I. A KNOWLEDGE-BASED ECONOMY: PROMOTE COMPETITIVENESS




Competitiveness is at the heart of economic performance. To enable Europe to adapt to the global economy and to meet its economic, social and environmental objectives, we need enhanced European competitiveness, and therefore to establish a genuine single market in knowledge and research.

Yet in this field, Europe needs to perform better. Regarding research for example, our competitive disadvantage is obvious: the overall spending on research remains low in Europe and our economies are less able to exploit the results of our scientific work in economic terms. To overcome these weaknesses, Europe needs more innovation as well as an increased mobility of individuals and ideas.


I. 1. Creation of an European area of knowledge: Focus on education and life-long learning

Quality is the key to our competitiveness. The EPP-ED Group strongly supports the creation of an area of knowledge, identified as a priority by European Councils of Lisbon and Stockholm, because it will enable our continent to provide highly qualified human resources. In the framework of the new economy, priority - when elaborating EU-policies- should be given to education, training and promotion of co-operation with the labour market. These are key elements in making Europe a competitive knowledge-based society, but also in consolidating and promoting among new generations the great strengths of a European identity built on respect for and promotion of diversity.


I.1.1 Develop a genuine culture of learning.

Life-long learning is vital for all citizens. This is a central element for human development. Access to effective education and training of high quality must be improved in order to allow citizens to play a full part in the knowledge society. Yet, our objective goes beyond that: education and training systems must systematically take into account the specific needs of individuals, as well as those of European business. Universities should always take these needs into consideration when designing their courses, in order to reconcile education and long-life learning with the opportunities of the labour market. In this way, we will improve the adaptability and “employability” of the working force - including the elder generation - and thus contribute to reducing unemployment.


I.1.2 Make the Community a centre of excellence

In order for citizens to be better prepared and to adapt to the needs of a competitive high-tech based economy, our higher education systems needs to be made more competitive on the international stage, while training systems are opened up to the wider world.

Focus must be put on language skills and mobility in Europe. Citizens should be encouraged to learn two or more languages and to study abroad for at least half a year. Entrepreneurship and self-reliance should also be taught in the early stage of education.

It is very important to overcome obstacles to mobility, and develop policy instruments that promote it, especially in respect of taxation, administration, social security and the recognition of qualifications and diplomas.

The utilisation of, and education in, information technologies should be given special emphasis. This area offers enormous opportunities and a strong means for social inclusion, e.g. for women or disabled persons.

The Socrates, Tempus, Leonardo da Vinci, Youth, Erasmus Mundus and eLearning Programmes need to be developed and adjusted both in terms of objectives and of budgetary funding. New impetus must be given to a COMETT programme being restored in its original form according to specific objectives. In order to increase the efficiency of the programmes and enable their further development, benchmarks should be set. Achievements should be made known and these results taken into consideration when designing successor programmes.

Inter-university cooperation, common Master degrees, the recognition of diplomas, as well as the exchange of experience regarding teaching methods and knowledge, must be promoted.


I. 2. Prioritise research as key element for Europe's competitiveness

Research has a significant influence on Europe’s economic performance, competitiveness and trading position, as well as on job creation. Yet, in this field, Europe lags behind its main competitors in terms of investment and trade balance in high-tech products, as well as in number of patent applications, and its trade balance in high-tech products is in deficit. Its main weakness lies without doubt in the fragmentation and dispersion of its research activities. That is where Europe can bring clear value added.


I.2.1 Increase Europe’s research efforts to at least 3% of GDP

To match its competitors, efforts need to be undertaken to increase our overall research spending to at least 3% of GDP (1/3 public spending and 2/3 private investment). The EU spends only 1.9% of its GDP on R&D, as compared with 2.7% in the US and 3% in Japan. It is essential to facilitate access to new technologies for SMEs, in particular for those who have less than 9 employees, which find more obstacles when using IT compared to big companies. Benchmarks need to be set and the effective industrial exploitation of research results improved. This issue is closely linked to the establishment of adequate and legally certain intellectual property protection mechanisms at the European level, and especially a decision concerning the Community patent.


I.2.2 Create a functioning European Research Area

Focus research efforts on new technologies: Industrial exploitation of scientific research results in areas such as biotechnology, information and communications technology is the main driving force behind economic growth. Europe’s competitiveness in coming years will be strongly influenced by its ability to be in the front lead in the field of new technologies.

"Blue sky" fundamental research needs to be build up into real value added research. “Today’s blue sky research contributes to tomorrow’s applied technologies.” To prepare the future, we need to support fundamental research, bearing in mind that product cycles are getting increasingly shorter. Priority must be given to more customer focussed work.

More cooperation between public and private institutions should be encouraged, as well as increasing research activities in universities and making the transference of results to private companies easier. Tax incentives should play an important role in the promotion of research in the private sector.

Medical research must be intensified in order to improve treatments and face new public health challenges. Adequate funding must be provided, especially for research in the fields of rare and age-related illnesses as well as the phenomenon of resistance to antibiotics.

Food quality research is another central focus point in relation with our priority of ensuring safe and high quality food. Bio-based industries need more particularly to be strengthened.


I. 3. Focus on new Technologies: Tackle the challenges of the Digital Era

The development of digital technology accelerates the convergence of media and renders common minimum standards indispensable for the circulation of audiovisual content across frontiers. The right for a supportive policy in the field of audiovisual media at the national/European levels has to be maintained with a view to promoting cultural diversity.


I.3.1 Explore the potential of biotechnology

The EPP-ED Group believes that new technologies, and in particular biotechnology, have the potential of providing sound solutions to environmental problems and of contributing to more sustainable development. These technologies could also improve the availability and affordability of food, thereby enabling the improvement of human health. For these reasons, such new technologies need to be promoted.

Our Group opposes the view that, in medicine, genetic technology and biotechnology are primarily associated with opportunities, whereas in agriculture they are primarily associated with risks. The EPP-ED Group is much more inclined to believe that in both areas there are major opportunities, which should be taken advantage of, but also significant risks, which need to be reduced by means of appropriate legislation. Concerning the ethical limits of human genetics, the Group's position is based on the decisions of the EPP Congress, "A union of values", in 2001 in Berlin.


I.3.2 Recast "Television without frontiers" into an EU-wide content directive

This programme that aims at promoting far reaching co-operation between television broadcasters, should be further developed into a EU-wide content directive in order to better manage the circulation of audiovisual content across borders and to promote a strong and competitive European audiovisual industry, in which the private sector should be a driving force. Delays in adapting European legislation must be avoided to prevent further gaps for European technology. Yet legal obstacles to cross-border media remain (e.g. copyright).

This reshaping should take into account technological and market changes. This would mean, on the one hand, the need for common European basic principles (human rights, protection of minors, etc) to be applied across all audiovisual content services, and on the other hand, the need to adapt or eliminate obsolete rules containing inappropriate levels of detail, which nowadays can no longer be justified (some advertising rules, mandatory quotas, etc).

New forms of controlled self-regulation for the new media need to be developed: alternative forms of regulation and standardisation seem to provide an efficient and less bureaucratic means of filling gaps in national and European legislation, e.g. for consumer protection.

Existing programmes in the field of audiovisual media must be pursued and extended, especially the EIB Initiative i2i visual and the MEDIA programme, with the aim of increasing the circulation of European works outside their country of origin.

To ensure the continued development of the dual system in European broadcasting, while eliminating the existing competition distortions, Member States must, in accordance with the Amsterdam Protocol, clearly and expressly define the public service remit of public broadcasters to justify public funding.


I.3.3 Develop a new generation of telecom

In order to improve European competitiveness in the field of telecommunications, our aim is to facilitate the implementation of telecoms legislation. It is also fundamental to ensure internet security. At present, the lack of security is a major obstacle to the development of e-business.

Facilitating the roll out of 3G telecoms is a central issue for European competitiveness. Yet, it is equally important to allow a smooth consolidation of market operators, as well as secondary trading of 3G spectrum. It will also be necessary to set rules for sharing a mobile network infrastructure.

A priority of the EPP-ED Group is to promote better broadband connections and infrastructure and to improve e-content in public administration, health care and education, in order to give easily accessible information and better services to the citizen.


I. 4. Build an entrepreneurial European Economy of the highest quality

To be enabled to tackle competition in the global economy, companies need a qualitative and entrepreneurship-supportive legal and fiscal environment. Strong emphasis needs to be put on the effective and timely implementation of the Lisbon strategy and on creating a stimulating business environment.


