European Community is published JET pages 3-4 on behalf of the Commission of the European Communities. Community thermonuclear fusion programme London Office: 20 Kensington Palace Gardens, London W8 4QQ Tel. 01-727 8090 European elections pages 5-8 Cardiff Office: 4 Cathedral Road, The Irish and Danish results Cardiff CF! 9SG Tel. (0222) 371631 The CAP pages 9-11 Edinburgh Office: 7 Alva Street, Have we reached a turning point? Edinburgh EH2 4PH Tel. (031) 225 2058 Greece - The tenth Community pages 12-13 Office: 29 Merrion Square, member Dublin 2. Tel. 76 03 53 Intended to give a concise view of Misleading and unfair pages 14-16 current Community affairs and advertising stimulate discussion on European problems, it does not necessarily Giles Shaw MP, criticizes the reflect the opinions of the Commission draft directive on Community institutions or of its misleading and unfair editor. Unsigned articles may be quoted or reprinted without advertising payment if their source is acknowledged. Rights in signed articles should be negotiated with their authors. In either case, the editor would be glad to receive the publication. Printed by Edwin Snell printers, Yeovil, England European Community also appears in the following editions: 30Joursd'Europe, 61 rue des Belles Feuilles, 75782 Paris Cedex 16. Tel. 553 5326 Comunita Europea, Via Poli 29, 00187 Rome. Tel. 68 97 22 Europa Gammel Torv 4, Post Box 144, 1004 K0benhavn K. Tel.144140/ 14 5512. EG Magazin, Zitelmannstrasse 22, 53 Bonn Tel. 23 8041 Europese Gemeenschap, Lange Voorhout 29, The Hague. Tel. 070-46 93 26 Comunidad Europea, 200 rue de la Loi, I 049 Brussels. Tel. 35 00 40 Europaiki Koinotis, 2 Vassilissis Sofias, The Community in July T.K. 1602, Alhina 134. Tel. 743 982 A vrupa Top/u/ugu, Bogaz Sokak July 16 Economic and Finance Council No. 13, Kavaklidere-Ankara. July 17-20 (Strasbourg) Tel. 27 6145-2761 46 July 23 Budget Council European Community, 2100 M Street, NW, Washington DC 20037 July 23-24 Agriculture Council Tel. 8728350 July 23-24 Foreign Affairs Council Community thermonuclear fusion programme Dr Guido Brunner, member of the The implementation of the Joint Commission in charge of energy, science, European Torus (JET) project is the result research and education, laid the of years of difficult negotiations. I am foundation stone for the main convinced that in many quarters this experimental building of the Joint decision has restored confidence in the European Torus (JET) joint undertaking creativity of Europe's scientists and at Culham, Oxfordshire, on 18 May. The researchers and in the ability of JET project represents a substantial part Europeans to share their common future. of the nuclear fusion research programme We hope that some day this vital effort of the European Atomic Energy will significantly reduce the dependence of Community (EURA TOM). The Europe on external energy supplies. programme aims to develop nuclear The Community has now charted its fusion as a new source of energy for main course for energy policy over the Europe. coming years. There are encouraging The JET joint undertaking was developments in this area. But it is not all formally established on 1 June, 1978 by a going to be plain sailing. decision of the Council of Ministers. Members of the joint undertaking include Dramatic situation today EURA TOM, the Nine member countries Let us consider today's dramatic situation of the EEC and Sweden (through their in the energy field. Uncertainties and risks national laboratories where these exist). now face us in this sensitive sphere. Iran Switzerland is shortly expected to become and the effects of Harrisburg illustrate the a member. The decision to establish the precarious nature of our energy JET joint undertaking followed the circumstances. satisfactory completion of the design The immediate difficulties arising from phase of the project (November 1973-May the Iranian crisis have illustrated all too 1978) - the result of significant effort by clearly the urgency of the longer-term the design team, the European energy situation, and the dangers inherent Communities and the national fusion in the Community's position. Iran stands research organisations which provided for the ultimate demise of the oil economy. staff and finance, and, together with Before the Iranian crisis, we thought industry, made scientific and technical that the limits of incremental world oil experience available to the project. supply would be reached in the middle or The JET laboratory is expected to be late l980's. On this basis, we had up to lO completed and the JET experimental years to diversify out of oil, and to buiid device assembled in 1982. The apparatus up the contribution from coal and will be the most powerful of its kind in the nuclear. Now, the problem is even more world. The successful completion of the pressing. Unless we can make radical subsequent programme will assist in inroads into our oil dependence in the specifying the parameters of a fusion next two or three years, we are going to power reactor. face serious trouble. This will consist of Dr Brunner made the following physical constraints on the economy, and remarks at the Cul ham ceremony. of rapidly increasing energy costs.

