Commission Vice-President Günter Verheugen: ” Meeting with the ENVI Committee

Strasbourg, 12th June 2006

Dear Mr Chairman, Ladies and Gentlemen,

I thank you for the invitation and am very glad to have another opportunity, after some considerable time, to discuss our joint tasks for the next few months in person.

1. Basic considerations &ndash” environmental issues and competitiveness

One of the most stubborn and politically fraught misunderstandings is the apparent conflict between our European policy for growth and employment and our interest in high consumer protection, environmental protection and health policy standards. Unfortunately, this persistent, albeit in my view contrived conflict has cost us a lot of friction over the past two years alone.

I would therefore like to repeat my guiding principle on this issue, which I emphasised last year to you in the Committee in relation to the shift in approach of the Lisbon Strategy: nothing that is ecologically wrong can be economically right. The same applies for consumer and health protection. The renewed Lisbon Strategy and the European strategy for sustainability do not contradict but complement one another. We want to and must get ahead of the global competition if we want to reliably secure our European way of life.

The way to do this is to produce top quality on a broad front: in technology and in standards &ndash” we need the best, safest and most ecologically friendly solutions everywhere. More growth can only be sustainable growth. More and better jobs are a necessity in our time. Otherwise we will fail to do our duty towards our citizens, as job safety is the key social issue of our time.

We must therefore reinforce our industry’s capacity for competition and innovation and this means that we must at last get rid of the obstacles in the path of small and medium-sized enterprises, for European industry is not the few transnational enterprises but the 23 million small ones, the majority of which employ fewer than ten people. The major industrialists are not the problem.

Modern European industrial policy is integrated, inter-disciplinary policy. The issues facing us in the future can no longer be tackled in isolation. That is why I already proposed last year to set up a high-level group for competitiveness, the environment and energy. This Group started work at the beginning of the year and is intended to help us to:

• ensure there is more coherence between these areas of policy,
• to develop an integrated approach to industrial policy
• and to create a more stable and more reliable regulatory environment.

The participants in the Group are all appointed in a personal capacity and not as representatives of their institutions. We need broad-based knowledge and representative opinions. We therefore asked the European Parliament to appoint four members to this Group. I think that such a step would increase the credibility of the Group and would mean that Parliament and its committees would also have direct access to the Group’s deliberations and issues without impinging on the Parliament’s role as a legislator. I would be glad to be able to welcome members of the Parliament at the next meeting in autumn. The discussion on the long-term framework must be wide-ranging and must be conducted with the greatest possible transparency.

I would like briefly to take the opportunity to outline what the Group has done so far. During its meetings, the last of which was on 2 June, it discussed both the way in which energy markets and the EU emission trade functions. We have presented the initial outcome in the form of a report.

It covers:

• the functioning of the electricity and gas markets;
• easing of access to stable energy prices for energy-intensive industries
• and issues such as energy efficiency and the economic use of resources.

In October 2006 the Group will hold another plenary session to discuss the national reform plans in the context of the Lisbon Strategy and will examine the long-term energy prospects for Europe, including renewable energy sources, innovative technologies for producing electricity and energy efficiency. The second main task is better legislation. It is intended to offer companies and citizens a better and simpler regulatory environment. The point is not to dismantle existing legislation but to modernise it so that we release potential for growth and innovation.

In order to achieve this aim, the economic, social and ecological impact of all new proposals in the working and legislative programme is examined comprehensively. These impact assessments guarantee that we examine the entire range of effects before weighing them in the political balance

A further instrument is consultation of all those involved in the preparatory phase so that we have as wide a possible overview of the various concerns and interests.

We will also continue our October 2005 simplification programme. A total of 220 legal instruments are to be examined within three years. The current work programme comprises 54 initiatives for simplification. And we are currently engaged in preparing a new programme which is based on further examination of our legislation and the results of current studies in various sectors. As I have emphasised in the past, this is not a question of deregulation but more selective and effective legislation than previously.