I.4.1 Implement the Lisbon strategy for structural reform: establish a clear road map

There is clear political inertia and backtracking on vital structural reforms from the side of the Member States in the implementation of the Lisbon programme. To ensure a timely adoption of reforms, a clear road map defining the steps to be taken needs to be established.

A new Structural Reforms Action Plan (SRAP), which fixes a strict calendar to be fully completed by 2010, is required. Stronger focus should furthermore be put on the Lisbon strategy's targets, and in particular, on the following areas: public and private investment, especially in human capital and R&D, an enhanced entrepreneurial spirit in European society, support for SMEs, and lower levels of overall taxation in the EU.

Adequate protection of intellectual property: As the Commission proposal on the European patent has been discussed for years without a conclusive solution being found to date, a totally new concept for an intellectual property protection could offer a way out of this dead-end.

Our Group intends to launch an initiative towards a new coherent, more accessible European patent providing a balance between the American protective approach and the European approach, which gives incentives for investment efforts. Other intellectual property directives (software or trademarks) will have to be reviewed accordingly.

The liberalisation of the energy market must be completed: The EU is currently working on a total deregulation with the aim of introducing a level playing field in the electricity and gas sectors, the two major remaining monopolies in the internal market. Both business and private persons must be enabled to freely choose their providers according to their needs. We need a harmonised legal framework, in which a suitable public service is ensured.

A strong pan-European capital market must be created in order to reduce the cost of business capital in a rapidly changing financial environment. Our priority is to ensure the timely completion the Financial Services Action Plan for 2005 at the latest, as foreseen in the Lisbon conclusions. This process must introduce a transparent financial information system enabling effective comparability of company results and provide for appropriate and comprehensive prudential supervision. In parallel, the new rules on contract law ought to be extended to other sources: bonds, securities, insurance contracts.

I.4.2 Corporate Governance: Create a level playing field in the field of company law

As a consequence of discrepancies in corporate law - with all the possible combinations as to the structure, the accounts, and the contestability of control - some companies cannot fully take advantage of the internal market, while others are granted excessive advantages. Harmonisation is urgently required to create a level playing field for European companies.

New initiatives need to be launched to replace the 5th directive on company law, for which no common position could be found. Additionally, a framework for a genuine European Company, i.e. allowing the creation of a new European Company not emanating from a fusion of already existing companies, must be established.

The Winter II report, published in November 2002, provides concrete proposals: Our Group, which still needs to finalise its position on this matter, shall submit new initiatives on the public company limited by shares as well as regarding limited liability companies, for which more flexible common rules, allowing SMEs to benefit from the internal market, are required.


I.4.3 Entrepreneurship and an SME-friendly environment

To tackle competition in the global economy, companies also need a qualitative environment in terms of the legal and financial frameworks, infrastructure as well as taxation systems. Strong emphasis needs to be put on creating a stimulating business environment.

A pre-requisite is to eliminate subsidies, invisible barriers and other distortions of the market and to rely on effective competition rules.

Yet our utmost priority is to create an entrepreneur-friendly environment that improves the situation of European companies, in particular by reducing cumbersome red tape to a minimum and by carrying out a systematic business cost impact assessment for legislation.

The EPP-ED Group wants to encourage new company formation, by reducing legal obstacles and facilitating access to start-up and venture capital. In this area, all different models for start-up should be examined and the exchange of best practices between Member States encouraged.

Entrepreneurship, self-reliance and responsibility must be encouraged already in the early stages of education.


Create a better framework for SMEs: Small and Medium Enterprises are the engine of the European economy. Over 99% of companies in the EU are SMEs. They provide 66% of all jobs and thereby contribute to economic growth. It is essential to protect and promote them accordingly within the EU, while not imposing useless burdens on them. The implementation of the SME-Charter is a pre-condition for reaching the Lisbon-objectives.

This includes among other things.

• flexible rules for the labour market;
• the removal of regulatory burdens and better access to information.
• better access to financing and to the capital market;
• easing quality investment in research and technology;
• promoting innovation

I.4.4 Create an integrated utilities market

A fair and balanced liberalisation process of the utilities market to avoid unfair competition, should ensure the supply of goods and services at reasonable prices to Europe's citizens and businesses in the future.


I.4.5 For competitive taxation systems and lower taxes

The principle of lower taxation is at the centre of the EPP-ED economic model, because all centre and centre-right parties aim at creating wealth in the economy and encouraging private initiative. High taxes are burdens for the private sector and the individuals and entail more involvement of the state in economic matters to the detriment of entrepreneurschip.

Not only are the various tax systems complex and inconsistent, but moreover they constitute clear obstacles to cross border activities and to the free movement of goods, persons and capital. Therefore, further steps in reforming tax systems should be encouraged, as well as the adoption of the definitive VAT system based on the country of origin principle accelerated. This will make the tax systems of the EU Member States neutral and competitive.

We want fair and efficient competition of tax systems. Our model is based on a co-ordinated definition of the tax base of single market relevant taxes, while leaving to Member States the free choice of the tax level. This will create a healthy tax competition, as it allows for companies to choose their location in a more transparent environment and to re-localise if necessary with a lesser amount of administrative burden. It will also stimulate cross-border activities by ensuring an efficient allocation of capital, and in turn boost the entire economy. Taxes not relevant for the single market should be left entirely to the discretion of the Member States.

A company taxation system promoting cross-border activity, and eliminating tax obstacles which jeopardise the proper functioning of the internal market, by establishing a consolidated corporate tax base for those companies incorporated under the European company Statute, or allowing this option to companies operating in several Member States, is a major priority of our Group.

A definitive VAT system based on the 'country of origin' principle is the better solution to avoid disruptions in the Internal Market. We oppose the new Commission approach, which merely intends to "improve the transitional system" established under the 6th VAT directive".


I.5. A competitive European Transport policy: ensure efficient transport connections

In the enlarged Union, effective and quick transport connections will have a strong impact on the competitiveness of the European economy considering that the Trans-European transport networks (TENs) handle almost half of all goods and passenger traffic. They are veritable lifelines of the EU. Remaining bottlenecks in the transport networks must be removed and the growing imbalance between transport modes and between regions redressed.

The Trans-European Networks need to be extended in order to bring the transport networks of the new member countries to a high level and ensure effective connection to the existing networks of the current 15 Member States. In the same move, a fair competition among the transport modes must be ensured and the cost of the construction and maintenance of the TEN charged to the users.

To establish an effective railway market in the Union, national railway networks must be opened up and market access for new railway undertakings facilitated.

To provide reasonable conditions of competition for suppliers of transport services and for users, relations with third countries, especially regarding aviation and maritime transport, must be dealt with at Community level. The implementation of the concept of a European Internal Market in the European sky, with a uniform air traffic control, must be ensured.

A high safety level in maritime, rail and air transport is an important component of a comprehensive transport policy. Safety legislation needs to be effectively applied and sanctions harmonised in cases of non-application. The activity of new European Railway Agency, aimed at guaranteeing security Community wide, will have to be assessed.


II. SUSTAINABLE DEVELOPMENT: BUILD FOR THE FUTURE

We want a comprehensive policy based on a dynamic, environmentally and socially responsible market economy. Our vision is based on the concept of sustainable development, which needs to influence all areas of legislation from environment, regional on to economic, energy, transport or agriculture policies as well as trade policy. To build a competitive and environmentally healthy Union for us and for future generations, we need to strengthen the link between a healthy environment and a strong economy.

The opportunities linked to the progressive introduction of a long-term environmentally and socially responsible model of economic growth are immense, as this process will stimulate the development of research, of new industries and technologies, and hence, enable the creation of new jobs. But the concept of sustainable development cannot simply be imposed from the top. Over-regulation would kill the process.

We believe that the key to success lies in:

• Subsidiarity and local responsibility: Detailed legislation and/or centralisation would be counter-productive. We believe that local authorities can best determine what is required and feasible in the context of a given region. On the basis of framework objectives, they are best in the position to decide upon concrete action and means of implementation.
  
• Realistic legislation objectives allowing flexibility in the implementation: Objectives are useless if they can by no way be implemented. Realism is the first step for success; therefore legislation needs to leave room of manoeuvre to adapt to the local context and to regional specificities. Nevertheless, the EU shall control implementation with scrutiny.
  