European Community July 1979 3 Harrisburg, on the other hand, means absolute terms - about equal to present postponing the application of a potential day UK oil production from the North and important alternative to oil as a form Sea. of energy. After Harrisburg we may not, to the extent we had planned, turn to conventional fission technology. Unrest Nuclear fusion has us in its grip again. There will be more Nuclear fusion as a commeri:;ial reality is delays. Unless we are very careful we will even longer term, but it requires intense find ourselves tumbling into an energy gap efforts now. This brings me to the heart of whilst the base for new economic growth today's proceedings: the fusion is being pulled from under our feet. programme of the Community and JET. The fusion programme is a long-term Medium term difficulties cooperative project. It embraces work Thus, in the medium term, the scope on carried out in the member States and in the energy supply side is limited. Coal the States associated with the project. It is production and consumption have been designed to lead in due course to the joint languishing since 1973. Neither in oil or construction of prototypes with a view to gas production have we much room for their industrial-scale production and manoeuvre in the next decade. So our marketing. priority now must be energy saving - The realisation of this objective particularly oil. That is why the recent depends on the outcome of much complex community decisions to set limits on oil scientific and technological research. This consumption in this year, and on oil task is certainly technically more difficult imports in 1985, are so important. than putting a man on the moon and is It is essential that we implement strong clearly of more direct significance. practical measures, so that these limits are The main objectives of the not broken. thermonuclear fusion programme are the construction of JET and the preparation of the next step - the post-JET device. Hopeful future This involves the solution of several In the longer term, however, in spite of all problems both in the field of physics and the uncertainties, the picture is more of fusion technology. Several hopeful. Not only should we by then have intermediate-size devices, mainly of the put in place really solid energy savings tokamak type, each one designed to programmes, but the scope on the supply answer some specific question, will be side will be greater. Much depends on operated in the associated laboratories. farsighted research and development Thus JET, the flag ship of the work begun in this or even earlier decades. Community programme, will be Both at Community and national level, supported by a powerful fleet of we have seen an increase in research and specialised tokamaks. development work on the new forms of The Community has established and energy. It is vital that these abundant and maintained a position in the forefront of clean sources are exploited to the full. the world fusion programme in spite of Progress is encouraging, and major the fact that the USA annual fusion programmes are under way in the main budget is larger than the European one. fields of solar energy on a domestic and The USSR budget is still larger. It is industrial scale, geothermal energy in essential to maintain this competitiveness specific areas, and on new uses for coal and with the completion of the JET through gasification and liquefaction. machine the Community will have one of Although it may be prudent not to rely the most powerful experimental devices of on these technologies for more than five this kind in the world. If JET is successful or six per cent of our total energy demand this will put the Community well along the in the year 2000, that share would path towards the solution of its energy represent an important contribution in problem.

4 European Community July 1979 Politics .A. European elections .. The Irish and Danish results

Until the next wave of new members There is no doubt that the elections to arrives from Southern Europe, Denmark the European Parliament in Ireland and Ireland, together with the UK, are provided several shocks and some still often known as the 'new' member pleasant surprises. The overall turnout states, even after nearly seven years in the considering petrol shortages and postal Community. The election results in these strike problems was an excellent 63.6 per countries are of considerable interest as a cent. Fianna Fail, the Government party gauge of their integration into the EEC. which has a substantial overall majority of 84 seats in the 148 seat Dail (the Irish Major shocks in Ireland Parliament) took only five seats out of the Matt Dempsey, farmer and journalist, 15 allocated to Ireland with 34.86 per cent relates how the main parties fared and the of the vote cast. success of two independents. The main opposition party ,

