Welcome President. I would like, on behalf of the House to give a warm welcome to the delegation from New Zealand, who are led by the Speaker of the House of Representatives, Mr Jonathan Hunt, and who are seated in the Distinguished Visitors' Gallery. Mr Speaker, we welcome you! The delegation from New Zealand consists of five members of the country's House of Representatives. The Tenth Interparliamentary Conference between the European Parliament and New Zealand started yesterday and several meetings have already been held. Further meetings are scheduled for today. New Zealand and the European Union are closely joined together by common values, faith in democratic institutions and the decisive role played by parliamentary democracy. We are glad that you are visiting our House here in Strasbourg and hope that you will have good dialogues during your stay here and that the bonds of friendship between Europe and New Zealand will continue to flourish. (Applause) President. The next item is the recommendation for second reading (A5-0343/2002) by Mr Robert Goebbels on behalf of the Committee on Economic and Monetary Affairs on the Council common position (9359/6/2002 - C5-0384/2002 - 2001/0118(COD)) for adopting a European Parliament and Council directive on insider dealing and market manipulation. Goebbels (PSE) Mr President, Commissioner, ladies and gentlemen, the directive on market abuses is important for several reasons. It is the first directive to be adopted under what is known as the Lamfalussy procedure. This is a piece of framework legislation that will be supplemented by implementing regulations. The Commission will pass this secondary legislation on the basis of proposals by the Committee of European Securities Regulators, known as CESR in English. The CESR will draft its proposals on the basis of broad public consultation. The Commission will also adopt the implementing regulations in a transparent way. The Ecofin Council and the European Parliament will monitor the Commission. Parliament will have a deadline of three months in which to deliver an opinion. If, within that period, Parliament adopts a resolution, the Commission will have to re-examine its draft measures. This, therefore, provides a guarantee that secondary legislation will be democratically monitored. For the future, in order to provide the possibility both of giving secondary legislation more regulations of a technical nature and of providing colegislators with final decision-making rights, a 'call-back' procedure, amending Article 202 of the Treaty, absolutely must be provided for. The aim of the directive is to lay down the same rules for all financial products throughout the Union, in order to combat all forms of insider dealing and market abuse. At first reading, Parliament adopted 77 amendments. The Council accepted 60 of these in full and 10 in part. This is clearly a success for Parliament. I wish to pay tribute to the Belgian, Spanish and Danish presidencies and to the Commission staff, who have always proved willing to reach workable compromises. I also address my thanks to my colleagues in the Committee on Economic and Monetary Affairs, especially Mr Thomas Mann. Because the Commission and the Council have declared their agreement on the five amendments accepted by the Committee on Economic and Monetary Affairs following second reading, the directive could be implemented quite rapidly. The new rules will certainly help to restore confidence in the integrity of the financial markets. Since the bursting of the speculative bubble over the stock markets and the financial scandals that have hit both the United States and Europe, many investors are hesitant. Since the beginning of 2000, more than USD 7 trillion of virtual stock exchange profits have also been wiped off the market. In Europe, several thousand billion euros have also gone up in smoke. This situation destabilises economies, penalises savers, weakens investment funds and lowers the value of pension funds. In order to restore the confidence of investors and small savers in the financial markets, we must combat all forms of criminal connivance, forcing companies to be as transparent as possible. In recent months, we have seen numerous revelations about the pally form of capitalism operating amongst company directors, accounting companies, investment banks and financial analysts. This entire group, which on the surface, appears to be quite respectable, operated in such a way that it could milk stock market exuberance for their own profit. As a result of the market's lack of transparency, there have been conflicts of interest within accounting firms. Many financial analysts have been both judge and accused. Auditors and analysts duped the market players that placed their trust in them. The reason for this was the practice of stock options and other personal bonuses to be received in line with the financial results of their employers. The sums in question sometimes defy belief. One example is that the CEOs of the twenty-five largest American companies to have declared themselves bankrupt in the last 18 months had awarded themselves, in the three years preceding their company's bankruptcy, packages totalling around USD 3.3 billion. Although we should not generalise, the golden years of the financial sector have nevertheless led to a sort of 'financial mad cow disease' - the 'mad finance syndrome'. Just like the clean-up of the meat market, the need for and the establishment of a rigorous monitoring system and the clean-up of the financial markets will require precise rules to combat all insider dealing and all market manipulation. The sole aim of the directive is to better regulate the financial markets. It is not seeking to regulate the profession of journalism. Unfortunately, some parts of the press, especially in the United Kingdom, have launched a sometimes incredible campaign against the Commission's proposals, suggesting that the very freedom of the press was at stake. The freedom of the press has not been in any danger and nor will it be. The first article clearly states that no journalist can be held responsible for disseminating false or misleading information, unless that journalist is gaining any advantage or profit from divulging such