• Encouragement and confidence in private initiative: It is essential to convince the private sector of the long-term competitiveness gains of developing "sustainable" production methods and using environmental friendly technologies. This is to be done by means of fiscal incentives rather than subsidies, which tend to limit individual risk-taking and creativity, and the promotion of voluntary agreements and market instruments aimed at improving the competitiveness of companies with a high environmental efficiency.
  
• Information and teaching to citizens. Adequate information is essential to increase civic awareness on environmental related issues.

II. 1. Promote Europe's Common Heritage

Our future is our choice. The EPP-ED Group has made a clear choice in favour of a cleaner environment and sustainable development. The protection of the citizen and his or her environment, of their historic and natural heritage, needs to be put at the centre of European policy. Climate change and its possible repercussions, air pollution in cities, the deterioration of the urban environment and the secondary effects of the growth, as well as other pollution nuisances, have a strong impact on citizens in their everyday life in economic, social and health terms. We need to react urgently and with determination.


II.1.1 Promote a safe environment: give reality to the right to a healthy environment

Recent natural disasters (e.g. floods, storms) have raised serious concerns about the repercussions of climate change. Likewise, the wreckage of the Erika off the French coast, and then again, in a similar way, that of the Prestige, have highlighted the need of strengthening the system of environmental responsibility. It is our duty both for the quality of life of European citizens and for that of future generations to provide for a mechanism that gives substance to the right to a healthy environment.

Proper implementation and close monitoring of Europe's strict environmental legislation as well as a better evaluation of future one are major pre-conditions on the way to becoming world leader in environment protection.

An effective system of ecological accountability would give substance to the citizen's right to a healthy environment. This genuine regime of environmental responsibility, based on the "polluter pays"-principle, would include adequate controls, penalties and compensations.

Combating climate change remains a high priority. Europe has made a clear future-oriented choice in favour of a cleaner world by firmly committing itself under the Kyoto Protocol to reducing its greenhouse gas emissions by 8% by 2010. Our Group favours a European road map for a rapid and concrete implementation of the Kyoto Protocol. It shall introduce a comprehensive policy initiative aimed at making the EU world leader in this field.

Improving the environmental quality of urban areas shall be a further point of focus. 80% of population now lives in urban areas and is subject to continuous nuisances (noise, air pollution, traffic, litter, allergies and stress) affecting public health. Enormous efforts are in particular necessary in terms of fuel quality and clean engines as well as investments aimed at reducing vehicle consumption. Public awareness campaigns need to be carried out to promote the use of renewable energies. In compliance with the subsidiarity principle, it is also important to promote rational land-use planning that preserves the urban environment.

The EU´s biodiversity is our citizens' heritage. The new Member states will significantly increase the number of unspoiled landscapes, forests and wetlands. It is our responsibility to preserve these sites and bequeath them to future generations.

The EPP-ED Group is determined to take common action aimed at enhancing the contribution of science and technology to sustainable development, and in particular, at promoting a better understanding of the links between the environment and technological development.


II.1.2 Promote clean energy production and a sustainable transport policy

Combating climate change is an absolute priority and also a major challenge for the Union. The European Union is an energy intensive economy: Consumption increases by 1 to 2% each year and is dominated by fossil fuels. 94% of CO2 arising from human activities in Europe can be attributed to the energy sector. This is not sustainable on the longer term: Europe urgently needs to re-examine its energy supply system.

The penetration of new and renewable energy sources must be promoted. We need to highlight investment opportunities in renewable energies and support access to funding for projects in key sectors, such as solar, wind, energy and biomass, in order to promote the take up and penetration of these energy sources.

Our room of manoeuvre is nevertheless restricted: while promoting the reduction of energy intensity in our economy and ensuring higher energy efficiency, we also need in the strict respect of high safety standards and national choices to maintain the nuclear energy share.

New, more efficient, lower-cost reactor designs need to be developed by intensifying research into both fission reactors and the management of irradiated fuels and waste. By doing so, we must also guarantee that the new Members States apply the same high nuclear safety standards and strictly adhere to their closure commitments for old power plants.

A new more environmental friendly transport policy implies to break the link between constant transport growth and economic growth. Reducing the pressure on the environment and preventing congestion requires severe changes in our transport means and habits, and especially a more rational use of different means. This implies a shift in the balance between transport modes towards less polluting means, in particular in urban areas, while more long-distance transport of goods need to be transferred to environment respectful transport (railways, inland navigation and coastal shipping).

A balanced building-up of the Trans-European networks (TENs), so as to reverse a growing imbalance between regions and facilitate the economic development in peripheral regions, especially in the new Member States, must be combined with the development of a cost efficient transportation system.


II. 2. Sustainable growth in a more inclusive society

To progress towards sustainable growth in a more inclusive society, macro-economic stability must be maintained, investment promoted and the unacceptable high level of unemployment reduced. Our vision relies on free market - and not on the State - to provide growth, quality of opportunities and social progress. Because being genuinely social means above all creating jobs and reducing unemployment. A market economy based on the principles of individual responsibility, competition and genuine social responsibility is the best way to promote higher growth in a socially inclusive society.


II.2.1 Ensure higher growth and investment: improve the business environment

To boost economic growth and investment further measures to improve the business environment and liberalise the market are necessary.

Business cost impact assessment for legislation and environmental measures must be made systematic and the cumbersome red tape and administrative requirements, so harmful to SMEs, eliminated. New company formation must be encouraged and access to start-up and venture capital facilitated: We must make it easy to build a company in Europe.

The supply of public services by the private sector must be promoted and thus opportunities for consumer choice expanded. Competition will help reduce prices and improve the quality of services, while Governments will set standards so as to guarantee equal and universal provision of services of general interest.


II.2.2 Create Jobs and ensure mutual support

Creating jobs is essential for Europe's survival. This surely is more socially acceptable than destroying them. The level of unemployment in most of Europe is unacceptably high, socially unbearable and financially unsustainable. Improving opportunities for the unemployed, labour market reforms, investing in human capital and lifelong learning are at the centre of our policy. Administrative obstacles to a more flexible labour market need therefore to be eliminated and training made systematic to boost dynamism and improve the adequacy of skills. Passive measures to support the unemployed can only be seen as a short term solution.

To achieve the Lisbon targets and increase productivity, it is important to focus on enhancing flexibility and security at work, to promote entrepreneurship, as well as to improve the employability of the unemployed and the integration of socially excluded people.

Basic provisions of social security systems must be maintained for those who cannot manage by themselves, although reform of the current arrangements appears necessary. The principle of mutual support should remain at the heart of the European social model. Citizens have a right to rely on national support and solidarity when in difficulty, due to illness, unemployment or other risks possibly leading to a reduction of their resources and those of their families.


II.2.3 Social inclusion

We want a quality of opportunity. The main directive to our policy is no-one held back or left-behind. With a view to a socially inclusive and cohesive Union, we are committed to "a fair deal for everyone". To meet this aim, special emphasis needs to be put on combating social exclusion, which affects ever more people nowadays, women as well as young people or minorities.

The expectations of young people should be given specific attention. The Youth programme should put greater emphasis on those facing difficulties in economic and social integration.

The social and educational role of sport, as a factor of integration and participation in social life, as a means of promoting tolerance, good sportsmanship, the respect for rules and differences, as well as of combating exclusion, xenophobia and racism, should be better emphasised and taken advantage of. The Treaty should explicitly recognise the specific nature of sport with regard to the social role it plays. Greater emphasis should also be placed on the role of sport in education, linking it with formal education programmes (school syllabuses) or informal activities (promotion of the voluntary sector and the role of sports associations or federations), policies broadly upheld and supported by the EPP-ED Group. Measures to combat doping in sport are also a priority.

High quality of life for the elderly, which represent a growing amount of the population, must be a priority. Yet, an over-proportional share suffers from isolation and poverty. Their special needs and expectations need to be integrated into European policy-making.

The promotion of equal opportunities for women and the elimination of all types of discrimination must be pursued in the Community policies. It is essential to adopt concrete measures, such as improving the availability of childcare facilities, increasing support for mothers and reducing their social security contributions, in order to balance professional life with family life.

Following the decisions adopted by the European Council of Barcelona, the implementation of these measures will contribute to the fight against poverty and social exclusion. The eradication of poverty, the promotion of social development, as well as the improvement of health, constitute some of the main challenges in relation to the global dimension of sustainable development.