European Community July 1979 5 linked with the Christian Democrats, He will have a close ally in the last of improved its 1977 General Election the three most convincingly elected performance and achieved 33.13 per cent candidates - elected in the of the total votes cast. However, despite three seat Leinster constituency. A former the high poll, it ended up with only four Minister for Agriculture in the 1973-1977 seats. Fine Gael/Labour coalition Government, A real surprise was the success of the Mark Clinton will probably be the leader Irish . With only 14.4 per of the Fine Gael group withip the cent of the vote they achieved 26 per cent Christian Democrats group. of the 15 seats to give them the same total All of these three personalities, whilst of four. The Labour Party is a member of of different political parties, share a very the European Parliament's Socialist strong agricultural connection and base. Group. All three are inherently traditional in their moral outlook in a still traditionally Another surprise was the strength of religious country. There is no doubt that two Independents.First who all three will see their role within the new was sacked from his post as Agricultural European Parliament as working to the Minister in 1969 and from the Fianna Fail full to further the agricultural and Party in 1970, and has sat as an regional interests of Ireland. Independent in the Dail since then. The other leading personality to be Representing the old Republican ideals of elected was Labour Party member Dr Fianna Fail he comes from the Northern John O'Connell. He was the first to be border county of Donegal. It was always elected in the Dublin constituency though thought that his base and appeal was not until the eighth count. Always a slight localised and narrow, but in the straggling maverick within the party, Dr O'Connell Northern and Western constituency of represents within the Dail an immense Connacht/, Blaney achieved a working-class constituency to the west of remarkable 81,522 votes, enough to get Dublin. His constituency backed him him elected on the first count, one of only solidly and the support was widened by an three candidates in the country to be intensive campaign. elected so convincingly. . He will sit very comfortably on the The other successful independent T. J. Socialist benches. A man with an Maher also ran as a non-party candidate enormous capacity for hard work, his in the predominantly farming oriented success will be viewed by his Labour five seat constituency of Munster. A colleagues in the Dail with a mixture of former chief of the main Irish farming admiration and irritation. organisation and currently head of the With their best personalities in the agricultural cooperatives body, Government, Fianna Fail was not achieved a remarkable 86,208 first presenting its first team, but whatever the preference votes, far ahead of the 71,666 excuses, the results came as a nasty shock votes necessary for election. Mr. Maher's to the leadership. election severely dented the support that In the new Parliament, Fianna Fail will could have been expected by both Fianna probably continue to sit with the French Fail and Fine Gael. Gaullists in the EPD group.

6 European Community July 1979 Anti-marketeers set the pace in Denmark Leif Beck Fallersen, political scientist and EEC membership reverted to 'EEC radio journalist, reports from Denmark. scepticism', leaving the party with a blurred profile and a disorganised The new European Parliament has been campaign. given only a qualified mandate by the First analyses indicate that most rank­ Danes. Less than half - 46.8 per cent - and-file Social Democrats have not voted in the first direct elections, and the changed their attitudes towards the EEC most spectacular result was undoubtedly since 1972, i.e. the party remains fairly the success of the anti-marketeers. evenly divided. But, not wanting to vote The so-called Popular Movement against their own party, many seem to against the EEC (Folkebevaegelsen mod have reacted to this cross-pressure EF) won four of the 16 Danish seats, situation in a typical way, by staying away campaigning for a new referendum in from the polls. Denmark, and a subsequent withdrawal The same analyses show that about a from the Community. The allied Socialist quarter of the votes for the Popular People's Party won one seat, giving the Movement against the EEC were cast by anti-marketeers a total of five, six if the Social Democrats. This group seems to member for Greenland joins the Popular have decided that they could afford to Movement. vote against their· party, because it would In stark contrast to the success of the have no national repercussions, at least Popular Movement, the Social Democrats not directly. fared very badly. The party won only But the real problem for the Social three seats, barely maintaining its position Democrats, indeed for all supporters of as the largest single party, with the the EEC, was that the ability of the anti­ technicalities of the electoral alliances marketeers to define the issues of the giving it one seat Jess than the Popular campaign was never successfully Movement. challenged. The Liberal-Conservative Alliance did better than expected, winning six seats (Liberals three, Conservatives two, Centre Democrats one). The anti-tax party of Mr. Glistrup () also had difficulty in mustering its supporters winning only a single seat. Several factors contributed to the surprisingly poor showing of the Social Democrats. The party was more or less evenly divided on the EEC issue at the electoral level at the time of the referendum in 1972, but it was generally expected that the vast majority of Social Democrat voters have by now accepted EEC membership. The Social Democratic platform was accordingly defined in no­ nonsense pro-EEC terms, and former opponents of EEC membership openly campaigned on this platform. But as opinion polls showed increasing support for the Popular Movement against the EEC, Social Democratic party discipline faltered, and in the last crucial weeks some of the former opponents of