information. I am starting from the premise that all journalists attempt to do their job correctly and that they check their sources. If a journalist is wrong, they will not be held responsible, unless he has touched money in the manipulation that has occurred. Some recent scandals, from the Daily Mirror to the Magazine des actionnaires, show that no profession is entirely honest. Parliament wishes to encourage the establishment of codes of good conduct and self-regulation for journalists, not least with regard to potential conflicts of interest, but the best form of self-regulation in the world will never exempt legislators from having to remain vigilant and from intervening at regulatory level if, perchance, self-regulation should prove to be inadequate or unworkable. This is why I ask you to reject the two strangely identical amendments tabled on this matter. It is simply unacceptable that a profession, even one as respectable as journalism, should attempt to exempt itself definitively from a European regulation that concerns it. Once again, it is not the CESR that will establish the rules but the Commission, under the democratic control of the Council and Parliament. I can assure you, Mr President, that I shall be the first, and not the only one, to oppose any attack on the freedom of the press or against any unworkable over-regulation. European law must, however, be the same for everyone. Every democrat and, consequently, every journalist worthy of the name should welcome this crucial principle. Bolkestein I wish to begin by thanking the rapporteur, Mr Goebbels, for all his efforts. As we all know, he has been working under heavy pressure. This is a very complex and sensitive issue. I applaud the fact that he has resolutely defended the aim of the directive, which is to enhance the integrity of European financial markets. I should also like to thank the shadow rapporteur and Members of this Parliament and, in particular, of the Committee on Economic and Monetary Affairs for their readiness to proceed as quickly as possible. After all the discussions we have had on comitology in the past, let me highlight the successful cooperation between our institutions in drawing up this directive, the first to apply the Lamfalussy approach in full. I believe that today's text will provide a good basis for effective cooperation between the European Commission and the European Parliament in the future. As Mr Goebbels knows, the Commission is in favour of amending Articles 202 and 211 of the Treaty to bring the positions of Parliament and the Council into line. I hope that will become even clearer in the contribution the Commission is preparing for the Convention, which, I hope, will be finalised by the end of November. Mr Goebbels, his colleagues and the Commission think alike on that topic. I assure this Parliament that the European Union has no truck with greedy financial cheats - certainly not with the equivalent of financial mad cows, as Mr Goebbels called them. That is a very vivid phrase which the Commission finds very apt. We want stable, transparent, integrated and efficient European markets for every consumer and investor. The directive will indeed enhance investor protection and make European financial markets more secure and attractive in future. It will dispel the international concerns expressed over the last few years about insider dealing and manipulation on European markets. As we are all aware, recent events have shown how important these issues are. Scandals like Enron and other household names show clearly the need for strong rules to make markets more transparent and safe, to ensure that they remain free of abuse and free of fraud. The smooth functioning of financial markets and public confidence in them are essential to sustained economic growth and the creation of wealth. Abuse of markets leads to companies paying more for the finance they need; investors will stay away and the economy will suffer as a result. We must do everything to stamp this out and to restore public confidence in our markets. The directive aims to do just that. Since there has been an in-depth discussion about the application of the directive to journalists, which Mr Goebbels referred to, let me say a few words on that subject. Firstly, may I make it clear that under no circumstances do we want to add to the burdens of journalists. The directive does not do that. Journalism is a difficult profession; the pressure of work is great and we do not want to add to that. The directive guarantees freedom of expression and the liberty of the media. That is clearly expressed in the recitals, and the text of the directive itself introduces several safeguards for journalists, including the possibility of self-regulation. However, recent scandals in several Member States have shown how recommendations by journalists to buy or sell a specific share can influence its market price to their advantage. What we do not want is to exempt from transparency obligations the small category of highly specialised financial journalists who recommend investment strategies. The Commission cannot therefore accept Amendments 6 and 7. It would not seem justified to exempt this rather small category of persons from basic market integrity standards which apply to all the other market participants. In addition, completely or partially excluding journalists from the scope of the directive would mean harmonising the definition of 'journalist' at Community level, not a very easy task and something we do not wish to do. Therefore, Amendment 5 is a compromise proposed by the Committee on Economic and Monetary Affairs for today's plenary. It is fair both to journalists and to the public interest, and therefore acceptable. I strongly hope that Members of this Parliament share the view of Mr Goebbels and of the Commission on this point. After all, financial journalists who specifically recommend a certain strategy to the investing public should declare any conflict of interests they may have. I do not see why that should not be a useful aspect of this directive. So the Commission can agree with Amendments 1 to 5, but we cannot agree, for the reasons which I have already explained, to Amendments 6 and 7. Should Parliament adopt the common position