II. 3. Cope with the challenges of an ageing population

The increase in life expectancy, i.e. the growing number of retired citizens compared to the working population, has put public pension systems under extreme financial pressure. The old -age dependency ratio will more than double from some 24% in 2000 to 49% in 2050 for the EU, in other words the EU will move from having 4 to only 2 persons of working-age for every elderly person. Therefore, decisive reforms need to be urgently implemented, if public social protection schemes are to be financially viable on the longer term. To face the consequences of demographic change, a series of non-exclusive, but complementary measures should be adopted in the EU-Member States so as to allow the financial balance to be partially restored.

II.3.1 The retirement age should be raised¹. As people live longer, they should also work and thus contribute for an extended period of time to the national pension systems, as a condition for an entitlement to receive a full pension.

II.3.2 The labour-market participation for the over-55s should be increased. In most European countries, labour-market participation of the over 55s is relatively low due in particular to very costly early-retirement possibilities. Thus, cases of early retirement should be reduced as much as possible, e.g. by means of tax incentives and retirement ages be raised.

II.3.3 Capital-funded pensions must be strongly encouraged. A sustainable solution to the financing of pensions calls for an adequate balance between public, occupational and private pension schemes. The share of pay-as-you-go systems should be progressively reduced, while guaranteeing national solidarity through an adequate public provision of pensions.

II.3.4 The need to promote higher birth-rates should be considered. Immigration is no long-term solution to cope with the consequences of demographic change. A wise solution is to encourage higher birth rates by providing an adequate environment, especially for women wishing to work.


II.4. Keep regions alive: Build a more prosperous Union by working together

The EU’s economic and social cohesion policies are playing an important role in less developed regions by reducing the development gaps between them, allowing regions to live and prosper. Thus, they are a key element in the process towards a stable, social inclusive and cohesive European Union.

II.4.1 Adapt economic and social cohesion policies to a new geographical framework

"Providing cohesion" in the newly enlarged Union represents an ever-greater challenge for the structural policies. In the upcoming legislative period, the Union faces the challenge of having to reconcile two fundamental requirements: solidarity with the new Member States and support for the structural development of the current less-favoured regions.

Structural policies need to be reassessed so as to meet the growing needs in terms of infrastructure and social development with proportionally lesser financial means. As differences in development levels between regions have increased with enlargement, meeting our cohesion objectives consequently requires a higher level of both efficiency and solidarity.

To prepare the redefinition of the financial table for Community cohesion policy, policies must be better co-ordinated in order to adapt to the new European geopolitical framework, and an optimal use of regional resources be prioritised. Framework conditions for infrastructure development and sustainable projects must be set up and their implementation closely monitored. Delay factors must be eliminated - and not their effects merely corrected - and transparency in the allocation of funds ensured.

II.4.2 Develop sustainable and quality tourism

Tourism makes up 5% of Community employment and has an important impact on regional employment levels. To boost the European tourism potential and thereby promote the historical, cultural and gastronomic riches of the European regions, the EU should be enabled by selecting best practices to co-ordinate efforts towards dynamic and quality tourism.


II.4.3 Promote European Culture

Europe's wealth lies in its cultural specificity and diversity. This common heritage needs to be preserved and the European cultural area established with a visible presence. Europe’s regional culture and languages as well as its specificity in the field of media and film must be strongly promoted. Publicly funded broadcasters whose role in delivering cultural diversity is recognised in the Amsterdam Protocol should demonstrate a practical commitment in this area.

An understanding of Europe's historical and cultural heritage should include specific attention to central and eastern Europe, which, until the restoration of pluralistic democracy, was often overlooked.

To this aim, the Culture 2000 Framework programme needs to be redesigned to increase its operationality and its adaptation to citizens' expectations.

The competitiveness of the cultural sector should be enhanced with cultural aspects taken into account in the projects pursued under the Structural Funds.

The principle of qualified majority voting must be extended to cultural policy in the context of article 151 of the TEU and the abnormality of co-decision procedure combined with unanimity voting redressed.


II.5. Develop a viable and sustainable agriculture

Developing a sustainable agriculture in Europe is our means of ensuring that future generations will also be able to enjoy the benefits of Europe’s unique natural resources. At the same time, sustainability reflects the concerns of consumers, particularly concerning safety and quality of production methods.

With the Agenda 2000 expiring in 2006, a priority will be to formulate political lines for a comprehensive and long-term framework for a viable as well as sustainable agriculture.

Three challenges need to be met: An economic challenge first, which lies in the strengthening of the competitiveness of the agricultural sector. Second, a social challenge, i.e. the improvement of living conditions and economic opportunities in rural areas. Third, we need to meet the ecological challenge by promoting good environmental practices and the provision of services linked to the maintenance of biodiversity and landscape. The EPP-ED Group must ensure that the up-coming reform of the CAP addresses all three aspects.


II.5.1 Develop an environment friendly agriculture

Improving the soundness of agricultural production is our priority. Environment friendly does not mean an agriculture using “old-fashioned methods”. On the contrary, special emphasis must be put on strengthening new and/or bio-based industries and technologies.

Research in the field of environment friendly products can help provide sustainable solutions for a sensible use of the Earth’s natural resources and for the development of environment respectful products.

The role of farmers as countryside protectors needs to be promoted. Beyond efforts of extensification, we need to encourage farmers to actively preserve the rural landscape and biodiversity as well as to use environment respectful products.

The promotion of animal welfare is essential not primarily as a requirement of an ethical nature, but also as a guarantee for high quality, now increasingly demanded, and thus a means of competitiveness. Investment by farmers for healthy animal breeding must be strongly encouraged as the best way of making animal productions sustainable on the longer term.


II.5.2 Towards a new comprehensive rural development policy

To ensure viable and socially cohesive rural areas, the second pillar of the CAP needs to be strengthened and a new comprehensive rural development policy established. The aim is to stimulate multifunctionality, family enterprise and rural industry, thus to promote employment and prevent rural depopulation. Considering the fact that 50 per cent of the rural population is more than 50 years old, we will put special emphasis on the promotion of the entry of young farmers and on the provision of training. Moreover, it is essential to encourage the use of all human potential in rural regions, especially that of women, who play an important role both at the farm level and in the development of rural areas.

As of today, 10% of the agricultural budget goes to rural development measures. This is not sufficient to meet our goals. The cost of the proposed shift to the 2nd pillar is to be borne also by means of structural policy measures, rather than by the CAP 2nd pillar alone.

Farmers living under the subsistence level must be granted adequate social-economic support and a special insurance scheme set up to protect farmers faced with animal disease.

The implementation of these structural measures would be decentralised where possible, but Parliament must have co-decision on key aspects.

More generally, it is necessary to support the introduction of measures to avoid the new cross-compliance regulation leading to a loss of competitiveness with third countries.


II.6. Develop a socially and environmentally sustainable Fisheries Policy

The fisheries sector is confronted with both severe environmental issues - and thereby reflects our dependency on natural resources - and difficult social and cohesion problems with unemployment growing. As of today around 550.000 direct working places depend on fisheries. Many of the regions concerned are peripheral regions and goal 1-areas, for which the fishing sector is strategic for the regional economy. Thus, considering the sometimes detrimental effects of the fisheries policy in terms of environmental and social impact in the past, the current reform appears unavoidable and we need to strongly support it.

The reform must ensure a sustainable and viable existence of the EU fishery sector. We need to promote a more flexible policy able to encompass the current needs of the sector, and parallely, to plan a rational administration of the resources reduced by catches and find a solution to the problem of by-catches. Better administration of resources will require enhanced research and reliable information on current fishery resources.

A modern fleet adapted to the available resources must be secured. We also want the people working in this sector to receive an income that guarantees insofar possible, living conditions comparable to those in similar production sectors.

The CFP must be integrated in the Union's foreign policy in order to combine trade with foreign relations aspects. We need to establish a coherence between access to resources and access to the markets (right to invest in third countries, free access to ports, fight against illegal fishery) and develop our fishery treaties with third countries so as to maintain the fishing possibilities for our fleet outside the community waters.

Measures to strengthen aquaculture must be developed.


¹ The point II.3.1. which mentions that the retirement age must be increased, cannot be accepted by Nea Democratia. The retirement age in Greece is the 65th year of a person's life, which ND does not intend to change.


