because we do not have the impression that the level of mobilisation, which it seems to me has nothing to do with the challenges of the crisis, has not quite materialised as it should have done.
The fact is, this project, which has received a great deal of support from those in the sector and from the legislator but which, above all, must provide a modern payment tool that is suited to the circumstances of our single currency, the euro, is in danger of not achieving the critical mass that it should have in order to be fully effective.
We are particularly concerned that the launch of the SEPA Direct Debit scheme, which is undoubtedly one of the most original aspects of this project, is running into some difficulties.
We feel that, in view of the Commission's responsibility, there are two questions to be asked. Firstly, how does the Commission intend to promote and support migration to the SEPA payment instruments? A timescale had been fixed, and it is obvious that it does not take all the practicalities into account. Secondly, is the Commission of the opinion that the migration of a critical mass of transactions to the SEPA instruments should have been achieved by 2010, and, if not, what should be done to achieve this?
When we adopted this legislation, we did not decide on a clear and binding end date for migration to the SEPA instruments. We think it is undoubtedly time to do so. We understand that some questions still remain about the compatibility of national systems with the SEPA system and about what is meant by definitive migration, but we feel that it is the Commission's responsibility to support the industry in finding solutions to the questions they still have.
Next, there is the matter of interchange fees, which clearly has been ignored or neglected, when, for many players, it is absolutely central to the success of the SEPA project. From this point of view, it sometimes seems that, among the various competent bodies, be they in the professional banking sector, the Internal Market and Services Directorate-General or the Directorate-General for Competition, we are passing the buck somewhat.
Perhaps it is part of the legislator's responsibility to talk with these players and to demand some sense of responsibility from them. We feel that, at this stage, we cannot call a consistent piece of legislation into question without supporting the market operators in their efforts to develop an alternative system. This is precisely the difficulty we have with this issue of interchange fees.
The Directorate-General for Competition has indicated, in some cases, that it considers this piece of legislation to be contrary to the competition rules, but then it believes that it is up to the industry to find an alternative solution. The fact is, the alternative solutions that exist at Member State level have not been tested by the Directorate-General for Competition. Therefore, there is no way of knowing whether the Directorate-General for Competition could support them, or whether some of the solutions are appropriate for the problems we face.
For example, imagine that financing an interchange system relied on penalties imposed under the legislation, that is to say, on errors committed. In practice, this would very often mean making the most vulnerable people pay, and that does not seem to me to be reasonable or socially just.
I therefore call on the Commission to take action on two important points: to fix an end date for migration and to help develop an alternative system or a system that is acceptable from the point of view of the rules of the Treaty on interchange.
Androulla Vassiliou
Member of the Commission. - Mr President, first of all may I convey the regrets of Commissioner McCreevy for not being able to attend.
Well, this is indeed a long question but I believe both the question and the draft resolution on SEPA implementation correctly identify the key issues we need to resolve to make a success of SEPA.
The first question asks how the Commission intends to promote and foster migration to SEPA instruments.
SEPA is primarily a market-driven project, but given the substantial benefits to the wider economy, the Commission has sought to encourage SEPA migration, for example by acting as a catalyst to raise the political profile of SEPA through our SEPA Progress Report and by encouraging early migration by public authorities. And, also, by striving itself to be an early adopter of SEPA. And finally, as announced in last week's Commission proposal 'Driving European Recovery', by coming forward with proposals to ensure that the full benefits of SEPA are realised.
The second question asks if a critical mass of payments will have migrated by the end of 2010. Clearly we favour rapid migration to keep extra costs during migration to a minimum. Although the SEPA Credit Transfer (SCT) has been successfully launched, less than 2% of payments have migrated. Furthermore, the Sepa Direct Debit will only be launched later this year. So the current pace of migration is too slow to attain critical mass migration by 2010.
The third question was on the necessity of a clear and binding end date. We see the strong merits of fixing an end date and, of course, 2012 does not seem unreasonable. However, for many Member States this remains a very sensitive question. We therefore favour establishing a clear process to examine this question, by collecting information on the impact of an end date on different stakeholders and launching a meaningful debate with them.
This could pave the way for some political endorsement and, if needed, a possible legislative proposal, for example, at the end of the year.
Your fourth question asks how to enhance legal certainty for the SEPA Direct Debit in relation to the MIF and existing mandates.
We need a temporary solution to the business model problem to provide legal clarity and get the SEPA Direct Debit successfully launched. That is why the Commission fully supports the efforts of Parliament and the Council to find a temporary solution within the context of the revision of the Regulation on cross-border payments.
The Commission also supports the continued legal validity of existing national direct debit mandates under SEPA migration. However, this is a legal matter for national authorities to solve, for example, by using the opportunity provided by the Payment Services Directive's implementation.
The fifth question related to how the Commission is tackling the MIF issue for card payments.
This work is progressing primarily through the Commission's assessment under the competition rules of the two major international card schemes, namely MasterCard and Visa.
On 19 December 2007, the Commission decided that the MasterCard MIFs for cross-border card payments with MasterCard and Maestro branded consumer credit and debit cards were not compatible with the competition rules. MasterCard is appealing the Commission's decision.
In March 2008, the Commission opened proceedings to establish whether Visa Europe's MIF constitutes an infringement of Article 81. Discussions with Visa are ongoing as well.
The Commission seeks to maintain a level playing field for MasterCard and Visa Europe as well as for the other payment card schemes which might emerge in the future.
Your penultimate question asks if the Commission should propose a concrete solution to the MIF issue. In a market economy, it is incumbent upon industry to propose an appropriate business model. In relation to cards, as I have said, discussions are ongoing with Mastercard and Visa. In relation to SEPA direct debit, the Commission is willing to assist industry by providing urgent guidance within the framework of a sustained dialogue with the banking industry and on the basis of contributions by the relevant market actors. This guidance should be provided by November 2009 at the latest.