together with Amendments 1 to 5 and reject Amendments 6 and 7, for which I am now making a plea, I hope the Council will be able finally to accept this text in the next few weeks. Adoption of the directive before the end of the year would be a major step towards the integration of European financial markets by 2005 that we all aspire to. I recommend adoption of this directive to Parliament and I hope that all who take part in the debate will agree with Mr Goebbels and myself. President. Ladies and gentlemen, it now gives me great pleasure to call Mr Thomas Mann. Before you speak, Mr Mann, let me most warmly congratulate you on having the Federal Cross of Merit conferred on you yesterday by the German Federal President. Congratulations, Mr Mann! Let me also take the opportunity, as he is present in the Chamber - and please allow me this - to also congratulate the leader of the group, who is sitting in front of me. He was, indeed, invested yesterday, by the Federal President, with the Federal Grand Cross of Merit! Warm congratulations to both Members! (Applause) Mann, Thomas (PPE-DE). Mr President, I feel especially honoured that it is you who are presiding when this important report is presented. The American and European financial markets continue to be hit by successive scandals, which make it clear that the actors in them include many black sheep, who lack professional integrity. Balance sheets are being falsified, funds embezzled, and false information deftly fed to the public. Securities are first talked up in price, then offloaded at a profit, and shortly afterwards the price falls rapidly. Many small investors have suffered as a result of market abuse and insider dealing. This makes clear rules and confidence-building measures necessary. As the PPE-DE Group's shadow rapporteur on the Economic and Monetary Affairs Committee, I had a hand in a number of the amendments. At first reading, Parliament submitted 77 amendments, to the quality of which the Council paid tribute by adopting almost 60 in their entirety and giving partial approval to 10 more. At the time, I congratulated Robert Goebbels, the rapporteur, and I would like to reiterate those congratulations now that we are at second reading stage. We have come to agree on important matters. The points at issue include 'frontrunning', in which, on the basis of a client's being of sufficient size to affect the market on its own, brokers trade on their own account even before they carry out the client's orders. This is to exploit insider information and is already prohibited. A ban should apply to all the markets within the scope of the directive. The question of how financial journalists who recommend investments to the public should be obliged to disclose their conflicts of interest - to which Commissioner Bolkestein has just referred - provided substantial material for debate. We are not dealing here with objective financial information, but exclusively with recommendations to the public. There are journalists who succeed in using their own publications to manipulate the prices of securities for their own benefit. Yet it should be in the interests of journalists themselves to make a distinction between their reputable and less reputable colleagues. It is surely not acceptable that a small element in a single profession should get some sort of derogation. I have proposed, by way of compromise, taking Mrs Kauppi's amendment as a basis for taking into account journalists' professional rules of conduct, including self-regulation, when arranging the technical details. Mr Goebbels and I have jointly tabled an amendment providing for this idea to be incorporated in Article 6 (10), which covers this area. This was supported by a broad majority on the committee. I am of course acquainted with the criticisms of CESR, the Committee of European Securities Regulators, and with the open letter from journalists' associations concerning its work, but I want now to point out that it has no legislative authority, and cannot, therefore, impose binding rules on the way journalists work. The Commission called on it, as an independent institution, to play an advisory role. The Commission will then elaborate the regulation, which will be submitted to the European Securities Committee - including representatives of the Member States' finance ministries - and also to us in Parliament. I cannot imagine that the Commission will disregard the principles of press freedom and journalists' right to free expression of opinion. After all, they are anchored in the recitals of this directive. As the PPE-DE Group's shadow rapporteur, then, I am seeking support for the Economic and Monetary Affairs Committee's resolutions dating back to early October, which, slightly altered, now form Amendments Nos 1 to 5. Commissioner, on that you have my forthright support. Under these circumstances, there is a good chance that the Commission and the Council will give their assent at an early stage. The directive could enter into force at the beginning of 2003. That would represent a decisive move towards greater integrity in Europe's financial markets, with greater confidence on the part of investors resulting in increased investments. I believe we have a good chance of ensuring that we win broad support for this important piece of comitology. Katiforis (PSE). The recommendation for second reading on a directive on market abuse, which we are considering today, is both timely and appropriate. It is timely because confidence in the integrity of market participants has been seriously damaged over the last two years as a result of various cases of market abuse, chiefly in the United States. It is appropriate because the common position addresses the need for regulatory authorities to have sufficient enforcement flexibility to be able to detect market abuse and sanction its practitioners on a consistent and effective basis. Also covered is the right of market participants to enjoy reasonable legal certainty that their actions will be considered appropriate. The key is to be able to deal with market abuse in a consistent manner. Those who have intent and knowledge of market abuse - and knowledge includes journalists - or who act recklessly will be punished. Those whose actions