Scrutiny of EU Proposals.

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.

I do not fully understand why this document does not warrant further scrutiny while a previous document on financial perspectives does. Would it not be better that we refer both documents?

It is not a legislative proposal, it is just a report, but that is why I said "information and consideration". It is more than just information for the European Affairs committee.

To which committee was the other one referred?

To the Joint Committee on European Affairs. It is likely the committee would want to consider both together.

Is there any point in sending these to the Joint Committee on Finance and Public Service? We will need to have a debate on financial perspectives at some level. Perhaps the Joint Committee on European Affairs should hold hearings on it.

Two weeks ago officials from the Department of Finance came before the Joint Committee on European Affairs and they were also before the committee last year. At the most recent meeting it was agreed that the Department's representatives would attend an interim meeting some time during the year, The European Affairs committee has interested itself in this issue, so perhaps we will leave it there for the moment.

The next document is COM (2004) 532. Members will be aware from the documentation circulated that the Commission is primarily seeking to encourage third countries to adopt humane standards for trapping certain animals, through the adoption of this proposal. I understand the adoption of the measure is unlikely to impact on current trapping activities. However, the proposal encourages member states to carry research to develop standards and this may result in changes to practices in the future. It is proposed that this does not warrant further scrutiny, but that it be sent to the Joint Committee on Agriculture and Food for information. Is that agreed? Agreed.

COM (2004) 551 is concerns the current programme for promoting gender equality which concludes at the end of 2005. Members will have seen that the Commission proposes in this document to extend the programme to the end of 2006 to allow its conclusion to coincide with the start of the proposed successor programme, which was considered earlier. Members will also have noted that the current programme supports the work of the European Women's Lobby, which includes the National Women's Council of Ireland in its network. It is proposed that this does not warrant further scrutiny but that it be forwarded to the Joint Committee on Enterprise and Small Business for information in the context of consideration of COM (2004) 488. Is that agreed? Agreed.

The next document is COM (2004) 568. The Commission outlines in the memorandum that it is seeking to maintain pre-existing trade flows, following the recent enlargement of the EU. I understand the adoption of the proposal would result in approval for the importation of 4,600 cattle from Switzerland, up to the 30 June 2005. It is proposed that this does not warrant further scrutiny. Is that agreed? Agreed.

The next document is COM (2004) 576. Following concerns over the situation in Togo, the Commission opened discussions with the authorities there on how democracy and respect for human rights might be encouraged. The Commission has reported that positive developments in Togo have led it to propose here that restrictions in place as regards the provision of development aid be relaxed. It is proposed that this does not warrant further scrutiny. Is that agreed? Agreed.

COM (2004) 592 is the next Commission document. The adoption of this proposal would, I understand, amend the current list of EU regions to include those of the ten new member states. This is a purely technical proposal and it is recommended that it does not warrant further scrutiny. Is that agreed? Agreed.

COM (2004) 559 is a proposal from the Commission which seeks approval for an agreement with Switzerland, laying down ground rules for judicial co-operation as regards fraud and other illegal activities. In particular, the agreement provides that the requested parties shall make use of all investigation facilities allowed by its legal system and that, effectively, it should, following a request for assistance, respond as if it were acting on its own behalf. Members will have seen from the note circulated that the Department has concluded no major implications are involved for Ireland from the adoption of this proposed measure. It is proposed that this does not warrant further scrutiny but that it be sent to the Joint Committee on Justice, Equality, Defence and Women's Rights for consideration. Is that agreed? Agreed.

COM (2004) 582 is the next document. The Commission argues in the memorandum to this proposal that the market in replacement parts for certain products is fragmented due to Directive 98/71/EC permitting member states to operate different rules as regards this matter. I understand that currently nine of the member states, including Ireland, operate an open market in the production of visible replacement parts for products such as motor vehicles, for example replacement doors, light covers, etc. The other member states restrict this facility to the original manufacturer. This proposal would open the market on such replacement parts across all member states of the EU. Members will have seen, however, the Department's note indicating that EU consumers may have some time to wait before this wider choice becomes a reality as the move is being resisted by a number of large European motor manufacturers, and by member states in which they are based. It is proposed that this does not warrant further scrutiny. Is that agreed? Agreed.

As regards No. 6, there are no adoptive measures.