And your final question asks what specific measures the Commission intends to propose to make sure that SEPA migration does not lead to a more expensive payment system.
In the Commission's opinion, this should not happen. Firstly, SEPA should foster competition and increase operational efficiency through economies of scale - both producing downward price pressure.
Secondly, SEPA should also increase transparency, which will limit cross-subsidisation and hidden pricing, although optically, some users may perceive the switch from high hidden pricing to low visible pricing as a price increase. Here, clear communication by banks will be important.
Third, the Commission is carefully monitoring the impact of SEPA on customers by launching studies.
Finally, we agree that there is concern that efficient national debit card schemes may be replaced by more expensive alternatives. However, there are initiatives that could develop into a new pan-European debit card scheme and an overall backstop is provided by the existing powers of EU and national competition authorities.
Therefore, in conclusion, SEPA should result in a more efficient payment system and adequate safeguards under EU and national competition policy exist.
I therefore very much welcome this Resolution and Parliament's strong support for SEPA.
Jean-Paul Gauzès
Mr President, Commissioner, ladies and gentlemen, much has just been said about what has become of this Payment Services Directive for which I was Parliament's rapporteur and which was adopted at first reading in 2007.
The purpose of this directive was, among other things, to give the various banking institutions, grouped within the EPC, the legal instruments necessary for the implementation of SEPA. A European regulation has therefore been adopted for bank cards, credit transfers and direct debits.
SEPA is an integrated market for payment services in euros where there will be no difference between cross-border payments and national payments. This situation will have benefits both for the banking sector and for consumers.
As you said, the Commission has committed itself to ensuring that migration to the SEPA instruments does not result in a more expensive payment system for the citizens of the European Union.
Since the adoption of this report, migration to SEPA has progressed very slowly, much too slowly. On 1 October 2008, only 1.7% of transactions were made by way of the SEPA Credit Transfer format.
That is why, today, we are approving the European Parliament resolution calling on the Commission to fix an end date for migration to SEPA products. This date must not be later than 31 December 2012, after which date all payments in euros should be made using the SEPA standards.
Before this migration can take effect, however, the sensitive problem, the sensitive issue of multilateral interchange fees, needs to be resolved. These fees should not be abolished. Payment services are a commercial activity. It is legitimate to cover costs and keep a profit margin for participants.
On the other hand, opacity or arbitrariness should be avoided. It is therefore appropriate for the Commission to lay down guidelines with respect to the application of these interchange fees.
In order to have more legal certainty, these guidelines must be known before the SEPA system for direct debits is launched. Without this legal certainty, banks in many countries might not launch the direct debit system, and this could bring implementation of SEPA to a halt.
The Group of the European People's Party (Christian Democrats) and European Democrats and the Socialist Group in the European Parliament have tabled very similar amendments along these lines for tomorrow's vote. Obviously, we hope that they will be taken into consideration.
Margarita Starkevičiūt
(LT) At this difficult time, it is very important to find possible sources of economic growth. The development of our European financial market is exactly such a source of possible growth for the European economy. In this instance, we are talking about the payment market, and it is regrettable that the decisions we have taken are being implemented rather slowly. Technical possibilities of banks are usually cited as the main reason, as these are mostly technical solutions, but I would like to say that technical modernisation of banks is in the interest of the banking sector and the banks themselves and, in this way, they can modernise their market, their payment systems and increase their profits. Therefore, it is very important that Member States implement the Single Euro Payments Area implementation plan with more determination.
Paul Rübig
(DE) Mr President, ladies and gentlemen, we know that the Single Euro Payments Area represents a genuine challenge to small and medium-sized enterprises. They have recently been working very intensively with the credit card system and the prices and costs which result from these systems differ greatly. I believe that the required degree of transparency is not present here.
It is precisely during a crisis that we need commensurate support for business. It must be possible to improve the creditworthiness of companies by reducing costs, because then, of course, they can get access to credit again. I think that the SEPA would be a good instrument here. It should be implemented as quickly as possible in order to achieve a situation where not only can small and medium-sized enterprises work cheaply and efficiently, but where this also applies to transactions between small and large businesses.
Androulla Vassiliou
Member of the Commission. - Mr President, I would like to thank the Committee on Economic and Monetary Affairs and its Chair, Mrs Berès, for this debate. The Commission welcomes Parliament's support for SEPA, which is not only a self-regulatory initiative, but also a major public policy initiative reinforcing economic and monetary union as well as the Lisbon agenda. Parliament and the Commission clearly share the same vision and the same goal for SEPA.
Let me, however, recall three important points. Firstly, as mentioned earlier, the Commission has been very active in helping to drive forward the SEPA migration process, in particular, by putting pressure on public authorities to be early adopters. We will relentlessly continue our efforts as a SEPA catalyst.
Secondly, although we share Parliament's interest for an end date for SEPA, we do not believe that the time is right to carve an end date in stone. We have put a process in motion and are convinced that a lot of ground work is needed before such a commitment can be envisaged.
Thirdly, I can confirm that the Commission will provide guidance on the compatibility of multilateral, interbank remuneration with competition rules. We know there is little time left before the entry into force of the SEPA direct debit, and that our guidance should therefore be available before November 2009. However, let me insist on one point: that guidance can only be provided subject to the industry supplying us first with concrete ideas for possible business models.
President
I have received one motion for a resolution tabled in accordance with Rule 108(5) of the Rules of Procedure.
The debate is closed.
The vote will take place tomorrow, 12 March 2009.