European Community July 1979 7 Political union became a key issue in Mr. Finn Lynge, who trained as a Catholic the campaign, the word 'union' sounding priest and is head of Greenland Radio. At far more ominous in Danish than in other the time of writing he had not committed European languages. Every suggestion of himself to join the anti-marketeers, but he the Tindemans Report was presented as did consider the result a popular rejection of an accepted goal of the EEC, the EEC membership. And he promised to implementation being a mere matter of demand a new referendum in 1982, when time. The report as such was given a the present special arrangement expires. prominence that will surprise Mr The losing, pro-EEC candidate, also Tindemans more than anyone else. He considered the result a first step away would also be gratified, had the intention from the EEC, though stressing that there been to foster a constructive debate. That were in fact more pro-EEC votes than in was not the intention, 1972. Responsibility for all the economic Danish membership of the EEC will woes of the 1970s were laid at the door of remain a political issue for the coming five the EEC, and the whole campaign of the years. That is perhaps the most important anti-marketeers was so highly emotional, implication of the direct elections in that it also appealed to the traditional Denmark. But there is very little anti-establishment sentiment of the likelihood that there will be a new young. referendum. More than two thirds of the Pro-EEC candidates were in the votes were cast for pro-EEC candidates, unenviable tactical position of having to and many well-known Danish politicians spend a lot of energy saying what the EEC are now Euro-MPs, among them four is not, and what it should not become, former cabinet ministers -· Social rather than what they believed the EEC, Democrats Kjeld Olesen and Eva Gredal, and the European Parliament, should be. Conservative Poul Moeller and Liberal Anti-marketeers also made the most of Tove Nielsen. Centre Democrat Erhard the fact that Social Democrats accepting Jacobsen will also be in the new candidatures for the Popular Movement parliament, with one of the highest were excluded from the party. One of personal votes. these excluded candidates was elected to the parliament. The Popular Movement against the EEC remains a medley of political parties and anti-marketeer groups. The Communist Party fielded its candidates on the Popular Movement list, the only party to do so, and one - the editor and founder of the anti-EEC magazine Det ny Notat - was elected. The question of how much influence the Communists have in the Popular Movement was hotly debated during the campaign, and is hardly resolved. But now the focus of interest is what the Popular Movement will actually do in the European Parliament. Conflicts may arise when members have to choose between a purely passive role and the normal working of a democratic parliament. Greenland provides the last Danish Euro-MP, and a special challenge to the new parliament. The winner in Greenland, with a total of 5,000 votes, is

8 European Community July 1979 Have we reached a turning point?

Dr Guido NAETS, who is Brussels Europe and indeed, from the ranks of the correspondent for the German farmers and farm workers, the armies publication 'Agra Europe', gives his themselves, had become the symbol of personal view of the Common Agricultural European unity. And agriculture was the Policy (CAP) today. only field in which a genuine Community policy had been developed in the EEC.

