We are dealing first with the items being sent for scrutiny. The first is COM (448) 2004. The Commission indicates in the memorandum to this proposal that it is using the revision of legal instruments for programmes during the next financial prospectus to create significant movement towards streamlining the operations of its programme. In its effort to assist member states in reaching the Lisbon policy goals, the Commission is proposing the continuation of several different community programmes through a single community programme embracing the promotion of social protection, improved working conditions, anti-discrimination and gender equality activities. The Commission contends that financial support at the level of the EU of approximately €628 million is required in those areas to act as a catalyst for the implementation of reform measures at the level of the member state. The Commission is also proposing that a separate and autonomous budget line of €479.9 million is required to promote social dialogue and the free movement of workers over the same period of time, 2007 to 2013. The sum of €266.4 million is foreseen for the European Agency for Health and Safety at Work, which is based in Bilbao, and the European Foundation for the Improvement of Living and Working Conditions, which is based in Dublin.
Furthermore, the Commission flags the creation of a European gender institute, for which a budget of €52.7 million would be required for the period 2007 to 2013. I understand that the institute would be tasked with providing objective, reliable and comparable data on gender equality. It would also act as a catalyst for developing, analysing and disseminating information that improves gender equality in Europe. The proposed programme sets lower limits for the percentage of the programme's funding that should be allocated to specific areas of theprogramme. Those are as follows: employment 21%; social protection and inclusion 28%; working conditions 8%; anti-discrimination and diversity 23% and gender equality 8%. EU co-funding of approved projects will be set at 80% of the total expenditure incurred by the recipient. A wide spectrum of projects appears to be eligible for support, including data collection, publications, experts, networks and the exchange of personnel between national administrations. That proposed measure is another in a series linked to the next financial prospectus of 2007 to 2013 and will be central to employment and social policy with a European dimension over the seven-year period. It is therefore proposed that it be referred to the Committee on Enterprise and Small Business for further scrutiny. Is that agreed? Agreed.
The next proposal, COM (501) 2004, is interesting. The so-called "British rebate" or correction from the then EU budget was agreed at an apparently tightly negotiated Fontainebleau European Council in 1984. As members will recall, demands for "wanting our money back" were part of the exchanges. The agreed conclusion of the summit put it in the following terms: "Any Member State sustaining a budgetary burden which is excessive in relation to its relative prosperity may benefit from a correction at the appropriate time". The refund rate was set at 66% of the balance, and the Commission's memorandum to that proposal contends that at the time of the European Council it was clear that the correction mechanism would not be unique to Britain and that it would be based on the size of the imbalance in contributions and the relative prosperity of the member state. The Berlin European Council later agreed on a capping system for the main contributors to the UK rebate. The Commission outlines in the proposed measure that Britain's per capita GNI has increased from 90.6% of the EU average in 1984 to 111.2% in 2003. In the case of Germany, however, the figures suggest that it has gone from 109.6% to 98.6%. The Commission therefore contends that a general correction mechanism is required and that the unique characteristics of the British rebate should be phased out.
The proposal seeks approval for the introduction of a general correction mechanism whereby any member state would receive 66% of the imbalance in its contribution and that all member states would contribute to such rebates. I understand that if the proposals were accepted the British rebate would not operate after 2007, and compensation for the loss would end in 2011. The proposal is also another part of the jigsaw of the next financial prospectus, and the figures presented in it are valid only if the shape of the other pieces remains unchanged. It is proposed that this be referred to the Committee on European Affairs in the context of consideration of the next financial prospectus for examination. Is that agreed? Agreed.
The next document is COM (477) 2004. On several occasions over the last two years, the committee has considered proposals relating to the GALILEO system and the European space programme and determined that those be forwarded to the Committee on Transport and the Committee on Enterprise and Small Business. Both the Commission and the Department contend that the European GALILEO radio navigation system will ensure Europe's strategic independence and enable European companies to be involved in a growing sector of industry. This proposal seeks approval for an additional €1 billion of public funding from the Commission for the deployment and commercial operating phases of the system. The memorandum to the Commission's proposal indicates that the deployment phase in 2006-07 will involve the building and launching of the satellite and the ground-based component. The commercial operating phase will cover the management, maintenance and updating of the system from 2008. The proposal suggests that the total estimated cost of the two phases is €2.1 billion, and the additional funds will be provided by the private sector.