2. Proposals for legislation and further initiatives

In order to illustrate the above-mentioned guiding principles, I would like to discuss some examples from our joint work programme and the plans for the coming year.

Automobile sector (Euro-5, CARS 21)

I am glad that the Environmental Committee reacted positively to the Euro-5 proposal. The Committee’s draft report shows that there is a considerable amount of common ground on important issues such as

• our basic approach on emission thresholds,
• the focus on reducing particulate emissions or
• with regard to improved access to repair information.

Euro 5 is not the final step. Euro 6 must be prepared and quickly in order to give manufacturers planning certainty. Currently research is being carried out on a drastic reduction of NO0x emissions. Existing technologies such as SCR (Selective Catalytic Reduction – based on urea) cannot be used for all types of vehicles. For the vast majority of cars manufactured in Europe there is still no technological solution. That is something everybody should know.

Of course we also need the results of an extensive impact assessment before we present a balanced and realistic proposal in line with our strategy for better legislation. I would be grateful for your support in this matter.

We are currently preparing a communication to the Parliament and the Council on the final report of the "CARS 21“ Group. This will give us an opportunity to look more closely at subjects such as CO-2 reduction, improvements in road safety and also questions of trade policy or the protection of intellectual property in this field in an inter-institutional debate. The communication is to be adopted this year.

Pharmaceuticals sector – “Novel therapies“

I would now like to go on to another sector in which issues of health, competitiveness and the environment play a major role: the pharmaceutical sector, in relation to which we have tabled our proposal on novel therapies.

Novel therapies have enormous potential for both patients and industry:

• We would like to guarantee the highest possible level of health protection for patients throughout Europe.
• At the same time we are creating a standard EU-wide framework for the biotechnological industry which is intended to make innovation, growth and job creation easier.

I welcome the progress which the rapporteur Mr Mikolášik and the Environmental Committee have already made. We are, I think, in agreement on the basic aims and I am confident that sensible compromises can be found for the majority of the proposals for amendments which have been made.

I also think it is right that the ethical aspects of the proposed regulation should be tackled. The Commission’s approach is to comply fully with the principle of subsidiarity and not to interfere in decisions which are made by the Member States with regard to ethically sensitive products.

I hope that you will support this approach and this proposal, since technological and medical progress is advancing at a great pace and we ought to pursue the joint aim of ensuring that European legislation does not lose touch with actual developments.

Pharmaceutical Forum

That is also one of the aims of the Pharmaceutical Forum: this was set up in order to provide a high-level platform for discussion on the effects of pharmaceutical innovation on national health systems in Europe. We would like to pave the way for further honing the pharmaceutical industry’s competitive edge and at the same time being able to implement health policy aims. The Forum is a non-legislative advisory body.

The main focus is on issues that fall within national competence but also areas in which there are significant European reservations and need for action such as price setting, the relative efficacy of medicines and also information for patients. I welcome the European Parliament’s move to participate by nominating its three representatives in this forum (Mrs Grossetête and Mrs Roth-Behrendt – proposed by the Environmental Committee - and Mr Chatzimarkakis, proposed by the industrial committee).

Medicinal products

I would now like to say a few words about medicinal products. A proposal has been submitted to you for amending two directives on these products (the Framework Directive and the Directive on actively implantable medical devices).

These amendments do not interfere with the main aims of these directives. The idea is merely to make the necessary technical clarifications in respect of the legal framework in order to maintain a high level of health protection and at the same time to ensure more effective implementation in an area which is characterised by rapid technical progress.

REACH

Parliament will shortly receive the common position of the Council on REACH, which is the basis for the second reading. The common position has the full support of the Commission. It is a balanced compromise which also takes account of the Parliament’s concern at the first reading and is the product of a very difficult and sensitive process of negotiation. We should take this into account in the second reading, in particular with regard to the rules on registration and approval. At the same time, I acknowledge, of course, that some proposals for amendments which met with broad support in the first reading should be taken into account. I will do my best to bring about a sound solution and hope that we can deal with any remaining problems quickly.