When the common agricultural policy - Galloping production entailing uniform prices, Community The policy entailed a large budget. It preference and financial solidarity - was helped generate a demand for economic completed in 1967-68, after a five-year and monetary union (EMU), since it was transitional period and considerable feared that without the union price unity intellectual and even physical efforts, would soon be distorted and the there was no doubt that the Community handsome farm policy structure would had produced a masterpiece. In twenty collapse. But no EMU was achieved. The years the Benelux countries had failed to member States were reluctant to let pool their farm economies, and yet six control over their national agricultural widely divergent countries had at last policies slip out of their hands, and with succeeded in forging a single policy on all kinds of measures designed to distort food production and trade. Agriculture, competition, they vied among themselves which for centuries had provided food in efforts to trick their neighbours out of and fodder for the warring armies of ever larger shares of the Community

European Community July 1979 9 agricultural market. Restraint of served only to aggravate the situation. overcapacity? - that was a problem for Through the introduction of a monetary the other countries. Production steadily compensatory amounts system, a political expanded, while the consumption of farm instrument was created to curb the produce, in a well-fed continent, tended adjustment of agricultural prices to the inevitably to mark time. The unlimited changed relationships between the values financing of surpluses under CAP cost the of the currencies. Where a currency had Community ever larger sums. gained in strength, 'positive MCA.s' could Measures to curb expanding production be used to offset to an unlimited degree failed almost before they had been got the reduction in common agricultural through the Council of Ministers. When prices when expressed in that currency, so prices were lowered (or raised less than that at any rate in theory farm producers inflation) the farmers simply worked received more for their products. harder to offset prospective losses. Conversely, where a country's currency Technical improvements also boosted depreciated, 'negative MCAs' could be productivity. Production losses due to used to offset indefinitely the higher cessation of farming by older farmers prices in national currency which were more than made good by the consumers in that country would expansion of production capacity by those otherwise have had to pay if the effects of still on the land. And the more the the devaluation had been allowed to work Community production incentives were through without restriction. reduced, the more the member States 'restored' the situation through their own The MCA transfers, which cost the agriculture budgets. agricultural fund (EAGGF) thousands of millions of units of account every year, Monetary instability are in effect consumer subsidies to the The collapse, at the turn of the decade, of United Kingdom, although they are the stable exchange rate relationship which recorded as export subsidies chargeable to had previously obtained in the Community other countries.

10 European Community July 1979 faster the current policy will be diverted Future Finance towards a new approach, and this could Since the Community's financial well lead to serious strain between the resources (customs duties, agricultural This consideration and this threat levies and up to 1 per cent of the VAT should induce the farmers to show basis of assessment) will be exhausted in moderation in the 1979/80 season. In this 1981 or 1982 by the present policy, the way they can begin to win the confidence Community faces a choice: either that of those who will have an ever greater say finding new sources of income, which is ?f m the future in the policies being an unwelcome development for the implemented, particularly agriculture. member States, since they prefer to spend Hence the enormous importance of a two­ their own money themselves, or that of way flow of reliable information for non­ developing no new European policies, farmers, about agriculture and only current business, which will condemn agricultural policy, and for the farming the elected Parliament to a largely community, about the mood and superfluous role, or that of curbing convictions of the rest of society. agricultural expenditure. Both within the Council and within the commission, there seems to be a consensus that the last option is the only realistic one. And this means that the Common agricultural policy is to be downgraded in the hierarchy of policies and that the door is open to unwanted or even harmful developments. In particular, there will then be the threat of a faster depopulation of the rural areas, the pauperization of a large proportion of the farming population and a sharp increase in unemployment. The consequences of this will then be felt within the individual countries and costs will have to be met (for example, unemployment benefits) which will far exceed the sums the member States are at present spending on the Community agricultural policy through the European agricultural fund. There is a grave danger that strong pressure will come from the directly elected Parliament to cut back spending under the agricultural policy in what it believes to be the interests of the consumer. The voice of the farming community and the rural community in general will be barely audible in the new Parliament. In most countries and political parties, representatives of this non-urban world are few in number an·d find it hard to get a hearing. A large majority of the Parliament is likely to be hostile to the agricultural policy or at least not to understand it. The louder the voice of Parliament in the Council of Ministers and in the Commission in Brussels, the