Additional information has been requested from the Department on the financial implications for Ireland of the proposal and on the measures that will be in place regarding any personal information collected by the system. The Department subsequently outlined that Ireland's contributions are set at 1.2% of the cost of the project and that it has to date directly contributed €6.6 million to its realisation. It has also indirectly contributed €1.7 million through its participation in the European Space Agency, or ESA.
However, there is effectively a guaranteed return on the ESA contribution, and in some respects it also facilitates a return on the direct contribution. The Department has indicated that the direct financial implications for Ireland of this proposal would be approximately €12 million over the years 2007 to 2011. Additional information has also been provided by the Department regarding technical aspects of the GALILEO system, and I understand that a note has been circulated on that. Since the earlier materials were circulated, some clarification on the role of safeguards concerning information collected by the system has been provided by the Department. In particular, the Department makes reference to Regulation No. 1321/2004 on the establishment of structures for the management of GALILEO. Recital 23 of the regulation states that the relevant Community legislation concerning public access to documents and the protection of individuals with regard to the processing of personal data should apply to the system. The Department has also forwarded a copy of a communication on the deployment of the system for the information of members, and I understand that it has also been circulated. It is proposed that this be referred to the Committee on Transport for further scrutiny. Is that agreed? Agreed. There are no Title 4 measures and no CSFP measures. Neither are there any deferred documents.
The next document is COM (2004) 244. Members will recall that the sub-committee has, on a number of occasions, considered proposals as regards trade in substances that facilitate the illicit manufacture of narcotic drugs and psychotropic substances. Following some amendments the sub-committee determined that the earlier proposed measure as regards controls on the trading of these substances within the Internal Market, did not warrant further scrutiny. This proposal seeks to bring the rules as regards trade with and between third countries into line with those of the Internal Market. I understand, for example, that operators will be required to notify competent authorities of all unusual orders and transactions that would suggest they are intended for illicit manufacture. It is proposed that this matter does not warrant further scrutiny. Is that agreed? Agreed.
COM (2004) 392 is a proposal from the Commission seeking to establish technical standards for the navigational support systems for certain inland waterways in Europe. I understand the proposal concerns the more significant waterways of the EU in terms of trade and would not encompass waterways in Ireland. It is proposed that this does not warrant further scrutiny. Is that agreed? Agreed.
COM (2004) 505 concerns a report which is the subject of the information note forwarded for the attention of the sub-committee by the Department of Finance. It outlines the Commission's views on how the system of resourcing the EU budget might be amended. It is therefore not a legislative proposal, but its significance would have influenced the Department's decision to draw it to the attention of the sub-committee. The report outlines the three existing sources of financing the EU budget that have been developed since 1970: Customs duties collected by member states; a portion of the VAT receipts collected by member states and a portion of member states' gross national income, GNI. Since 1985, as I mentioned earlier, the contribution from the United Kingdom has been adjusted and the other member states have contributed to this; since 1988 four larger contributors to this adjustment have had their contributions to the so-called "UK rebate" also adjusted. The Commission therefore contends that the system has over time become increasingly complex and non-transparent.
The Commission suggests in this report that there are three alternative sources of finance for the EU's budget: an energy tax; a contribution of a fixed percentage of the VAT collected by member states — it suggests if that were to happen receipts should indicate the percentage payable to the national exchequer and the EU budget, as for example in Ireland's case, if it was 21% the receipt would show 19% to the Irish Exchequer and 2% to the EU; and a tax on corporate income. The third source, I understand, would require agreement on a common tax base. The Department implicitly acknowledges that the Commission is correct when it points out that shortcomings in the current system exist. It indicates that, perhaps, the system could be improved somewhat through some simplification of the process. In addition, I understand that the alternative systems proposed are likely to introduce their own imbalances. Members will have noted from the circulated materials that unanimity will be required on any legislative proposal from the Commission on "own resources". It is proposed that this significant report outlining the Commission's views be forwarded for information and consideration to the Joint Committee on European Affairs.