III. EUROPEAN CITIZENS: THE GROWING NEED FOR SECURITY

Security is a major concern for Europe's citizens. This intensified need for security is making itself felt in many areas from the safety on the street, the control of external borders or the fight against terrorism to health, food or the economy with high unemployment and the risk of bankruptcies. To respond to the citizens' manifold concern, the EPP-ED Group proposes a range of initiatives aimed at ensuring safety within our societies, but also to improve the civil as well as legal protection of the citizens.


III. 1. Ensure internal security and stability within our societies

Illegal immigration, terrorism, and, closely linked to it, organised crime are putting security within and the stability of our societies at stake in an unacceptable manner. It is our duty to firmly combat these phenomena at all levels in order to ensure a safer society for all European citizens. In the field of security, the European Union can provide an obvious added value compared to the Member States acting individually.


III.1. 1 Strengthen European police and judicial co-operation for a safer Union

A coherent institutional framework for more efficiency

The institutional and legal arrangements in the area of freedom, security and justice needs to be substantially simplified. A safer Union requires above all a strengthened justice and police co-operation through the establishment of a single and coherent institutional framework integrated into the Community structure and covering all areas related to justice and home affairs. A single structure would endow the treaties with legislative coherence, provide for proper safeguards of the citizen's freedoms, and eliminate unnecessary complications by making the different areas interdependent. Thus, relevant legislation would be easier for the citizen to understand.

The integration of Europol into the institutional framework of the Union would, moreover, guarantee appropriate scrutiny by the European Parliament and judicial review by the European Court of Justice. At the same time, Eurojust - a system of collaboration between public prosecutors from the different Member States - should have its own legal personality. It tasks, once established, should be developed and increased to serve as a real communication and early-warning network.

Fight against crime

The definition of serious crimes with a cross-border dimension or which constitute a threat to community interests - in particular, trafficking in drugs and human beings, cyber-crime, money laundering - should be harmonised in the legal systems of the Member States, allowing EU minimum standards to be established. In parallel with this, a clear and stable framework for co-operation between agencies involved in the combat of organised crime and terrorism at a European level is to be progressively established.

In order to tackle organised crime and to better combat trafficking in human beings by cross-border crime networks, co-operation between police forces and intelligence services across the EU must be constantly increased. It is totally unacceptable that 700 000 women and children fall victim to smuggling and trafficking each year and suffer sexual exploitation. The EPP-ED Group is strongly in favour of higher minimum sentences for traffickers as well as for a better protection of victims and witnesses in judicial procedures.


III.1.2 Tackle illegal immigration and secure the EU’s external borders

We want to grant asylum to politically threatened persons, yet the abuse of this right to asylum and the entry into the Union of illegal immigrants simply seeking for a better life - more than 500000 are coming into the European Union every year - cannot be tolerated.

Common management for more secure EU-external borders

A safer society implies securer borders. Our priority is to guarantee that the increase in external land borders as a consequence of enlargement does not lead to less, but to a higher level of security.

A coherent and effective common management of the external borders of the Member States, including support for moves under way to create a European Corps of border guards are of utmost importance for an effective fight against illegal immigration, crime and trafficking in human beings. We must organise all the synergies for an enhanced operational co-operation at all the borders in the form of joint multinational teams - which would subsequently handle checks at border crossing points - as well as establish a good functioning early-warning system.

In parallel with this, the EPP-ED Group considers that the creation of a Corps of coast-guards should be a priority of the European Union, in order to improve the fight against criminal behaviour at sea, as well as to ensure the security of European coasts against environmental (oil pollution and unauthorised degassing) and terrorist threats. For all such hazards, which do not stop at borders, co-operation at the European level is absolutely necessary.

A Common Asylum policy with clear procedures

Clear standards on asylum and immigration policy for the management of migration flows need to be set up, if we are to avoid the internal security of the European Union being jeopardised, while ensuring that Member States can maintain room for manoeuvre in managing migratory flows. Combining common external borders with 25 or more different rules applicable to the entry of third country nationals into the Union is not consistent. Traffickers in human beings and illegal immigrants are the main beneficiaries of this situation: they are actively using the differences and inconsistencies between the national provisions to enter the Union more easily. For each of the three categories of immigrants - temporary refugees, asylum applicants and economic immigrants, Europe needs common, but specific responses.

A rapid asylum procedure based on the definition of “refugee” given in the Geneva Convention needs to be set up in the framework of the Common Asylum Policy.

Firstly, there needs to be clarity regarding the right to asylum in order to both ensure the safety of and legal certainty for asylum applicants and to enable Member States to effectively exercise the option of rejecting applicants, who are not entitled to receive refugee status.

Secondly, a harmonised asylum procedure limited in time to 6 months is required so as to avoid a constant postponing of the final ruling with the multiplication of appeals. The EPP-ED Group firmly opposes proposals for a multi-level procedure. It should be stressed that allowing rapid procedures would eventually leave more room of manoeuvre for a broader definition of the right to asylum.

Readmission agreements between the EU and third countries must be concluded as a complement to the above measures so as to ensure rapid and non-bureaucratic repatriation of refused asylum-seekers. Readmission clauses should also be included in commercial and association agreements.

Immigration policy: fight illegal immigration at the roots

A coherent visa policy will allow better control of the entry of third country nationals. Common and clear rules on the conditions for entry as well as on the procedures for the delivery of long-term visas are necessary in order to prevent a constant re-interpretation of legislation creating a situation of uncertainty, which is harmful both to the EU and to immigrants. Controls will also need to be strengthened.

Tackle the flow of immigrants at the roots. Traffickers are extensively exploiting poverty, the lack of economically interesting perspectives in many less developed countries as well as the insufficient information about the actual possibilities for legal immigration. It is therefore essential to increase co-operation with the countries of origin and transit, in particular with the development of a long-term prevention policy through economic development projects and information campaigns on the real possibilities of settling in Europe.


III.1.3 A firm stance in the fight against terrorism

Terrorism puts the security of our citizens at stake and causes damage to the victims and immense suffering to their families. Europe has shown an over-riding commitment to tackling terrorism in all its dimensions since the 11 September, but in this task we can only succeed on the longer term. As a priority, existing measures must be swiftly implemented, in particular the European arrest warrant and the surrender procedures between Member States.

A common definition of terrorism should be integrated into the acquis and a legal basis created in the Treaty allowing the Union to freeze assets and cut funds of EU individuals involved in terrorism. A credible strategy should also include, at the European level, the establishment of a coherent institutional structure enabling the Union to act efficiently and swiftly, and at the international level, the intensification of co-operation, in particular in the field of intelligence sharing. In parallel with this, relevant European Union measures for the compensation of victims of terrorist acts must be foreseen. The Union’s strategy to combat terrorism should be subject to democratic scrutiny as well ex-ante as ex-post.


III.2. Civil Protection: Greater safety for the citizens in everyday life

European citizens often feel unsafe in their everyday life. They feel food is not secure, while the environment in big cities has a negative impact on their health and favours the development of new illnesses. They want greater civil safety, i.e. safer food and an improved health protection level.


III.2.1 Guarantee safe and healthy food "from the farm gate to the dinner plate"

The recent series of food scandals have shown us the extent to which food is at the heart of European culture and civilisation. It concerns us every day. Enabling citizens to consume quality food and assuring them on the safety of products is thus a major priority of the EPP-ED Group. The creation of the European Food Safety Authority in December 2001 was a first important step in the good direction. Nevertheless, further struggle is necessary to offer in Europe the safest and healthiest food.

It is essential to try to guarantee as far as possible safe food throughout the entire food chain. To meet that aim, security standards and controls need to be strengthened at all levels, starting in the stable throughout the transport to the stocking, ensuring precise and accurate traceability throughout the entire food chain. Safe food also implies the compliance with high environment and animal welfare standards, so as to enable citizens to appreciate European food as the best and healthiest food. Consumers need to feel that enlargement has not led to a weakening of standards of food control. Not only will our aim be to ensure that sanitary measures and veterinary legislation be respected in the entire enlarged Union, but also that controls be strict and systematic as well as labelling precise.

Struggle against animal diseases and systematic prevention. Our Group is strongly committed in combating animal disease and has been very active in Parliament's Temporary Committee on Foot and Mouth Disease. We want to go a step further in order to effectively eradicate animal disease. Next to strong controls within the Union and the development of an early warning system, the control of imports at the borders must be extended and imports made conditional upon to the respect of the similar sanitary, food safety and animal well-being standards.