are innocent but have unintended effects will not, however, be penalised. The fact that we now have a debate with so few amendments tabled nearly 18 months after the initial proposal, when the financial services industry initially questioned whether there was any need for such a proposal, owes much to the skill and patience of our rapporteur, Mr Goebbels. I would like to congratulate him. We have obtained an appropriate definition of market manipulation and of financial instruments whose use falls within the scope of the directive. Nevertheless, Member States must increase the resources available to their regulators so that they can be effective in their investigation and pursuit of market manipulators. Huhne (ELDR). Mr President, I will begin with the controversial issue in this directive. It should clearly cover financial journalists, and Article 1 of the directive does just that. If journalists profit from the dissemination of information, they will fall within the scope of the directive and they can and will be prosecuted. The controversial question is different. Should journalists be subject to new regulations that may be established by the Commission and financial regulators, as currently proposed under Article 6(10)? Currently, Member States must ensure there is appropriate regulation so that persons who disseminate research or other information, i.e. news organisations, take reasonable care that such information is fairly presented. Commissioner Bolkestein would have us believe that it only concerns journalists if they recommend shares. That is not what the directive says. It actually gives the Commission and financial regulators a role in determining whether information is fairly presented. You do not need much imagination to see how this provision could undermine press freedom. It is extraordinary to suggest that the financial regulators, the most criticised public institutions in most Member States - they always get the blame when banks fail - should help determine whether information has been fairly presented. This is why the ELDR Group has retabled an amendment we tabled in committee seeking to exclude bona fide journalists from this regulatory provision, not from the whole scope of the directive, and to do so without opening up any loophole that would allow financial analysts to parade themselves as journalists. Do we really want today to set such an extraordinary precedent? Do we really want to introduce the first ever European regulation of the press? Do we want to ignore the objections of news organisations like Handelsblatt, Reuters, Agence France Press and the Financial Times, all of which live by their high reputations? Do we really want to take this terrible first step of regulating the press without a proper discussion of the potential consequences? I urge you to back the ELDR Group amendment and reject this ill-thought-through attempt to introduce media regulation by the back door. Herzog (GUE/NGL). Mr President, I would say that our Parliament has worked extremely well and that we should congratulate our rapporteur, Robert Goebbels, on his excellent work. We should, in particular, welcome the fact that the pressure to incorporate the concept of intent into the definition of offences, a concept which is usually impossible to prove, has been rejected, and also the fact that we have strengthened obligations of transparency in the field of insider information and in cooperation between market surveillance authorities. We are therefore in the process of breaking in the Lamfalussy procedure which has got off to a good start, I believe, with fine cooperation between our three institutions. Nevertheless, I feel that it is perhaps regrettable that the Commission asked, at 6 p.m., to begin its work on the regulation's implementation before it is even adopted by Parliament and the Council. In any event, this was merely an excuse to redouble the pressure exerted by the lobbies of financial journalists who want, in fact, to create a general exception in their favour in the field of comitology; I am talking about self-regulation full stop. In our view, financial journalists must indeed comply with all the provisions concerning transparency and the veracity of information and, with regard to the progress that can be made in the field of comitology, this will fall under a future revision of Article 202. This is why we fully reject the two amendments tabled by the Liberal and PPE-DE groups and support Amendment No 5, adopted by the Committee on Economic and Monetary Affairs, which further strengthens the guarantees concerning that profession. To conclude, I wish to say that, in light of the extremely serious shortcomings revealed by current developments, we are simply trying to take the first step, particularly where insider dealing is concerned. What is at stake is the entire production and consumption of the financial setup. Consequently, with regard to the harmonisation of accounting procedures, government reform of businesses, the organisation and the supervision of audits, of financial analysis and credit rating, we call on the European Union and the Commission in particular to rapidly draw up new regulatory and legislative initiatives. Blokland (EDD). Mr President, the concept of trust is a key one to any discussion about the economy. Our whole economic system is based on trust. And as long as trust is not betrayed, the economic system functions as we expect it to. Expectations of the financial markets are closely linked to the way in which legislative institutions, such as the Council, the Commission and Parliament, deal with unexpected circumstances. The financial markets expect to have regulations, but these should be unambiguous regulations, which are not open to many different interpretations. The concept of interpretation, in particular, plays an important role in the debate about prior knowledge. After all, what is prior knowledge and when do we talk about prior knowledge which has an actual effect? Article 1 of the directive mentions having 'a considerable influence on the prices of financial instruments' - a concept which ought to be explained, however, on the basis of the effect of the directive in practice. It is not possible to draw up one unambiguous rule