I am happy to be here for several reasons. First, I am originally from Estonia, a small country which has certain historical similarities with Ireland which has always been admired as a country by Estonians. It is very nice that I am here for a second time. On the first occasion I met the then Prime Minister and also had the opportunity to visit the Irish Parliament. I have pleasant memories of my visit in 2003. I am happy to talk to the committee about European transport policy. I will make some introductory remarks and then will be available to answer the questions of members.
The Chairman mentioned the Irish Presidency. We met today the Minister for Transport, Tourism and Sport, Deputy Leo Varadkar, with whom I have had many previous meetings. The Irish Government is preparing seriously for the Presidency which is also important for the transport portfolio, given that some important issues will have to be handled during the term of the Irish Presidency. I would like to refer to some of them.
I wish to start with a general observation. Two and a half years ago when the European Commission started its new term, transport was considered as a nuisance – only as a problem. It was not mentioned in any European strategic document. It was only considered as a problem in terms of CO2 emissions and considered to have other bad accompanying features. Now we recognise at European level in all strategic documents that transport is a very important sector of the economy. A total of 8 million people earn revenues from transport, which is a big number. The figure in terms of GDP is approximately 4%. If one calculates the numbers involved in transport in conjunction with equipment manufacturers, the percentage becomes even higher. For example, 12 million workers are employed in car manufacturing. Transport is a big sector of the economy and also an important sector philosophically. Again, coming from a country where mobility has been restricted for understandable reasons for a long time, we especially consider that freedom of movement of people, goods, services and capital is one of the essential values of the European Union which can also be felt in countries such as Estonia.
It is important to provide for transport policy. Our White Paper states clearly that the curbing of mobility is not an option. It is only one sentence in point No. 18. This is an important sentence for me and the European Union transport policy because there are also other views; that one should force people not to move because transport is bad. The official position is very clear. Mobility is a great European value which we must maintain, support and develop. That means also that we need physical infrastructure. It is not only a question of rules and texts, but we must also develop physical infrastructure.
One interesting project for European integration was developed in 1930. Its author was a man called Dannie Heineman. He developed a blueprint for the future European Union and all the elements he outlined are present today such as an authority to guarantee the functioning of the Internal Market, the Central Bank, the European Court of Justice and also infrastructure, including railways. He called for a trans-European network of railways which he considered as important as other elements of European integration. People have always considered that the European Union is of great value for many reasons, but mobility is one such value.
The White Paper was presented a year and a half ago and we have pursued several of its objectives. On the current position, I will outline the main points of today’s discussion, the most important being the budget. We are discussing the future European budget and will know by the end of November whether we will have an agreement. This is very important for the Irish Presidency also because if the agreement is reached, there will be one type of work to deal with accompanying legislation. More than 70 legislative Acts will be required, including the documents on a trans-European network. If there is no agreement, difficult negotiations will continue.
One could ask what is at stake. One year ago the European Commission proposed a budgetary change that had two very important new elements, one of which was to create an instrument to connect Europe’s facilities. A total of €50 billion will be spent on the instrument, including €31.7 billion for transport and approximately €10 billion for energy and IT infrastructure.
Another important element in this proposal is research and development, which is in the hands of the distinguished Irish Commissioner, Máire Geoghegan-Quinn, with whom we have close and good co-operation. This is to substantially increase our funding for research and development. We will see what happens. We are fighting for that instrument. I will outline the reason the Connecting Europe facility is important. First, additional resources are needed to take down barriers and eliminate bottlenecks in the functioning of pan-European infrastructure. Another important element is that this will allow us to develop connections between the eastern and the western parts of the European Union. I do not want to go into the details but if we do not have this instrument we will not have the resources or the legal framework to finance cross-border projects. If we compare the €50 billion for the Connecting Europe facility with the €4.5 trillion spent from 2008 to 2011 on supporting the banking system we can see clearly that the cost of infrastructure support is a modest one. This is a hot topic; let us wait and see what happens in that regard. The European Commission is participating in the negotiation process but members know as well as I that this is in the hands of decision makers at the highest level in the European Union. It is a complicated issue, especially concerning the position of this country's big neighbour, but it is also an issue for others. This is a crucial moment for our transport policy. What will happen with the Connecting Europe facility? If this goes in a satisfactory manner we understand there will be cuts, but the cuts have certain limits. Members will understand from their budgetary discussions that we can cut finance policies but in certain moments we must abandon policies because we cannot do anything without the available resources. I do not know what will be the limit. We must wait and see how it develops. That is the Connecting Europe facility.