If the procedure could be completed in the second reading it would help us in implementing REACH rapidly and, in particular, in getting the agency in Helsinki up and running, which would involve recruitment and training of the necessary human resources, provision of an efficient IT system and information for authorities and companies especially small and medium-sized companies.

I am aware of the fact that there is a public campaign which is insinuating that the Commission has sacrificed health and environmental protections on the altar of large chemical concerns. I will leave aside the fact that this also affects me personally in as much as it is an out-and-out slander. This campaign claims to represent the interests of citizens who have been betrayed by the Commission and the Council. That is incorrect. The Council and the Commission have not betrayed citizens’ interests since we have managed to reconcile maintaining jobs with high standards of environmental and health protection and animal welfare. It was never a question of BASF or other large enterprises. Our concern was the many small chemical companies and the many small companies that use chemical products and which we need in Europe tomorrow too. Just imagine what happens if we do not think about the small companies. An average-sized chemical company is Europe has just over 100 employees. That is the European chemical industry.

The decision as to what is the best way of serving the European public interest will not be made by an interest group, however honourable its intentions may be, but by the institutions set up to do so: Parliament, the Council and the Commission. I appeal to you, Ladies and Gentlemen, and to your sense of responsibility.

We will also require additional funds for the REACH Agency. This is necessary as a result of the considerable increase in its tasks, the site of Helsinki and the increased representation of the Member States in the various bodies. I would therefore like to ask for your support in explaining the significance of suitable funding to your colleagues in the Budget Committee in order to ensure that REACH is a success.

4. Outlook: main focus of work and initiatives (APS 2007)

Finally, I would like to present the outlook for the main focus of our work and future initiatives for the coming year. Since the adoption of the annual strategic planning for 2007 in March this year, the financial framework, in particular, has been agreed upon, which will enable a new generation of programmes to be started up, especially the framework programme for competitiveness and innovation (CIP) and the space navigation and security research sectors under the terms of the 7th Research Framework Programme.

Framework programme for competitiveness and innovation

With a budget of €3.6 billion for small and medium-sized enterprises we can continue working with the existing successful instruments and substantially extend them in the course of the next seven years. In the year 2013, expenditure on these instruments will be 60% more than this year.

With the additional allocation of €400 million which the European Parliament negotiated in April, we can also achieve two important aims

• more than €1 billion are now accounted for by the Community funding instruments for small and medium-sized enterprises
• and €430 million are available for ecological innovation.

Our main aim is to be fully operational by the beginning of 2007. Preparations are well on the way.

GMES - Global Monitoring for Environment and Security

Under the 7th Research Framework Programme, it is security research and space navigation policy in particular that fall within my remit. Much of the funds for space navigation will be available for GMES (Global Monitoring for Environment and Security).

We have already made considerable progress towards being able to offer our first presentable services by 2008 (land monitoring, ocean monitoring and crisis management).

At a large number of conferences it has also been shown that we can offer considerable European added value by simplified and rapid access, standard resource management and cross-border regional applications. This applies to both potential use by the regions and combating of off-coast oil spills or conservation of the Alpine environment.

In order to further pursue this approach quickly and resolutely, a dedicated GMES office was set up in the Directorate-General for enterprise and industry, which inter alia reports to a steering committee made up of representatives of several Directorates-Generals in order to provide for more coherence.

In the area of preparation of modern geographical information, Europe has, however, considerable ground to make up and is largely dependent on America. In order to develop our own systems and to open up new opportunities for our service industry, considerable investment is required both in space and on the ground (software, data simplification, e.g. INSPIRE).

In order to lay the groundwork for GMES services, the issue of a budget heading for operation and infrastructure should therefore be broached in the mid-term assessment of the financial perspective.

Item source: SPEECH/06/371 Date: 13/06/2006