which would apply to all situations. Events which have taken place in practice within Member States have led to regulations being drawn up in order to prevent or sanction fraud and insider dealing. This practice shows that in many cases an assessment of the facts is required based on a given situation. In my opinion, journalists are very much in a position to determine from specific cases in practice whether prior knowledge applies. After all, in their day-to-day work they have to judge whether something is 'news' or prior knowledge. The reason for which information is gathered or disseminated forms the basis for the assessment of whether prior knowledge applies or not. It is for these reasons that I will not support Amendments Nos 6 and 7. It is unsatisfactory to declare that technical modality does not apply to journalists in the exercise of their profession. Considering that an assessment takes place on the basis of facts and situations, reference should be made to existing rules and self-regulation within this professional group. It is also the case that an appeal to this professional group constitutes a question of trust. Although I believe that a number of matters should be regulated at Member State level, the arguments for harmonising the rules at European level are convincing. National legislation falls short within the international context of the financial markets. I support, therefore, the recommendation for a second reading by Mr Goebbels. Della Vedova (NI). Mr President, Commissioner, Mr Goebbels, the Committee on Economic and Monetary Affairs has done an excellent job on this directive. I do feel, however, that there are a number of things we need to bear in mind. We are all quite familiar with the Enron question and other financial scandals, but the important thing is not to be under the illusion that a new law, a new regulation, a new authority will resolve the problem of market abuse and insider dealing. It may be that the situation is gradually improving, but we must be under no illusion - I reiterate - as to whether the new law, the new directive, the new authority will resolve once and for all the issue of transparency and the need to prevent abuse in the financial markets. Then we have a number of particularly serious concerns where the regulation affects the mechanisms through which information reaches the market - principally the work of the media. Here too, in the past, the most effective tool for preventing the exploitation and manipulation of confidential and other information has proved to be the market, which confirms the reliability and validity of methods of producing and disseminating information. I agree with what Mr Huhne said and with the amendment tabled by Mr Huhne and Mrs Villiers, and I believe that we must avoid introducing specific, rigid legislation, which would, inevitably, ultimately lead to some sort of regulation of the freedom of the press and the freedom to exercise the profession of journalism. We must therefore reject the illusion that we can use the law to regulate and guarantee the veracity of the information provided by economics and financial journalists. Moreover, we would be running the risk of it having little or no effect because, if a person wants to put the information in their possession to an inappropriate use, they will find a way to do so whatever we do, whatever the law governing the matter. Villiers (PPE-DE). Mr President, it is vital to have tough rules to prevent insider dealing and to punish those who abuse the market, including journalists and market practitioners. It is vital to protect consumer investors from the misconduct of market insiders. I would like to put on record my thanks to the Council, the Commission and the rapporteur for taking on board a number of issues in relation to accepted market practices, commodity derivatives and Chinese walls at first reading. But this draft directive leaves a number of very significant problems. It is of very serious concern, as we have heard, to a whole range of journalists and media organisations across the European Union - media organisations that live or die by their reputation for integrity and a high standard of public conduct. I agree that journalists should be subject to market abuse rules. I agree that journalists should be subject to rules that prevent conflicts of interest. I agree that we should have tough enforcement mechanisms to enforce those rules. However, I do not agree with the rapporteur that the Committee of European Securities Regulators is the appropriate body to do this. In the case of journalists, the rules should be enforced by specialist media regulators, who know how the media works and understand the issues that relate to journalists. CESR does not have the expertise to regulate journalists. It has already demonstrated that it does not understand how the media works. The proposals in its consultation paper would have been impractical and unworkable. Special constitutional issues apply to journalists because of the demands and importance of that vital constitutional issue, freedom of speech. It is vital that we respect those constitutional issues. It is at least arguable that, in some countries, giving CESR this role would be unconstitutional and contrary to the principle of freedom of speech. The free flow of information to the markets is absolutely vital in preventing market abuse and protecting consumer investors. If we disrupt that free flow of information to the market, we will be playing into the hands of market abusers. That would be the consequence of allowing CESR to regulate journalists when it does not understand the media issues. Throughout the first reading, MEPs believed that Article 6(5) was not targeted at journalists. Despite this understanding, CESR has indicated it will regulate journalists. This is a test case. This is the first time we have used the Lamfalussy process. We need to use our codecision power to send a clear message to CESR that we will stand up for the prerogatives and powers of the only elected EU institution and support Amendment 7. Kauppi (PPE-DE). Mr President, there are still too many obstacles in the way of smooth provision of financial services across national boundaries. The draft directive on market