European Community July 1979 11 Greece will join the European Community requirements, with an extension to seven as its tenth member on 1 January 1981. years for certain agricultural products. The Treaty of Accession was signed in the Freedom of movement of workers within Zappeion palace in Athens on 28 May. the enlarged Community will be achieved by the end of the seven year period. Greece, with a population of just over nine million, is a comparatively poor country by Community standards; about Customs union and a third of its people is engaged in external relations agriculture. It obviously faces problems in Greece has had an Association Agreement integrating into the Community with the European Community since economy, and it has taken three years of 1962, though this was suspended during negotiation to devise solutions. the junta period. She has already started Vice-President Natali, the European to adapt to the Community customs Commissioner responsible for handling union and, since 1974, with the exception the negotiations, remarked on their of ECSC products (coal and steel), conclusion that Greek entry was a first approximately two-thirds of the step in altering the North-South balance Community's industrial exports to Greece in the Community, which hitherto, he have been duty-free, while Greece has noted, had been weighted in favour of the adopted the Community's common North. external tariff (CET) for the same With Spain and Portugal waiting in the products with regard to third countries. wings to join the Community in the Apart from coal and steel, Greek 1980s, the terms that have been industrial exports have entered the negotiated with Greece are of particular Community duty-free. interest. A five to seven year transitional Under the new arrangements there will period aims to ensure gradual adaptation be a five year transitional period for the of the Greek economy, while a financial complete elimination of all Greek tariffs mechanism has been devised to protect on industrial goods from the Community. Greece from becoming a net contributor Greece will accordingly reduce existing to, rather than a beneficiary of the tariffs by 10 per cent on I January 1981, Community in the first few years of followed by five annual reductions, so membership. that all tariffs will be eliminated by I January 1986. Tariffs on steel products The basis of agreement will similarly be eliminated during the Subject to transitional measures, Greece transitional period, and alignment with has agreed to accept what is known as the the CET will follow the same timetable. 'acquis communautaire', that is the Quantitative restrictions will be abolished treaties and secondary legislation already immediately on accession except for 14 adopted by the Community to date. On industrial products for which Greece has the basis of these principles Greece will requested extra protection during the have a five year transitional period to transitional period. The quotas will be adjust to the bulk of Community raised in five annual steps so that imports

12 European Community July 1979 are completely liberalised by the end of accruing from VAT or from a financial the five-year period. contribution based upon the gross Greece has also agreed to adopt the national product (GNP) will be paid in system of generalised preferences and the full. The Community, however, will multi-fibre arrangement for textiles by the refund to Greece a proportion of the end of the transitional period. amount paid ranging from 70 per cent in 1981 to 10 per cent in 1985. In the field of Agriculture taxation, Greece has been granted a three­ The full application of the Common year delay in implementing the Agricultural Policy (CAP) will not come Community's Sixth Directive relating to into force until the end of the five year the common system of VAT. period, with a further two year extension The Commission estimates that, with for fresh and processed tomatoes and the application of the special mechanism, fresh and preserved peaches. For Greek and on the basis of a hypothetical 1979 products such as durum wheat, processed budget, Greece's net benefit from the fruit and vegetables, as well as olive oil, Community budget will amount to about where prices are significantly lower than £54m in 1981. Community prices, full price support and income subsidies under the CAP will be Institutions gradually phased in over the five year Greece will, like Belgium and the period. Producers of cotton, dried figs Netherlands, have five votes in the and raisins will benefit from deficiency Council of Ministers. She will also have payments. Meanwhile, to avoid abrupt one Commissioner, one Judge in the changes in Greek producer costs or in European Court of Justice, and one prices, Greece will gradually phase out representative on the Board of Governors existing national state subsidies, chiefly of the European Investment Bank. She on fertilisers and live-stock rearing. She will have 24 MPs in the European will also eliminate all restrictions on Parliament, and 12 members of the Community agricultural products. Economic and Social Committee. She will participate fully in these and the other Social Affairs community bodies as from the date of Although there will be restrictions on the accession. As with UK accession in 1973, a free movement of workers until the end of procedure has also been worked out to the seven-year period, Greek workers ensure mutual consultation on policy already legally employed in any decisions between now and accession. Community country will enjoy full social benefits immediately on accession. These will also be extended to their families three years later. Finance From the date of accession Greece will contribute to the Community's own resources system of financing and budget through customs and agricultural levies and a proportion of VAT. But in order to prevent her from becoming a net contributor to the Budget rather than a beneficiary, it was agreed to set up a special mechanism during the five-year transitional period with regard to the GNP/VAT element of own resources. From 1 January 1981 and throughout the transitional period the amounts