With regard to the Irish Presidency, Ireland has different items to deal with, but the big issue in Europe is the so-called fourth railway package or railway reform, and it is a terribly difficult issue. What is the problem? If we compare with other areas of European integration - the Internal Market and other sectors - we can see that railways are the most fragmented and most nationally separated system in the European Union. If I look for any political commitment to overcome that fragmentation, I do not see much of it. Every country wants to defend its special features. We do not always understand the reason. Every change in railways needs investment and certain rearrangements, but behind technical specifications there are always countries. Sometimes agreement cannot be reached, but let us hope there will be agreement.
The railway package is about two things, the first of which is European infrastructure. It is not the objective of the European Commission to intervene in national affairs but we have an objective to create something which has added European value. That is important for me. I always tell people in the Directorate General for Mobility and Transport that our role is to do what cannot be done at national level. Second, it is about the Internal Market. We still have isolated sectors in the railway area. Free competition is avoided and rules for public procurement are neglected; therefore, we want to have a fair and transparent economic environment for the functioning of the Internal Market in the railway area. That is the second important point. The list of details is very long and members will probably have an opportunity to discuss this during the Irish Presidency because it is an issue that will come before the Irish Presidency.
The third major hot topic is the necessity of adjusting our aviation policy in terms of our airspace. The situation is bad. We have one major issue which can only be discussed; it is not a legislative proposal, but I will probably come forward with some infringement procedures. Member states have decided to move gradually towards a European common airspace. During the volcanic ash crisis, in which I had an instrumental role, we saw clearly that no member state can close or open its airspace alone. It is impossible. Therefore, we need some kind of functioning European airspace. Member states decided more than a decade ago to develop this common airspace, the so-called functional airspace, and 4 December will be the date on which the functional airspace blocks no longer function. It is very clear. We will then launch some infringement procedures, but the process has slowed down and nobody has any real enthusiasm for developing it. This is important, because if we realise the so-called single European sky project through air traffic management reform, it will reduce the amount spent on fuel by 10% or 15% as well as reducing CO2 emissions, because the management of air traffic will be based on satellites and certain computer systems. It will be much more flexible and we will have fewer delays. It will function better and everybody is calculating that it will bring benefits. That is the single European sky project.
We proposed a so-called airport package but what happened last Monday in the European Parliament was spectacular, and I would like to share my frustration about it. The package contains one ground handling proposal. Ground handling is a socially sensitive area but it is important in terms of organising air traffic and for airlines. I personally met the leadership of the European Transport Workers' Federation and asked its members what they consider to be the most important issues to address if we proceed with this reform. They said that some of the provisions were in place. The Frankfurt Airport proposal went to the European Parliament.
During the last parliamentary term, I was responsible for budget discharge and lobby registration and now see how the process works in reality. The lobby from Frankfurt airport did not want to have any opening and succeeded in having a vote such that the European Parliament transport committee rejected the proposal. Nobody else was involved. It is not a problem for trade unions; it was Frankfort airport. It was a case of Lufthansa supported by the Government of Hessen. The federal Government was not instrumental. That is life.
There are other elements to be considered. The so-called slot proposal was discussed at the last Council meeting in Brussels on 29 October. The compromise made amounted to nothing. It sometimes happens in Europe that when one tries to find compromises, it results in a document that changes nothing. This is exactly what occurred in this case.
The airport package and airspace issues in general will definitely be discussed during the Irish Presidency. I just wanted to identify the hot points. If the level of progress is really bad, we will consider the withdrawal of the proposal as a whole. Then there will be nothing to do in this regard for the Presidency. If we continue, it will be a matter for the Presidency.
The emission-trading scheme for aviation comprises a very difficult issue, as members know. Europe has adopted a big decision that its airlines, and those from other counties, should pay for carbon dioxide emissions. It is too much and too early to say there is a trade war but there is much conflict. Tomorrow, the International Civil Aviation Organization will probably release a compromise proposal. In so far as I know, it will be acceptable, allowing us to avoid the trade war and solve the emissions trading scheme conflict. The conflict arises in the first instance with the United States, but there are other countries that follow suit. I am positive at this stage.
Although I discussed finances, railways and airlines, there are many other issues also. However, I do not want to take up too much of the committee's time. Other issues that will arise concern innovation, clean transport and road transport. We can discuss these in detail, if necessary.
I assure the members that we are co-operating very well with Commissioner Geoghegan-Quinn and making a substantial contribution to innovation and research work, which are essential for transport, especially intelligent transport systems. The latter are extremely important in terms of creating intermodal transport networks. There are many details to be considered in respect of transport, as members know. There are many positive details on which we can really move. It is a nice area in which to work.