abuse that we are discussing today is one step in the right direction. Investor confidence is crucial for the successful development of our financial services markets. The integrity of European markets has to be safeguarded. Common and efficient standards to combat market abuse have to be established and thoroughly implemented. Clearly, actions that intentionally manipulate financial markets, including those by financial journalists, have to be penalised. Like some other colleagues, however, I am worried about some proposals whose basic intention might be good and respectable but whose effects would be devastating. I believe that there must be tough rules in place to prevent conflicts of interest among financial journalists. But these need to be rules that are sensitive to the media context. Free speech is one of the cornerstones of democracy. In many countries, for example in my country and in Scandinavia, it would be simply unconstitutional to subject journalists to the sort of heavy-handed regulation that the CESR put forward in July. Under the draft guidelines, a report by a journalist that merely records accurately a recommendation made by an investment analyst - for example, Merrill Lynch has upgraded its rating on Nokia - would require a public disclosure of personal interest on the part of the journalist. This would be impractical, unnecessary and disproportionate. The European Parliament did not address the issues raised by Article 6(5) at first reading because it was widely believed that the Article was targeted at financial analysts employed by investment firms where well-publicised abuses have occurred. The publication by the CESR of its draft guidelines in July revealed that it has another plan. The aim is to cover an extensive range of routine financial journalism where standards have remained high and existing governance mechanisms have proved adequate. As explained above, the recent amendment to Article 6(10) by the Committee on Economic and Monetary Affairs is insufficient, as the CESR would still be able to override or amend these mechanisms. The feedback we have had from the European financial journalism community is clear. The proposals would have an adverse impact on media freedom and on journalistic independence. Financial journalism contributes to one of the key objectives of the directive, that is to ensure market transparency. This is especially important for small retail investors. They are the investors in the European Parliament should be trying to protect. Karas (PPE-DE). Mr President, Commissioner, ladies and gentlemen, I would like to start by thanking those Members, from all the groups, but especially those belonging to my own, who worked on this report in our committee, and who demonstrated commitment, expertise and passion - which have also been apparent in this debate - in tackling this important topic. This is an important and necessary directive, it is one that we want; we want an agreement with the Council, and we want the directive to enter into force at the beginning of 2003. This directive is the first under the new comitology procedure. I see it as being founded on seven points. The first is that the insider-trading directive, which has provided the framework, is thirteen years old. A lot has happened in the meantime. It is based on the results of the Lisbon Council and on the conclusions of the Stockholm Summit. It forms part of the action plan on financial services. It is a response to 11 September, because the directive is what the Member States want in order to be better able to take counter-terrorist action. It is a response to Enron, Microsoft, and the EM.TV trial; today's information society makes it easier to engage in insider trading by exploiting the many sources of information available. We have to build up confidence in the financial services sector, in the financial markets and in the economy. This directive helps to do that by safeguarding the integrity of the European financial markets, establishing rules for combating market abuse in Europe, and strengthening investors' confidence in the European financial market. I would like to say, though, that we have not made it easier for ourselves, as this debate itself shows. Between the Goebbels Report as it was at first reading, and what we have before us today, there are two more extreme standpoints. Let me point out, though, that this is not a directive on journalists, but one on insider dealing and market manipulation. This directive is not to exclude anyone, but it does have to deal with the differences in quality. We should not expect this House to come to a decision that promotes censorship and infringes fundamental rights and freedoms. That is the basis of our political work. Because we want to get both sides together, combining the arguments of Mr Huhne, Mrs Villiers, Mrs Kauppi and those of the parties affected, the committee came up with a compromise motion, and I believe that it, and perceptiveness, have enabled us to find a very good and broad compromise on the basis of the special role of journalists and of the possibility of self-regulation. (Applause) Ebner (PPE-DE). Mr President, Commissioner, ladies and gentlemen, many of those involved in this business used to wonder whether regulation is needed - they still do. It is my belief that the answer to this question should be an unambiguous 'yes', even though many of the actors take the opposite view. I am, in principle, opposed to the proliferation of rules. I hope that the future will see politicians, policies, and even the Commission, judged on the basis of what rules and directives they have abolished or unified, rather than the opposite. This situation, though, is rather different. This is about honesty, about trust; this has to do with the prevention of theft, insecurity and, in the final analysis, fraud. I am glad that there is to be an increase in controls and, it is to be hoped, that there will be more sanctions in future. If I may turn to the subject of journalists and media freedom, I cannot but agree with what Mr Karas has said about the principle that we stand up for freedom of opinion and oppose any sort of censorship. I do, however, see it as inadequate to take the view, as some in this House do, that the