European Community July 1979 13 Consume* Affairs Misleading and

;::1,9• :::ir ~ · unfair advertising

Giles Shaw MP, criticizes the Commission draft directive on misleading and unfair advertising. The directive in its present form requires covering aspects of advertising. The law is the adoption of laws against misleading used to provide the necessary back-up if and unfair advertising and enables court the administrative control should fail to action to be taken. It also makes specific be completely effective. recommendations as to how these laws are That this system is effective has been to be implemented. I certainly agree that amply demonstrated by the review of the the consumer must be protected from Office of Fair Trading, which having misleading and unfair advertising commissioned research to gauge the (although there is precious little evidence extent to which advertisements conform that the consumer is seriously at risk), but to the self-regulatory code of practice, do not agree with the means proposed in reported that 'the results indicate that the the directive. A system has been built up vast majority (93 per cent) of in Britain which costs little and has proved advertisements in newspapers and most acceptable. We do not want to see it magazines conform to the code'. over-thrown for the sake of a general This is an astonishing statistic, bearing objective to harmonise protection against in mind the vast numbers of different misleading advertising throughout advertisements which are printed each Europe. Indeed harmonisation of day and each week throughout the UK. advertising practices is stretching the remit The Director-General of the Office of of the Commission unnecessarily, for in Fair Trading believes that the self­ the UK the consumer is protected against regulatory system is valuable and should misleading advertisements by a wide range be built upon. of statutes, the most important of which is Research has produced no real evidence the Trade Descriptions Act 1968. to suggest that the public is being misled Broadcast media are controlled by the or confused by advertising on a wide Independent Broadcasting Authority with scale. Indeed, Mr. Gordon Borrie, a statutory obligation to vet advertising. Director-General of OFT said 'it suggests Alongside this legislative protection, the strongly that, with a general tightening up advertising industry (advertisers, their and the limited statutory backing agencies and media) maintains its own proposed, the self-regulatory system system of self-regulation based on the should provide adequate protection for principle that all advertisements should be consumers'. 'legal, decent, honest and truthful'. This 1 recognise that there may be principle is elaborated in the British Code circumstances in which current self­ of Advertising Practice. The body which regulatory procedures can be shown to be implements the industry's commitment of weak. There will always be rogue self-regulation is controlled by the advertisers and in particular those who Advertising Standards Authority, an fail to observe the spirit of the voluntary organisation set up and financed by the code. This is the view of the National industry under an independent Chairman Consumer Council also. However, 1 and Council. This process is further believe that the advertising industry itself strengthened by some 60 statutes each recognises that some additional power