Yet, the establishment of an effective and systematic prevention policy based on sound agricultural practices in breeding animals intended for human consumption (safe use of plant protection products, fertilisers and antibiotics), improvement of bio-security together with a good treatment of animals is indeed the most efficient means to eradicate animal diseases and avoid the appearance of new diseases in the future.

Promote quality food productions and labels. A further step is to encourage the production of quality i.e. healthier and more flavoursome food of higher nutritional value and produced by more environmental friendly methods. Quality aspects make food products really unique. Incentives for quality production should constitute a central objective of the CAP reform, and be accompanied by relevant labelling, as is already the case for organic production. Good quality has a price and therefore needs to be easily recognisable.


III.2.2 Face new public health challenges: constantly improve health protection levels

People in the EU are now living longer and leading healthier lifestyles than ever before. Nevertheless, one in five still dies prematurely, often due to preventable diseases, while disturbing inequalities in health status between social classes still remain. Furthermore, new risks to health, especially communicable diseases, are emerging, while the longer life expectancy brings its own new problematic issues with the sharp rise in age-related diseases. Thus, new public health challenges are constantly emerging. These need to be tackled to ensure the highest possible level of health in Europe, yet bearing in mind the conflicting pressures within the health care systems.

Implementing the new Public health programme in the EU. The new programme of Community action in the field of public health (2003-2008) replaces the fragmented European Health initiatives (combat cancer, health promotion, prevention of AIDS, prevention of drug dependence, health monitoring, prevention of injuries, pollution-related diseases) by a more integrated approach oriented mainly to the prevention of diseases. The EPP-ED Group believes that the programme should contribute to the development of the health strategy in the EU and promote the protection of public health throughout the tree main strands of action: improving information and knowledge of public health data, enhancing the capability of responding rapidly to treats to health and addressing the various health determinants.

Promote an effective monitoring and coordinated response capacity at the EU level to tackle disease threats and outbreaks. New challenges for public health are posed by diseases and epidemics, which do not know national boundaries, as well as by possible deliberate health threats (bioterrorism). Increased population mobility allows for unprecedented dynamics of communicable diseases. Communicable disease is a clear example of the need to enhance the role of the EU with regard to public health. The EPP-ED Group recognises the contribution of the network of epidemiological surveillance and control of infectious diseases and stresses the need for a stronger EU-capacity in communicable disease surveillance, as well as a response capacity to unexpected health threats. The creation of a European Centre for Disease Prevention and Control will improve networking between national data-processing structures and national reference laboratories concerning diseases and will enhance the monitoring of infectious diseases as well as contribute to effective a coordinated response to health threats.

We underline that in principle the Member States are responsible for the health policy according to the principle of subsidiarity, but one has to acknowledge that the control of infectious diseases can only be exerted on a transnational base.

Ensure the mobility and well-being of an ageing population. The EPP-ED Group has strongly promoted research on age-related illnesses, such as Alzheimer's, Parkinson's, arthritis and rheumatism, in the 6th Framework Programme for Research. These illnesses affect more and more people and represent chronic handicaps for the persons concerned. This issue remains on top of our agenda. We want elder European citizens to live their retirement years as a period of well-being and not of pain and isolation.

Improve the quality of life of those who suffer from mental illness: Neuropsychiatric disorders are one of the main burdens of diseases in the EU. The EPP-ED strongly supports efforts made in the 6th R&D Framework Programme and actions of awareness to combat stigma and social exclusion as well as information for the most effective treatments.

Research on rare diseases and drugs to cure them is lacking, the main reason being the high cost related to the expected number of patients. We shall further support research in this field, because it is not acceptable that in Europe today the health of citizens be dependent upon purely profit calculations.

Drugs taking into account the age of patients and precisely adapted to the specific medical needs of each age group must be developed. Relevant drugs for small children and elder persons need in particular to be promoted.

Pollution related illnesses, especially in urban areas, are developing. We need to combat and prevent new diseases, such as asthma.

Essential is to tackle the determinants of health themselves by promoting prevention. Increasing awareness and enabling people to have more control over the determinants of their health through adequate large-scale public information can contribute to reducing the proportion of early deaths due to unhealthy and unbalanced diets. Likewise, disease prevention, including vaccination campaigns, and testing of target population can improve public health.


III.3. Strengthen the concept of the European citizenship

The protection of the citizens' rights is at the heart of our democratic system based on the rule of law. The Charter of Fundamental Rights incorporated into the Constitutional Treaty and the European legal system provide citizens with additional protection, for instance against their own Member State. We want citizens to feel the substance of their rights and to be enabled to make use of them.

Likewise, Europeans must feel safe as consumers so as to fully benefit from the advantages of the single mark. Our task is therefore to make Europe a natural and concrete part of the everyday life of Europeans as citizens, workers, consumers, students, retired or children.


III.3.1 Improve the legal protection of the European citizen

Reinforce and give substance to the European Citizenship. We must now effectively implement and duly protect all rights and obligations inherent to the European Citizenship pursuant to the Charter of Fundamental Rights, incorporated into the Constitutional Treaty. Citizens must realise that they are included in a comprehensive protection system, even against their own government.

A functioning legal system, which ensures adequate access to justice is an essential prerequisite to meet our aim of increasing legal certainty. The coexistence of 15 civil law systems as well as the related procedural hurdles creates obvious obstacles to free movement of goods and services in the single market. As regards contract law for instance, companies and consumers need to get acquainted and adapt to 15 different series of rules. We therefore need to build a legal system that is understandable for all and in which the applicable rule is easily determined. A common body of law already exists, but the rules are not necessarily consistent.

Regarding judicial cooperation in both civil and commercial matters, it is essential that the complexity of legal and administrative systems in the Member States does not prevent Member States from exercising their rights. In order to do so effectively, while respecting the principle of subsidiarity, the principle of mutual recognition of judicial decisions should be applied, based on the principle of the equivalence of legal systems in Member States.

An improved access to justice needs to be ensured as regards in particular cross-border disputes. Emphasis should especially be put on the development of alternative dispute settlement systems, such as arbitrage or mediation, for instance through the Chambers of Commerce, because alternative systems often lead to more rapid and cost-effective solutions. Thus, next to the European extra-judicial network (EEJ network), we need to promote the development of EU-wide alternative dispute resolution schemes, particularly on line.


III.3.2 Strengthen the rights of the European consumer

The internal market is designed to benefit not only business, but also the European citizens as consumers. To make the single market tangible to 470 million Europeans, consumers need to be enabled not only to benefit from a wider choice of products and better prices, but also from better protection as regards their economic and legal interests. In order to ensure a high level of consumer protection at EU-level, relevant measures need to be codified in a comprehensive agreement containing the fundamental principles of consumer protection.

Codifying consumer protection rules and practices at EU level and ensuring uniform enforcement of these rules will create a coherent and common environment guaranteeing protection of their rights throughout the enlarged Union. This way, consumers will feel equally confident when shopping cross-border or in their local high street.

Allowing consumers to make autonomous informed choices by providing accessible and relevant information is also essential. We need to further redress the structural imbalance between individuals and businesses concerning access to information and legal expertise.


III.3.3 Clarify the rights of citizens in relation to the EU institutions

The European citizen has a right to a sound administration. Yet, numerous different and non-transparent administrative procedures have been developed in recent years. The citizens, who are increasingly called to participate in the elaboration of Community acts, ought to be aware of their rights and obligations as well as their role in the procedure. Because, legal protection also requires the clarification of the citizens' rights in relation to the European institutions and its officials, procedural law needs to be codified and made understandable.

Legislation on administrative procedural law should be initiated in order to codify procedures to be followed in the adoption of various Community acts and highlight the thereby requested consultations. A codified administrative procedure, common to all EU-institutions, will provide a useful complement to the Code of Good Administrative behaviour recommended by the Obudsman, which concentrates on the relations of the public/citizens with the EU-administration and is to be binding to all the EU institutions, their administrations and made available to the public.

Procedures for dealing with petitions and complaints from citizens also need to be harmonised. Citizens are not able to exercise their right to submit complaints and petitions properly due to the complexity of the procedures, which vary from one institution to the other. Harmonisation should be pursued in the form of an interinstitutional agreement. Our Group intends to promote better access of Ombudsman actions and citizens' complaints/petitions to the agenda of the Plenary Sessions of the European Parliament in cases of serious infringements of Community law.