good name of certain media and media organisations that have been referred to guarantees that abuses will be prevented. I was myself in that line of business and am, alas, all too well aware that publishers and journalists are human, but that there is a very, very narrow dividing line between honesty and respectability on the one hand and debatable conduct on the other. It is for this reason that I believe a good reputation does not at present offer a sufficient guarantee, and that there is a need for regulation. Arthur Andersen also had a good reputation until that business was struck by disaster. I am in favour of these interests being disclosed. I believe that we owe a duty to the public to address problems and find approaches towards a solution even in sensitive areas. It will be for the future to show whether we have been able to do that properly in the first stage, with all the nuances involved. We will then have to make any adjustments that turn out to be necessary. (Applause) Bolkestein Mr President, I have asked to speak again on this subject because of certain remarks made by Mrs Villiers, Mrs Kauppi and Mr Huhne. Both Mrs Villiers and Mrs Kauppi said that freedom of speech is under attack. With all due respect to those Members of Parliament who have spoken and whom I have just mentioned, that is a caricature of the aims of this directive. Financial journalists are free to write whatever they wish. There is not the slightest doubt that they can write as they please. The only thing the directive says is that, when they recommend to the public certain stocks in which they themselves have invested, they must state that fact. In other words, if financial journalists advise the public to buy shares in a certain company and if they themselves own shares in that company, they must declare how many shares they own. I do not understand why that should be an attack on the freedom of the press or, as Mr Huhne said, regulation of the press or of the media by the back door. Why should the rule of transparency apply to all and sundry who engage in dealings on the stock market but not to financial journalists? After all, we are simply asking them to be transparent about their investment in stocks they are recommending the public buy. President. - The debate is closed. The vote will take place today at 11.30 a.m. President. The next item is the report (A5-0324/2002) by Mr Ward Beysen, on behalf of the Committee on Industry, External Trade, Research and Energy, on the proposal for a European Parliament and Council decision (COM(2001) 775 - C5-0111/2002 - 2001/0311(COD)) on amending Decision No 1254/96/EC laying down a series of guidelines for trans-European energy networks. De Palacio Mr President, ladies and gentlemen, the European Commission proposes a revision of the guidelines for Trans-European Energy Networks in order to update European policy in this field. Since 1996, when the first guidelines were adopted, certain salient events have taken place on the European energy scene. I shall limit myself to pointing out the most important, namely the first phase of the internal market, increasing use of natural gas - which also reflects our concern for improved environmental protection - the setting of more ambitious objectives with regard to the use of renewable energy sources and, lastly, the prospects that have now been confirmed with regard to the enlargement of the Union. The Commission proposal reflects these events in the priorities of our energy network policy and in the other provisions of the guidelines. The most important element of our proposal is the establishment of twelve priority axes for the development of the energy networks, in order to integrate them fully at European level. These axes determine the broad lines that are essential to the operation of a competitive energy market and improved safety of the energy supply, specifically with regard to natural gas. I am pleased to note that the Barcelona European Council gave its approval to the swift implementation of these projects and clearly recognised their political importance for the European Union as a whole. I would like to remind you that, in addition to the proposals for a revision of the guidelines for transport and energy networks, the Commission has also proposed to adapt certain provisions of the Rules of Procedure with regard to financial aid for these networks. In this context, the Commission has suggested the possibility of granting more financial aid, specifically up to 20% of the priority energy network projects. It is clear that increased aid will only be granted to projects that really need it and in which there is a clear prospect of accelerated development, effective implementation and added value for the Union as a whole. In the case of the energy networks, this concentration of financial means is taking place with a limited, low, constant budget and therefore there should in theory be no concerns with regard to the impact on competition or on spending, because, I repeat, the volume and quantity remain the same. Lastly, with regard to all the consequences of enlargement, I would like to ask you to be patient. A large number of projects of interest to the candidate countries already appear in this proposal. The Commission considers, however, that these countries need to undergo an initial period of increased competition in the energy market before implementing the priority axes. As far as possible, the Commission will present a proposal in this regard. Mr President, ladies and gentlemen, I have briefly summed up the Commission's objectives in presenting this proposal and I eagerly await the debate on this matter. Beysen (ELDR) Mr President, Commissioner, ladies and gentlemen, the particular importance of this report is clearly apparent right from the Commissioner's introductory explanatory comments. As a result of congestion and insufficient joint activity, certain Member States can now only profit to a limited extent from the advantages of the open markets, meaning that competitive advantages for consumers are becoming increasingly smaller. The European Commission is therefore right to propose a reform of the guidelines for Trans-European Networks in the energy sector. The revised proposal takes account