14 European Community July 1979 might help its code of practice and self­ campaigns are developed with the prime regulatory system to improve and thus be object of crossing individual frontiers. more speedy and effective to the It may be necessary in certain markets consumer. of the Community to introduce a legislative I believe that it is infinitely preferable framework for advertising control to for some additional power to be given, say prevent consumers from being exploited. to the Office of Fair Trading, to provide a This is not the position in the UK market. legal back-up to the self-regulatory We have an effective self-regulatory system, than to endorse that constrictive system that is financed by the industry. In legal system proposed under this EEC practice, the provis;ons of law are more directive. likely to be knowingly flouted than an What these additional powers should be accepted code of practice operated is a matter for discussion. But the according to its spirit. Commission must recognise that what is As the directive stands it ignores the proposed in the directive is not accepted concept advanced by the acceptable. Not because we do not share President of the Commission, Mr. Roy the Commission's aims and general Jenkins, when he said that the Commission objectives, but because in the UK we have 'does not believe in harmonization for a system that has been demonstrated to harmonization's sake'. In the context of work effectively and is well established. the advertising directive he added an The other main claim which the important point - that the Commission Commission has made for this directive is 'should not seek to include unnecessary that misleading advertising and unfair detail' but should 'rather ... lay down the advertising are improper ways of primary objectives to be obtained and influencing the market processes. But leave the detailed implementation to there is little evidence that advertising individual member States'. The Commission replies It is important to understand the potential considered by consumers to be an impact of the directive in the UK. At unfortunate gap in the law. present, television and radio advertising is Nevertheless, Mr Shaw says the self­ under statutory control. Within that regulatory arrangements which apply to framework of law, a self-regulatory press advertisements are effective. He system operates. The independent TV quotes the recent OFT report indicating companies vet the acceptability of that 93 per cent of advertisements in advertisements before transmission. They newspapers and magazines conform to the do so with reference to the Independent Code of Advertising Practice. The Broadcasting Authority's Code of OFT survey was based on a sample of Advertising Standards & Practice. If the about 3,000 advertisements. However, IBA failed to fulfil its statutory approximately 30,000,000 advertisements responsibilities, for example because it did are published in the press each year in the not apply reasonable standards, then the UK. If 7 per cent fail to conform to the consumer could take the issue to court. He Code, it follows that some 2,000,000 would probably need the prior consent of infringing advertisements are published the Attorney General, but this need not be each year. an obstacle in a proper case. This is not to say that the Advertising No general statutory framework exists Standards Authority, set up and financed to control advertising in the press. Specific by the advertising industry, fails to do its aspects are controlled under a multiplicity job. On the contrary, it does a good job. of legislative measures. The lack of a However, that is not the point. The general test for misleading advertising, question is what is to be done about the such as that proposed by the directive, is misleading advertisements which escape

European Community July 1979 15 the net? Should they be allowed to made the point that international continue in circulation? After all, they advertising is now a feature of today's represent only 7 per cent of the total world. With respect, that is not entirely number of advertisements published true. There is an increasing incidence of annually. Surely, the answer must be no. campaigns being created in one country. Take an analogy. Each year, millions of Admittedly, they are put into another words are published in the press. Very language, but the basic copy point is kept few are defamatory. This certainly does common, and the basic message is quite not lead to the conclusion that there is no often kept common. I think that we shall need for the law of libel. Would Mr Shaw see this developing over the next few accept that newspaper and magazine years. It is not something that is declining. publishers should be free of any We should not delude ourselves that there responsibility for defamatory statements are not pan-European campaigns, because merely because they take great trouble - there are.' and most of them do - to avoid Whatever 'the prime object' of an defamation? advertising campaign the fact is that However, the whole question of the advertisements do cross frontiers. Think proportion of misleading advertisements of the advertisements which do so in is something of a red herring. The magazines and newspapers. Think of the Commission does not wish to see the end commercial radio broadcasts to the UK by of the self-regulatory system in the UK. Radio Luxembourg or TV advertising in Like the former Secretary of State for Belgium - a country which has no Prices & Consumer Protection and the indigenous commercial TV, but receives Director-General of the Office of Fair advertisements broadcast by French, Trading, it sees the value of a legal German or Dutch stations either direct or framework in this area. Mr Shaw appears via cable. With the advent of to accept this view too. As he points out, transmissions via satellite in the 1980s, the form which these measures take is a TV advertising will become less and less a matter for discussion. respecter of frontiers. As to the evidence of advertising campaigns 'developed with the prime The directive is not harmonisation for object of crossing individual frontiers', it harmonisation 's sake. It recognizes the is worth quoting Mr Michael Morris MP. value of a common approach to In the Commons' debate on the proposed misleading and unfair advertising in the directive he said: 'Several hon. members common market. The Commission sent the draft Directive to the Council in February 1978. Since then, it has been welcomed by the European Consumer Law Group of the European Bureau of the Consumers' Union (BEUC) and by the European Parliament, which has proposed a number of amendments. The Economic and Social Committee has also submitted detailed comments. The Commission has recently modified its proposals to take acco11nt of these views.

16 European Community July 1979