IV. EUROPE IN THE WORLD: THE NEW SECURITY CHALLENGES

IV.1. Europe should meet its international responsibilities

The main purpose of the Common Foreign and Security Policy is to preserve peace and security as well as to safeguard common values, develop democracy, the respect of human rights and the rule of law. In this framework, our priorities in the field of CFSP will be to intensify the EU’s strategic partnerships, while putting stronger emphasis on collective security and on the need to adapt to new security threats.

To live up to its responsibilities in the field of international security and gain strong positioning on the international political scene, the European foreign needs to provide itself with institutions enabling it to speak with one voice, thus fulfilling the institutional pre-conditions to the forthcoming of a genuine European foreign policy. To meet this aim, the EPP-ED Group believes that that the European Union will not be able to avoid a clarification of competencies and a simplification of the decision-making processes. In this framework, the Group considers that a partial integration of CFSP into the Community structures offers a strong means for increasing the coherence and visibility of the Union policy.


IV.1.1 Intensify our strategic partnerships

Strategic priorities for the EPP-ED Group for the coming years are the establishment of an area of peace and stability, respectful of democracy and the rule of law on the European continent together with the intensification of our strategic partnerships. But parallely, Europe shall remain equally receptive to the ever-higher expectations of the Mediterranean countries. In its relations with third countries, the EU will constantly focus on democracy and the respect of human rights, with specific reference to women’s rights (e.g. Iran), on the fight against terrorism and illegal immigration. The inclusion of a specific clause relating to the respect of women's rights in the association and partnership agreements could be considered.

Establishing an area of peace and stability on the European continent is a strategic priority for the EPP-ED Group in the coming years.

Peace, prosperity and stability in South-East Europe with the long term aim of integrating these countries into the European structures is at the centre of this strategy.

In this framework, intensified co-operation with the enlarged Union's new neighbours (Ukraine, Moldova, Belarus) in the form of a global neighbourhood strategy, in order to develop a zone of prosperity and peaceful and cooperative relations shall be prioritised as well as the further development of co-operation with Russia, this especially on issues of major mutual interest, such as a shared prosperity, democratisation, security policy, energy supplies, nuclear safety, transports or the fight against organised crime and corruption. Special emphasis shall be put on the Northern Dimension, in particular on the issue of Oblast of Kaliningrad. Cross-border co-operation, which is of high importance for the balanced development of the region, needs to be promoted.

A comprehensive long-term policy for the Caucasus should be established with the aim of stabilising the entire area, while focus is also put on its role as energy supplier.

Developing Transatlantic ties and enhancing cooperation within a transatlantic strategic community is essential to guarantee stability, security and prosperity in the world. Old schemes should be revised to build a new adult relationship that enables strategic viewpoints to be brought closer together, notably by reinforcing NATO and by developing European military capacities. EU-US relations should be promoted by a project enhancing both the political and the economic dimension of the partnership, including the completion of a transatlantic market.

New impetus must be given to the Barcelona process in the Mediterranean region, notably through the establishment of a Euro-Mediterranean Parliamentary Assembly, emphasis being put on democracy and the respect of the rule of law, on economic and social development as well as on intensifying cultural dialogue. The Group will strive for the timely implementation of the Euro-Mediterranean Free-Trade Zone – as foreseen in the Barcelona Agreements - and for the deepening of its dialogue with its North-West African partners, in order to help them establish the Union of the Arab Maghreb. In parallel with this, a stronger political commitment of the EU in the Middle East must continue through the role of the Quartet and a clear and balanced in-put to the peace process. Furthermore, the Group will work constantly to consolidate peace in Afghanistan. Dialogue with the Arab and Muslim world shall be a priority of the Union's presence in the region.

Co-operation with Asia needs to be stepped up. Utmost priority should be given to relations with China as a strategic growing partner. Relations with ASEAN as well as the ASEM process, which have a major role to play in conflict prevention and the promotion of political stability in Asia, should also be intensified. In the same line, India, as the biggest democracy in the world and a geopolitical balancing factor to China on the Asian continent, should also be given weight in the EU’s foreign policy. The political dialogue launched with Iran in the framework of negotiations aimed at the conclusion of a co-operation agreement, which would constitute a important step towards closer relations, must be persued.

In Latin-America, the Group will aim at consolidating the Bi-regional Strategic Association with Latin America, through an enhanced political agenda and a full association process with new agreements with Mercosur, the Andean Community and Central America, in order to support stability, prosperity and the rule of law in the region.

Finally, it is both the duty and in the interest of the European Union to promote dialogue whenever it appears necessary because of cross-border tensions, which are putting regional stability at stake (Middle-East, Western Sahara, Cashmere, African continent).


IV.1.2 Focus on tomorrow's conflicts

In order to respond adequately to new security challenges, such as the fight against terrorism, priorities are shifting from collective defence to collective security. This has an important impact on the reform of political and military structures, which are increasingly focussing on the preparation of tomorrow's conflicts. To be comprehensive, this new orientation needs to be backed by a strong emphasis on conflict prevention. The contribution of the OSCE in the field and its special role in Europe must herewith be acknowledged.
Parallely, the CFSP should increasingly address horizontal matters (water supply, trade in drugs, diamonds and small arms), which are often either at the origin of or a means for financing regional conflicts. This should be accompanied by efforts to promote regional co-operation and by the development of a Common Strategy for conflict prevention in Africa. The Petersberg Tasks¹ should be revised, in order to be adapted to the new threats to security and include the fight against terrorism.


IV.I.3 A clear and effective CFSP integrated in the Community structure

For the CFSP to gain high profile and positioning on the international political scene, competencies and decision-making processes will have to be clarified.

A partial integration of CFSP into the Community structure, with a European Foreign Affairs Minister supported by a European diplomatic service, composed of both community and national assets, and decision-making by majority vote as a general rule, would certainly provide more coherence and visibility to the Union's external action. The democratic control by the European Parliament must thereby also be ensured.


IV.1.4 Towards a European Defence Policy

A genuine European concept in the field of security, which defines a common view and analyses of needs, would serve as a basis towards a European Defence policy at a later stage. The principle of differentiation in the area of military operations would determine the relevant responsibilities in the decision-making process.

An important prerequisite for an effective European defence policy on the longer term is to overcome shortfalls in military capability. These are linked with nationally fragmented defence procurement, leading to dispersing of financial resources.


European Security Strategy

1. The European Union needs to formulate a "European Security Strategy", as a constructive answer to the National Security Strategy published by the Bush administration on September 20, 2002. Part of it should deal with adjusting international law and the Charter of the United Nations to the realities of today. It is no longer exclusively conflicts between states that threaten international peace, but more and more also those involving non-state actors. The European Union has to give satisfactory answers to this issue. With proliferation of weapons of mass destruction being a fact, we have to face the question of whether reaction, even massive, can still guarantee the security of European citizens.
   
   Such a strategy also has to address the relations between NATO and the European Union. The European concept in the area of defence has to be closely linked with NATO.
   
2. The European Union needs to adopt a plan for developing European Defence, with strict goals as to the timetable and the content. In the past, this approach has proved to be very successful, as seen with the internal market and the introduction of the single currency. The details of a two-stage plan for European defence have already been adopted by the European Parliament, in the Morillon resolution on the new security and defence architecture on April 10, 2003.
   

Capabilities

The European Union spends currently around € 150 billion per year on defence. This is equivalent to around 50% of the US defence effort. Still, because of 15 fully-fledged armies and widespread duplication, especially in the costly area of research, the efficiency of European defence reaches only about 10 % of American levels.

The EU needs to establish a common market for armaments. The Code of Conduct concerning arms exports should be further strengthened. On such a basis, a mutual recognition of arms exports decisions by member states' governments could be introduced, allowing the EU to strengthen its capacity to speak with one voice. An agency for defence research and development needs to be created. Such an agency would have to be responsible for the co-ordination of procurement by national armies. Research projects could be centralised or at least be coordinated through a central structure.

Tenders need to be published Europe-wide to allow for real competition in the field of armaments procurement, as far as security interests do not suggest otherwise. Article 296 of the current Treaty will gradually need to be used less extensively. The European Court of Justice has made encouraging decisions on this topic in recent years.