of the liberalisation of the energy markets, the increasing external dependence on energy and the stricter requirements to get sustainable sources of energy accepted. These are the objectives which have been emphasised by the political leaders on the European Councils of Stockholm and Barcelona. Concentration on a new list of priority projects forms the core of this proposal. Member States will give special support and attention to these projects. The maximum percentage for co-financing will be increased from 10% to 20% and from now on the construction phase will take precedence. The question which immediately comes to mind is whether this is the best solution. In my opinion, a massive subsidy for the energy sector is not a good solution because I feel that it is at variance with the current trend towards liberalisation and the creation of a competitive internal market. It must be emphasised that the main responsibility lies with the energy sector and with the industry itself. Measures which are taken on the basis of this decision may in no way be allowed to cause disruption of competitive practices within the internal energy market. I also feel that Community aid should only relate to the design phase. Subsidies for the construction phase such as proposed by the Commission should then only be granted in exceptional cases. In this context, the integration of renewable energy sources constitutes an important factor. In my opinion, these will contribute in future to the diversification of energy sources and thus as such to the continuity of energy provision within the European Union. Support of tangible projects such as off-shore wind parks should therefore be encouraged. The way in which the Commission wants to implement all this does give rise to a number of questions. I think it is not a good idea to give the European Parliament a droit de regard only when the issues concern strategically important changes to project specifications. It is important to seek a balance between, on the one hand, a quick reaction by the Commission to new developments and, on the other hand, the need for effective control by Parliament. To satisfy the need for transparency, the Commission needs to submit regular reports. Finally I would like to emphasise that actual measures will be necessary if we want to reap the rewards of the internal market. In fact, the new guidelines might significantly contribute towards coping with the problems of: the continuity of energy provision, the integration of renewable energy, the outermost regions as well as enlargement. I would like to clearly point out that Community aid must be applied pragmatically and that, in the first instance, accountability must be given to the energy sector itself. Matikainen-Kallström (PPE-DE). Mr President, my sincere thanks go to my colleague, Mr Beysen, for the work he has done. He took the views of the shadow rapporteurs into consideration back in the formulation stage in an exemplary manner and the levels of cooperation we have seen have been fruitful. We must take account of the fact that in rather more than a year's time there will be 10 new Member States in the European Union. Their concerns are also our concerns. The candidate countries must be included in programmes like the TEN-Energy programme as swiftly as possible. All candidate countries have huge problems with regard to their electricity transmission networks. In the Baltic countries there are no such networks as such. If and when Ignalina is closed, and whatever decisions are made concerning bituminous shale, the Baltic countries' energy strategies cannot rely exclusively on Russia. What sort of timetable does the Commission have for including the new Member States in the trans-European networks? I have given emphasis to the question of whether the EU should support the private sector. The basic philosophy here is that the energy sector must be one in which the market economy works unaided. Only in exceptional cases can public sector aid be granted to the private sector. The Commission's contribution, which in the end is the European taxpayer's money, must not be raised from 10% to 20%. Previously, aid was available only for studies in the planning stage. If the Commission's new proposal is accepted, aid would also be granted for project development. There is always the risk that project coordinators will increase their costs just to obtain as much aid from the Commission as possible. It is good that the Commission will provide support for building trans-European networks. This programme and this amount of money, however, will have only a limited effect, and will not solve the problems of Europe's energy infrastructure. The solution to the problem of bottlenecks is to be found in the Member States rather than in this EU programme. There have been a lot of problems when constructing power lines as a result of the way in which decisions have been made at local and regional level. Residents complain about electromagnetic radiation, the impact on the environment, blighted landscapes, and so on. It is for this reason that no solution has been found for the largest bottleneck in the European electricity networks, which is on the border between Spain and France. Matters relating to technology must not be linked to this programme. We are now deciding on trans-European networks, without adopting a position on what technology is to be used in producing the energy transmitted through the network and what its source is. The supplementary role renewable energy sources play in basic production is a part of the European energy palette. In certain circumstances they serve as excellent local solutions. This report is about infrastructure, not energy production. The network and production must be kept separate. As a separate issue I want to mention Amendment No 9. If this is meant to suggest that renewable energy sources will result in lower charges for the consumer, that is not true. All the research shows that nuclear power is the cheapest option for the consumer of all forms of energy. The Commission is proposing an electricity interconnection capacity of at least 10% as a European minimum level. The level of interconnection is already
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