It is of the highest importance in today's security situation to ensure inter-operability of the different armies of the Member States. Therefore, we need to make sure that the equipment and the training of all member states comply with common norms and standards.

The establishment of a genuine European space policy is one of the Union’s central technological challenges, the implementation of which will, among other things, eventually enable it to ensure the independence of its military intelligence. For this reason, the EPP-ED Group strongly supports the Gallileo programme, while nevertheless regretting that the military aspect of the project had not been accepted as of yet, and proposes that the European Space Agency becomes the Space Agency of the European Union.


IV.2. A strong financial commitment to the developing world

Over 1 billion people live on less then $ 1 per day. Too many people daily lack food, seek education and need medicines. The EPP-ED Group will ensure that the EU maintains a strong financial commitment to the developing world.


IV.2. 1 Effectively address the eradication of poverty

Our target is that 0.7% of national GNPs be dedicated to development aid, the aim being an effective eradication of poverty, in particular by promoting sustainable social and economic development. Member States shall at least dedicate 0.33% of their national GNPs to development aid by 2006. We must ensure that EU legislation takes account of the world's poorest.


IV.2.2 Conditionality of aid: Promote the respect of human rights, democracy and rule of law

In line with the Cotonou agreement, aid must remain conditional to the respect of human rights, democracy and the rules of law. We consider that the development of real parliamentary democracies is essential to promote the freedom of the individual, enable economic growth and secure prosperity for all nations. The issue of the protection of women should also be systematically raised, when granting development aid.


IV.2.3 Improve the efficiency of aid: decentralise the management of aid

To increase efficiency, the management of the Commission’s programmes needs to be decentralised and made less bureaucratic. Moreover, the European Development Fund should be integrated into the EU budget to enhance overall coherence.


IV.3 Ensure the current WTO Round is based on fair trade and development

Negotiations within WTO provide a comprehensive framework not only for fair and reciprocal opening of markets and reduction of trade distortions, but also a neutral and effective system to settle trade disputes.

Although the new WTO-round will have strong impact on the EU internal policies, the EPP-ED Group, aware of the overall potential gain for the Union, supports the negotiating principles set up at the WTO Ministerial Conference in Doha in November 2001. A focus point of the upcoming trade negotiations should be to help emerging economies and Least Developed Countries to integrate into the global economy.


IV.3.1 Support for global, but fair trade

Global trade needs to be fair. We are in favour of further removing trade barriers and creating a globally liberalised trade market, but rules and standards must be applied similarly by all WTO partners, and rulings effectively implemented. Moreover, fairness also implies that the specific difficulties of less developed counties be taken into account.


IV.3.2 Make the current Round a genuine "development round"

2004 is certainly also a turning-point for the Union’s traditional development policy, as development issues will then be included in the overall framework of WTO negotiations. The EU is committed to eliminating commercial preferences by that date.

We will use the momentum of the new round to put forward a platform of policies designed to help the poorest countries bridge the economic, technological and digital gaps they now face and to ensure that LDCs have adequate access to the most urgently needed medicines.


IV.3.3 Increase accountability in WTO: Create a strong Parliamentary Assembly

The absence of Parliamentary scrutiny in the field of trade needs to be redressed. An appropriate involvement of national parliaments is of major importance in order to increase accountability in the WTO negotiation process. The creation and further strengthening of a WTO Parliamentary Assembly has our full support. Members of Parliament could constitute an important link between the negotiations carried out by representatives of the executive and citizens, in particular as a means of information and response to their concerns.


¹ The Petersberg tasks include humanitarian and rescue tasks, peace-keeping tasks, tasks of combat forces in crisis management, including peace-making. A concrete example of the implementation is the powers and competencies given to the High Representative in Bosnia.

V. SOUND FINANCIAL MANAGEMENT: THE NEED FOR RIGOUR

Openness and accountability in the expenditure of EU funds is a major democratic requirement. The EPP-ED Group will ensure that high standards of management of public money are attained, while further committing to vigorous fight against fraud. In parallel with this, to achieve its political ambitions, the Group aims at a review of all budgetary dimensions to allow greater flexibility on the medium-term and a more relevant use of funds.


V.1. Careful management of expenditure and vigorous fight against fraud


V.1.1 Increase accountability in the expenditure of EU funds and pursue institutional reform

The reform of the European Commission needs to be effectively completed and the results of the reform package assessed, especially as regards staff policy and openness to external scrutiny.

Commissioners should be made politically responsible for the money administered under their portfolio. Additionally, a binding Code of Conduct for the appointment of senior officials should be introduced and the publication on the Internet of the financial interests of Commissioners and Director-Generals made compulsory.

The appointment procedure of the Court of Auditors and the statement of assurance procedure need to be reformed.

The Council of Ministers should be made properly accountable for the financing of operational aspects of its activities


V.1.2 Openness and transparency: improve the function of discharge authority

A widespread access to documents and more openness in the contract awarding process are of major importance in this context.

To help meet these aims, the powers of the budgetary control committee should be strengthened by giving it the legal power to call for persons or for any paper from the Commission. We will ensure that, also in the new member States, the necessary administrative arrangements for high standards of management be set up.


V.1.3 Protection of the financial interests of the Union

Fight against fraud has to take place at all levels. Considering the fact that the misuse of EU funds remains at an unacceptable level in the Member States, the Group will seek to identify cases and ensure the repayment of misspent money. Strengthening OLAF by seeking its total independence from the Commission is an important objective in this context. Finally, the fight against fraud in the collection of own resources needs to be better addressed.

The establishment of the function of European Public Prosecutor as a means of protecting the financial interests of the Union will be strongly supported by the EPP-ED Group.


V.2. Ensure Europe has the means to fulfil its ambitions

A more dynamic and medium-term oriented budgetary policy needs to be established, so as to enable the Union to act swiftly and respond accordingly to citizens needs.


V.2.1 Full parliamentary rights in the budgetary procedure:

Equal footing with the Council must be established in budgetary matters. The right of Parliament to co-decision must be the underlying principle for the budgetary procedure and be extended to the field of own resources and to the financial regulation. The distinction between compulsory and non-compulsory expenditure must be abolished and Parliament should fully participate in the setting-up of policy priorities and in the control of their implementation.

Once the new budgetary provisions laid down in the Constitution come into effect, a standing practice in their application must be established, one which fully respects the institutional balance between the Parliament and Council.

For any new tasks for which the EU will be responsible, the Parliament must be fully involved in budgetary terms and have the final say on the expenditure.


V.2.2 For a new budgetary policy: Priority-setting and qualitatively improved execution

Adequate priority setting in the overall budget should be promoted, and consequently, the necessary resources for the policy fields, for which the Union is made responsible, provided. The investment elements of the budget, as opposed the current budget dominated by subsidies, must be developed. This is of utmost importance for Europe's global political and economic competitiveness. For a qualitatively improved execution of EU policies, performance targets need to be determined combined with a better control of the implementation.


V 2.3 For a dynamic concept of medium-term five-year financial framework

The new 'multi-annual financial mechanism' from 2006 onwards (= currently Financial Perspective) should provide for mechanisms which ensure the necessary budgetary flexibility to enable the European Union to act (cf. internal security, natural disasters, external policies) and for sufficient budgetary means to attain its objectives and carry through its policies.

A modernised and dynamic concept of medium-term five-year financial planning, with streamlined and efficient procedures implemented in the Treaty, should replace the current Interinstitutional Agreement. The system would be closely linked to the mandate of the Commission.

For an efficient matching of legislative and budgetary procedures. With a new Constitution the role of the European legislation and the role of the European Parliament thereinto will increase. This implies further improvement of the matching of the legislative and budgetary procedures in order to ensure high standards of legislation. It should therefore be ensured that the primacy of politics is better respected in the political decision-making and law-making process.


V.2.4 Establish a link between the citizens and resources

A genuine system of own resources, replacing the current system, which reflects the perspective of the Member States and gives no say to the EP, could give citizens a better idea of the monies spent at European level¹ . The power to raise funds is in this framework essential. Guarantees in terms of ceilings or maximum rate of increase could be given to the Member States, but decision-making would follow the co-decision procedure².


¹ As an alternative, a first step, consisting in the introduction of the co-decision procedure to the existing own-resources system, could be considered.
² The UK Delegation makes known its general reservation on the Priorities Paper in line with its special position within the Group, as recently communicated again in a letter to the Group.